STRATEGIC MANAGEMENTEVALUATING DIVERSIFICATION AT DISNEY

Michael Tjowari01120120061

UNIVERSITAS PELITA HARAPANLIPPO KARAWACITANGERANG2015DIVERSIFICATIONDiversification talks about degree to which a firm conducts business in more than on arena. Diversificationis a corporate strategy to enter into a new market or industry which the business is not currently in, whilst also creating a new product for that new market. This is most risky section of the Ansoff's matrix, as the business has no experience in the new market and does not know if the product is going to be successful.

The notion of diversification depends on the subjective interpretation of new market and new product, which should reflect the perceptions of customers rather than managers. Indeed, products tend to create or stimulate new markets; new markets promoteproduct innovation.

Product diversification involves addition of new products to existing products either being manufactured or being marketed. Expansion of the existing product line with related products is one such method adopted by many businesses. Adding tooth brushes to tooth paste or tooth powders or mouthwash under the same brand or under different brands aimed at different segments is one way of diversification. These are either brand extensions or product extensions to increase the volume of sales and the number of customers.Type of Diversification1. Vertical integration: diversification into upstream and/or downstream industries2. Conglomerate: corporation consisting of many companies in different businesses or industries3. Portfolio planning: practice of mapping diversified businesses or products based on their relative strengths and market attractiveness.

Company Profile

The Walt Disney Company, commonly known asDisney, is an American diversifiedmultinationalmass media corporation headquartered at theWalt Disney StudiosinBurbank, California. It is the world's second largestbroadcasting andcablecompany in terms of revenue, afterComcast.Disney was founded on October 16, 1923, byWalt Disneyand Roy O. Disneyas theDisney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. The company also operated under the namesThe Walt Disney Studio, thenWalt Disney Productions. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theater, radio, music, publishing, andonline media. In addition, Disney has since created corporate divisions in order to market more mature content than is typically associated with its flagship family-oriented brands. The company is best known for the products of its film studio, theWalt Disney Studios, which is today one of thelargest and best-known studiosinAmerican cinema. Disney also owns and operates theABC broadcast television network; cable television networks such asDisney Channel,ESPN,A+E Networks, andABC Family; publishing,merchandising, music, and theatre divisions; and owns and licenses14 theme parks around the world. The company has been a component of theDow Jones Industrial Averagesince May 6, 1991. An early and well-known cartoon creation of the company,Mickey Mouse, is a primary symbol of The Walt Disney Company.In early 1923,Kansas City, Missouri, animator Walt Disney created a short film entitledAlice's Wonderland, which featured child actress Virginia Davisinteracting with animated characters. After the bankruptcy in 1923 of his previous firm,Laugh-O-Gram Films, Disney moved to Hollywood to join his brother,Roy O. Disney. Film distributorMargaret J. Winklerof M.J. Winkler Productions contacted Disney with plans to distribute a whole series ofAlice Comediespurchased for $1,500 per reel with Disney as a production partner. Walt and Roy Disney formedDisney Brothers Cartoon Studiothat same year. More animated films followed after Alice. In January 1926, with the completion of the Disney studio on Hyperion Street, the Disney Brothers Studio's name was changed to theWalt Disney Studio. After the demise of theAlicecomedies, Disney developed an all-cartoon series starring his first original character,Oswald the Lucky Rabbit, which was distributed by Winkler Pictures throughUniversal Pictures.The distributor owned Oswald, so Disney only made a few hundred dollars. Disney completed 26Oswaldshorts before losing the contract in February 1928, when Winkler's husband Charles Mintztook over their distribution company. After failing to take over the Disney Studio, Mintz hired away four of Disney's primary animators (the exception beingUb Iwerks) to start his own animation studio, Snappy Comedies. Deciding to push the boundaries of animation even further, Disney began production of his first feature-length animated film in 1934. Taking three years to complete,Snow White and the Seven Dwarfs, premiered in December 1937 and became highest-grossing film of that time by 1939.Snow Whitewas released throughRKO Radio Pictures, which had assumed distribution of Disney's product in July 1937,after United Artists attempted to attain future television rights to the Disney shorts. Using the profits fromSnow White, Disney financed the construction of a new 51-acre (210,000m2) studio complex inBurbank, California. The newWalt Disney Studios, in which the company is headquartered to this day, was completed and open for business by the end of 1939. The following year on April 2,Walt Disney Productionshad its initial public offering. The studio continued releasing animated shorts and features, such asPinocchio(1940),Fantasia(1940),Dumbo(1941), andBambi(1942).[4]After World War II began, box-office profits declined. When the United States entered the war after theattack on Pearl Harbor, many of Disney's animators were drafted into the armed forces. The U.S. and Canadian governments commissioned the studioto produce training and propaganda films. By 1942 90% of its 550 employees were working on war-related films.Films such as the featureVictory Through Air Powerand the shortEducation for Death(both 1943) were meant to increase public support for the war effort. Even the studio's characters joined the effort, as Donald Duck appeared in a number of comical propaganda shorts, including the Academy Award-winningDer Fuehrer's Face(1943).In 1954, Walt Disney used hisDisneylandseries to unveil what would becomeDisneyland, an idea conceived out of a desire for a place where parents and children could both have fun at the same time. On July 18, 1955, Walt Disney opened Disneyland to the general public. On July 17, 1955, Disneyland was previewed with a live television broadcast hosted byArt Link letterandRonald Reagan. After a shaky start, Disneyland continued to grow and attract visitors from across the country and around the world. A major expansion in 1959 included the addition of America's firstmonorail system.For the1964 New York World's Fair, Disney prepared four separate attractions for various sponsors, each of which would find its way to Disneyland in one form or another. During this time, Walt Disney was also secretly scouting out new sites for a second Disney theme park. In November 1965, "Disney World" was announced, with plans for theme parks, hotels, and even a model city on thousands of acres of land purchased outside ofOrlando, Florida.Disney continued to focus its talents on television throughout the 1950s. Its weekday afternoon children's television programThe Mickey Mouse Club, featuring its roster of young "Mouseketeers", premiered in 1955 to great success, as did theDavy Crockettminiseries, starringFess Parkerand broadcast on theDisneylandanthology show.Two years later, theZorroseries would prove just as popular, running for two seasons on ABC. Despite such success, Walt Disney Productions invested little into television ventures in the 1960s,with the exception of the long-running anthology series, later known asThe Wonderful World of Disney. Disney's film studios stayed busy as well. Averaging five or six releases per year during this period. While the production of shorts slowed significantly during the 1950s and 1960s, the studio released a number of popular animated features, likeLady and the Tramp(1955),Sleeping Beauty(1959) andOne Hundred and One Dalmatians(1961), which introduced a newxerographyprocess to transfer the drawings toanimation cels. Disney's live-action releases were spread across a number of genres, including historical fiction (Johnny Tremain, 1957), adaptations of children's books (Pollyanna, 1960) and modern-day comedies (The Shaggy Dog, 1959). Disney's most successful film of the 1960s was a live action/animated musical adaptation ofMary Poppins, which was one of the all time highest grossing movies[4]and received fiveAcademy Awards, including Best ActressforJulie Andrews. The theme park design and architectural group became so integral to the Disney studio's operations that the studio bought it on February 5, 1965, along with theWED Enterprisesname. On July 8, 2005, Walt Disney's nephew,Roy E. Disneyreturned to The Walt Disney Company as a consultant and with the new title of Non Voting Director, Emeritus.Walt Disney Parks and Resortscelebrated the 50th anniversary ofDisneyland Parkon July 17, and openedHong Kong Disneylandon September 12.Walt Disney Feature Animationreleased Chicken Little, the company's first film using 3-D animation. On October 1,Bob Igerreplaced Michael Eisner as CEO. Miramax co-foundersBob WeinsteinandHarvey Weinstein also departed the company to form theirown studio. On July 25, 2005, Disney announced that it was closing Disney Toon Studios Australia in October 2006, after 17 years of existence. In 2006, Disney acquiredOswald the Lucky Rabbit, Disneys pre-Mickey silent animation star.Aware that Disney's relationship with Pixar was wearing thin, President and CEO Robert Iger began negotiations with leadership ofPixar Animation Studios,Steve JobsandEd Catmull, regarding possible merger. On January 23, 2006, it was announced that Disney would purchase Pixar in an all-stock transaction worth $7.4billion. The deal was finalized on May 5; and among noteworthy results was the transition of Pixar's CEO and 50.1% shareholder,Steve Jobs, becoming Disney's largest individual shareholder at 7% and a member of Disney's Board of Directors.Ed Catmull took over as President of Pixar Animation Studios. Former Executive Vice-President of Pixar,John Lasseter, becameChief Creative OfficerofWalt Disney Animation Studios, its divisionDisneyToon Studios, and Pixar Animation Studios, as well assuming the role of Principal Creative Advisor atWalt Disney Imagineering. In April 2007, the Muppets Holding Company, LLC was renamedThe Muppets Studioand placed under new leadership in an effort by Iger to re-brand the division. The re-branding was completed in September 2008, when control of The Muppets Studio was transferred from Disney Consumer Products to theWalt Disney Studios. After a long time working in the company as a senior executive and large shareholder, Director Emeritus Roy E. Disney died from stomach cancer on December 16, 2009. At the time of his death, he owned roughly 1% of all of Disney which amounted to 16 million shares. He is seen to be the last member of theDisney familyto be actively involved in the running of the company and working in the company altogether. On August 31, 2009, Disney announced a deal to acquireMarvel Entertainment, Inc. for $4.24 billion.The deal was finalized on December 31, 2009 in which Disney acquired full ownership on the company.Disney has stated that their acquisition of Marvel Entertainment will not affect Marvel's products, neither will the nature of any Marvel characters be transformed. In October 2009, Disney Channel presidentRich Ross, hired by Iger, replacedDick Cookas chairman of the company and, in November, began restructuring the company to focus more on family friendly products. Later in January 2010, Disney decided to shut down Miramax after downsizing Touchstone, but one month later, they instead began selling the Miramax brand and its 700-title film library toFilmyard Holdings. On March 12,ImageMovers Digital,Robert Zemeckis'scompany which Disney had bought in 2007, was shut down. In April 2010,Lyric Street, Disney's country music label in Nashville, was shut down. In May 2010, the company sold thePower Rangersbrand, as well as its 700-episode library, back toHaim Saban. In June, the company canceledJerry Bruckheimer'sfilm projectKilling Rommel.In January 2011,Disney Interactive Studioswas downsized.In November, two ABC stations were sold.[41]With the release ofTangledin 2010, Ed Catmull said that the "princess" genre of films was taking a hiatus until "someone has a fresh take on it but we don't have any other musicals or fairytales lined up."He explained that they were looking to get away from the princess era due to the changes in audience composition and preference.However in the Facebook page, Ed Catmull stated that this was just a rumor. In April 2011, Disney broke ground onShanghai Disney Resort. Costing $4.4 billion, the resort is slated to open in 2015. Later, in August 2011, Bob Iger stated on a conference call that after the success of thePixarandMarvelpurchases, he and the Walt Disney Company are looking to "buy either new characters or businesses that are capable of creating great characters and great stories." Later, in early February 2012, Disney completed its acquisition ofUTV Software Communications, expanding their market further intoIndiaand Asia. On October 30, 2012, Disney announced plans to acquireLucasfilm, along with plans to produce aseventh instalmentin itsStar Warsfranchise for 2015.On December 4, 2012, the Disney-Lucasfilm merger was approved by theFederal Trade Commission, allowing the acquisition to be finalized without dealing withantitrustproblems. On December 21, 2012, the deal was completed with the acquisition value amounting to approximately $4.06 billion, and thus Lucasfilm became a wholly owned subsidiary of Disney (which coincidentally reunited Lucasfilm under the same corporate umbrella with its former spin-off and new sibling, Pixar).

One of the reasons why Disney has a reputation of delivering a seamless "magical" experience to its guests in all of its operations - theme parks, hotels, restaurants, retail stores, etc. - is because it has one overriding vision and mission for all of its business operations.

"The mission of The Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.

DISNEYS BUSINESS SEGMENTSThe Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified and international family entertainment and media enterprise with five business segments : media networks, parks and resorts, studio entertainment, consumer products and interactive media.1. Media NetworksMedia Networks comprise a vast array of broadcast, cable, radio, publishing and digital businesses across two divisions, the Disney Group and ESPN Inc. The Disney Group is composed of The Walt Disney Companys global entertainment and news television properties, owned television stations group and radio business.

2. Park and ResortsWalt Disney Parks and Resorts is one of the worlds leading providers of family travel and leisure experiences, giving millions of guests each year the chance to spend time with their families and friends, making memories that last a lifetime.

3. Studio EntertainmentThe Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings, and live stage plays.

4. Disney Consumer Products Disney Consumer Products is the business segment of The Walt Disney Company and its affiliates that delivers innovative and engaging product experiences across thousands of categories from toys and apparel to books and fine art. Disney Publishing Worldwide (DPW) is the publisher of children's books, magazines, and digital products.

5. Disney InteractiveDisney Interactive is a high-quality interactive entertainment across all current and emerging digital media platforms. Products and content released and operated by Disney Interactive include blockbuster mobile and console games, and online virtual worlds.

DIVERSIFICATION AT DISNEYEntertainment and media conglomerateTheWalt Disney Companyhas much more than just animated films. One of Disney's main strengths is its diverse group of income streams. By creating highly diversified operating segments, the company has set itself up for growth and opportunities for years to come while facing less risk from a single segment declining.The company's operations include five segments: media (involving movie production, ESPN Network, Disney Channel, ABC Family, and others), parks and resorts (including theme parks and the Disney cruise line), studio entertainment (such as live performances), consumer products (including licensing), and interactive (involving all gaming).Of Disney's $45.05 billion global revenue in 2013, only half came from the company's most well-known segment, media. This revenue diversification means that Disney faces less risk because of an economic or competitive factor that decreases revenue for a single segment, and results in more chances to expand in multiple markets.

Analyzing the segmentsMedia accounts for 49% of Disney's operating portfolio, which has come in part from the company owning and growing diversified media networks. For instance, Disney purchased ESPN (the sports network, a big diversification from the classic Disney style of children and family entertainment) and Lucas Films in the last few years. With the purchase of Lucas Films, Disney is now taking advantage of the rights by creating a new TV series based on the popularStar Warsmovies that is likely to bring a large revenue stream to the company over the next few years.Parks and resorts is the next-largest segment for Disney, and one that has shown to be a great profit booster for the company. The company reported a 7% overall revenue increase for 2013 year-over-year, while the parks and resorts segment reported a 9% gain individually. Part of this success comes from the company's ability to keep bringing families to the Disneyland and Disneyworld resorts, both in the U.S. and abroad.Another highlight is the company's cruise line segment. The cruise industry has seen massive growth over the last few years, with a market of 20.3 million cruisers in 2013 alone. Disney is taking part in this growth, and with travelers making arrangements sometimes as much as a year in advance just to get their preferred spots on Disney cruises, it's clear that demand is high. In the 2013 earnings release call, CEO Iger talked about this growing demand and said that, while the company isn't planning to build a new ship yet, it is continuing to increase routes and itineraries throughout the year to allow for more passengers.Interactive is the one area in which Disney has not seen growth in 2013, and the only segment reporting a loss in 2013 at $87 million. The loss was steady throughout the year as few games were released, and the one sub-segment of growth came from Japanese mobile gaming. A little help came from the release ofDisney Infinity, a console game, in August. However, the company is planning to releaseFantasia: Music Evolved,another console game, this year. This should bring a revenue payoff after Disney incurred an expense in 2013 for developing the game. The interactive segment exemplifies how Disney's diversification works to decrease its risk. Even though this segment dropped in 2013, the company as a whole was not majorly affected thanks to its four other strong segments. Whether or not Disney is able to turn this segment around will be something to watch in 2014, but that should not turn investors away from this stock.Disney is by far the largest player in the industry by revenue and market cap, nearly twice as large as the next-largest company,Time Warner. The other competitors in the industry includeTwenty-First Century Fox, andDreamWorks Animation.

Company NameRevenues (ttm)Market Cap.P/E MultipleShare Price

The Walt Disney Co.$45.05 B$127.6 B21.48$72.61

Time Warner$29.39 B$56.84 B15.31$62.83

Twenty-First Century Fox$28.73 B$72.16 B12.11$31.24

DreamWorks$767.29 M$2.83 BN/A*$33.74

While Disney may seem to be the highest priced option based on P/E multiples, consider the growth that accompanies this price. Disney was able to produce revenue growth of over 7% in 2013, which compares to 0.2% for Time Warner and -17% for Dreamworks. Or consider the broad amount of revenue streams this price buys investors. The risk that is mitigated for Disney with its five separate segments is something that Twenty-First Century Fox will not be able to replicate with only two distinct segments, media and satellite broadcasting (though the company does have plans to build its first theme park in Malaysia in the coming years). Should an economic shift happen within the media segment, such as competition from China perhaps, Twenty-First Century Fox will face a much more challenging landscape in regard to steady revenue.Disneys diversification didnt start today. In 1928, its first cartoon was released. One year later, it licensed a pencil tablet, then the Mickey Mous Club (MMC) was formed as a vehicle for selling Disneys products under one roof. Within a short time, the membership of the club grew to 1million members. In 1949, the company diversified into music was was even said to have produced training and educational films during the war. Diversification produces synergy. Diversification strenghtens the existing business and the entire new business created. According to Strickland et al (2010), Diversification can be related or unrelated. It is related if the activities of the businesses complement those of the firms present business in a way that increases or adds to the competitive advantage. In order words, related diversification leads to strategic fit which itself creates opportunities. Opportunities to

a) Transfer technological know-how (that are competitively valuable) from one business to another.b) Lower cost by combining the performance of common value chain activitiesc) Leverage or exploit use of a well known brandd) Get valuable resource strength and capabilities across business

But if the businesses being diversified into have no competitive and valuable value chain that fits with the value chain of the present businesses, then the diversification is said to be unrelated as there is no strategic fit.Walt Disney understood the interrelation of new industries to each other right from the beginning, something that continues to be the source of competitive advantage to the company till today. Encapsulated in the Magic of Disney, the story goes thus.Family take a trip to Disney, book into a hotel (owned by Disney) inside the park.While in the park, the family eats at Disney-owned restaurants, buy Disney merchandise. It doesnt matter that they are paying higher for accommodation and meals compared to other hotels. Children meet the Disney characters everywhere in the park which leaves a long lasting emotional experience. The children and their parents end up buying videos, books, TV broadcast which they take home with them. All of these make them look forward to another visit to the Disney and the circle continues. The integration of these complementary businesses is the Magic of Disney.Ever since, Disney has expanded its operations to cover theatre, radio, publishing, online media etc. Until the early 1980s Disney focused on the family creating entertainment for the home and the family. As a result, they were clearly differentiated in the market from their competitors. All of that was to change around 1984 when Michael Eisner took over as CEO. Like Walt Disney, Eisner was an innovative and intuitive leader and his era marked a turning point for the company that was hemorrhaging for cash and that soon became the target of takeover by several companies.Eisners goal was to evolve a company that would grow by 20% a year. To achieve this, Eisner followed these three principles which include keeping its cost down so it doesnt erode its profit, operate the core business in a profitable manner and find new businesses that could integrate with Disney and guarantee an annual growth rate of 20% for the company (1). To achieve a 20% growth rate, the business had to diversify, exploring synergies in new industries, and overseas expansion. Overseas expansion is inevitable when the local domestic market has reached a near saturation point.Some of the early businesses Einser was to add to Disneys portfolio include the Disney Store, Euro Disneyland and the purchase of KHJ-TV, Disneys first broadcasting outlet. Also, the company established a major television presence and increased the number of films released from 2 in 1984 to 15-18 yearly. Disneys expansion and diversification efforts was driven purely by the need to attain an economy of scope that will give it the desired market dominance as well as the economies of scale to bring down its cost of business. It pursued this strategy throughout the 90 using a combination of diversification into areas that were a natural extension of their current business as well as such other areas where they had less synergy but obviously had found potential opportunities. Both of these led to the birth of Disney Cruises, Pleasure Island and the incorporation of theme park management into its business model.Despite the huge successes recorded, it was questionable whether the diversification into some market or acquisition strategies pursued with some companies such as ABC actually enhanced the shareholders value. The presumption is that when two companies who are leaders in slightly different fields combine, both would be better off by the synergy created between two of them. But Disney and ABC are both leaders in providing entertainment and both with extensive networks in creativity and production . When firms cannot leverage on their strengths following an alliance, then they stand the risk of diluting their brand to a point where they will not be able to make the profits necessary to return good value to their shareholders.Today Disney has grown beyond the traditional amusement parks, movies, television shows, clubs, or books business. Its stable of businesses include Disney Cruise Line, Resort Properties, Radio Broadcasting, Musical Recordings and sale of animation art, Anaheim Mighty Ducks NHL franchise, Interactive software and internet site, etc. Whether these businesses are related or unrelated to Disneys core business is not an issue as long as it produces synergy that strengthens Disneys position in the market and creates value for its shareholders. Throughout its history, Disney has, with minor exceptions, shown the true value to shareholders created by synergies from thoughtful diversification . The companys corporate strategy identifies the fact that while Disney may have some magical products (its core products), its strength is not in the products themselves, but instead in the way in which they interrelate and complement each other. Disneys diversification efforts further increased the magic of Disney. Television advertised the movies, which advertised the hard-goods and which advertised the television shows. So instead of paying to advertise Disneys products, people were charged to be exposed to advertisement.When you consider its portfolio of businesses, it will be right to say that Disney has pursued a combination of related and unrelated diversification. Take for instance Resort properties. That is real estate. But Disney has used this to make its customer live out the Disney experience right on Disneys properties as opposed to going to a third party environment to watch Disney Movies or lodged in a different hotel and visiting Disney park.

The Result:Is the diversification strategy working for Disney? The simple answer is that the numbers are there as proof. Since the coming of Eisner, revenues grew from $1.6 billion in 1984 to $2.9billion in 1987 largely as the result of the pursuit of diversification as a strategy for growth. One of Eisners greatest achievement was how he placed creativity as Disneys most valuable asset and supported this as a leader to get the best out of his core innovation team

THE INDUSTRYS FIVE FORCES SCORE

Threat of New Entrants (and Entry Barriers)It takes significant investment to enter the market. Threats of new entry is medium because there are many industries as competitors. Like today, there are some entertainment park offer the same service and product like Disney , such as Universal Studio, Dunia Fantasi and Everland. But we have to look again, that they are not easily to enter the market. It has high capital requirements. They need a big effort to attract the attention of the visitor. As we know, Disney dominates the market , it already has their brand names and customer loyalty. Besides, Disney got the biggest revenue among its rivalry (Merlin Entertainment Group, Six Flags, Parque Reunidos) at 2010.

Bargaining Power of BuyersBargaining power of buyers is low. They involve customer into several segments of target market, so they can fit in easily. The customers are also influences by the product design, brand strategy and also the price. Walt Disney know how to treat the customers in each segments. Buyers are end consumers. Their power will keep low as prices are controlled by theme parks.

Bargaining Power of SuppliersSuppliers include equipment manufacturers, construction companies and vendors. Bargaining power of suppliers is still medium because there are a lot of different revenue streams, so it will highly cost to change the suppliers continuously. Especially the technology is capital intensive and require support and maintenance. Whereas the bargaining power of suppliers of food, toys and clothing vendors are low.

Threat of SubstitutesThreat of substitutes for Walt Disney is very low. Substitutes such as museums and zoos do not match the theme park experience. In addition, media networks also do not match anything to be changed. Everyone loves watching television. But the threat of substitutes of Disney Interactive is high because video games is easily to change with other toys such as monopoly, ludo, etc. Studio Entertainment is the most creative place which is highly to search the substitute for it.

Degree of RivalryRivalry among existing firms is few but they are large players such as Universal Studio and Merlin Group (LegoLand, Madamme Tussauds,etc). They have same segments in parks and resorts. Warner Bross and Picture Inc. also compete with Media Networks of Disney, even Disney Channel has lower ranking than Warner Bross. Besides that, there is DOTA which is the most demand video games nowadays compare to Disney Interactive

Competitive Advantage of Disney

1. Great brand identity It gives Disney's parks an edge over its competitors. Its ESPN business similarly enjoys a brand moat and has few competitors. Best of breed brands area huge advantage.

2. Talented and committed management teamDisney has a talented and committed management team, with "skin in the game," and that is an advantage.

3. Economic of scaleDisney has a media network and studio entertainment for movie making.