Disney is not a film company; It’s a television company

Thank God. The movie industry is horrible. Just watch “The Lone Ranger”.

So “The Lone Ranger” was a disaster. This we know.

During its extended holiday weekend opening, the $ 225 million (!!!) film garnered just a fifth of its box office budget. Analysts are now forecasting depreciation for Disney of up to $ 190 million. That sounds bad. This is Wrong.

But it’s also a good time to remind people less familiar with The Walt Disney Company that, despite what you might think, Disney isn’t strictly speaking “a movie company.” It’s a television company.

What does it mean? Doesn’t Disney make movies? Yes. A lot of films. And it has amusement parks all over the world. And the cruise ships. And merchandise. But if you look at Disney’s finances, the majority of its income doesn’t come from its movie studio. They come from its television holdings: cable networks, notably ESPN and Disney Channel, and ABC.

Looked. (Broadcasting, here, refers to its ABC property.)

Financial reports are not perfectly accurate snapshots of a company’s identity. The accounting for the films is totally wacky and the studio division might not reflect its true importance to the parent company. Without his films, you might say, Disney wouldn’t have much merchandise trade. Without his films, he wouldn’t have much amusement park activity. There wouldn’t be any spin-off and licensing characters and plots on TV. Etc.

This is all true. But fundamentally, the Disney company derives its largest and most reliable source of revenue from the subscription fees that power its cable networks … even though casual newspaper readers could be forgiven for thinking the company lives and dies here. the opening weekend of his blockbuster summer movie.

And that’s what’s great about Disney. The movie industry is a rotten thing. American audiences don’t go to theaters every week, so they must be lured into hugely expensive marketing campaigns for a handful of tentpole films which, if they explode, can destroy the film division’s quarterly revenues and bring down. careers. The television industry is somewhat the opposite. The subscription fee model (in which a slice of your cable bill goes straight into the pockets of networks) ensures that cable networks are paid with or without a “hit”.

Think of it this way. “The Lone Ranger,” the movie, only earns money to people who choose to sit down to watch it in a movie theater. It’s a high bar. But if “The Lone Ranger” was on TV, its network would make money from every pay TV household, whether they watched “The Lone Ranger” or not. It is the dirty secret and the dark genius of the cable television industry. And that’s why it’s Disney’s business.


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