“With every passing day of coronavirus uncertainty and social upheaval, Disney finds itself scrambling not only for revenue but also for relevance.” “How Disney could be facing a lot more than a lost summer,” Steven Zeitchik, The New York Times.
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When it comes to licensing and entertainment, The Walt Disney Corporation has, over the decades, become “The” dominating force in entertainment and licensing. The Walt Disney Company owns a high percentage of the world’s most popular entertainment brands, and they get a steep royalty and guarantees because of it. As the riddle goes: “Where does an 800-pound gorilla sit? Anywhere he wants.”
That was then, and this is now. Coronavirus has changed the game for everyone, and The Walt Disney Company is, perhaps surprisingly, no exception. Why, because much of what makes the company so dominant is its dependence on crowds. Crowds at movie theaters. Crowds at theme parks. Crowds at sporting events (don’t forget that they own ESPN). Crowds at Broadway theaters. Crowds at retail stores. Mickey Mouse is lonely.
But, of course, these days there are no crowds. Theme parks are closed, movie theaters are closed, stores are closed, sporting events are closed, and Broadway is closed until next year.
What is The Walt Disney Company to do? Coronavirus has flared up with a vengeance in Southern California and Florida, home to the company’s major theme parks. Health officials see movie theaters as incubators for Coronavirus. AMC theaters, the world’s biggest movie theater chain, is talking bankruptcy. Retail is reopening, but projections are that 25% of America’s 1200 malls are in danger of closing. That according to Deborah Weinswig, founder of Coresight Research, as quoted in The New York Times.
Disney+ has come to the rescue with its airing of “The Mandalorian” and now “Hamilton.” Yet, there is a concern there as well. The company has chosen or been forced to release its “Artemis Fowl” movie via streaming video rather than theaters. Digital streaming is undoubtedly an alternative but a disappointment to children and parents who want to see a Disney feature on the big screen. It is an even bigger disappointment to toy companies and retailers who depend upon blockbuster openings to drive sales of licensed tie-in products.
If digital streaming becomes the way forward than everyone may have to take a second look at the current costs of licensing. Keep your eye on The Walt Disney Company, they are the major tent pole for a whole lot of tents, and their destiny will have a significant impact on all of us.
