Disney has made the decision to shut down Disney English, its chain of English language learning centers in China. While Covid-19 made this an almost inevitable move, I was sad to see the news because Disney English played such a formative role in my career as an executive at Disney and so informed the path I followed thereafter.
I thought it would be interesting to briefly examine this obscure portion of Disney’s empire. I’ll devote this column to the the reasons why Disney undertook this venture. Later I’ll write about the issues of execution, why it became the most obvious victim to Covid, and what next.
Wait—what was Disney English?
Disney English was a chain of centers in China providing supplemental English language instruction for kids from ages 2-12. It featured seven levels of instruction, which each level comprising a full year of instruction delivered for two hours per week in one or two sessions. The senior instructor in each class was a native English speaker. In-class instruction was designed around a multiple intelligences curriculum, incorporating video, music, games, movement, and manipulatives. The centers themselves were a colorful and comfortable place to leave your kids while they waited for their classes to start. There were materials with take-home activities and an online learning portal to check on your child’s progress.
At its height, the chain comprised over 30 centers in Shanghai, Beijing, and surrounding cities, and employed about 30 people per center plus central office staff.
Why the heck was Disney in this business?
One of the fascinating aspects of the Disney brand is that it has tremendous permission to enter a far-flung range of businesses. English language learning (ELL) services was one of these—not obvious, but an organic extension of its publishing business.
Disney Consumer Products, through its publishing division, had long licensed its characters to several companies that created ELL curricula, including World Family—a Japanese MLM company that sold Disney’s World of English, an expensive home learning system) and Pearson, which sold Disney co-branded classroom programs to Ministries of Education and private schools throughout the world.
In the mid-2000s, this business faced declining sales and the strategy team—which included me—was asked to figure out why. We discovered that:
- This was a robust market: in Asia alone, ELL products and services accounted for $6+ bil in consumer spending. This excluded public spending—this was a market that rivaled the scale of the domestic DVD business.
- Disney had a lack of presence in the highest-value segments of the market: high-end services and lower-price products were growing strongly—our licensees’ business models meant that they were focusing on either high-end products or low-end services.
- Disney had strong education equities: our consumer research indicated that parents in China, Japan and South Korea viewed Disney as a trusted educational brand and highly associated with the English language.
Based on these insights, we proposed a more audacious strategy: Launch Disney English as a service business in China. Why did this make sense?
- Strategic Advantage: Disney’s assets and capabilities gave it an edge in this market. There are 4 key deliverables for delivering effective ELL. The first is an effective curriculum. There’s been a lot of research on best practices for teaching and the educational community—including the board of advisors we assembled—is enthusiastic to share. The others are (1) great content to deliver the curriculum; (2) excellent teacher training; and (3) a welcoming environment in the classroom. Disney’s capabilities in content creation, guest services, and Imagineering are renowned.
- Licensing Revitalization: the high-end service business would serve as an engine to create content that could be monetized through traditional licensing. Creating this content for ourselves, we could more carefully control the look, feel and educational point of view to create a more grounded business.
- Gain Learnings in China: Having been stymied on Shanghai Disneyland (Disney English predated Shanghai Disneyland by several years), Disney had no consumer-facing businesses in China. Disney English was an opportunity to gain learnings about operating vertically in the country until that deal could be secured.
- Chinese Halo Effect: Many observers of Disney English saw the business as a cynical play to make Chinese kids into Disney fans. This is nonsense. It was in fact an idealistic play to make Chinese kids into Disney fans. By overdelivering on our core promise—to deliver effective instruction brought to life by Disney content—we would convert these English-speaking kids into lifelong Disney fans, paying dividends back to the rest of the company.
Under the sponsorship of the heads of Disney Consumer Products and its subsidiary Disney Publishing Worldwide we advocated for the business in late 2006 and got approval to work towards a launch.
More to follow.