Walt Disney (DIS, Financial) is a media and entertainment company that generates revenue from four main segments pertaining to media, entertainment and retail sector. Parks and Resorts segment for the company provides the major contribution to the consolidated revenue that is recorded to more than 30%, with highest contribution provided by media networks. In the past the theme park industry underwent a chaotic season due to the global recession having a terrible impact on the industry as traffic reduced to such entertainment theme parks.
As the globe rebounds from the recession, market analysts anticipate the revenue for themes and amusement parks to grow in the next five years. Various companies are now focusing on new attractions to entice more traffic to the park and boost revenue. Walt Disney is one such global leader that has been constantly adding new features to its various theme parks in an effort to redefine the entertainment experience.
Quarter overview
The company recently released its third-quarter results, and if observed closely all the revenue generation segments of the company recorded growth. The consolidated revenue was up by 8% year over year, to record $12,466 million as compared to $11,578 in the same terms last year.
Segmental Revenue
| Â | Segment | Revenue (Q3-2014) | Revenue (Q3-2013) | Contribution In Total Revenue | Growth |
| 1 | Media Networks | 5,511 | 5,352 | 44.2% | 3% |
| 2 | Parks & Resorts | 3,980 | 3,678 | 31.9% | 8% |
| 3 | Studio Entertainment | 1,807 | 1,590 | 14.5 | 14% |
| 4 | Consumer Products | 902 | 775 | 7.3% | 16% |
| 5 | Interactive | 266 | 183 | 1.5% | 45% |
Media networks remained flat in terms of growth although it has major contribution to the consolidated revenue. Parks and resort segment contributed around 32% to the consolidated revenue and witnessed growth mainly due to the higher traffic and increased spending by the visitors to the park. Growth in the studio entertainment segment was leveraged by increase in international distribution and the performance of Frozen, Captain America 2 as compared to the theatrical distributions in the same quarter in the previous year. Higher comparable store sales were observed in the consumer product segments that influenced the 16% year over year growth. The interactive segment witnessed a growth due to strong demand for the game Disney Infinity.
New travel packages with Disney
At the start of 2015, Double Bucket List itinerary will be added to the adventure travelers list for an amazing experience in the Amazon region. This package provides a trip to the Amazon filled with various adventures for the travelers. Families opting for this package will be taken to various adventure tracks of the Ecuadorian Amazon and will also explore the world-famous Galapagos Islands. The company is all excited about this new package as it believes this to be the most adventures travel package announced as on date.
Furthermore, Disney also plans to launch new packages for traveler opting for long weekend trips. New itinerary is added for mini vacations, that includes New York City, San Francisco and Napa. The four days prolonged weekend trip will provide travelers to explore America’s more preferred locations. These travel packages will be generally preferred by families and friends looking to take a short break from a regular hectic life.
More features in the amusement parks
Animal kingdom is one of the most preferred destinations in the Disney world, mainly by kids. It provides a connection between nature and the living being for a great new experience for the travelers. Themes at the animal kingdom are created from various blockbuster films to provide a real-time experience to traveler based on the virtual world. At the start of this year, Disney had announced plans to add new features to its Animal Kingdom based on the block buster film “Avatar.” The main feature added will be the ride on a Banshee. This feature is anticipated to provide a totally new experience to the travelers. The Pandora is estimated to be unveiled in 2017.
"One of the things guests tell us they love the most about our parks is their ability to step into amazing worlds that otherwise only exist in our imaginations or on films," Staggs said.
He said, "Pandora is one of the most elaborate and captivating worlds ever caught on film. It celebrates the connections between nature and living things."
The company also plans to launch various new attractions at EPCOT. This attraction will be based on the hit movie “Frozen.” The company expects this to be open for public in the year 2016. The fans of Frozen are eagerly waiting for this launch and will certainly provide a growth to the top line of the company in future.
Conclusion
As the global population continues grow, it has a direct impact on the travel and entertainment industry. The budget allocated for travel expense has also seen growth with favorable economies that has led to increase in the market size of the travel and the entertainment industry. Keeping the growth pattern of the travel and the entertainment industry, Disney is more focused on its travel packages and features addition in the amusement park to attract more traffic which adds on to the revenue of the company. I feel, in the coming years, Disney is all set to achieve new heights and the stocks of this company can also soar benefiting the investors. As an investor, I would, certain try to include this stock in my portfolio considering the brand name Disney and its future growth plans.
