The reason for the move by Disney to reduce its movie load may be coming more clear as they reported their consumer products unit is poised to grow by 13 percent to a record $26 billion in fiscal 2007, said Consumer Product Chairman Andy Mooney to Reuters.
That's not the end according to the company, as they believe that figure will double in a relatively short seven years. If it does, that would be huge.
Mooney says the major factors in the strength of the 2007 fiscal growth has been the surge by its Princess and Fairies lines for girls and the surprising "Cars" line for boys. For older girls the Disney Channel lines has been the key instigator of growth.
With the Princess line, Disney projects a growth rate of 17.6 percent, reaching the $4 billion mark. The Fairies line, targeting the older girls, is expected to reach $800 million for the fiscal year.
Disney is pleasantly surprised by the "Cars" franchise, as it has the unusual honor of increasing sales after the release of the DVD in its first year, something unheard of in the industry. Mooney thinks sales for the "Cars" franchise can grow to $2 billion for the fiscal year.
"We are in uncharted territory (with Cars) because we have never seen this type of phenomenon where in the year post-DVD release we are actually experiencing growth not decline," he said. "We actually think that Cars is going to be our hallmark property for boys."
What is impressive about all of this, assuming the projections work out, is it is believed that this growth is sustainable. If that is a reality, Disney could explode in growth and share price in the years ahead.
When I said at the beginning of the post about Disney's reduction in the numbers of movies they're going to make, I meant that they are now considering them loss leaders for their merchandise. The movies are products set up for the purpose of creating consumer product franchises geared toward children.
Because movies are a means to an end, Disney had no need to put out too many of them, that would only clutter up their end game of focusing on a limited, but very successful product line.
Under Mooney's watch, Disney (DIS) has doubled its global retail sales since 2000.
» Disney Consumer Product Sales Expected to Explode from BizzBites.com
The reason for the move by Disney to reduce its movie load may be coming more clear as they reported their consumer products unit is poised to grow by 13 percent to a record $26 billion in fiscal 2007, said Consumer Product Chairman Andy Mooney. [Read More]
Tracked on: June 18, 2007 10:14 PM | Permalink to Trackback