News
Power of Disney Brand?
www.businessweek.com/investor/content/nov2008/pi2008114_541425.htm
www.nytimes.com/2008/11/06/fashion/06disney.html
By Robert Marich
Nov. 7, 2008 – Is Walt Disney Co. is riding out the economic storm better than other Hollywood-oriented companies because of its family brand image?
Business Week columnist Gene Marcial says Disney branding power make its parent company one of his favorite stock picks in this down economy.
“Movies are as popular as ever,” writes Marcial. “Disney’s newest offering, High School Musical 3, looks to continue the money-spinning success of the teen-focused franchise, and two upcoming films, Bolt and Bedtime Stories, are being lauded by analysts as potential box-office hits. Disney's home-entertainment offerings, including its ESPN and ABC TV networks and other studio creations, are gaining traction. Moreover, the theme parks aren't doing so badly."
In another example of the Disney brand generating revenue, the New York Times notes that the Mickey Mouse house is pushing into high-end merchandise. Where six years ago, $75 was the most expensive licensed Disney product, now Disney has items such as leather chairs, chandeliers and wedding dresses that cost thousands of dollars each.
“From a business perspective, the full-speed push into ‘non-character products’ like dining tables and executive fountain pens is a crucial way for Disney to expand its consumer products unit, which is better known for pumping out Power Rangers pajamas and Daisy Duck key chains,” notes the Times article by Brooks Barnes. “Disney says that sales of its home and lifestyle products will total about $85 million in the next 12 months, making up one percent of the consumer unit’s revenue. Within five years, the company projects the category will deliver $500 million in sales a year.”
In recent years, Disney has generated tens of millions of dollars in royalties and billions of dollars in retail sales by creating generic brands from studio properties, such as Disney Princess (aimed at girls), Tinker Bell and Disney Fairies.
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