Intro (00:01):
Pixie Dust & Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher and Yasmine Spencer as they explore the mouse’s $12.6 billion operation and break down exactly how you can apply these big scale concepts to your own business.

Nicole (00:26):
Hey, everyone, welcome to this week’s episode of pixie dust and profits. This week, we’re kind of digging back to our MBA roots and getting into a old fashioned quarterly report. I know that probably doesn’t sound super exciting to you, but recently me and Yasmin spent about an hour listening to the Q1 earnings report for the Walt Disney company. And we are super excited to break down some of the stats that they shared, why they’re important and how you can think about this quarterly review process in terms of your small business. And we’re probably going to cover everything from joint partnerships to marketing, to metrics, like all sorts of different topics here. We don’t have one at heart. We just want to be really fun to talk about how Disney’s been doing and performing in the marketplace and how you can do the same thing and look at those insights that they have and apply them to your own business.

Yasmine (01:17):
Yay. I love a good quarterly report because it sheds so much insight into how business is performing. So unsurprisingly, the star of Disney’s Q1 report was Disney plus. So we all know that Disney plus launched in it was November 11th, I believe. Yes, yes. Of 2019. And Disney’s Q1 ended on December 31st. So those are where a lot of the figures are coming from. But we do have some updated figures that they shared with us on the report. So as of December 31st Disney plus had 26.5 million users, which actually exceeded analyst expectations of 20 to 25 million. So go Disney. We learned that about 50% of them actually came from the Disney website, but that means 50% came from elsewhere. If we break down where they came from, well, about 30% came from other subscribing platforms like Roku and Apple, and then another 20% came from a really interesting partnership they did with Verizon, where if you had were you subscribed to select plans as a new customer upgraded to limited data, you got a year of Disney plus for free, is that right? Your mom’s subscribed to that Ryzen plan, right? Nicole.

Nicole (02:36):
Yeah, she had Verizon. And so she was looking into how she could get the Disney plus deal. And they said she had to upgrade to a certain plan. I don’t know if she ended up doing it, but it was a pretty significant offer for people when the year plan for Disney plus was, you know, $70, if you didn’t bundle it. I mean, at the very least you are saving $70 a year. If you already had the unlimited data plan with I think the most important thing to talk about here. Well, a few things, 26.5 million viewers, like what is the scope of that? Right. So if you look at Netflix, Netflix in the same markets that Disney plus is in, so like North America has 67 million subscribers like overall in the world, I think is closer to 120, but here where Disney plus is they have 67 million.

Nicole (03:25):
So Disney plus in three months has the same number or half the amount of subscribers that Netflix does. And we were just looking at some stats before we started recording this and it, Netflix actually needed six years to get to the point of having 25 million subscribers like Disney plus has. So we wanted to kind of take the teaching point there of these are phenomenal numbers and Disney had an established brand to do that. But I also want to talk about mindset a little bit when you’re starting a business or maybe have even been in business for a few years. And you’re looking at someone else who is maybe in your same industry, offers a similar product, just looking at them and saying, wow, I’ll never get to their level. Just think like they might be the trend-setters the trailblazer. I mean, Netflix had to do a lot around teaching people to let go of their KIBO and come stream something and, you know, wait for people to have internet connections that could handle as much streaming as they were doing. And so Disney plus already leveraged all of that industry knowledge or consumer training essentially to make their own platform. And that means you can be a late comer to the market and still do really, really well. So stop looking at what other people are doing and think about how you can leverage the things they’re doing well to do something even better.

Yasmine (04:46):
And at the same time, Nicole touched upon this, but don’t compare your start to someone else’s finish. I think that’s what we see. In a lot of places online Disney has been around for years and years and years and Netflix, they were like a disruptors. The term that we use to explain what they did to the marketplace and really revolutionized things. But it’s not surprising that it took them a while because they had all those barriers and hoops and stuff to jump through. So if you are starting out and it doesn’t happen overnight, don’t fret. It takes time even with every big successful brand.

Nicole (05:21):
The only thing we really wanted to talk about here with all of these subscribers is, you know, the importance of diversifying where your product lives because yes, 50% of the subscribers for Disney plus came from Disney’s own website. I know I got numerous emails. We recorded an episode entirely about Disney Plaza, where we talked about some of these marketing channels that they use. So we just want to reiterate, again, that 50% might’ve come from their website, but 50% came from somewhere else. Imagine if you were only promoting to your own email list or your own little circle bubble, and you do those scary things to put yourself out there, to get in front of a new audience or work with another person in the industry you’re essentially having your profit potential by not doing some more of that reach and visibility stuff.

Yasmine (06:11):
Absolutely. So a few ways that you can actually apply this lesson to your own business, I’ll start off with service-based businesses is joining like a summit, a virtual summit. For example, the way that these typically work is, you know, you put out an offer, a training, a freebie of some sorts that gets distributed to an audience that you’d normally don’t tap into and get to exposure. Now like with the Verizon partnership, you’re giving away some content for free, but the hope is, is that you’re going to wow. Them with your content selection like Disney plus or in your case, your services and your offerings or your brain. And they’re going to want more from you after that initial free period is up or after they’ve consumed your like free product. They’re going to want more. So leveraging different distribution platforms can be so helpful in increasing your reach visibility and your audience for our product based business owners out there.

Yasmine (07:06):
You can think of it as using different sales platforms. So if you’re currently selling on your website or if you’re selling on Etsy, for example, like that seems great because on one hand, the negatives are, it costs a lot. You’re restricted with an SEO ecosystem and their rules, but it increases your discoverability because Etsy is the brand itself attracts so many searches and so many buyers. So your chances of being discovered are so much higher than, you know, having to drive someone to your own website. But if you are on one platform, consider expanding to other ones, eBay, Amazon, they they’ll have marketplaces that are really trying to attract creators to sell their products. And both of those platforms attract millions and millions of visits. Every, I want to say day probably that’s not quite it, but you know, they get a ton of visitors and just by being on there, you’re increasing your chance of being discovered and the profit that you could bring in. So Disney did that with selling Disney plus through Roku and Apple devices, right. By having the option on there, it increased their ability to get subscribers from someone who’s like, Oh yeah, I heard about this. It’s available now who might not have like visit Disney plus website, or they might not even had an account with Disney and have gotten the marketing emails on Nicole and I,

Nicole (08:23):
Yeah. And I mean, this can also be just using apps and tools that are available to you for your existing website that you aren’t using. So for example in Facebook, if you are a product based business, you can list those products on your Facebook page, Instagram, you can also kind of tag the images that you share on there with a product link. You can, I believe do the same on Pinterest. And so it doesn’t necessarily mean that you have to be selling on other platforms, but using some of these tools that are available to you, that you may not be using right now, because it’s just kind of on your bucket list of someday I’ll do that. Or maybe you don’t even know that some of these things exist, but it’s just another reminder that every time we can get outside of our bubble in our comfort zone, there is opportunity there. Waiting for us if we just do that partnership or think about doing things in a different way. I mean, who would have known that everyone would have assumed Disney is going to come out of the gate with Disney plus, and everyone’s just going to subscribe and, you know, hand me my money that meme, but, you know, they knew that they were going to have to bring in an audience that maybe isn’t Disney lovers. And so that’s why they made this partnership with Verizon because it was a win-win situation for them.

Yasmine (09:35):
[Inaudible] Just to shout out some of the Disney, small shops that we follow so much on Instagram. Like another great example that I see is they’ll often do flat lays of their product, but then they’ll also feature other Disney, small shop products. And I have discovered and shopped so many items that way. For example, I just found the cutest pair of ears the other days, literally, because one shop linked it in an image. So again, collaborating can be a great tool using different platforms or using different features of your existing platforms.

Nicole (10:08):
So, you know, I think we kind of got the point there, but the next thing we want to talk about with these Disney plus stats are, you know, there’s a couple of things that Disney plus has done to diversify Disney in general, the Disney brand. Now, when you think Disney, you probably think like small kids, princesses, and I think they’ve done a lot in the last five to 10 years to move away from that image of that’s all they are between having these power, how strong women characters, but also bringing in Star Wars and Marvel and all these other brands to the business. And they talked a lot about Disney plus succeeding because of the content that is on there. So this is like our content marketing side of our business. They talked about, they have the classic Disney experience, but they also have Marvel.

Nicole (10:56):
They have star Wars, they have some like documentaries and then they have their national geographic. So they’ve got this kind of mix of content that you really can’t find on other streaming platforms. And then they took that to the next level to make sure that they were hitting people in all these different areas that they’re interested in with their content by bundling it with Hulu and ESPN. So there was something for everyone. And I think one of the things that has resulted in is kind of an improved brand outlook for people who are like that teenager, that young adult space that maybe Disney wasn’t such a great brand to, they weren’t like the tip of the tongue type of brand before that they’re now kind of, Oh, wow, Disney’s kind of cool. Look at this Mandalorian show. And it kind of goes from there. So thinking about ways that you can diversify a little bit to kind of bring in some of those fringe people. And that doesn’t mean that you have to be something that like everyone will like, but at the same time, it is knowing where you’re weak and knowing how to respond to that in a way that can bring people in

Yasmine (12:06):
Disney also did a couple of big acquisitions leading up to the launch of Disney plus like the Fox 20th century Fox platform. So you can like watch the Simpsons on there. Another way that you can look at this. And I know we’ve been talking about collaborations a lot, but it’s, it’s such a great medium for diversifying is in a product bundle. For example, you have bring in a product from someone else, maybe include a mini course from another creator. Who’s in a similar complimentary industry to you maybe include products from, again, another small shop because your products go so well together. For example, if you’re doing really, really, really cute custom tumblers like, Oh, so fabulous.com. She has like the most adorable glitter tumblers. There are a bunch of other Disney small shops that create these little straw toppers that are making shaped your bow shaped, right? And if you were to like bundle products like that together, featuring another owner that can, again, diversify your reach and audience.

Nicole (13:10):
The other thing that the bundling has helped Disney plus too, is it reduced their churn rate. So they talked about this on the Q1 call where, you know, just churn in general was a stat. They really needed to look at how many people were subscribing just to see what was there and then leaving. They don’t have the model that Netflix has where shows retire at the end of the month. And then a whole slew of shows start up again. Disney’s kind of going at it with here’s our best content. You’re getting access to our library and gas. We’re going to have releases along the way, but it’s not like this big extravaganza where you’re leading up to the first of the month waiting for what’s coming this month. So they’ve been looking at stats to make sure that people are staying and sticking around.

Nicole (13:52):
And so like talking about some of these metrics that they cared about, you know, churn rate, obviously super important, how many people actually stayed, how long until they unsubscribed, did they recover them when they answer this guide? I haven’t attempted to unsubscribe, but if you’ve ever been in a service of some sort, you could probably hit cancel membership and then they give you another offer. That’s like, well, we keep audible. We’ll give you a free month or whatever it may be. So they’re, they’re monitoring that, that rate and the discovered that their bundling option reduce churn rates because there’s something else for them to watch. You know, maybe they finished the Mandalorian, but they have Hulu on tap right now to catch up on some other shows. And so putting those things together overall kept their subscriber base really high.

Yasmine (14:39):
In fact, Disney noted that 65% of the people who watch the Mandalorian continued to watch 10 other things on Disney class. And what’s really interesting. There is not just that stat, but the fact that they had systems in place to measure that before the launch even happened. And it makes you think about tracking numbers in your business, know what metrics you want to keep an eye on? Because they knew the men, Laura would be a huge draw. They knew it would bring in a ton of people and they wanted to know how engaged it would be. Post show, plan, those metrics in advance and have the systems in place to measure them before you even put anything out there. A, it makes it easier just to keep on top of those success metrics that are super important to you. But B you’re not trying to dig through loads and loads of data, trying to uncover the story after the fact, right? And if you’re not a particularly analytical person who loves to live in spreadsheets like Nicole and I, it’s not going to be a lot of fun for you and you’re probably not going to do it. So make things easier for yourself upfront, figure out what you want to track, figure out what you want to measure, put the systems in place. So it’s easy after the fact.

Nicole (15:47):
I think they also the really fun thing with this statistic. I mean, they sat it on the call, 65% of people who watched the Mandalorian watched at least like 10 other things on Disney plus, that means they know who’s watching Mandalorian and they know what else they’re watching. You know, what, how many people we’re saying on places like Reddit or some of these like underground indie places that they were saying, Oh, the Mandalorians over, got to cancel my Disney plus subscription. And it was like a chip on their shoulder. Like, Oh, I got them. I got that big corporate brand. You know, I I’m, I’m fooling them. I’m not going to keep my membership now, but you know, Disney was watching that and they were able to say, well, that’s not really true. You turn frozen on right after you finished that episode.

Nicole (16:31):
And what’s important to you is that like they were talking to their shareholders in this meeting and in the meeting, they addressed that statistic specifically because there’s probably PR press that that memo is kind of getting through the weeds and it’s coming to those shareholders. And so shareholders are wondering, you know, are people actually subscribing like what’s going on over there? So they have that answer ready to go because it’s a fun statistic. It, it shows them a success metrics, but it also speaks to that investor to say, Hey, this is if I share this information with you, you’re going to trust me more because you know that I hear what’s happening out there and I can give you a stat 65% did not cancel their membership because they’re watching other things. All right. So that was a lot of talk about Disney plus.

Nicole (17:18):
And it’s mostly because part of the quarter, one call a revolved around it. That’s what people wanted to know about, but there’s also things happening in the film industry and in their parks and some things that we want to talk about there. So first and foremost, the parks right now we’re kind of in this public health crisis with the Corona virus and Disney take safety very seriously, they take their guests, their cast members it’s of the utmost importance to them. And so they actually had to make the decision to close Shanghai Disney until this resolves itself. And at the last report I saw was that it was like, you know, $200 million in losses and climbing because they made this decision to close Shanghai Disney. There’s also been strikes in Hong Kong that have led to them needing to close Hong Kong Disneyland. And so, you know, talking about this mostly because like it’s not all roses and sunshine with, you know, Disney plus doing so well. They’ve also got this other arm to their business that really these, these things were unexpected and, you know, they had to make a plan for them. So making sure you kind of have a backup plan for when things don’t quite go the way you think they should go is always really important as a business owner, as a CEO.

Yasmine (18:43):
For example, if you get pregnant and your baby comes a little bit earlier than planned for your mat leave, sometimes you have to scramble to make sure that everything is covered. So if it’s not obvious, that happened to me. My, my little girl was born about a month earlier than I had planned to have her. And the good news was I got a bit of warning that that happened. But as a business owner, I needed to make sure that my clients were taken care of. So I had to bring in people, Nicole was one of them, train them and really make sure that that they knew what they needed to know to cover me during my mat leave. So unexpected things happen in your business and you really need to make sure that you’re planning for them. So what I ended up doing was making sure that I had reached out to Nicole, other contractors who had specialized skills that I typically covered for my clients and spent the time to give them the resources, training, everything that they needed well in advance of me having to go in for my C-section.

Yasmine (19:45):
So it could be covered. And my clients didn’t have any issues whatsoever. It’s really important to also plan financially for times where you have downturns in your business. So one of the things that Nicole and I are super big on, and we can literally do a whole episode unrelated to Disney on financial planning and your business, but making sure you’re setting aside savings for the quieter periods, or if something unexpected happens. My recommendation tends to be, to set aside at least 10 to 20% in a business savings account. If you can, to cover you during unexpected surprises or during slower periods in general, but yeah,

Nicole (20:25):
We’re actually going to be doing a mini workshop and the next month or so, that is about investing in innovating in your business. And so a big piece of this is like teaching you the way to save for your business, the way to look at your numbers and the financial side of things. There’s other parts to it too, but this is one component of it because we think it’s so important for people to understand and to not be scared of that tax bill that comes in and to like, feel like they’re fumbling for the cash or whatever it may be, but to really show you, here’s where you are, here’s what you should have in your reserves. You know, that’s just a fancy way of saying in your savings account for if something comes up. So we’ll be having that come out soon. And we’re really excited about it because I don’t think enough conversation happens about business finances and this industry.

Nicole (21:16):
And there’s some smart people out there helping other business owners, but anything we can do to normalize that conversation, I think is great. So we’ll talk more about that soon, but generally yeah. Planning for the unexpected. You can do this in a few easy ways, start making procedures for things, as you do something in your business that you have to do routinely you know, refunding a customer, something that may seem like so easy to do you just click a button depending on what software you’re using, just record yourself doing it, you know, make a document. That’s just a link to all these different procedures that you do. So when something does come up, you can outsource easier if you grow fast, or if you go on maternity leave or, you know, you get hurt or a family member sick, like you have this backup means to work with when the unexpected happens.

Nicole (22:05):
This is particularly difficult. If you have a team or a few contractors under you, because you know, you’re responsible for their payments every month. And then, you know, sometimes that means when the unexpected happens, it comes out of your own owner draw or your own salary. And that can be really rough. So making sure you have a plan in place for, you know, always thinking ahead to what are my contractors working on what is like a need to do and what is a not so necessary and just having, having a backup plan when it comes to having a team?

Yasmine (22:40):
Well, another quick thing that I want to mention going back to the finance conversation is holding off on like accepting revenue until it’s like realized. So by that we mean, if, for example, if you have a membership, right, and you offer like an annual plan and someone pays upfront for the year, don’t take that full amount and just spend it in your business. What you probably want to do is take that amount divided by 12 and for every month, realize that revenue as it’s being used up by the subscriber, because you never know what’s going to happen. Someone might want a refund midway, because you know, they want drop out of the program or something might happen to, you might not be able to fulfill your obligations. And all of a sudden you have to refund all these people, all this money. And if it’s already spent, it puts you in a really difficult financial position

Nicole (23:36):
And you might have terms and conditions that say like no refunds and things like that, but that doesn’t mean PayPal. Isn’t going to try to dispute you, or there won’t be a fraud claim. You know, just, just your personal feelings when it comes to something you might want to be able to offer that refund to someone. So generally speaking, you should, you know, earn it when you do the work. So, you know, if someone has a 12 month membership and at six months, and you decide like I’m changing this program up and that person doesn’t want to continue well on their side, they’ve paid for six months and we’re still remaining six months. So yes, that is technically how you should realize your revenue.

Yasmine (24:18):
So I think we covered, Oh, one more thing that we want to mention box office success. Yeah.

Nicole (24:24):
Yes. Yes. So last year, the very end of their quarter, probably to boost their already amazing numbers. Frozen two came out in November and rise of the resistance came out and disseminate what it’s called.

Yasmine (24:41):
No, no, I just Skywalker Skywalker, Skywalker.

Nicole (24:45):
All right. And so those were already anticipated to be really big movies, but I think they’ve already earned like a billion dollars each Disney studios overall in that last fiscal year. What was it? $11 billion in the box office. They just had such great films. They had, you know, Aladdin and black Panther and a few others that were, Oh yeah, well, I and King, they had, they had so many films come out. It was almost like a heyday back to those days where, you know, the original lion King and Aladdin and all of those came out. And so they were super excited to show those numbers. But one thing that I thought was really interesting was Bob biker, the CEO on the quarterly call, said something along the lines of like, we are so pleased with these results, but don’t expect another year like this next year.

Nicole (25:36):
Like he didn’t promise those shareholders that they’re going to have another $11 billion box office a year. He recognized that there were some big name films that did really well, that had good reviews, that they were just quality content. And so I thought it was really awesome to hear like a CEO, not promising something, just basically saying like this was a great year and we’re really pleased with it, but this isn’t our goal to keep chasing another box office a year like that. And you might not see one next year, we’ve got all these different initiatives going on. And it was kind of setting that expectation. So he’s really good about that. There was another thing that I wrote down unrelated to the box office, but he was talking about ESPN. It’s not doing so great in viewership right now. The viewership is down even with the Disney plus subscribers, but basically he had this anchor point of saying, yes, viewership is down, but the ad revenue is the same as last year. So he always had this like anchoring point to show, like, you know, here’s the bad side, but here’s the positive side of it. So when were talking to investors or, you know, joint partnerships or your customers or anything like that, just knowing like there’s a bad side. And then there’s, there’s the other side to that too. So having that, that balance I think is really smart.

Yasmine (26:57):
I think it’s also always important to manage your own expectations. I know as business owners, we’re constantly chasing growth in our own businesses, and sometimes you’re not going to have that like increase year over year, because what you’re putting out there changes the landscape changes, circumstances, changes exactly, exactly. You can become pregnant and be on bedrest for nine months of a year. That’s me again, by the way. So managing your own expectations is incredibly important. And the other thing with the anchoring is celebrate the wins. You have little wins every day in your business, and it’s okay to like pat yourself on the back and celebrate them. We don’t always need to focus on the big successes, the little ones that we achieve every day, every week, every month that our business are equally as important. So be sure to give yourself a pat on the back for me.

Nicole (27:45):
Well, this is a really awesome breakdown of a quarterly planning call. I’m sure you can go listen to that. We’ll put that plan in, call it in the show notes. So that way, if you wanted to go into all the details about how the Disney business is doing you can, we hope that this is giving you some sort of insight into what investors here while they’re hearing these quarterly reports, how you can use some of this information in your own business. And really, I hope you just enjoyed getting some insight into Disney, which is their report was $69.5 billion in revenue last year. That’s a lot of money. And so it’s great to look at these big brands and see what they’re doing, because there’s definitely things that we can model for ourselves too. So if you love what you’re hearing and want to join us for more, go ahead and follow us on Instagram @pixiedustandprofits and send us a DM because we love hearing what your favorite parts of each episode was. Someone just came into us saying that the last episode was great, but he wants an entire episode devoted to negotiation. Now because of a few minutes that we spent chatting about negotiation. So we love to hear from you send us a DM, gives us great ideas for the next episode, and we just love to check out your businesses too.

Yasmine (28:59):
Awesome. Well, thank you again for joining us for another long episode of Nicole and I nerding out and we’ll see you real soon. Bye.