By Shaun Beirne and Ashlee Yang
The number one goal of any commercial business is to make a profit. To do this a business must design a product with a compelling value proposition to satisfy customer desires.
Once designed, prototyped and manufactured the business must find a way to transfer the title of the product to the consumer. This by definition is when a business must consider a way to place or distribute the product.
Popular culture as captured by Film has been delivered to mass market consumers since around the beginning of the 20th Century, although some suggest it was far earlier.
The original films would be produced and distributed to ‘Nickelodeon’ theatres in North America.
Traversing the 20th Century theatres saw such developments as Multiplexes, Drive-Ins, 3D and IMAX. However the underlying distribution here was to start and end with Film Producers and the Consumer via mass market offerings.
In this way the Supply Chain was very simplistic:
However the advent of Videocassetes in 1971 and later DVD’s meant that the Film makers had a new market to contend with and as such they were forced to diversify their distribution to meet new consumer needs.
In modern times we have cable television (e.g. Foxtel) and now Video On Demand (VOD’s) like Netflix.
Let us now look at one of the major film corporations as a Case Study.
Walt and Roy Disney incorporated The Disney Brothers Studio in 1923 releasing their first comedic production in 1927.
Since that time they have employed various supply chain methodologies and in fact concurrently using more than one model
Prior to 1953 the entity, by then known as Walt Disney Studios, combined with upstream partners such as Columbia Pictures and United Artists to distribute their productions to the theatres who in turn delivered them to the consumers.
This traditional 2-level supply chain was broken, as so many are, by a dispute over the value of a Disney production ‘True-Life Adventures’.
It was then that the brothers incorporated Beuna Vista Film Distribution Company so that they could take control of their own distribution thus removing one level of the supply chain and delivering directly to their retail partners.
In 1983, Walt’s son in law and CEO Ron W. Miller launched the Disney Channel in April. Disney Channel successfully targeted children and teenagers during the morning and afternoon by showing popular series, occasional live- action and animated specials. The premium programming services also includes family oriented movies in the early evenings and classic films during late evening and overnight hours.
Feature films were still distributed, at least in their initial release, to the major Theatres by Beuna Vista Film, however there was also a second supply chain that now took programs directly to the consumer via Television.
By 1990, the Disney Channel had about five million subscribers within the United States.
In 1992, the channel launched their own multiplex service and by 1995, its subscriber base expanded to 15 million cable homes.
By 1996, Disney and Tokuma Shoten Publishing agreed that Disney would distribute studio Ghibli animated films internationally and followed this agreement with acquisitions of Capital Cities/ABC, Buena Vista Pictures Distribution, Inc was merged into ABC, Inc.
So now not only was Disney in the business of producing their own film and television but also distributing content on behalf of other production companies.
In 1997, The Disney Channel rebranded to the name “Disney Channel” and introduced a new logo. It went on to transition from a premium service into a basic cable channel and decided to shift its target audience more toward children. In the same year, the home division of the Disney Company released its first DVDs.
The Channel expanded during the following years with buying ABC stations and Fox Family Network (now known as ABC Family), launching overseas with Fox Kids channel (now known as Disney HD),and launching Disney Cinemagic (now known as Sky Movies Disney) in United Kingdom 2006.
During 62 years of the distribution history, Walt Disney Studios Motion Pictures has promoted 26 films that have received nominations for the Academy Award of Best Picture.
With the launch Video-On-Demand in Australia and New Zealand on March 31st 2015 Disney teamed with Netflix to distribute the magic of its films such as the current number one kids flick ‘Frozen’.
So now, you guessed it, Disney is back to where it all began in teaming with a separate entity to distribute their content.
This leaves the question what next for Disney and it’s cohorts in the film and television industry?
Will as they have before end up acquiring the independent streaming services or launch their own distribution service? Only time will tell
Oh and if you can think of the next generation of distribution beyond VOD’s feel free to share, though you may want to patent it first and make yourself a few billion dollars first!