Disney at Goldman Sachs Conference Notes

Bob Iger – Chairman and CEO

Healthy consumer

“Generally speaking, we actually see a relatively healthy consumer in the United States, we see that through a few different lenses, clearly theme parks is probably the biggest one. And frankly our domestic business both Orlando and California is quite strong and we’ve seen no sign whatsoever of a consumer slowdown or issues with the consumer. And I’d say looking forward the same would be the case not just looking back, we will be more specific when we announce earnings in November but our advance bookings are relatively strong. On the other side we see is consumer products, for us that’s retail mostly that can be cyclical based on product we have in the marketplace but that’s been strong as well.”

Market could be moving to more narrow sports packages

“we think where the market could be going in terms of some of these sports is being able to buy at a very, very selectively, a specific sport, maybe even for a specific season or a specific date or a specific weekend, this is what Sky does in the UK for instance with a lot of its Premier League rights. And we think that that could be really interesting for fans that may not want to buy another bundle of sports rights but maybe want very specific sports that they’re willing to step up and pay for, again provided that gives them mobility and the ability to watch wherever they are.”

Shanghai has been successful

“We’ve had a fantastic opening for Shanghai starting with opening day. We are not updating specific numbers except I can say that had it not been for some typhoon-like weather there last week, the first 100 days of Shanghai would have delivered more in attendance than any park that we’ve ever opened. And in fact it delivered more in the first 100 days than most parks that we’ve opened over the history of our theme parks. ‘

Attracting people from outside of Shanghai

“And by the way, the other thing that we found that was interesting in the 100 days or so that we’ve been open, is we knew that Shanghai was a tourist destination for the rest of China, but our anticipation when we opened was that the attendance would be dominated by people from Shanghai and actually it was dominated by people from China, but outside of Shanghai and what that told us that was really interesting was that the marketing was really effective”

Tent-pole films strategy has worked

“when I got the job that we were going to make fewer films that we’re going to focus on quality over quantity. We had seen some very sobering returns at our studio over the prior decade in both live-action and in animation and looked at the industry and thought that returns in general across the entire US movie business were not impressive, and we thought one of the reasons for that is that too many movies were being made, too many bets being made, too much money being spent on at least at that point of the business that we didn’t think was expanding much with the volume of movies being released. So we said, simply, let’s make fewer and make bigger bets. We also thought that bigger bets, meaning tenfold films had the ability to be leveraged more across the world, particularly as new markets emerged and what’s happened over the last five years in China is a great example of that, tenfold films work really well there.”

29 films from acquisitions have averaged $800m at box office

“I mentioned a statistic like this, but we bought Pixar and closed the deal in 2006. Since then, after we bought Marvel and Star Wars, we released 29 films; make sure I get this right, under the Disney Animation because we turned Disney Animation [indiscernible] bought Pixar. Disney Animation, Pixar, Marvel and Lucas, 29 films since then. The average global box office of each of those films is a hair and I mean a hair under $800 million. So the returns that we talk about and not due to consumer products, but due to the success the direct success of those films and the fact that we’ve figured out not perfect science, obviously, and we have made some mistakes, but we figured out how to improve the odds of making good films and we also have a, you know, we’ve got great talent at our studio led by Alan Horn, but then what we’ve done is we’ve created these individual sub studios, Pixar, and John Lasseter and Catmull and they run Disney Animation, Marvel under Kevin Feige, and Kathy Kennedy running Lucasfilm”