Disney Business Model

Disney’s business model revolves around the creation of sustainable, scalable brands that are based on Disney characters and stories.

Understanding Disney’s business model

Disney characters are some of the most recognizable and long-lived in the world.

Mickey Mouse made his first cartoon appearance in 1928 while Snow White and the Seven Dwarfs debuted in a feature animated film in 1937.

Since that time, Disney has created over 2,000 characters with countless princes, princesses, villains, and heroes.

These characters and the stories they feature in are fundamental to Disney’s business model.

The company turns them into brands that are marketed to children and adults alike, and since Disney owns the intellectual property, it has control over who can profit from its vast portfolio of brands.

The assumption that Disney is in the business of making movies is too simplistic. Instead, the company strives to entertain, inspire, and inform with unparalleled storytelling.

The stories the company has told (and continues to tell) resonate with viewers across generations and countless people can recall a childhood spent watching Disney movies.

To promote its brands, the company relies on nostalgia marketing to remind customers of their youth and feelings like connection, safety, hope, and joy.

These feelings breed positive emotions that the consumer experiences when interacting with the Disney brand.

How does Disney profit from its stories and characters?

Disney profits from this mixture of emotions, feelings, and experiences in several diverse ways which are described below.

Media networks

Media networks incorporate cable networks such as ABC Family, Disney Channels, 20th Television Animation, and Disney Television Studios.

Also included here are various production operations, radio networks, and television distribution assets.

Revenue here is derived from advertising fees, affiliate fees, and both the sale and distribution of television programming.

Parks and resorts

Disney’s parks and resorts allow customers to experience its stories and characters firsthand.

The company operates hotels, resorts, water parks, cruise vacations, theme parks, and conference centers, among other recreational facilities.

Revenue is collected from the sale of cruise tickets, admission tickets, hotel rooms, branded experiences, and food.

Studio entertainment

Studio entertainment is perhaps the segment with which most customers are familiar.

It houses Walt Disney Studios – the epicenter of Disney movies, music, and theatre – which itself houses producers such as Walt Disney Animation Studios, Pixar Animation Studios, Searchlight Pictures, Marvel Studios, and Lucasfilm.

Disney makes money from the global distribution of its films to television markets, homes, and cinemas. It also profits from theatre ticket sales and event licensing fees.

Consumer products

This encapsulates merchandise sales from the Disney brand, Disney retail stores, international retailers, and its many theme parks and resorts.

Consumer products also include the licensing of stories and characters to third parties.

Interactive media

Interactive media covers online games and entertainment. As such, it incorporates game content licensing, branded online services, and multi-platform game distribution.

Revenue is earned via mobile and online game subscriptions, advertising, and sponsorships.

Key takeaways:

Disney’s business model revolves around the creation of sustainable, scalable brands that are based on Disney characters and stories.
Disney relies on nostalgia marketing to remind customers of their youth and feelings like connection, safety, hope, and joy. This combined with various emotional cues results in a positive experience for consumers when they interact with the Disney brand.
Disney makes money from positive brand experiences in a number of ways. The company’s brands are sold, licensed, or marketed across parks and resorts, consumer products, interactive media, studio entertainment, and media networks.