When you wish upon a star, your dreams come true"
-- "When You Wish Upon a Star," Pinocchio
Can you believe it? It's something out of a Disney fairy tale -- like Cinderella actually. A year ago, the entertainment giant was scrubbing the floors as its ABC broadcasting network was dead last in the ratings. Then Regis tries on the Fairy Godmother outfit and, bibbedee bobbedee boo, Disney has done the unthinkable. The shoe fit. Disney is Charming again.
Bill will no doubt see a pumpkin. Or a lifeless piece of wood. He will argue that pixie dust has gotten into my eyes. I imagine he's seen the big picture and will try in earnest to avoid his role this week -- that of the villain who ultimately gets vanquished in time for the closing credits.
Let's dive into the story line. The company kicked off the new fiscal year with stunning earnings results. Excluding its interest in GO.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GO)") else Response.Write("(NYSE: GO)") end if %> Disney reported quarterly profits of $0.25 a share, obliterating the $0.20 mark set by analysts.
The blowout report came at the hands of an amazing turnaround at ABC. The network had struggled over the past five years. It was holding the rest of the entertainment giant back. It had failed to land that one hit show that it could build around the way General Electric's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %> NBC had done in the past.
In a stunning November debut, Who Wants to Be a Millionaire? tore the sandbag to shreds. December revenues for Disney's network division rose 19%. More importantly, operating income soared 73%.
Beginner's luck? Hardly. Now that "Millionaire" is an ABC fixture three nights a week, it continues to earn Nielsen-topping ratings. Competing networks, publicly jealous, have tried to launch their own quiz shows only to find minimal success and early cancellation.
The question isn't if "Millionaire" can keep this up forever. It can't. The key is if ABC will be able to develop a roster of shows that will take advantage of the extra traffic. NBC's "Must See TV" worked its Thursday night magic even after the hit shows faded away. ABC has the luxury of three magnetic nights -- possibly a fourth.
ABC's news programming and daytime soaps have always been top-notch. Now it has an unprecedented opportunity to retain its prime-time pole position.
The rest of Disney's broadcasting efforts don't leave much room for second-guessing. ESPN is one of the most recognizable brands in the world. The Disney Channel, Toon Disney, A&E, Lifetime, E!, and the History Channel all serve their target audiences well. SoapNet is the new Disney venture and it has the benefit of same-day rebroadcasts of ABC's top-rated daytime soap operas along with classic serials.
Disney's media networks have become an E-ticket. That brings us to the ultimate money machine -- theme parks and resorts. It's amazing to think that Disneyland is now 45 years old. Today, the world's seven largest amusement parks all carry the Disney banner. Disney has parlayed that into a thriving tourist industry where it can't build onsite hotels fast enough to pacify its industry-envious 90% occupancy rate. Cruise ships. New parks. More hotels. Growth as steady as a perpetually clicking turnstile resides here.
It is this collection of brands that has made the company a merchandising goldmine. That has also given the company a worthy presence on cyberspace. Disney's 72% stake in GO.com is valued at $2.6 billion. The union of Infoseek's portal efforts with Disney's popular ESPN, ABC, and namesake websites have made it the fifth most popular network on the Internet.
For screens bigger than your monitor, Disney's studio efforts are noteworthy. Disney continues to turn out animated features that score huge at the box office and then go on to consumer product and park possibilities. I'll go out on a limb here and predict that the company's May release of Dinosaur will be one of its most popular since The Lion King.
And while the company's live action studio is scaling back on productions (and expenses) it managed to land last year's sleeper hit Sixth Sense as well as another batch of critically acclaimed Oscar-hungry films from Miramax.
If you put it all together you have to wonder if Bill will only be wasting his time by trying on the Grumpy costume. Knocks on individual segments are growing fainter. And last month's announced merger between AOL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> and Time Warner <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TWX)") else Response.Write("(NYSE: TWX)") end if %> vindicates Disney's decision to seek out Infoseek to have an online presence and make Disney the largest independent entertainment empire.
The scene darkens. The villain breaks into song...
This Week's Duel
Related Links