Streaming, happily ever/after DeGroote Consulting Group Elizabeth, Chinomnso,

Streaming, happily ever/after DeGroote Consulting Group Elizabeth, Chinomnso,

Streaming, happily ever/after DeGroote Consulting Group Elizabeth, Chinomnso, Marley, Britney 1 2 ever/after Augmented reality Lightsaber enabled 3 How might Disney disrupt online streaming leveraging synergies in the organization? Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 4

Key issues 5 Key issues 2.Changing consumer preferences 43.6% YoY customers are leaving TV behind for internet Customers looking for low cost and high convenience + - Importance Acquisition Urgency 1.Disrupted industry Drastic changes within media and entertainment industry Online streaming is growing quickly

Increased number of competitors - 3.Acquisition Culture must be considered when merging two companies Ability to generate maximum value from additional content 70-90% of acquisitions fail to deliver the Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps adequate value + Disrupted industry Changing consumer preferences Analysis 7 Acquisition analysis

You purchased Fox film Fx Networks National Geographic Hulu Star TV India 39% of Sky to get More content More direct relationships with custo Into the streaming market Increased Indian market share for $71.3b cash & stock Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 8 Competitive analysis Key opportunities exist to capitalize on Netflixs weaknesses

Inconsistency Interactivity Transparency Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 9 Analysis of Disneys streaming capabilities Valuable Rare Disney is already generating value through existing streaming services (e.g. hulu), however value captured in the market is indirect and not maximized. Disney has access and control of exclusive character and content use, however Disney allows other streaming services to benefit from their rare

content. Inimitable Disneys current streaming services were late to market and imitated other service providers rather than building a unique experience and/or business model. Organized to capture value Disney is not currently organized to capture value in the online streaming market. Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 10 Opportunities 11 Opportunities 1 reimagine hulu kids

2 eTheatre 3 ever/after integrated experience platform Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 12 1 reimagine hulu kids Reimagine the existing hulu kids experience with interactive Disney games and unlockable content for Disney park visitors or individuals with specific Disney products Key benefits Leverages existing hulu platform Content can be exlusively used on hulu kids Existing content enables increased speed-tomarket Knowledge and understanding of target market Key considerations Doesnt improve strategic position relative to Netflix Difficult to capture existing Netflix kids users

Only generated cash flows for limited period Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 13 2 eTheatre Develop a new direct-to-consumer release platform, eTheatre, where users can watch new Disney releases live with fans worldwide for limited time periods Key benefits Eliminates middle man and provides direct access to customer base Increased margin Increased control of user experience Key considerations Untested revenue model for direct-toconsumer releases only Inability to generate ongoing recurring revenue stream Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps

14 3 ever/after integrated experience platform Develop ever/after integrated experience platform which allows user to stream content, and engage with Disney portfolio content and characters in new ways (e.g. using augmented or virtual reality, smart devices) and transition existing hulu users to ever/after Key benefits Disruptive user experience enabled by emerging technology Leverages strengths of acquisition and existing Disney portfolio content Increased control and ability to continuously engage customers Key considerations Requires contingent workforce to support interim activities prior to launch Additional content must be created to support new experiences

Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 15 Decision matrix 1 reimagine hulu kids 2 eTheatre 3 ever/after integrated content streaming platform Valuable

Rare Inimitable

Organized to capture Improves current state value Maintains current state Harms current state Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 16 Preferred solution 17 ever/after Augmented reality Lightsaber enabled 18 mouse

media after operations user experience synergy ever/ Year 2 media operations user experience synergy

ever/after Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps 19 Implementation 20 mouse media operations user experience synergy

ever/after Key activities Develop new content Market research Innovation lab Across all subsidaries Year 2 media Key considerations Exclusivity of content Changing media landscape Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps

mouse media operations user experience synergy ever/after Key activities

Contingent workforce Advertisement development (interactive) Accessory development Investor relations Acquire top talent from Netflix content creations team Year 2 media operations Key considerations Ad team must agree to create interactive content Onboarding of contingent workforce Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps mouse media

operations user experience synergy ever/after Key activities

Interactive shows Virtual reality Augmented reality Interactive ads (generate revenue) Connecting users Easter eggs to match accessories Key considerations Year 2 media operations user experience Compatibility of accessories Understanding customer preferences Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps mouse media

operations user experience synergy ever/after Key activities Eliminate redundancies (increase operating income) Create synergies between content (generate revenue) Reverse engineer content (generate revenue) Across all of Walt Disney Studios

Key considerations Cross functional teams required Ability to leverage content but remain distinct branding Year 2 media operations user experience synergy Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps mouse media operations user experience

synergy ever/after Key activities Happily ever after Create social medias Allow Hulu users 1year free Influencer promotion Word of mouth Ever/after enabled packaging

Key considerations Entering a competitive market Year 2 media operations user experience synergy ever/after Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps Investment Year 1 Year 2 media $3.5m $2.5m

operations $10.6m user experience $5.0m synergy $1.0m ever/after $1.0m Grand Total $21.1m $2.5m Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps

Revenue Growth media network growth $6,800 $6,600 $6,620 $6,460 $6,400 $6,156 $6,200 $6,156 $6,000 $5,866 $5,866 $5,800 $5,600 $5,400

2019 2018 Media Networks 2017 Media Networks after Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps Operating income 14% 12% 10% 8% 6% 4% 2% 0% 12%

5% Improved operating income Trend operating income 2019 Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps NPV Incremental CF 2019 2020 $15 $15 Cost -$24

Rate 11% NPV 2 Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps Key metrics 30 Key success factors factor target timeline 9.7mil 2 years

Customer satisfaction 90% 2 years Incremental cashflows 15mil YoY 5% 1 years 1% increases 1 year Initial screenplay adaptation

1.5 years ever/after subscriber base People $ Profit Net profit margin Improve inefficiencies within workforce Process Revamp key movie segment based on purchase of Fox Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps Risks + mitigation Risks + mitigation risk

likelihood impact mitigation Netflix provides similar survey H M Disney content is exclusive to ever/after platform, which is marketed as an experience platform Customers do not want to engage in online platform due to preference for content on other services L

H Ensure wide variety of content across all Disney subsidaries, conduct market research High cost of integration across all platforms M H Research and development in innovation lab to ensure integration and ease of use Background Key issues Analysis OpportunitiesPreferred solutionImplementationKey metricsRisks + mitigationNext steps Next steps 34 35 ever/after Augmented reality

Lightsaber enabled 36 mouse media after operations user experience synergy ever/

Year 2 media operations user experience synergy ever/after 37 Appendix 38 Detailed costing (1/3) Year 1 media Content development Year 2 $3.5m $2.5m $2.5m

$2.5m Innovation Lab Market research operations $1.0m $10.6m Accessory Development $2.0m Acquire Top Netflix Talent $5.0m Contingent Workforce $3.6m Appendix

Detailed costing (2/3) Year 1 user experience Year 2 $5.0m Augmented Reality $1.0m Connecting Users $1.5m Easter Eggs $1.5m Interactive Ads Virtual Reality synergy $1.0m

$1.0m Eliminating Redundancies Reverse Engineered Content Synergies Between Content Appendix $1.0m Detailed costing (3/3) Year 1 ever/after Year 2 $1.0m Hulu Trial Influencers Social Media $1.0m Product labellinh

Grand Total Appendix $21.1m $2.5m Video streaming market (in millions USD) in millions Video Streaming Market 2017 2018 2019 2020 2021

2022 2023 32 37.44 43.80 51.25 59.96 70.15 82.08 17% 17% 17%

17% 17% 17% 26% 9.73 11.38 13.32 15.59 18.24 8 77.87 91.11

106.60 124.72 145.92 CAGR Capture 26% Ever after price Appendix Revenue breakdown by segment 2019 2018 2017 Media Networks $6,620 $6,156

$5,866 Parks and Resorts $5,557 $5,193 $4,894 Studio Entertainment $3,461 $2,878 $2,393 Consumer Products & Interactive Media $924

$1,001 $1,085 $16,562 $15,228 $14,238 Revenue Total Appendix Segment operating income as a % of revenue Media Networks $2,025.65 30% Parks and Resorts

$1,488.30 26% Studio Entertainment $886.11 25% Consumer Products & Interactive Media $308.15 32% Total $4,708.20 IMPROVED OPERATING INCOME Appendix

12% 5% Questions Can Disney battle digital disruption and shake up the streaming market? Can the Fox acquisition help Disney in gaining a timely advantage in streaming content wars or was it too late for it to succeed in streaming? Appendix 45

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