The Walt Disney Company (DIS) CEO Bob Chapek is preparing the company for its second century. In a recent letter to employees, he identified three pillars to prepare the company for its next era.
- Disney CEO Bob Chapek sent out a list of priorities for 2022.
- He identified three pillars—customer focus, innovation, and storytelling excellence—that build on his predecessor's legacy of profit-minting acquisitions to propel the company into a cross-platform future.
- Disney is entering a new era of its business.
The first one is a storytelling excellence that relies on Disney's creative talent. To further encourage the practice, Chapek announced a monthly meeting of senior creative leaders within the company to cross-collaborate and come up with new ideas.
The second pillar of Chapek’s plan is innovation. "We should be especially innovative as we seek to bring stories to life in new ways—particularly if they enhance what many call our 'franchise ecosystem,' which is one of the things that sets us apart," he wrote, referring to the company's massive ecosystem of properties, both physical and intellectual, that help generate revenue for a self-sustaining business model.
The final pillar of Chapek's 2022 reinvention for Disney is a focus on changing audience demographics. "We must evolve with our audience, not work against them," he wrote.
A Different Disney
Chapek's predecessor, the recently retired Bob Iger, responded to crises in Disney's business by making bold and ambitious bets to return the company to "greatness." The slate of acquisitions—Pixar, Marvel, 21st Century Fox—are examples of this approach. It helped consolidate and enhance the company's creative chops and minted profits.
Chapek's missive comes at an interesting juncture for the entertainment behemoth. Disney's top line suffered during the pandemic shutdown as theme parks and theaters—two vital sources of revenue for Disney—closed. Investors bid up its stock price anyway due to skyrocketing subscriber numbers for Disney Plus, the company's streaming business, which was a bright spot even though the division was mired in losses due to heavy customer acquisition costs.
While the theme park business returned to profitability last quarter, recovery for other parts of Disney's business has stuttered. Disney Plus reported slowing subscriber growth, and the studio division had to contend with a rapidly transforming distribution landscape. Investors punished its stock, making it the Dow's worst performer.
In this context, Chapek's call for cross-platform innovation and collaboration builds on Iger's acquisitions. In an entertainment ecosystem that underwent a drastic change during the pandemic shutdown, it might help the company to think holistically about the entertainment experience across its properties. Whether that translates to future profits is another matter altogether, however.