Disney to Combine Consumer, Interactive Into Single Division

Updated on

Walt Disney Co. is combining two businesses with increasing overlap, consumer products and interactive units, into a single operation to be led jointly by the current heads of the two divisions.

The new Disney Consumer Products & Interactive Media will be run by Leslie Ferraro, who became president of consumer products in May, and Jimmy Pitaro, who held the same post at Disney Interactive, the company said Monday in a statement. The company created a laboratory within the new division to develop high-tech toys.

“As technology and digital entertainment continue to evolve, a shared innovation strategy will enable this new segment to create unique and engaging products and experiences that exceed consumers’ expectations,” Thomas Staggs, Disney’s chief operating officer, said in the statement.

The company’s Infinity video game, which combines onscreen play with collectible toys based on multiple Disney characters, has helped Pitaro’s interactive division become profitable. The unit reported a $116 million operating profit last year, from a $308 million loss as recently as 2011, helped by new products like Infinity as well as staff cuts.

The improved performance of the interactive unit and the increasing convergence of technology and traditional toys made this a good time to combine it with the larger consumer products operation, according David Miller, an analyst with Topeka Capital, who issued a report June 1 saying the move was being considered.

“It seems natural to combine the units,” Miller said in a telephone interview on Monday. “It simplifies the reporting structure.”

The consumer products unit this month unveiled a line of wearable toys that use radio waves and other technologies to interact with each other. The Playmation toys will be promoted by Disney this holiday season.

Disney is the world’s largest licensing company, on the strength of characters from Mickey Mouse to Iron Man. Sales at the consumer products division rose 12 percent last year to $4 billion.

Disney fell 1.7 percent to $113.05 at the close in New York. The shares have advanced 20 percent this year.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE