The Walt Disney Co.

World’s #2 largest media company.


31% broadcasting

23% theme parks and resorts

46% "creative content" (films, publishing, merchandise)


Early Years: Disney

Walt Disney: born in 1901. He and his brother Roy opened their first studio in 1926. It was a partnership of two brothers: Roy and Walt. Walt, the younger brother, handled animation, and the older brother, Roy, handed financing.

The birth of the company may well have been Walt’s brainstorm, on a cross-country train ride from NY to LA, to create a little mouse character named MORTIMER MOUSE. Walt’s wife, Lillian, however, insisted that Mortimer was too formal a name. How about Mickey?

First full length animated feature film, 1937. Princess: Snow White. Wicked Step Mother: Queen. Queen obsessed with being the most beautiful woman. "Magic Mirror on the Wall, Who is the fairest one of all?"

The young princess lives a life of drudgery. One day, at a wishing well, singing, and a handsome young man -- a PRINCE -- comes by. They fall in love. Mirror: tells the wicked queen that Snow White is the fairest of all. Queen tells her huntsman: take her in the woods and kill her; bring back her heart in a box. Huntsman takes SW into the woods -- but tells her to flee. In the dark forest, she befriends woodland creatures who help her find a place to stay. At the home of the 7 dwarfs. The evil queen is fooled at first; but the mirror tells her that Snow White lives. So the queen concocts a sleeping potion -- sleeping death -- and puts it in an apple. Anyone who eats the apple will fall into a deep, death-like sleep; they can only be revived by a kiss from their first love. Queen figures the dwarfs will bury her alive.

Not a prominent studio. During the late 1920s, and throughout the 1930s and 1940s, the company produced cartoons, a few animated feature films, nature documentaries and live-action features (such as Treasure Island).


The 1950s witnessed the great early growth of the company with television.


Disney remained a family-controlled company until 1984 when the company was taken over by other stockholders.



1. Disney Motion Pictures

The largest source of income is the motion picture industry.

Various labels:

Motion picture strategies:

2. Disney Theme Parks.

Very successful. In 1996, 47.5 million people visited Disneyland and DisneyWorld.

The 1995 debut of Disneyland’s Indiana Jones attraction helped attendance zoom 35%. Growth does not come easy. Major new rides can cost $50 million to $200 million apiece; their drawing power soon wears off. Building a new theme park takes years of planing, more than $1 billion in capital outlays and inevitable battles with area residents over what constitutes the best use of real estate.

Not all Disney theme parks have done well. EURO DISNEY, opened in 1992, posted operating losses for its first three years and at one point was losing $1 million a day. Disney had spent too much money on it, built too many hotels, opened during a recession and blundered in initial marketing strategy by refusing, for examples, to serve wine. Changes have been made; park turned a profit for the first time in 1995. Euro Disney is now France’s number 1 tourist attraction.

In 1999, Euro Disney unveiled plans to build a movie theme park outside Paris,next door to its Magic Kingdom Park. The $4 billion dollar park is slated to open in 20002. The idea: attract more people to Euro Disney, and a broader range of people (moving beyond the present accent on families and small children to embrace adolescents and young adults).

Another theme park plan was defeated. Disney wanted to open a historical theme park about 40 miles West of DC, near Civil War battlefields in rural VA. The project had the support of many local politicians but was bitterly opposed by property owners and historians.


3. Disney Television

Disney’s greatest modern success probably stems from Walt Disney’s move into television in the 1950s. Disney shows common on TV ever since. But that presence increased dramatically with Disney’s July 31, 1995, takeover of the TV network giant ABC . That deal gave Disney its own distribution company.

The deal brought together the No. 1. TV distributor and network and the nation’ premier producer of movies. One of a kind global powerhouse. In 1995, Disney made the move from being a dominant global content producer to being a fully integrated media giant with the purchase of CAPITAL CITIES/ABC for $19 billion, one of the biggest acquisitions in business history. The ABC deal provided Disney, already regarded as the industry leader at using cross-selling and cross-promotion to maximize revenues, with a U.S. broadcasting network and widespread global media holdings to incorporate into its activities.

AD AGE (8/7/95): Disney is uniquely positioned to fulfill virtually any marketing option, on any scale, almost anywhere in the world. Disney plays to expand aggressive overseas. Stated plan: to expand its non-US share of revenues from 23 per cent in 1995 to 50 per cent by 2000.


Many ABC Sitcoms have episodes set at Disney world -- since Disney acquired ABC. In the 1996-97 season, at lest three ABC shows sent their characters to DisneyWorld for an episode or two and painted the park as something close to heaven. Not only were there no 45-minute lines for rides or overcrowded restaurants, but everyone’s problems were solved there. A theme park: a place to find true love, rekindle it or teach the kids vital moral lessons they apparently never bothered to learn at home. STEP BY STEP. Frank and Carol (Patrick Duffy and Suzanne Somers), parents of 7, leave Wisconsin with the family and get a romantic night alone. one of the teems overcomes a lifetime of self centeredness; their son learns fiscal responsibility. BOY MEETS WORLD. At home in Philadelphia, Cory (Ben Savage) has spent there months trying to get his ex girlfriend, Topanga, to take him back. But after he and his best friend follow her to Disney World, she sees him in a new light when she overhears him talking to a lovelorn dolphin. The episode also shows how nice Disney World can be for homeless people: the boys sleep overnight in a ride with long shaped seats, but Goofy treats them like honored guests when they ask for directions..

Other Disney Enterprises, developments:

ESPN: a 24-hour service., owned 80 per cent by ABC (a subsidiary of Disney) and 20 per cent by the Hearst Corp. ESPN’s family of networks includes ESPN, ESPN2, ESPNEWS, Classic Sports, ESPN Radio, ESPN SportsZone and ownership or interest in 20 international networks.

ESPN enormously important for its Disney’s expansion. ESPN International dominates televised sports, broadcasting on a 24-hour basis in 21 languages to more than 165 countries. Disney plans to use the synergies of ESPN much as it has exploited its cartoon characters.

"We know that when we lay Mickey Mouse or Goofy on top of products, we get pretty good creative stuff," says Michael Eisner. "ESPN has the potential to be that kind of brand."

4. Other Disney ventures

Disney plans: ESPN theme sports bars, ESPN product merchandising and possibly a chain of ESPN entertainment centers based on Club ESPN at Walt Disney World. ESPN has released 5 music Cds, two of which have sold over 500K copies. ESPN Sports Weekly, a joint venture with Hearst, to be a competitor to Sports Illustrated.

Other activities spurred by competition:

Competition brisk in the theme park business (e.g., rivals MCA, Time Warner and Paramount Communications).


The Disney Co. has been a pioneer in marketing to children since the company began. In 1929, only a few years after the company had started, the company sold the rights to use Mickey Mouse on school writing tablets and began extensive merchandising and licensing campaigns shortly thereafter. Products include: underwear, jewelry, toothbrushes, silverware, toys, etc.

Roy Disney: "The sale of a doll to any member of a household is a daily advertisement in that household for our cartoons and keeps them all ‘Mickey Mouse Minded.’"

As is true today, Mickey merchandise helped sell movies and movies helped sell merchandise. The resulting synergy helped break a seasonal sales cycle that had up till then plagued the toy industry (that is: toys only sold at Christmas time). By tying toys in with movies, Disney found a way to create new toys and continually reinvent old ones year around. Like movie going, toy buying was to be an every day ritual. 1950s and TV and merchandising. In 1954, coonskin caps from Disney’s DAVY CROCKET became a huge national fad. Sensing great potential with TV, Disney came up with a new program which, unlike Disneyland, was designed exclusively for kids: THE MICKEY MOUSE CLUB.

MICKEY MOUSE CLUB was a key component of early kids programming.


1994: Lion King and merchandising.

1994 animated Disney film.

1996: 101 Dalmatians and marketing.

Very successful movie. Did well at the box office. But much more than that: a very successful merchandising event, too. Dalmatians was a test of a strategy to both boost earnings and lift pressure from Disney’s animation division, which is under attack from a growing roster of competitors, including Warner Bros., Fox and DreamWorks. The idea is to roll out family oriented live action EVENT movies that will produce the same huge payoffs for Disney’s consumer-product, home video and theme-park operations that its animated features have been providing. Obvious merchandise tie ins: mostly toy Dalmatian puppies.


Disney: attacks, boycotts, etc.

1. Critics say: Sexy Messages Hidden in Cartoons

Three Texans sued Disney, arguing that three Disney animated video hits -- Mermaid, Aladdin and The Lion King carried subliminal sexual messages slipped into them by the Disney company.


--Aladdin says, "Good teenagers, take off your clothes." Disney has previously insisted that the line is, "Good tiger, take off and go." But with the music in the background and the garbled sound quality, it is very hard to tell.

One Web site contends that Aladdin says: "Good kitty, take off and go."

This rumor started soon after Aladdin was released on home video in 1993. A garbled and whispered portion of dialogue that could barely be heard in the theater was being replayed over and over in some homes but was still hard to distinguish. Someone came up with a salacious phrase; the rumor spread.

In 1994, the rumor appeared in print, in Movie Guide magazine, an Atlanta-based Christian entertainment review. Due to that article, the controversial phrase was brought to the attention of the American Life League, a religious organization which had been boycotting Disney films since the previous April as a protest over the movie PRIEST. The American Life League gave new prominence to the rumor in September 1995 when it claimed the phrase was yet another piece of evidence that Disney had been sneaking "sexual passages" into their animated films for the past several years.

Lion King

--Lion King looks on contentedly while the stars above spell out the letters S-E-X.

About half way to three-fourths of the way through the film, Simba, Pumbaa and Timon are lying on their backs, looking up at the stars. Simba arises, walks over to the edge of the cliff, and flops to the ground, throwing up a cloud of dust. Eddies of dust form and dissipate in the roiling cloud, and at one point the various curves and angles in these eddies appear to form the letters SEX.

You have to incline your head slightly to the left to see the letters as the dust drifts to the left hand side of the screen.

It takes a bit of persistence to see specific letters in the shapes formed by the swirling dust clouds, even when the video is played in slow motion.

People who are just told to look for a word in the clouds seldom can find one. People looking specifically for SEX sometimes can find it.

Origins: A young boy, viewing the video with his head tilted, noticed the appearance of the letters SEX and told his mother about it. His mother notified a religious organization called the American Life League, which claimed that was yet another occurrence of Disney’s deliberately inserting hidden images into their animated films.

Little Mermaid

--The minister in the wedding scene in Mermaid has an erection. Either that or knobby knees.


Southern Baptist Boycott

In 1996, the 15-million member Southern Baptist Convention put Disney on notice -- they were watching the company’s actions. A year later, further dissatisfied with Disney, the 2000 delegates at the 1997 Southern Baptist Convention voted to boycott Disney and its subsidiaries. The resolution urges "every Southern Baptist to take the stewardship of their time, money and resources so seriously that they refrain from patronizing the Disney Co., and any of its related entities." The resolution was not binding on the 40,613 churches affiliated with the Southern Baptist Convention.

Objections to Disney:

Rev. Richard Land, President of the SBC’s Christian Life Commission:

Health benefits to gays, gay days, Ellen, some Disney movies: all objectionable. He advised: target Disney theme parks and megastores rather than trying to hit all Disney movies and TV shows.

Herb Hollinger, convention spokesperson: "There seems to be a feeling that Disney has ignored us, and the crowning blow was the coming out of Ellen."

Other criticisms of Disney:

"Magic Kingdom" dubbed the "Tragic Kingdom" by some of its critics.


Eisner Response: no effect

Michael Eisner, Disney chairman, called the boycott "ridiculous" and denied it would have any effect on Disney. No effect financially, he said. Eisner denied that Disney was pushing an "anti Christian" or "anti family" agenda. "That’s ridiculous. We’re not pushing any agenda."

Eisner on Pocahontas: "When somebody says Pocahontas is anti-Christian or anti-Jewish or anti-black or anti-Native American, I say inside deep down, ‘They’re nuts." They really are. She didn’t become a Christian in the legend until after our story ended. Pocahontas is one of the most pro-social movies made in the 75 years of the history of the Disney Company."

Eisner on Ellen: He said the show’s lesbian story line had been very well done. He said that a recent advisory placed at the beginning of an ELLEN episode (where the star, Ellen DeGeneres kisses another woman) was in no way a response to the boycott. Eisner said the advisory warned parents who didn’t want their children watching something that is against what they believe in.

Eisner on Gay Days at the Theme parks: "I think it would be a tragedy for us to exclude anybody."

Are the boycotts of Disney effective? Answer depends on whom you ask.

Any Effect?

1. YES:

Disney recalled 100K copies of a hip hop album laden with obscenities just days after it was released to stores under Disney’s Hollywood Records Label. The unusual decision to pull the record, Insane Clown Posse’s THE GREAT MALENKO came just about a week after Baptists announced their boycott of the company for its alleged anti family products and practices. Disney senior management said the recall was not triggered by the boycott but by "inappropriate" lyrics. Internal review procedures had not caught those at first. Said lyrics: offensive to women. (Disney has been trying to revive its Hollywood Records; signed Insane Clown Posse for $750K. ICP is a white hip hop and that has self released several albums previously).

In 1999, Disney’s Miramax film company gave up distribution rights to the movie "Dogma" (with Ben Affleck and Matt Damon) after it was judged controversial. The movie was generally cynical about religion and was deemed by some to be anti-Catholic.

2. NO:

Quite possibly true. Many Baptists have criticized the boycott, calling it doomed to failure. Some have argued that it needs to be focused on a few Disney properties (e.g., movies or theme parks) rather than on television. The wide spread of the Disney company (including ESPN, theme parks, etc.,) means that there are many attractive aspects of the company. That makes a boycott all the harder.

Washington Post story, July 6, 1997:

The Rev. Ray Hope had just arrived home from Dallas where he’d helped approve the Southern Baptist Convention’s boycott of the Walt Disney Co. His 1-year-old daughter met him at the door, dressed in a Minnie Mouse bathing suit. Inside, his son was watching a Disney video. The pastor of Rockville (Md)’s Montrose Baptist Church also has cable television, leaving him vexed with the problem of how to stop his money from going to Disney-owned channels, including the all-sports ESPN. How far do you go? Hope wondered aloud. "What am I going to do, call the cable company and say I don’t want cable anymore? Where do you stop? Do I not go to McDonald’s because it’s promoting [Disney’s] Hercules?"

Other Baptists are very critical of the boycott. Rev. Robert Maddox, pastor of the Briggs Memorial Church in Bethesda, Md: "I’m embarrassed to be a Southern Baptist anymore. There was no struggling with the real issues, with the pain that I think a lot of gay people feel, the ostracism. If Baptists had any hope at all to minister to the gay community, they’ve just wiped it out. To go after a very complex problem in this kind of shotgun way is a terrible misplacement of energy and a terrible loss of compassion." (Maddox has been a pastor for 40 years/)


Another target of protests was the ABC show "Nothing Sacred." The TV show debuted in Autumn 1997 on ABC. It was the story of Father Ray (starring Kevin Anderson). Entertainment Weekly described him as an "irreverent priest who questions the existence of God, feels lust in his heart and touches people’s souls." Tampa Tribune noted it was the story of a priest who faces a corrupt parish and self doubt. Orange County Register: iconoclastic priest.

ABC: "It’s been tough being a priest in the 90s, just as Father Ray. In one morning alone, he has nearly been fired for advising a pregnant teenager to follow her own instincts. He has to turn down a bribe in the confessional, even though he’s desperate for money to keep his church afloat. His college flame has just walked back into his life and reignited old passions. And now his mentor is asking him to deliver a sermon proving the existence of God. How should he know if God exists?....he hasn’t even read the book yet!"

Firestorm of protest from one group: Catholic League for Religious and Civil Rights:

"The leading priest, Father Ray, comes form a dysfunctional family, thinks of his vocation as merely a job, admits that he isn’t sure of the existence of God, violates his duty as a confessor and rejects the Church’s teachings on sexuality. But he loves the homeless, ponders a love affair with an old flame and tells his adversaries to ‘go fax yourself.’ Quite naturally, those Catholics who accept the teachings of the [Church] are portrayed as cold hearted, selfish and tyrannical persons.

"It is amazing to hear Father Ray tell his parishioners that it’s time to ‘call a moratorium on the sins of the flesh.’ He then says that the Church’s teachings on homosexuality, promiscuity, abortion and contraception can be ignored because the Bible says little or nothing about them. He boasts that he will no longer be a ‘sexual traffic cop’ and advises those who want such a priest to go elsewhere.

"This Disney/ABC Show is nothing more than a political statement against the Catholic Church. The goal is to put a positive spin on Catholic priests who prefer Hollywood’s libertine vision of sexuality to the moral teachings of the Church. This propaganda is fodder for dissenting Catholics and anti Catholic bigots alike. We hope that others will join with us in what is only the beginning of our protest.

"Disney/ABC would never put a positive spin on a priest who rejected the Church’s teachings on welfare reform, nuclear war, immigration and the death penalty, for to do so would be to undermine their own politics. On the other hand, if they really believe that Father Ray is not offensive, then why not make him a black minister or a Jewish rabbi?"



League targeted advertisers, hoping to put pressure on the show that way. Some sponsors did discontinue advertising, although may well have been from the low ratings. Aiding the boycott call: poor ratings for the show. It was on ABC, on Thursday nights, one hour show, 8 p.m. , running against NBC’s top night (Thursday; with Seinfeld).

Sponsors who quit -- according to the League: Isuzu, Chrysler, Nissan, Kmart, Red Lobster, A&M Kitty Litter, Montgomery Ward, Albert Culver, CORTEXX Hair conditioner, Honda, Ovaltine, Ponderosa steak house, Weight Watchers

Home Depot, Pier 1. (Note: they may well have quit because of the show’s low ratings, not because of the League attack).

Sponsors who remained: GM, Sony Pictures (a lot of movie ads on Thursday nights); Warner Lambert (Sudafed, Park Davis Benadryl, Listerine, Schick Razors); Bristol Myers (Clairol, Excedrin); Time Warner (Movies); Burger King, Universal Pictures; Samuel Adams beer; Disney’s Touchstone pictures; Paramount pictures

League also urged its members to send a petition to Michael Eisner, Disney’s chair, urging him to kill the show.

The show’s low ratings led to its cancellation.


Other challenges for Disney: remaining popular.

1.Disney has been in a slump since 1997. Kids lose interest in Disney entertainment at a much younger age than they used to do.

2. Teens and even some pre teens are now snubbing Disney; Disney’s family-centered entertainment seen as boring by many in this group.

3. Disney did not even merit a mention on the Teenage Research Unlimited’s Survey of the Fifty Coolest Teen Brands.

4. Disney’s reaction: more pop music on the Disney Channel and more of an Internet presence to court coveted 9-15 year old audience. Popular mainstream acts from Britney Spears to the Backstreet Boys are appearing on Disney Channel .

5. However, many of these acts are agreeing to alter their lyrics, wardrobes and dance moves to get Disney Channel airtime. With its 55 million subscribers, exposure on the Disney Channel can generate surprising huge sales. Disney can also arrange for other publicity on other Disney shows (such as Live With Regis and Katie Lee). In 1998, Disney’s "In Concert" special featuring the group N Sync ignited previously mediocre album sales and propelled the group to stardom.

6. Since 1997, Disney’s ratings share of 9-15 year olds has doubled.

7. Internet presence: Zoog Disney (a web site that is the Disney Channel’s interactive companion).

8. Other efforts: faster paced movies (e.g., Tarzan in 1999 was more of a fast paced action movie than its predecessor Mulan), somewhat edgier after school programming on Disney Channel.