Why did Disney pick Josh D’Amaro to become the next CEO of the company? It’s all about return on investment.
As chairman of the company’s Disney Experiences segment, D’Amaro has overseen some of the most impressive financial returns in the entire entertainment industry. Since the pandemic lockdowns ended, Disney’s theme parks and cruise line have been carrying Disney’s studio and TV operations more often that not. In the most recent quarter, Disney Experiences reported $3.3 billion in operating income, up 6% for the year, while Disney’s Entertainment and Sports segments combined for just under $1.3 billion, with double-digit percentage losses from the prior year.
But return on investment is not just an accounting metric. Return on investment is how relationships develop. D’Amaro has invested time and attention to meet with and listen to thousands of Disney theme park fans and cast members over the years. When Disney announced D’Amaro’s selection last week, those fans flooded social media with countless selfies that they had taken with the new Disney boss.
Every one of those personal connections is an investment in Disney’s future. By elevating D’Amaro to the top job in The Walt Disney Company, Disney is hoping to leverage a return on those investments by showing its most loyal fans that the company will take direction from the person who has spent so much time listening to them.
Relationships are, of course, a two-way street. Whenever we read or watch or listen to a story, we make an investment in that story. That can be an investment of time and of emotion as well as the money to buy a ticket or subscribe to a streaming service. If Disney wants its fans to keep investing in its stories, then the company needs to invest wisely in the stories that it chooses to tell.
Josh D’Amaro’s promotion is a story about how an attentive leader of beloved destinations rose to the top of Hollywood. That’s a feel-good story. But that story has just begun. Every decision that D’Amaro and his team will make about Disney’s theme parks, movies, TV shows and sports coverage will write new chapters in that story.
Disney’s current CEO, Bob Iger, has cast franchises as the star of his Disney story. Fans have made deep investments in franchises such as Star Wars, Marvel, Toy Story and Frozen. By producing more films, shows and attractions based on those its proven franchises, Disney can expect better returns than it might get from new and unproven stories.
The danger to Disney’s approach is that almost every investment eventually suffers from diminishing returns. People turn to entertainment not just for comfort but also to experience the rush of something fresh and exciting. That can happen within existing franchises, but sometimes a hot rookie quarterback needs to come into the game to replace an ailing veteran. Disney needs to keep investing in new stories and new creators if it wants to keep cashing returns on its fans’ investment in the company.
Now it is Josh D’Amaro’s turn to write his Disney story. Disney fans are hoping that it will be one to remember.