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Disney shares hit a new all-time high on the heels of the company announcing at its annual shareholder meeting a "Frozen" sequel and details of how it will expand "Star Wars" with three movies over the next three years. Those announcements—as well as high box office expectations for "Cinderella," and the "Frozen" short running ahead of it—are about more than just hit movies.
They're valuable intellectual property, and epitomize CEO Bob Iger's strategy, which is to build or buy brands that exploit across Disney's divisions: movies, TV, consumer products, digital properties and theme parks.
Since Iger was named CEO 10 years ago Friday (he took over the role in October 2005), Disney shares have tripled, bolstered by that brand-focused strategy. Another key to Iger's successful run: savvy international expansion, both adapting Disney content and creating product specifically for overseas markets, such as India. (Iger's most ambitious international project is readying for launch—a massive park in Shanghai.)
Iger has also placed a huge emphasis on technology and experimentation. Disney has innovated with everything from digital distribution at ESPN, to launching MyMagic + wrist bands at the parks to enable shorter waits and cashless payments.
We'll see the power of Disney's brands this weekend. Boosted by audiences eager to see the "Frozen" short, "Cinderella" is expected to gross $60 million. The movie is expected to continue Disney's streak with live action remakes of classic fairy tales, starting with the "Alice in Wonderland" $1 billion plus gross in 2010. And it's projected to match the $750 million worldwide gross of "Maleficent" last year.
But "Cinderella," with a budget of $95 million, is expected to be a lot more profitable than the new take on "Sleeping Beauty" in "Maleficent," which cost about $175 million to make.
"Cinderella" won't be a hit on the level of record-breaking "Frozen." It isn't expected to have crossover appeal to boys, as "Frozen" did with charming snowman Olaf, and it doesn't have catchy songs throughout—"Cinderella" isn't a musical. Plus unlike superhero movies, the more classic a fairy tale, the less opportunity there is for a sequel.
But "Cinderella" has the advantage of massive name recognition, worldwide, and positive reviews. Plus, it's a consumer products gold mine—building on Disney's $1 billion plus in revenue from its "Princess Products." And that "Frozen" short may bring in a much broader audience than "Cinderella" would otherwise have drawn.
"Cinderella" kicks off a packed movie schedule, including two Pixar films this year and 11 Marvel movies in the next few years. The next Marvel film, "Avengers: Age of Ultron," opening May 1, is already seeing huge demand. Disney revealed that the teaser-trailer was viewed 35 million times within its first 24 hours after release.
With this packed movie slate, Iger still has some big challenges before he leaves his post in 2018. He's talked extensively about the fact that the way people watch, and pay for content, is changing, and Disney's biggest division—in terms of revenue and profits—is its TV networks. And much of that revenue comes from TV bundling.
One recent example: Disney's offering ESPN as part of Dish's new over-the-top service, Sling TV. And his acquisition of Maker Studios last year was a move to serve the short-form content that is in high demand, and to market Disney content to younger audiences.
Iger says he's being careful not to disrupt Disney's core business, while experimenting to position the company for the future. There's no question that content rules in the Magic Kingdom. But in coming years it will be distributed in increasingly nontraditional ways.