Disney in Russia
The
Soviet nation of Russia was first introduced to Disney’s animated characters
back in 1931, when Moscow hosted the Festival of American Cartoons. [8a]
Though, it was sixty years later, after the fall of the communist party in 1991,
when Russia was introduced to democratic politics and free market economies.
With the lack of a communist government in charge, Russia became a newly
developing economy, despite the fact that it is over one thousand years old.
[2] It is because of the potential for economic growth combined with the increase
of the population’s purchasing power that The Walt Disney Company has focused much
of their energy into establishing a foundation for long-term growth in newly emerging
markets like Russia’s.[3] The nation of Russia is, literally, the largest
country in the world with the ninth largest population. At 17,075,200 square
kilometers (that is over 7 million more square kilometers than the second
largest, Canada), it holds a mere 144 million people. [1] To the Walt Disney
Company, they are extremely important people.
The
Walt Disney Company frequently uses smart business strategies for reaching
global markets such as Strategic Alliances, Foreign Outsourcing, Licensing, and
Direct Investment. [3] Over the last ninety years, Disney has grown from a
small cartoon studio in the United States to a worldwide brand name, something
that could only seemingly be done with help from a little magic. However, it
isn’t magic; it is just smart strategic action. “When pursuing new markets,
Disney typically focuses first on introducing the channel to deliver its brand
directly to people’s homes. Then it uses that base to sell theme park vacations
and merchandise” (Brooks Barnes) [4]. Broadcasting their specialized Disney
channel to households in the developing markets such as Russia, allows Disney
to advertise their brand name and expand their presence in the country.
Disney’s
first successful entry into Russia came in 2006, with the opening of The Walt
Disney Company CIS, which is a company that works on the production and
distribution of films, stage productions, licensed products, distribution of
consumer goods, publishing, online and digital gaming, and destination
vacations. [8b] Though that does seem like a lot, Disney never stopped pursuing
an opportunity for a television channel and network Russia.
Of
course, as an American company, Disney faced many barriers to trade when
entering Russia, and they have developed a need to adapt to the sociocultural,
economic differences, and legal differences, as well as political differences
there. [3] This is especially true when the government blocked Disney’s
original attempt in 2008 at a partnership with Media-One-Holdings Limited, a
Russian media company. However, in 2011,
Disney was able to enter into a strategic alliance by acquiring 49% of the
broadcast channel SevenTV, which is estimated to reach more than 75% of
Russia’s measured television audience. The channel, SevenTV, which was airing
old Soviet films at the time of Disney’s acquisition, will remain majority
owned by the fast growing media company, UTH Russia. [4]
This localization strategy of
aligning with an existing, developing channel, is seen in the programming
lineup of the new rebranded channel (from SevenTV to Disney Channel), which
shows a mix of Disney’s signature children’s show as well as original Russian
content. The channel is set to reach approximately 40 million households out of
a population of 140 million people. Although the acquirement of SevenTV is
considered a small audience share in Russian television and advertising, Disney
knows that this will provide them with the infrastructure to build a national
network in Russia. This deal also signaled a new approach for Disney Channel,
which had always been part of a paid-tv service (non-basic channel), since they
launched this channel in Russia as part of a free network of programming. [4]
This is a smart tactic by Disney, because according to the Geert-Hofstede
cultural model of Russia, there is a large gap in the financial power of this
country. Two-thirds of this country’s financial power lies in one city, Moscow,
causing the rest of the country to struggle financially. So offering free
programming is a smart move by Disney for a guarantee that they will have their
name, their brand, and their presence known throughout the entire country. [9]
The Walt Disney Company holds itself and its affiliates at a high
standard. It expects all to be highly responsible for its employees, their
families, and to society. [8] In Russia, the social policy of Disney is in tune
with the national projects that are implemented by the Government of the
Russian Federation, such as Education and Health. Disney has also been actively
involved in supporting children’s organizations, particularly hospitals and
charities. [8c] In December 2007, on the
New Year’s Eve, Mickey Mouse, as part of the Disney Russia Team, invited
children with special needs from all over the country to come to the Bolshoi
Theater. The children were invited to meet their favorite characters and to
watch “The Nutcracker” ballet, starting an annual tradition in which the Disney
Team in Russia hosts a theatrical event that leaves a lasting impression on
young Russian Disney fans. [8d] This is yet another smart move by Disney. In
Geert-Hofstede’s cultural dimension of masculinity vs. feminism, Russians are
shown to be collective society, and view caring for others as an extremely
important quality. [9]
Disney is well aware of the Russian
culture, and so, as part of their 2012 Season of Giving the Disney team in
Russia hosted an event at the newly opened Rossia Theater in Moscow. More than
1200 children, including orphans, children with disabilities, and children with
life-threatening medical conditions were invited to a special performance of
one of their newest Disney experiences, a stage performance of The Little
Mermaid musical. [5] In 2013, Disney worked with the Saint Petersburg Theatre
of Musical Comedy to develop a special performance of Aladdin. In reference to
this specialized performance, Marina Zhigalov-Ozkan, the managing director for
Disney in Russia, stated, “We are committed to creating shows specially
designed for Russian audiences, and Aladdin is another example of that
commitment.” [6]
For Autism Awareness Day, the Disney
Team in Russia worked with charities and Russian talent to create a special
performance of “Beauty and the Beast” for children within the autism spectrum.
The performance, which was part of the international campaign known as “Light
It Up Blue”, was altered for the audiences’ sensitivity to lights and
sounds. In fact, the Disney Team in
Russia has a consistent habit of giving away the first run of tickets to every
show, to children with special needs, so that they can be the first audience to
see the premiere of the Disney movies and stage productions. Additionally, The
Walt Disney Company CIS in Russia hosts an annual global event that they call
“VoluntEARS Day”, where the employees go to orphanages and hospitals to help
bring gifts and play with the children, while also helping with restoration
needs and redecorating. [8c, 8d]
Even
though the Walt Disney Company has been present in Russia through various
aspects since 2006, [8a] they had always viewed their position there as just a
small ‘toehold’, but the acquisition of SevenTV in 2012 gave them an important
‘foothold’ where, according to Disney’s CEO Robert A. Iger, “We can now grow
more robustly.” [4] Truthfully, they have been growing robustly since 2006. The
Walt Disney Company CIS in Russia in involved in filmmaking, publishing,
theatrical performances, internet portal/content, online games, mobile
applications, and licensed consumer products. In the area of filmmaking, the
Disney Company in Russia does not only provide the best of Disney’s famous
films, but is also engaged in the outsourcing for the production of local films
as well (under the Disney brand). The first Russian Disney movie was released
in 2009 and was titled “The Book of Masters”.
This film was based on Russian folk tales, and was the first film to be
wholly produced and filmed in Russia. [8b]
In
the spring of 2014, The Disney Company CIS in Russia launched its first
large-scale multimedia project title “Happiness Is…”. The project was aimed at
the development of national cinema by supporting the country’s film directors
and screenwriters. The project consisted
of four creative outlets, two of which were specifically for professionals
(young directors and screenwriters), the other two were open for all Disney
fans. All who entered the event had a chance to participate in the creation of
seven short stories, united by one theme… happiness. [8b] This is a new concept
to many of the older generations in Russia. According to the Geert-Hofstead
model of cultural dimensions, where one of the highest scores falls in the
Power Distance category. [9] This basically means that the most powerful people
in Russia are very distant from the bulk of society. There is a large gap
between the less powerful and more powerful people in Russia.
As
far as future charitable endeavors, the Disney Team in Russia has recently
announced its plans to add a third city to the 2015 Holiday events. [8d] The
past events have always been held in the two most populous Russian cities of
Moscow and St. Petersburg, but this year, a third city has been added,
Rostov-on-Don. On November 27, 2015, thousands of children with special needs
will be invited to the Rostov State musical theater to watch the Nutcracker,
and meet with their favorite characters. Then on December 18th,
children with special needs from other areas of the country will be treated to
a special showing of “Aladdin”. Coming
in 2016, as The Disney Russia team celebrates its Tenth anniversary, they will
invite more than ten thousand children from different regions of the country to
be the guests of a charitable event. The team is pleased as always, that their
efforts are supported by the administration of the President of the Russian
Federation. [8d ]
Igor Shchegolev,
Russia’s minister of communications and mass media, has been quoted in saying
that he hoped the partnership with Disney would be “a positive start up” in
Russia’s media industry as Russia is interested in cultivating its own
entertainment industry and viewed Disney as an important source of
expertise.[4] This is an important bit of information for The Walt Disney
Company, and their potential for direct investments in the future. Since they
view Disney as a successful company, they must also see their partnership with
Disney as low-risk. Russia is not a country that enjoys risk-taking, as shown
in their score of the Geert-Hofstede model of Uncertainty Avoidance. [9] Disney
is definitely a company that has proven their continuity and long lasting
success more than once.
As
you can see, the Walt Disney Company’s pursuit of emerging markets is much like
the easy, yet powerful stroke of an artist. Slowly and steadily, they make
their mark as they expand their presence. By working closely within the
communities to transition into the culture, Disney is able to grow
significantly through strategic alliances, foreign outsourcing, licensing, and
direct investments. Perhaps in the
future, Disney will be able to directly invest in a theme park, resort, or land
adventure of its own to advertise to the residents of Russia. For now, Disney
continues to build its presence through its Disney team; outsourcing the producing
films, licensing consumer goods, interactive play, and creating strategic
alliances with the television and theatrical company performances. The magic of
Disney cannot be contained.
Cited Websites:
[1] Minniwatts
Marketing Group, 20-Sept-2015, http://www.internetworldstats.com/stats8.htm
[2] Wikipedia,
last update 31-Oct-2015, https://en.wikipedia.org/wiki/Russia
[3] Menegazzi-Caseiro,
Bianca, 11-Feb-2012, https://sites.google.com/a/email.vccs.edu/bus100bmenegazzi/strategies-for-reaching-global-markets
[4] Barnes,
Brook NY TIMES, 27-Oct-2011 http://mediadecoder.blogs.nytimes.com/2011/10/27/disney-channel-to-be-introduced-in-russia/
[5] Gill,
David, Disney Company Event Blog, 7-Dec-2012 https://thewaltdisneycompany.com/blog/disney-hosts-charity-event-special-viewing-little-mermaid-musical-russia
[6] Gill,
David, Disney Company Event Blog, 25-Feb-2013 https://thewaltdisneycompany.com/blog/international-roundup-winter-highlights-europe
[7] The
Walt Disney Company Website https://thewaltdisneycompany.com/about-disney/disney-around-the-world
[8] The
Walt Disney Company CIS Russia Website http://waltdisney.ru/
a. About
the History of the CIS company in Russia http://waltdisney.ru/about/russia/
b. Business
Segments http://waltdisney.ru/business/
c. The
Company ‘s involvement in Society http://waltdisney.ru/society/
d. Latest
News of the Company’s events http://waltdisney.ru/press/
[9] Geert
Hofstede Cultural Analysis of Russia http://geert-hofstede.com/russia.html
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