3. Disney’s Integration of MARVEL Review Issues from Fall Quarter Provide Three Alternatives Defend our Selected Alternative Review Financial Implications 3
13. Alternative 1 Decision: Hold Theme Park in Dubai – under development Unknown MARVEL Characters Transition of MARVEL Characters to being family friendly 13
16. Disney Retail $700 million in revenueUnited States, Canada, Europe & Japan Retail rollercoaster 2004-2008The Children’s Place, LLC “Imagination Park” – Steve Jobs’ vision Requires $.75-$1 MillionRevamp 340 stores 16
17. Alternative 2 Decision: Hold Disney’s need to focus on their retail revitalizationDisney has the opportunity to test their retail “imagination parks” before opening MARVEL retailCreation of broader market to strengthen MARVEL fan base 17
19. Proven Method Introduce New Talent on an established show Create a new television series Recording Contract Play songs on Radio Concert Series Merchandising & Licensing Opportunities 19
20. Disney Channel Life Cycle Miley Cyrus Selena Gomez Jonas Brothers DemiLovato 2006 Miley Cyrus Hannah Montana 2007 Selena Gomez 2008 Jonas Brothers 2005 High School Musical 2009 DemiLovato 2010 Bridget Mendler 20
21. BCG Matrix 21 Bridget Mendler’s Good Luck Charlie High Business Growth Rate STAR ???? Low CASH COW DOG High Low Position/Market Share
22. The Miley/Hannah Montana Effect Original Television Season cost = $15.6 million 85 episodes $225 million in ticket sales Best selling Miley Cyrus autobiography 2 sold-out concert tours Merchandise – from books to clothing 22
24. Objective Incorporate the MARVEL Library into various channels Effective targeting the of ‘under 18’ boy market Generate larger fan base 24
25. Modified MARVEL Pipeline (TV) On new episodes of MARVEL television series, give new characters guest spots. These recurring roles can lead to a new series based on the new characters Develop supplemental entertainment Create a made-for-television movie, or direct release DVD License merchandise for the character. 25
26. Estimated MARVEL Time Line - Television 26 2015 2011 Spider-Man and his Amazing Friends 2013 2014 2012
27. Modified MARVEL Pipeline (Movie) 27 Release a feature length film with new MARVEL Characters Create a new television series to the new MARVEL Character to add to the value of the characters popularity Develop supplemental entertainment Create a made-for-TV movie, or License merchandise for the character.
28. Estimated MARVEL Time Line- Movie 28 2015 2011 THOR The First Avenger: Captain America 2013 2014 2012
29. Current Example – 29 2012 The Avengers 2011 The First Avenger: Captain America 2008 Iron Man The Incredible Hulk 2010 Iron Man 2 2009
30. Value Chain - Highlights Access to Technology 3D Developments Pixar Animation Consolidating Redundant Groups In House Movie Production 30
31. Alternative 3 – Decision: GO Television presents a Low Cost/Low Risk Cable Networks – Profitable Combining successful Development Methods 31
33. Financial Analysis Acquisition of MARVEL aimed at generating long-term profits MARVEL shareholders received $30 per share plus .745 Disney shares This resulted in roughly 59 million new shares issued by Disney 33
34. Return On Investment High School Musical $5 million – Made for TV Movie cost $150 million in Operating Income Hannah Montana Est. Cost 85 Episodes: $700,000 per = $60 mil. total Movie Budget: $30 mil. Gross: $225 mil. Concert Tours: Average Gross - $45 million Total Estimated Value: $1 billion 34
35. Financial Analysis Past performance when using this pipeline formula has been very successful Cable networks and television LOW RISK 80% of NI from Cable Networks Effective use of MARVEL’s 5,000 characters will allow Disney to become more profitable 35
36. Financial Analysis Disney’s revenues were over $36 billion with a net income of $3.3 billion in 2009 Disney’s profitability ratios are very strong compared to industry medians 36
37. Projected Financials - EPS EPS for 2009 were 1.76 We expect this number to increase about 10% over the next 3 years to about 2.40 in 2012 37
38. Projected Financials – Net Income Disney will average a 4% increase in Net Income over the next 5 years with over $4.3 billion in 2013 38
42. Brand Strategy Maintain consistency of MARVEL content, do not change (No Disney-izing to please MARVEL target market) Build a brand (new MARVEL character) around consistent Disney Channel formula (Hannah Montana, Jonas Brothers, High School Musical) 42
43. Character Development Continue to honor agreements/contracts with outside studios/production companies Develop characters through Television: Disney XD Grow into characters into television & movie franchises, etc. Attract the expanded age-group 43
44. Distribution of Content Increase forms of digital distribution, similar DisneyDigitalBooks, for MARVEL fans Use other Disney properties/companies to utilize characters, i.e. Pixar 44
45. Market Strategy License the right to use characters, character’s likeness to different companies to produce products, toys, household items, school products, clothing, video games The addition of MARVEL content to the overall Disney retail strategy 45