The 1970’s, in the immediate wake of Walt’s death, were lackluster years for the Disney Company. Most of the revenue was generated from the re-distribution of old films and attendance at Walt Disney World. Top animators defected in 1977 and subsequent efforts failed to capture the magic of the studio’s glory days.
In the early 80’s, Ron Miller began expanding the product line into films for “adult audiences”. Touchstone’s pictures were some of the most financially and critically successful films of the time. Although Disney was careful not to use its name on any Touchstone production in order to preserve its image as a creator of family entertainment.
Beginning in 1984, Michael Eisner continued to pursue a market segmentation and expansion strategy, adding two more film subsidiaries, one devoted to producing films for teenagers and young adults and the other for adult entertainment.
The 90’s were a breakout decade for Disney, primarily driven by a return to quality animation and storytelling. A sting of hits produced by both Disney and Pixar reminded us that great “family friendly” entertainment never really goes out of style.
Over last 20 years, Disney has expanded operations, adding theme parks, cruise ships, resorts, television and live theater, basically returning to Walt’s model of owing both the media production and distribution channels for high quality stories. The popularity of Disney franchises and animated features has funded further acquisitions; Pixar, Marvel and Lucas Film, adding more stories to the library, while renewing and expanding on updated versions of classic fairly tales.
There is no doubt that over the past 10 years Disney has been a rousing financial success. Since 2008, their market capitalization growth has bettered the overall market by nearly 3:1. In the midst of this fiscal fever, it’s important to not loose track of what made it all possible. Based on results, what works is when the company sticks to the four basic principles espoused by its creator; Safely, Efficiently and Courteously telling stories to the kid in everyone.
That may sound boring to some, but financially it appears to be pretty exciting and, so far, it seems to be working.