While we recently learned about upcoming entertainment at Disney’s Investor Day and the impact of the pandemic on the company during the Quarter One Earnings Call, Disney also participated in the Morgan Stanley Technology, Media and Telecommunications Conference today!
Bob Chapek participated in a question-and-answer session to discuss the company’s current standings across their business segments and some of the strategies they’re looking to employ moving forward as the world heads into the second year of the pandemic.
And, we’re giving you all the news we learned from Disney today about the business, entertainment, and MORE!
Direct to Consumer
In the last year, Disney has shifted its focus to be a “Direct-to-Consumer first” model, with streaming services like Disney+ at the forefront of the company’s operations. That shift in focus has yielded in large subscriber counts, the likes of which exceeded Disney’s expectations.
During the call, Chapek shared the three priorities when it came to Direct to Consumer. First would be the original content that falls under the brands available on Disney+, such as the animation studios, Pixar, Marvel, Lucasfilm, etc. Second would be general entertainment offerings, one area that has grown in importance to Disney when they shared that 50% of their global market for Disney+ do not have children. Third would be local content, particularly with their international Star brand.
When asked about the future of film releases on Disney+, Chapek echoed the sentiments made in Disney’s last earnings call when it comes to the need to be flexible. Chapek shared that Disney believes in the power of exhibition, pointing to the company’s massive success in 2019 with $11 billion at the box office.
However, there were two factors to consider moving forward. First, there is the short term impact of COVID-19, both in the number of screens that are open and consumers’ willingness to go back to theaters. Second, there are the fundamental changes in consumer behavior overtime, which Chapek noted was more profound to him.
When it comes to the Parks, Chapek noted how the company was thrilled with the way guests have responded to the precautionary measures in place. Chapek said that this speaks to brand confidence, and that it fuels the fire once the pandemic subsides and Disney can increase capacity in their open theme parks as well as reopen the parks that remain closed.
Actual recovery in the Parks, however, will be a function of two major factors according to Chapek: the speed of the vaccine distribution and travel readiness from guests. Reopening the parks will incur additional costs, including labor, but Chapek noted that it was an expense they we’re happy to incur and emphasized that they want people to be able to return to work.
While there were no major announcements concerning the Parks, we did get some insight into some of the ways Disney plans on bringing their one-of-a-kind magic to guests: technology and how it can improve the guest experience.
Chapek noted the two major ways that technology plays a role in the guest experience. The first is storytelling, or using technology in a way that tells a story without the technology itself being apparent. A perfect example, according to Chapek, is Rise of the Resistance, which uses technology to completely immerse guests.
The second way technology is being used in the parks to improve the guest experience is through offering a more frictionless experience for guests. This includes services like keyless entry at hotel rooms, Mobile Order for food, and contactless screenings, which Chapek noted will continue to be present moving forward.
Chapek also mentioned how the company was using this time as an opportunity to make operations changes. In particular, the decision to “sunset” Disneyland’s Annual Passholder program would have been an extremely difficult decision to make given the rate of renewals, but when everyone’s passes lapsed, the opportunity to make change presented itself to again, as Chapek said, improve the guest experience.
Finally, there was a brief discussion regarding some of the studios, including Marvel and Lucasfilm. Chapek was asked to comment on those who believe there may soon be a “superhero fatigue.” Chapek responded by pointing to not only the success of original Marvel content like WandaVision, but that WandaVision is one of the most unique and creative takes on Marvel mythology.
Chapek was also looking forward to Falcon and Winter Soldier as well as Loki to continue the studios success on Disney+ with creative as well as big and bold content.
We’ll continue to keep you updated on all the information you need to know about the Walt Disney Company as changes continue to happen. Stay tuned with All Ears for more Disney news!
What were you the most interested to learn during the conference? Let us know in the comments below!
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