Disney gaffe mars Eastern expansion - Business.Telegraph - 2/07/2006
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It wasn't quite the publicity that Disney had hoped for. Last weekend, local television stations repeatedly broadcast images of the hundreds of angry people barred from its new Hong Kong theme park.
As the celebrations for the Chinese Lunar New Year got into full swing, the company admitted it had underestimated the potential number of visitors, leaving many furiously waving their tickets and attempting to scale the gates that separated them from the Magic Kingdom. For them at least, it was hardly the Happiest Place on Earth.
For Disney, satisfaction that the $3 billion (£1.7 billion) park was at last attracting significant numbers of visitors was overshadowed by the PR blunder in precisely the part of the world the firm is targeting for future growth - another park is planned for Shanghai, with India expected to follow.
Nor is it just the theme parks. The firm is launching Toon Disney, the first 24-hour Tamil language children's channel in India, while in December, Disney announced it would produce its first Chinese film, The Secret of the Magic Gourd.
The ventures are crucial if Disney is to succeed in its vision of emulating the likes of Coca-Cola in seriously boosting the amount of revenues to come from overseas. For Coke, the figure is 70pc, compared with about 20pc for Disney.
Overseas expansion is just one of many issues at the top of Bob Iger's to-do list as he begins his first full year as chief executive of the world's second largest media company.
Perhaps more crucially though, it helped highlight Disney's future strategy as a content company. Following a period when media groups were keen to build distribution platforms alongside their content divisions, Disney now appears to be going in the opposite direction. The company is said to be very close to a deal to sell off its radio stations for around $2.7 billion.
How successful the strategy will be remains to be seen. Critics of the company insist its stock, like many in the underperforming media sector, offers no value and little growth.
However Jason Bazinet, analyst at Citigroup, remains a bull and said he expects double-digit profit growth through 2008.