Kenversations: Disney’s Changing Playing Field (Part 1 of 3)
Page 1 of 3
Disney’s Changing Playing Field
There has been much that has happened within Disney over the last few years:
We're all here because of our interest in Disney, and the events described above have been a lot to follow.
But not everything that should be news to people like us is directly about Disney. What has happened around Disney has also dramatically changed the landscape in which The Walt Disney Company operates, including corporate structures.
The corporate structures themselves have changed. Just consider Viacom, one of Disney’s biggest competitors and partners - a paradox that is practically unavoidable in today’s media production or communications fields. The result of several acquisitions and mergers in recent times, Viacom reorganized by splitting into "Viacom" and "CBS" on December 31, 2005. A visible sign of this split to any is all of those "Viacom" billboards that switched to having a "CBS" label. This past September, Sumner Redstone, the Chairman of both Viacom and CBS, shook up the management of Viacom. After the split, CBS subsequently announced that it was reviving the CBS Records label, and getting into film production, potentially becoming a rival to its former partner.
Some investors in Time Warner, another Disney competitor/partner, have been talking about splitting that behemoth into as many as four companies. A deal was recently announced to sell 18 of Time Warner’s magazines. The company sold its book publishing business in March of 2006. Some of Time Warner’s AOL properties have been sold off, and AOL, which was once so powerful that it bought Time Warner, is now relying more on advertising revenue and less on subscription funding, just like Time Warner’s television properties.
There have been changes underway at NBC Universal, as the NBC TV network cut jobs and gave the first hour of prime time to reality/game shows, which usually can be made for less money and with fewer personnel than dramas or sitcoms. The NBC-Universal combination came about in May of 2004 after General Electric’s NBC, which had been the only broadcast television network left without a film studio partner, combined with Vivendi’s Universal, which had previously been controlled by talent agency MCA, then electronics company Matsushita, and then beverage maker Seagram’s. As a side note to all of this, consider that General Electric, a company that goes back to Thomas Edison, was a longtime sponsor of Disney theme park attractions (Carousel of Progress, Horizons, Innoventions at EPCOT Center), and NBC once tried to get Disney to build a theme park in the New York area.
After decades of acquisitions, mergers, consolidations, and integrations, large entertainment/media corporations are trying to deal with the changing world, new technologies, political pressure, investor desires, and executive ego clashes with splits, spin-offs, and shutdowns. On the other hand, the cable and telecom companies that provide the pipelines have been continuing to consolidate.
But let’s take a look at some changes inside Disney before we go further.