The aftershock of COVID 19 maybe worse than the initial attack. Understanding the pandemic is not only a question of science but one of commerce. As we move forward there will be a mega-transformation by businesses to a digital-first model.
To illustrate this I explore the impact of the virus on 97 year-old, global entertainment/media giant Disney Company.
Last week, Disney announced a major restructuring. It stated that it was reducing its focus from theme parks, cruises, movies, and cable TV to a digital-driven strategy. In a statement, Disney CEO, Bob Chapek said, “Given the incredible success of Disney+ (Disney’s streaming service) and our plans to accelerate our direct-to-consumer business, we are strategically re-positioning our company.” Disney+, launched last year, has quickly grown to over 60 million subscribers. On the flip-side, COVID 19 devastated Disney’s theme parks, cinema, live sports, cruise, cable TV, and retail businesses. Disney lost $4.7billion in the second quarter of this year.
A Very Quick & Bold Pivot
For a company of its size and culture, Disney’s pivot to digital was astounding. Pre-pandemic, Disney held the top-spot in global entertainment. Making the bold and quick decision to reinvent itself around a digital strategy is very telling. Clearly, management felt that waiting-it-out was not a viable option. Its non-Digital+ (non-digital) businesses will be de-emphasized, which points to management’s belief that the virus’s impact will be longer and deeper than once thought.
The shifting to digital is not specific to large companies like Disney but must be embraced by all businesses – of all sizes. Shifting your business model to accommodate access to customers in a more personal and economical way is a requirement for future profitability.