Disney Entertainment Co-Chair Dana Walden goes one-on-one with Jim Cramer

Key Concepts

• Disney Entertainment's turnaround and growth strategy
• The importance of iconic IP and branded series
• The role of linear channels in a streaming-focused strategy
• The significance of creative partnerships and talent
• The bundling strategy with Disney+, Hulu, and ESPN
• The value of premium programming and trusted partnerships for advertisers
• ESPN's innovative approach to sports programming and fan engagement

Disney Entertainment's Turnaround and Growth Strategy

• Blowout Quarter: Disney stock rallied significantly (over 20% in six sessions) after a strong quarterly report.
• Dana Walden's Role: As co-chairman of Disney Entertainment, Dana Walden oversees global television business, Disney+, Hulu, ad sales, technology, and platform distribution.
• Turning Around a Billion-Dollar Loss: Walden credits the success to a multi-faceted strategy focused on:
  • Amazing Stories: Unique stories that can only be found at Disney.
  • Iconic IP: Leveraging Disney's well-known franchises and characters.
  • Branded Series: Creating high-quality, recognizable content.
• Studio Success: Disney's studio was number one at the box office this year and eight of the past ten years. Films are billion-dollar performers that drive subscriber acquisition and engagement on Disney+.
• General Entertainment: Disney's streaming business is thriving, winning 60 Primetime Emmy Awards last year, more than any other company.

The Importance of Iconic IP and Branded Series

• Reliable Performance: Disney's films are consistently high-performing, generating significant revenue at the box office and driving subscriptions to Disney+.
• Subscriber Acquisition and Engagement: Films stimulate subscriber acquisition and drive engagement on Disney+.
• Franchise Activation: Releasing a new show on streaming lifts the entire library. People go back and watch those six films. It's going to create engagement across the entire franchise.

The Role of Linear Channels in a Streaming-Focused Strategy

• Linear is Not Dead: Linear channels, especially for sports, are still relevant and growing. ESPN on ABC is growing and grew ratings and is delivering for those partners that are are in our sports programing.
• Dual Audience: 50% of Disney's audience watches on linear programming, and 50% watch it on streaming.
• Content Windowing: Content is programmed for linear audiences and then windowed onto streaming platforms (Disney+ and Hulu) for on-demand viewing.
• Library Activation: Shows with deep libraries (e.g., The Simpsons with 30+ seasons) activate the entire library with each new season.

The Significance of Creative Partnerships and Talent

• Attracting Top Talent: Disney serves as a magnet for the best creators (stars, filmmakers, writers).
• Creating a Winning Environment: Disney aims to put creators in a position where they can win and their work is celebrated.
• Partnerships Matter: Strong relationships with creative partners (e.g., Martin Short) and advertisers are crucial.
• Ad Sales Team: Disney has an incredible ad sales team that nurtures relationships over decades. They're dependable, reliable. We deliver for our partners and we deliver for our creative partners.

The Bundling Strategy with Disney+, Hulu, and ESPN

• Bundling Services: Soon, Disney+, Hulu, and ESPN will be bundled together with a simple interface, making all content available through one app.
• Bundling Success: The bundling strategy is paying off, providing a comprehensive entertainment offering.

The Value of Premium Programming and Trusted Partnerships for Advertisers

• Premium Programming: High-quality programming is a hallmark of Disney, attracting advertisers.
• Trusted Partners: Advertisers want to be with trusted partners in programming that is premium.
• Reliable ROI: Advertisers seek reliable ROI on their investment in Disney's programming.

ESPN's Innovative Approach to Sports Programming and Fan Engagement

• Visionary Leadership: Jimmy Pitaro and his team at ESPN are doing a great job with a real vision for the product.
• Integration of Features: ESPN is incorporating ESPN Bet, fantasy sports, and personalized studio programming (Sportscenter).
• Fan Engagement: Knowing who the fan is that's watching.
• Game Changer: The new ESPN approach is expected to be a game changer.

Conclusion

Disney Entertainment, under Dana Walden's leadership, has achieved a significant turnaround through a strategy focused on iconic IP, high-quality content, strategic use of linear channels, and strong partnerships. The bundling of Disney+, Hulu, and ESPN, along with ESPN's innovative approach to sports programming, positions Disney for continued growth and success in the entertainment industry. The company's focus on premium programming and trusted partnerships also makes it an attractive platform for advertisers.