Disney’s new CEO: “If we sit back and rely on old technology, the consumer is going to pass us by”

disney.jpgRobert Iger, the new appointed CEO of Disney, might have big shoes to fill by replacing the fallen King Michael Eisner. Most important, he needs to redirect Disney’s positioning and take into account the numerous new challenges of the ever-changing consumer market: a downturn in the core film business, the complications of expanding into foreign markets, particularly China and India-, and the urgency pressing upon all traditional media companies to reinvent their businesses for a new digital era. He is under pressure to devise new ways to drive growth.
The 54-year-old executive inherits a company whose old way of doing business has been blown up by technology. “If we sit back and rely on old technology, the consumer is going to pass us by”, Mr. Iger says, noting the music industry made that mistake. He realizes that his biggest obstacles may be the business habits of Disney’s old employees and of theater owners, mass retailers, television affiliates and others. “We need to create an atmosphere that tolerates experimentation, even if it’s at the expense of near-term economics”.

In Disney’s case, mass marketing is possibly not dead: its very profitable brand is a huge asset and the Magic Kingdom still appeals to children across the globe and with multiple social backgrounds. But Disney has to rethink how it reaches its audiences. The new technology allows companies, especially in the entertainment industry, to segment market their audience. For example, some viewers today watch video clips on cellular phones and use digital recorders that skip ads. Others watch entire seasons of a TV series on DVD, missing advertising altogether. These developments are shifting how companies reach viewers and how they set their business model based on advertising.
Mass marketing that focuses on new movie releases and DVD sales needs to evolve now that the movie attendance is declining and the DVD sales stagnant. Per-per-view is on the rise as well as any type of audio and video-on-demand service, going through multiple channels: cable boxes, computers, cell phones, video games, rentals. Many marketing niches have been created with the availability and the successful penetration of new technology. Disney will have to tackle these new segments, perhaps by becoming a service provider instead of a product provider, filling up these new entertainment channels or else, the new consumer might well be passing by.

3 responses

  1. Per Nick’s reference, here is below an application of how Disney got on the technology train to catch the moving customers:
    By Mark Boslet
    SAN JOSE, Calif. -(Dow Jones)- Apple Computer Inc. (AAPL) produced a video iPod in time for the Christmas selling season and announced a deal with Walt Disney Co. (DIS) to sell five current television shows from its iTunes Web site.
    The deal with Disney was billed by Apple Chief Executive Steve Jobs and Disney CEO Robert Iger as a breakthrough agreement as well as just a beginning.
    Full article: LINK

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