The Walt Disney Company has evolved from a wholesome family-oriented entertainment company into a massive multimedia conglomerate. Not only is Disney a producer of media but it also distributes its and others’ media products through a variety of channels, operates theme parks and resorts, and produces, sells, and licenses consumer products based on Disney characters and other intellectual property. CEO Michael Eisner has been instrumental in many of these changes. How can such extensive changes occur while trying to maintain the Disney brand?
Disney Through the Years
After his first film business failed, artist Walt Disney and his brother Roy started a film studio in Hollywood in 1923. The first Mickey Mouse cartoon, Plane Crazy, was completed in 1928. Steamboat Willie, the first cartoon with a soundtrack, was the third production. The studio’s first animated feature film was Snow White in 1937, followed by Fantasia and Pinocchio in the 1940s. Disneyland, the theme park developed largely by Walt, opened in 1955 in Anaheim, California. The television series, the Mickey Mouse Club, was produced from 1955 to 1959, and the Disney weekly television series (under different names, including The Wonderful World of Disney) ran for 29 straight years. (1) Walt Disney died in 1966 of lung cancer. Disney World in Orlando, Florida, opened in 1971, the same year that Roy Disney died. His son, Roy E., took over the organization. However, the creative leadership of brothers Walt and Roy Disney was noticeably absent. Walt’s son-in-law, Ron Miller, became president in 1980. Many industry watchers felt that Disney had lost its creative energy and sense of direction because of lackluster corporate leadership and nepotism. In 1984, the Bass family, in alliance with Roy E. Disney, bought a controlling interest in the company. Their decision to bring in new CEO Michael Eisner from Paramount and a new president, Frank Wells, from Warner Bros. ushered in a new era in the history of Disney. (2)
Work the Brand
Michael Eisner has been involved in the entertainment industry from the start of his career (ironically, beginning at ABC Television in the 1960s). He exhibits a knack for moving organizations from last place to first through a combination of hard work and timely decisions. For example, when he arrived at Paramount Pictures in 1976, it was dead last among the six major motion picture studios. During his reign as the company’s President, Paramount moved into first place with blockbusters such as Raiders of the Lost Ark, Trading Places, Beverly Hills Cop, and Airplane, along with other megahits. By applying lessons he learned in television at ABC to keep costs down, the average cost of a Paramount picture during his tenure was $8.5 million, while the industry average was $12 million. (3) Eisner viewed Disney as a greatly underutilized franchise identified by millions throughout the world. In addition to reenergizing film production, Eisner wanted to extend the brand recognition of Disney products through a number of new avenues. Examples of his efforts over the years include the Disney Channel (cable), Tokyo Disneyland (Disney receives a management fee only), video distribution, Disney Stores, Broadway shows (Beauty and the Beast), and additional licensing arrangements for the Disney characters. However, in the early 1990s problems began emerging for Disney. An attempt to build a theme park in Virginia based on a Civil War theme was defeated by local political pressure. EuroDisney, the firm’s theme park in France resulted in over $500 million in losses for Disney due to miscalculations on attendance and concessions. In 1994, Eisner underwent emergency open-heart bypass surgery and Frank Wells, long working in the shadows of his boss but increasingly viewed as integral for the success of Disney, died in a helicopter crash. Eisner’s choice to succeed Wells, Michael Ovitz from Creative Artists Agency, did not work out and Ovitz...
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