Bob Iger, President and Chief Executive Officer of the Walt Disney Company, spoke to Bear Stearns 21st Annual Media Conference. The question and answer session began with a question about the power of brands. Bob said that Disney showed their belief in the power of brands by shifting investment in to brands that make sense. So more money is spent on Disney and ESPN and less is spent building up Touchstone and Buena Vista. Brands do many things for the company including giving the company “shelf space” to distribute their product. Additionally, if your brand is known, you can spend less Bob marketing the brand and its products.
Bob believes that one mistake many brand managers make is to push technology away because they feel that technology can threaten the brand. He believes technology is a friend, not a foe, and that brand managers should embrace technology. Technology does two things for the brand. It allows you to enhance the brand by offering a better product like new theme park attractions, HDTV, and Blu-ray. It also allows you to reach more people more often. One way that Disney reaches folks through technology is the new Disney.com that launched a year ago. Once Disney.com 2.0 launched last year, they started working on Disney.com 3.0, which will be launched in the United States by the end of the calendar year. Disney.com 2.0 or 3.0 will continue to be rolled out internationally.
Bob feels that you need to balance innovation and heritage, and that sometimes you rely on heritage and fear innovation because they feel innovation threatens the company’s core values. However, Bob feels that innovation can improve the brand without changing the core values of the brand. Better does not be edgier. And while Bob believes you need to take the values of the company seriously, you shouldn’t take yourself too seriously. “Enchanted” poked fun at Disney without sacrificing the values of the brand and without been edgy. He feels this is good because if you take yourself too seriously, you risk becoming stodgy.
When the question about piracy came up, Bob said he feels you need to fight piracy, but that the best way to combat it is to make your product available at the right price and at the right time. When the product is unavailable, customers result to piracy, but if the product is available legitimately they will tend to consume it through those channels.Bob then talked about how Disney is a true global brand. Technology is breaking down a lot of barriers and there is unprecedented access, but he disagrees with the thought that it is creating homogeneity. Cultures are still proud of their individual identity, so to succeed you need a balance of exported product with locally produced Disney branded content. Disney did this by turning international distribution centers in to creative centers. And while most content will remain local, some might be exported. But through this all, brand values remain constant. He feels that the key to this is to hire well internationally and let them know that your values are unwavering.
He talked about how the theme park experience is pretty consistent; however there are cultural habits that need to be addressed at each park. For example, in the domestic parks guests tend to spend 20 minutes at a quick service restaurant. However, at Hong Kong Disneyland guests tend to spend 40 minutes. Disney had to add seating capacity in order to address this habit that they were not aware of until after they opened.
When asked about the Pixar acquisition he talked about the importance of animation to Disney. He felt that as a new CEO he would not have a lot of time to fix animation so acquiring Pixar seemed a good way to do that. In addition he feels gaining John Lassetter and Ed Catmull was an important part of the acquisition.When it comes to managing the brand, he feels it is important to hire the right people. He also believes that you need to give people room, especially with creativity. He also believes that you shouldn’t beat up individuals for creative failures for they will stop creating.
When asked how do you make the executives act as a team, he replied that their stock options are for the entire company. When it comes to their compensation, they de-emphasized division success, and emphasized company success. He also shows how more value is created through working together. For example Hannah Montana was created by The Disney Channel, has become a success for Walt Disney Records, created many consumer products, the 3-D concert for the studios, and a feature is also in the works. He tries to stress that the franchise is owned by company, not a business unit.
Bob also mentioned that he expects $1billion in digital revenue in 2008. He also showed his support for Blu-ray, but said that he never thought Blu-ray was same size leap as DVD and that there is consumer confusion over new format and benefits. But despite that, he underscores that anything that improves consumer experience is good for Disney.
Video of the Day: Check out Laughingplace.com's own video of the soft opening of Block Party Bash at Disney's Hollywood Studios. It is a little sureal to see the exact same parade at the Studios that I saw at DCA so often. But no matter what park it is at, I love that parade and look forward to seeing it several more times.
What to Watch: Tuesday night enjoy everyone's guilty pleasure, America's Funniest Home Videos. There is a three hour marathon on ABC Family starting at 8. What else could be better than watching people getting hurt because they do something stupid.