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A Disney Theme Park on the Blockchain
Frmr Disney Exec's advice to Bob Iger
👋🏽 Hello everyone, gm gm, WELCOME BACK to another edition of the Overpriced JPEGs newsletter, where we’re catching you up on the world of web3, NFTs, and the metaverse.
If you want to hang out with Overpriced JPEGs LIVE and in-person… we are having an event in Miami this Thursday March 30th from 6-8pm ET where Carly will be conducting a fireside chat with Doodles’ CEO, Julian Holguin, followed by mixing, mingling, and specialty cocktails :).
We are opening a select number of seats for Overpriced JPEGs readers. RSVP here; first come, first served, seats are very limited!
Today we have a special guest post from Jon Rogers, formerly the founding executive and global head of live-action franchise development for Walt Disney Studios.
Overpriced JPEGs has teamed up with Jon to create Blockbuster, a recurring series that looks at what is happening across Hollywood, the global media industry, and the blockchain.
Jon is a brand leader with 20+ years of experience in media/entertainment, consumer packaged goods, and most recently Web3. Prior to Disney, Jon was a member of the Star Wars brand marketing team at Lucasfilm where he managed theatrical campaigns, brand partnerships, and retail marketing. Earlier in his career Jon was a strategy consultant with Booz Allen Hamilton working with clients in media/entertainment, high tech, and oil & gas industries.
A Theme Park on the Blockchain
No company on the planet has a bigger opportunity than Disney to utilize blockchain technologies to build new products and experiences. This isn’t just about building metaverse experiences, NFTs, or collaborative storytelling. It goes much deeper – to the very heart of how Disney operates behind the curtain, and includes reengineering back office processes such as licensing and content production.
Take consumer product licensing (think Mickey Mouse T-shirts). It’s currently a $5.6 billion business for the company with ~$2.6B of that going to overhead and other expenses. If smart contract-based licensing solutions can save an additional 5% in overhead, that alone is worth $230M to Disney’s bottom line. Even small improvements are real money when operating at this scale.
Newly returned CEO, Bob Iger has not yet commented on Disney’s plans for building on the blockchain but, prior to the recent leadership transition, former CEO Bob Chapek was primarily focused on using the blockchain to empower next-generation storytelling through their streaming service Disney+. The idea here is essentially to make passive content interactive with features embedded within Disney+ that include social, gaming, commerce, and more. Indeed the opportunities with next-generation storytelling are very exciting, but this should be but one element of a broader and more comprehensive enterprise blockchain strategy. Chapek’s Disney+-centric approach failed to grasp the true scale and scope of the Disney company’s opportunity.
Disney’s strategy needs to be a coordinated, enterprise-wide response to launch a “theme park on the blockchain.” No, this is not a metaverse theme park experience (which would also be cool!), but rather an organizing principle that Disney’s employees are uniquely positioned to understand.
Every employee of The Walt Disney Company is familiar with the core constructs of how Disney’s theme parks work: extending storytelling through a broad variety of experiences and product offerings across Disney’s IP. It’s incredible, really. Despite the breadth and depth of the offerings, the Disney Parks successfully manage to pull everything together in a way that is cohesive and organized for consumers. Disney’s blockchain offering should have the same comprehensive and unified approach to avoid feeling scattershot - something that is already happening with Disney’s “toe-in-the-water” trial projects.
If I had Iger’s ear, here is what I would recommend:
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Clear the market. Disney’s toe-in-the-water experiments have served their purpose. As I have stated multiple times, in hindsight they are a mistake. Disney didn’t understand how much value they were giving away. The goals for these projects were tactical and short-sighted rather than long-term and strategic. Allow the existing deals to run their course and when the opportunity comes, opt-out of renewal. This will, over time, prepare the market and organization for the bigger opportunity on the horizon.
Reorganize leadership of Disney’s blockchain initiatives to report into the Walt Disney Imagineering (WDI) team – the group within the Parks division responsible for the design and construction of Disney’s theme parks. Imagineers are simultaneously storytellers, futurists, and technologists. Blockchain specialists will find a welcome home in WDI, where their co-workers are used to applying the most advanced tech towards real-world possibilities. It is WDI who is developing nex-gen robots to walk the parks, entertain, and serve guests. They also have established relationships and processes for collaborating with the creative storytelling leads, ensuring that the blockchain approach is to “publish” content (not license it) and is aligned with the broader storytelling vision of each IP.
Build their own tech stack, starting with an EVM Layer3 or by forking a Layer2 with identity, social, and commerce at the heart of it and managed through a branded, custodial (yes, custodial) crypto wallet (the Disney Vault!). Give Disney lovers a unique Web3 identity that not only works across the company’s apps, but also across the broader internet. Similar to the Nike.Swoosh platform - think “Disney.Magic.” Solving the identity challenge is the top priority - everything starts with that.
Finally, take your time to build this new “theme park.” Develop a plan to open this new park with a diverse suite of web3-enabled products, representing a comprehensive cross-section of Disney IP including next-gen and collaborative storytelling, digital collectibles, games, phygital, and more.
Disney has a unique opportunity to build new businesses and enhance existing ones with blockchain technology. The theory of architectural innovation, which I’ve outlined in this newsletter previously, tells us this is Disney's opportunity to seize. Typically with architectural innovations, incumbent leaders fail. To succeed, Disney should pivot from their prior tactical approach and adopt a strategic one, by reorganizing around a principle of a Disney theme park on the blockchain. With the right organizational structure, and a long-term strategic approach built on a foundation on storytelling, social, gaming, commerce, and identity, Disney can unlock the full potential of the blockchain.