Walt Disney Company Economic Conditions and Trends

As the economy continues to be The Walt Disney Company’s greatest threat, recent turmoil in financial markets has adversely affected economic activity in the United States and other regions of the world in which Disney conducts business, and has affected demand for some of Disney’s products and services. A continued decline in economic activity could negatively affect demand for any of your businesses, thereby reducing your overall revenue and profits. A sustained decline in economic conditions could reduce attendance and spending at one or more of Disney’s parks and resorts, purchase or advertising prices on transmission or cable networks or proprietary stations, the prices they will pay. cable service providers for cable programming, performance of their theatrical and home entertainment launches, and purchases of Company-branded consumer products. These conditions could also affect the ability of those with whom Disney does business to satisfy their obligations to Disney.

Changes in foreign currency exchange rates may also reduce international demand for your products, increase labor or supply costs in markets outside the United States, or reduce the US dollar value of income received. from other markets.

Cultural and social values ​​and trends

Each of Disney’s companies creates entertainment or consumer products whose success depends substantially on consumer tastes and preferences that change in often unpredictable ways. Your business success depends on your ability to consistently create and distribute filmed entertainment, broadcast and cable programming, online material, electronic games, theme park attractions, hotels and other resort facilities, and consumer products that meet preferences. changes in the broad consumer market. . Many of Disney’s businesses are increasingly dependent on global acceptance of their offerings and products outside of the United States, and therefore the success of these offerings depends on Disney’s ability to predict and successfully adapt to tastes. and changing consumer preferences both inside and outside the United States.

For instance:

• The success of Disney’s offerings in the home entertainment market depends in part on consumer preferences for home entertainment formats, including DVD players and personal video recorders, as well as the availability of alternative home entertainment offerings and technologies, including web-based delivery of entertainment offerings.
• Technological developments offer consumers an ever-expanding range of entertainment options, and if consumers prefer options that Disney has not yet fully developed over the entertainment products they offer, their sales may be adversely affected.

Political and legal matters

The success of Disney’s businesses is largely dependent on maintaining intellectual property rights in the entertainment products and services they create. New technologies, such as the convergence of computing, communication and entertainment devices, the fall in the prices of devices that incorporate these technologies and the increase in the speed and penetration of broadband Internet, have facilitated the copying and unauthorized digital distribution of your movies, television productions, and other creative works. and faster and more challenging IPR enforcement. The unauthorized use of intellectual property rights in the entertainment industry is a significant and rapidly growing phenomenon. These developments require Disney to devote substantial resources to protecting its intellectual property against unauthorized use and pose the risk of further loss of revenue as a result of the unauthorized digital distribution of its content and the sale of unauthorized DVDs and other counterfeit products.