Threats

The threats listed here is a result of an analysis made on potential external threads of The Walt Disney Company > Studio Entertainment area, mainly with focus on Walt Disney Pictures.

Illegal copying of dvds etc.

Since people in a larger sence have broadband and CD/DVD burners in their homes, then it have become easier to make illegal copies of movies, music etc. And as a result of this, then the producers have been facing cutbacks in sales, and thereby revenues. This is a thread that the companies are facing today, and with every technological gain made available to the consumers, then the entertainment industry will be facing cutback because of illegal copying of their products.

Fierce competition

Disney’s earlier near monopoly status on animation films does no longer exist. In the last 10-15 years, companies like Dreamworks, Pixar, Sony Animation, and Universal have gotten a larger focus on the industry of making movies for the younger audience. And in the last years The Walt Disney Company have lost market shares, and have not been able to face and exploit the challenges of new technologies, media and such.

Change in distribution methods

With the opportunity of a change in distribution and sales of movies, TV programs etc., then there are also merging new threads. Because even though it will be easier to reach the consumers/buyers, then the competition will also become fiercer. It will no longer be a battle over prime time slots on the major channels or the biggest theatres in the cinemas, but more about availability and appeal directly to the consumers through new channels, mainly online. If not considered and approached in the right way, it can become a big thread to current earnings.

Furthermore will the new ways of distribution make it easier for new entrants to reach out to a large market.

Main markets have weak developments

As it seems at the moment, then The Walt Disney Company’s largest market, North America with 77.7 percent of all revenues in 2005, have stalled in its economic development.  The real wage growth has been very low and there have been a weaker job creation compared with earlier trends. This hurts the earnings and profit margins of Disney.