Walt Disney: He Built A Better Mouse

Hollywood feared new technology -- but Disney used it to create an iconic brand

As part of its anniversary celebration, BusinessWeek is presenting a series of weekly profiles for the greatest innovators of the past 75 years. Some made their mark in science or technology; others in management, finance, marketing, or government. In late September, 2004, BusinessWeek will publish a special commemorative issue on Innovation.

"Never forget that it all started with a mouse," Walt Disney was fond of saying, and in a sense that was true: The company that today bears his name rose to prominence with Mickey Mouse, a character the onetime commercial artist first sketched on a 1928 train trip from New York to Los Angeles. Soon, Mickey Mouse would become a celluloid superstar. His third film, Steamboat Willie, for which Walt provided the rodent's high-pitched voice, was the first cartoon to synchronize sound and motion. Three years later, Disney added color to his growing menagerie, which included Minnie, Goofy, and Donald Duck. And in 1937, he made Hollywood's first full-length animated film, Snow White and the Seven Dwarfs, a $1 million production that nearly bankrupted the company he and his older brother Roy had established in 1923.

In an industry that feared new technology like TV, because it might keep moviegoers home, Disney loved it. In the process, he invented the world's first media conglomerate, turning his collection of characters into toys, parading them through theme parks, and featuring them on records, radio, and in comics. "He created a brand that stood for clean, wholesome family entertainment, using synergy before there was even a word for it," says Stanford University Graduate School of Business marketing professor Peter Sealey, an ex-Columbia Pictures executive.

Walt Disney
The man whose name is an American icon was born in Chicago in 1901, a farmer's son. Disney's first business, making satirical cartoons in Kansas City, went bust, so with $500 from an uncle, he and Roy headed for Hollywood, where they started a small studio. When Universal Studios Inc. hired away staff and with them Walt's popular character Oswald the Lucky Rabbit, the two vowed to stop working for others.

Walt Disney Studio was fueled by Walt's imagination, honed on Mark Twain and on memories of French castles he saw during his World War I tour as an ambulance driver. Business-minded Roy found ways to finance Walt's creations. One method changed business history: Roy's team struck Hollywood's earliest licensing deal, selling the rights to put Mickey's image on a writing table for $300. Soon, Ingersoll-Waterbury Co. was selling millions of Mickey Mouse watches.

Disney forever altered entertainment with his bet on Disneyland, built in 1955 on a 182-acre citrus grove in Anaheim, Calif. To help finance the $17 million park, the Disneys sold a 34.5% stake to the fledgling ABC TV (DIS ) network and agreed to produce a weekly show with the park as its backdrop. Not long after, The Mickey Mouse Club was born, and the driving force of the company became cross-promotion. Disneyland's Frontierland gave rise to the Davy Crockett TV series that in turn created a national craze for coonskin caps -- licensed by Disney.

Expansion continued after Walt's death in 1966 at age 64. The 28,000 Florida acres Disney purchased for $5 million opened as Walt Disney World's Magic Kingdom six years later. The company has suffered bumps -- a failed 1984 takeover attempt and shareholder revolt over current CEO Michael D. Eisner. But its early embrace of new technologies helps it endure. Kids flock to Disney parks from Paris to Tokyo -- and today buy Mickey DVDs on their way out the gates.

By Ronald Grover

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