The Walt Disney Company: The most successful enterprise for monetizing human nostalgia (Audio)

Have I ever shown you my Mickey Mouse Have I ever shown you my Mickey Mouse impression? [laughter] impression? [laughter] impression? [laughter] >> You've done your uh Mario impression for >> You've done your uh Mario impression for >> You've done your uh Mario impression for me in the past, but I'm not. me in the past, but I'm not. me in the past, but I'm not. >> They're a little similar. [laughter] >> They're a little similar. [laughter] >> They're a little similar. [laughter] >> All right. All right. Give me Give me >> All right. All right. Give me Give me >> All right. All right. Give me Give me Mickey. Give me Mickey. Mickey. Give me Mickey. Mickey. Give me Mickey. >> Oh, boy. Will you look at that? >> Oh, boy. Will you look at that? >> Oh, boy. Will you look at that? [laughter] [laughter] [laughter] >> That is really good. You sound like Walt >> That is really good. You sound like Walt >> That is really good. You sound like Walt himself doing Mickey, himself doing Mickey, himself doing Mickey, >> right? Didn't he do Mickey for like 20 >> right? Didn't he do Mickey for like 20 >> right? Didn't he do Mickey for like 20 years? years? years? >> Yep. Yep. Yep. He didn't at the very >> Yep. Yep. Yep. He didn't at the very >> Yep. Yep. Yep. He didn't at the very first and then one of the animators first and then one of the animators first and then one of the animators convinced him to do it and then yeah, he convinced him to do it and then yeah, he convinced him to do it and then yeah, he did it for 20 years. did it for 20 years. did it for 20 years. >> Have I ever given you my Donald Duck >> Have I ever given you my Donald Duck >> Have I ever given you my Donald Duck impression? impression? impression? >> Oh wow. Okay. Well, now I I do I need to >> Oh wow. Okay. Well, now I I do I need to >> Oh wow. Okay. Well, now I I do I need to sit down for this one? sit down for this one? sit down for this one? >> You you might need to. All right. Here >> You you might need to. All right. Here >> You you might need to. All right. Here we go. [laughter] [laughter] That's about right. That's about right. That's about right. That's about right. That's about right. That's about right. I have a great Donald Durbia for you I have a great Donald Durbia for you I have a great Donald Durbia for you coming up. Save it. coming up. Save it. coming up. Save it. >> All right. Save it. Save it. >> All right. Save it. Save it. >> All right. Save it. Save it. >> You're going to be blown away. I'm >> You're going to be blown away. I'm >> You're going to be blown away. I'm pretty sure you didn't find it. pretty sure you didn't find it. pretty sure you didn't find it. >> Great. All right. On to the episode. >> Great. All right. On to the episode. >> Great. All right. On to the episode. Let's do it. Let's do it. Let's do it. >> Who got the [music] truth? >> Who got the [music] truth? >> Who got the [music] truth? Is it you? Is it you? Is it you? Who got Is it you? Is it you? Is it you? Who got Is it you? Is it you? Is it you? Who got the truth now? the truth now? the truth now? Is it you? Is it you? Is it you? Sit me Is it you? Is it you? Is it you? Sit me Is it you? Is it you? Is it you? Sit me down. [music] Say it straight. Another down. [music] Say it straight. Another down. [music] Say it straight. Another story on the way. story on the way. story on the way. >> Welcome to the spring 2026 season of >> Welcome to the spring 2026 season of >> Welcome to the spring 2026 season of Acquired, the podcast about great Acquired, the podcast about great Acquired, the podcast about great companies and the stories and playbooks companies and the stories and playbooks companies and the stories and playbooks behind them. I'm Ben Gilbert. behind them. I'm Ben Gilbert. behind them. I'm Ben Gilbert. >> I'm David Rosenthal. >> I'm David Rosenthal. >> I'm David Rosenthal. >> And we are your hosts today. listeners, >> And we are your hosts today. listeners, >> And we are your hosts today. listeners, we finally tell the story of the Walt we finally tell the story of the Walt we finally tell the story of the Walt Disney Company. Unbelievably, in 11 Disney Company. Unbelievably, in 11 Disney Company. Unbelievably, in 11 years of doing Acquired, we have never years of doing Acquired, we have never years of doing Acquired, we have never told Walt's story and uh it's been a told Walt's story and uh it's been a told Walt's story and uh it's been a glaring omission. It is the glaring omission. It is the glaring omission. It is the entertainment company different than all entertainment company different than all entertainment company different than all the rest. It's over a hundred years old the rest. It's over a hundred years old the rest. It's over a hundred years old and it has played a prominent role in and it has played a prominent role in and it has played a prominent role in almost all of your childhoods and if almost all of your childhoods and if almost all of your childhoods and if you're a parent, likely your parenting you're a parent, likely your parenting you're a parent, likely your parenting journey, too. journey, too. journey, too. >> Oh, yes. >> Oh, yes. >> Oh, yes. >> I'm looking at you, David Rosenthal. Oh >> I'm looking at you, David Rosenthal. Oh >> I'm looking at you, David Rosenthal. Oh yes, and it has played a prominent role yes, and it has played a prominent role yes, and it has played a prominent role in acquired history too. Our very first in acquired history too. Our very first in acquired history too. Our very first episode, Pixar, done Lucasfilm, we've episode, Pixar, done Lucasfilm, we've episode, Pixar, done Lucasfilm, we've done Marvel, done ESPN, although those done Marvel, done ESPN, although those done Marvel, done ESPN, although those are a whole different version of are a whole different version of are a whole different version of Acquired, we may need to decanonize Acquired, we may need to decanonize Acquired, we may need to decanonize those and and redo them uh the proper those and and redo them uh the proper those and and redo them uh the proper way way way >> as part of this. >> as part of this. >> as part of this. >> Listeners, since there are tons of >> Listeners, since there are tons of >> Listeners, since there are tons of biographies and documentaries and places biographies and documentaries and places biographies and documentaries and places analyzing Walt's psyche, we're going to analyzing Walt's psyche, we're going to analyzing Walt's psyche, we're going to focus today on Acquired Sweet Spot, focus today on Acquired Sweet Spot, focus today on Acquired Sweet Spot, which is the business. What is it that which is the business. What is it that which is the business. What is it that Walt's merry band did from the 1920s Walt's merry band did from the 1920s Walt's merry band did from the 1920s onward that made them succeed uniquely onward that made them succeed uniquely onward that made them succeed uniquely well in Hollywood? And when you look at well in Hollywood? And when you look at well in Hollywood? And when you look at Disney's profits today, it is in a whole Disney's profits today, it is in a whole Disney's profits today, it is in a whole different league than Paramount or different league than Paramount or different league than Paramount or Universal or Warner Brothers or any of Universal or Warner Brothers or any of Universal or Warner Brothers or any of the other sort of classic Hollywood the other sort of classic Hollywood the other sort of classic Hollywood studios. The business of feature film studios. The business of feature film studios. The business of feature film production is a mediocre one, especially production is a mediocre one, especially production is a mediocre one, especially by the standards of uh what we study on by the standards of uh what we study on by the standards of uh what we study on this show here with Acquired, except for this show here with Acquired, except for this show here with Acquired, except for Disney. Disney. Disney. >> Yes, exactly. And I will say I am a huge >> Yes, exactly. And I will say I am a huge >> Yes, exactly. And I will say I am a huge Disney fan. I grew up on Aladdin and the Disney fan. I grew up on Aladdin and the Disney fan. I grew up on Aladdin and the Lion King. My first movie in theaters Lion King. My first movie in theaters Lion King. My first movie in theaters was Beauty and the Beast. I'm a huge was Beauty and the Beast. I'm a huge was Beauty and the Beast. I'm a huge Star Wars nerd and my wall was plastered Star Wars nerd and my wall was plastered Star Wars nerd and my wall was plastered with Toy Story posters growing up. But with Toy Story posters growing up. But with Toy Story posters growing up. But somehow I knew nothing about the somehow I knew nothing about the somehow I knew nothing about the company's early history before starting company's early history before starting company's early history before starting this research. Nor did I. For example, this research. Nor did I. For example, this research. Nor did I. For example, it started in Kansas City. there was a it started in Kansas City. there was a it started in Kansas City. there was a character that was supposed to be Mickey character that was supposed to be Mickey character that was supposed to be Mickey Mouse before Mickey Mouse but was lost Mouse before Mickey Mouse but was lost Mouse before Mickey Mouse but was lost in a contract dispute or that many of in a contract dispute or that many of in a contract dispute or that many of the movies I watched in my childhood are the movies I watched in my childhood are the movies I watched in my childhood are actually from 50 years before I was even actually from 50 years before I was even actually from 50 years before I was even born. Snow White was produced before born. Snow White was produced before born. Snow White was produced before World War II. Pinocchio, Bambi, these World War II. Pinocchio, Bambi, these World War II. Pinocchio, Bambi, these films are from the 30s and 40s. They films are from the 30s and 40s. They films are from the 30s and 40s. They even predate the existence of even predate the existence of even predate the existence of televisions in people's homes. Yep. And televisions in people's homes. Yep. And televisions in people's homes. Yep. And importantly for Acquired's roots, this importantly for Acquired's roots, this importantly for Acquired's roots, this really is a technology story. Giant really is a technology story. Giant really is a technology story. Giant innovations that often bet the whole innovations that often bet the whole innovations that often bet the whole company on things like synchronized company on things like synchronized company on things like synchronized sound or the crazy idea of a sound or the crazy idea of a sound or the crazy idea of a featurelength animated movie at all or featurelength animated movie at all or featurelength animated movie at all or the multiplane camera to photograph the the multiplane camera to photograph the the multiplane camera to photograph the whole thing and turn it into a movie. whole thing and turn it into a movie. whole thing and turn it into a movie. And of course, building a giant theme And of course, building a giant theme And of course, building a giant theme park in Anaheim when nothing else like park in Anaheim when nothing else like park in Anaheim when nothing else like it existed. And they really did invent it existed. And they really did invent it existed. And they really did invent the entire concept of the flywheel the entire concept of the flywheel the entire concept of the flywheel business model that so many business model that so many business model that so many entrepreneurs are trying to copy. entrepreneurs are trying to copy. entrepreneurs are trying to copy. >> Oh yes. >> Oh yes. >> Oh yes. >> So today listeners is the Walt Disney >> So today listeners is the Walt Disney >> So today listeners is the Walt Disney Company part one Walt's era. Woo. Company part one Walt's era. Woo. Company part one Walt's era. Woo. >> Well, big news from here at Acquired HQ. >> Well, big news from here at Acquired HQ. >> Well, big news from here at Acquired HQ. This episode has a companion PDF with This episode has a companion PDF with This episode has a companion PDF with visuals, charts, tables, and visuals, charts, tables, and visuals, charts, tables, and illustrations of key concepts, including illustrations of key concepts, including illustrations of key concepts, including Acquired's version of the Disney Acquired's version of the Disney Acquired's version of the Disney flywheel. We did a pilot of the idea flywheel. We did a pilot of the idea flywheel. We did a pilot of the idea after our Vanguard episode and we got after our Vanguard episode and we got after our Vanguard episode and we got such overwhelming positive response that such overwhelming positive response that such overwhelming positive response that we are doing it again. So, you can get we are doing it again. So, you can get we are doing it again. So, you can get access and follow along by clicking the access and follow along by clicking the access and follow along by clicking the link in the show notes. link in the show notes. link in the show notes. >> You might say we're uh building out our >> You might say we're uh building out our >> You might say we're uh building out our own flywheel here. own flywheel here. own flywheel here. >> We are >> We are >> We are >> eating our own episode cooking >> eating our own episode cooking >> eating our own episode cooking >> and we're we're taking this timeless IP >> and we're we're taking this timeless IP >> and we're we're taking this timeless IP that we are developing and figuring out that we are developing and figuring out that we are developing and figuring out even more things to do with it. even more things to do with it. even more things to do with it. >> That's right. >> That's right. >> That's right. >> All right. So, you can join the acquired >> All right. So, you can join the acquired >> All right. So, you can join the acquired email list at acquired.fm/e. email list at acquired.fm/e. email list at acquired.fm/e. That's where we'll send our big That's where we'll send our big That's where we'll send our big takeaways from each episode, past takeaways from each episode, past takeaways from each episode, past episode corrections, exclusive episode corrections, exclusive episode corrections, exclusive behind-the-scenes photos that we found behind-the-scenes photos that we found behind-the-scenes photos that we found at our research, and it's where you can at our research, and it's where you can at our research, and it's where you can vote on future episode topics. Plus, we vote on future episode topics. Plus, we vote on future episode topics. Plus, we will give away a little hint each time will give away a little hint each time will give away a little hint each time about the next episode topic. That's about the next episode topic. That's about the next episode topic. That's acquired.fm/e. acquired.fm/e. acquired.fm/e. Come talk about this episode with us in Come talk about this episode with us in Come talk about this episode with us in the Slack. That's acquired.fm/slack. the Slack. That's acquired.fm/slack. the Slack. That's acquired.fm/slack. And before we dive in, we want to thank And before we dive in, we want to thank And before we dive in, we want to thank our presenting partner JP Morgan. Yes, our presenting partner JP Morgan. Yes, our presenting partner JP Morgan. Yes, just like how we say every company has a just like how we say every company has a just like how we say every company has a story, every company's story is powered story, every company's story is powered story, every company's story is powered by payments and JP Morgan is a part of by payments and JP Morgan is a part of by payments and JP Morgan is a part of so many of their journeys from seed to so many of their journeys from seed to so many of their journeys from seed to IPO and beyond. So with that, the show IPO and beyond. So with that, the show IPO and beyond. So with that, the show is not investment advice. David and I is not investment advice. David and I is not investment advice. David and I may have investments in the companies we may have investments in the companies we may have investments in the companies we discuss and this show is forformational discuss and this show is forformational discuss and this show is forformational and entertainment purposes only. David, and entertainment purposes only. David, and entertainment purposes only. David, take us in. Well, first a thank you to take us in. Well, first a thank you to take us in. Well, first a thank you to my main source for facts and Walt quotes my main source for facts and Walt quotes my main source for facts and Walt quotes on this episode. Neil Gabler's on this episode. Neil Gabler's on this episode. Neil Gabler's biography, Walt Disney, the triumph of biography, Walt Disney, the triumph of biography, Walt Disney, the triumph of the American imagination. Gabler, I the American imagination. Gabler, I the American imagination. Gabler, I think, was the only author who had full think, was the only author who had full think, was the only author who had full access to the Disney archives and all access to the Disney archives and all access to the Disney archives and all the research he did for that book is the research he did for that book is the research he did for that book is just incredible. just incredible. just incredible. >> Yes. Well, with that, we start in >> Yes. Well, with that, we start in >> Yes. Well, with that, we start in Chicago in December 1901 where Walter Chicago in December 1901 where Walter Chicago in December 1901 where Walter Elias Disney is born. And the family Elias Disney is born. And the family Elias Disney is born. And the family lore is that the Disneys are descended lore is that the Disneys are descended lore is that the Disneys are descended from the French Disneys of Normandy. from the French Disneys of Normandy. from the French Disneys of Normandy. >> How do you spell that? >> How do you spell that? >> How do you spell that? >> D apostrophe I si G nys of Normandy who >> D apostrophe I si G nys of Normandy who >> D apostrophe I si G nys of Normandy who came over to England with William the came over to England with William the came over to England with William the Conqueror in 1066. Conqueror in 1066. Conqueror in 1066. That's family lore. unverifiable. That's family lore. unverifiable. That's family lore. unverifiable. >> Yes. At this point, lost to history. >> Yes. At this point, lost to history. >> Yes. At this point, lost to history. >> Yes. So, Walt's father, Elias, was sort >> Yes. So, Walt's father, Elias, was sort >> Yes. So, Walt's father, Elias, was sort of a frustrated entrepreneur. He was of a frustrated entrepreneur. He was of a frustrated entrepreneur. He was variously a carpenter, landlord, farmer, variously a carpenter, landlord, farmer, variously a carpenter, landlord, farmer, newspaper route owner, and eventually a newspaper route owner, and eventually a newspaper route owner, and eventually a failed jelly factory investor. failed jelly factory investor. failed jelly factory investor. But Elias's younger brother, Robert, But Elias's younger brother, Robert, But Elias's younger brother, Robert, Walt's uncle Robert, was the successful Walt's uncle Robert, was the successful Walt's uncle Robert, was the successful one in the family. He was a real estate one in the family. He was a real estate one in the family. He was a real estate speculator among other things and that speculator among other things and that speculator among other things and that is what brought the family to Chicago at is what brought the family to Chicago at is what brought the family to Chicago at the turn of the century. He had invested the turn of the century. He had invested the turn of the century. He had invested in a bunch of real estate in Chicago and in a bunch of real estate in Chicago and in a bunch of real estate in Chicago and the Midwest and so Elias came also to the Midwest and so Elias came also to the Midwest and so Elias came also to seek his fortune there. Now, when Walt seek his fortune there. Now, when Walt seek his fortune there. Now, when Walt is four, Elias moves the family out of is four, Elias moves the family out of is four, Elias moves the family out of Chicago to an idyllic farm town, also in Chicago to an idyllic farm town, also in Chicago to an idyllic farm town, also in the Midwest, where Robert had just the Midwest, where Robert had just the Midwest, where Robert had just purchased another tract of real estate, purchased another tract of real estate, purchased another tract of real estate, Marceline, Missouri. And Lily and Marceline, Missouri. And Lily and Marceline, Missouri. And Lily and Disney, Walt's future wife, would say Disney, Walt's future wife, would say Disney, Walt's future wife, would say about Marceline, "It was the most about Marceline, "It was the most about Marceline, "It was the most important part of Walt's life. He didn't important part of Walt's life. He didn't important part of Walt's life. He didn't live there very long. He lived in live there very long. He lived in live there very long. He lived in Chicago and Kansas City much longer. But Chicago and Kansas City much longer. But Chicago and Kansas City much longer. But there was something about the farm that there was something about the farm that there was something about the farm that was very important to him. was very important to him. was very important to him. >> And Elias moved the family because it >> And Elias moved the family because it >> And Elias moved the family because it was kind of like let's get out of the was kind of like let's get out of the was kind of like let's get out of the dangerous city of Chicago and raise the dangerous city of Chicago and raise the dangerous city of Chicago and raise the kids, right? So sort of somewhere small kids, right? So sort of somewhere small kids, right? So sort of somewhere small town. I think Marceline was actually town. I think Marceline was actually town. I think Marceline was actually created because they needed somewhere created because they needed somewhere created because they needed somewhere for the Santa Fe Railroads division for the Santa Fe Railroads division for the Santa Fe Railroads division point. point. point. >> Yes. Yes. >> Yes. Yes. >> Yes. Yes. >> Like when it was going to maybe Chicago >> Like when it was going to maybe Chicago >> Like when it was going to maybe Chicago and Kansas City and they were like and and Kansas City and they were like and and Kansas City and they were like and this place on the map looks good and this place on the map looks good and this place on the map looks good and they started the town of Marceline. they started the town of Marceline. they started the town of Marceline. Exactly. Exactly. And Robert, the uncle Exactly. Exactly. And Robert, the uncle Exactly. Exactly. And Robert, the uncle had bought real estate there, kind of had bought real estate there, kind of had bought real estate there, kind of speculating again that this is speculating again that this is speculating again that this is Marceline's gonna grow. Marceline's gonna grow. Marceline's gonna grow. >> So Marceline was like basically a Disney >> So Marceline was like basically a Disney >> So Marceline was like basically a Disney movie. There's orchards and ponds and movie. There's orchards and ponds and movie. There's orchards and ponds and animals and farmhouses. There's also animals and farmhouses. There's also animals and farmhouses. There's also this charming little town that the this charming little town that the this charming little town that the railroad had created with a main street, railroad had created with a main street, railroad had created with a main street, a main street USA, you might say. But a main street USA, you might say. But a main street USA, you might say. But that's getting ahead of ourselves. So, that's getting ahead of ourselves. So, that's getting ahead of ourselves. So, while the family's living there, Uncle while the family's living there, Uncle while the family's living there, Uncle Robert's wife, Walt's aunt Maggie, every Robert's wife, Walt's aunt Maggie, every Robert's wife, Walt's aunt Maggie, every time that they would come visit time that they would come visit time that they would come visit Marceline to check up on their real Marceline to check up on their real Marceline to check up on their real estate investments, she would bring Walt estate investments, she would bring Walt estate investments, she would bring Walt gifts. And one year when Walt is gifts. And one year when Walt is gifts. And one year when Walt is probably six or seven years old, Aunt probably six or seven years old, Aunt probably six or seven years old, Aunt Maggie brings him a big chief drawing Maggie brings him a big chief drawing Maggie brings him a big chief drawing tablet and pencil set. And Walt is tablet and pencil set. And Walt is tablet and pencil set. And Walt is enraptured. He starts sketching all the enraptured. He starts sketching all the enraptured. He starts sketching all the time, drawing, sketching everything he time, drawing, sketching everything he time, drawing, sketching everything he can see. And as the legend goes, one day can see. And as the legend goes, one day can see. And as the legend goes, one day Walt's retired neighbor asks the young Walt's retired neighbor asks the young Walt's retired neighbor asks the young boy to draw him a picture of his boy to draw him a picture of his boy to draw him a picture of his favorite horse. And the neighbor loves favorite horse. And the neighbor loves favorite horse. And the neighbor loves what Walt draws so much that he pays him what Walt draws so much that he pays him what Walt draws so much that he pays him a nickel for it. And he hangs it in a a nickel for it. And he hangs it in a a nickel for it. And he hangs it in a frame in his house. And Walt, his mind frame in his house. And Walt, his mind frame in his house. And Walt, his mind is blown, young Walt. He's like, "My my is blown, young Walt. He's like, "My my is blown, young Walt. He's like, "My my hobby, my my art, it can make me money." hobby, my my art, it can make me money." hobby, my my art, it can make me money." [laughter] Now, whatever the exact truth of that Now, whatever the exact truth of that story is, there is no doubt that story is, there is no doubt that story is, there is no doubt that somewhere in Marceline, in prepubescent somewhere in Marceline, in prepubescent somewhere in Marceline, in prepubescent Walt's mind, a connection is forged Walt's mind, a connection is forged Walt's mind, a connection is forged between these two great forces, art and between these two great forces, art and between these two great forces, art and commerce. And that would go on to drive commerce. And that would go on to drive commerce. And that would go on to drive not only the rest of his life, but the not only the rest of his life, but the not only the rest of his life, but the company, the studio, the movies. I mean, company, the studio, the movies. I mean, company, the studio, the movies. I mean, change America. change America. change America. >> Absolutely. The thing about Marceline >> Absolutely. The thing about Marceline >> Absolutely. The thing about Marceline though, you said it's idyllic and like though, you said it's idyllic and like though, you said it's idyllic and like it's out of a Disney movie. The reality it's out of a Disney movie. The reality it's out of a Disney movie. The reality of living in Marceline and life on the of living in Marceline and life on the of living in Marceline and life on the farm is that it was very hard. All the farm is that it was very hard. All the farm is that it was very hard. All the kids are involved. There's not, you kids are involved. There's not, you kids are involved. There's not, you know, magical economic prosperity know, magical economic prosperity know, magical economic prosperity everywhere. It's sort of a tough life. everywhere. It's sort of a tough life. everywhere. It's sort of a tough life. Even though he can sort of remember it Even though he can sort of remember it Even though he can sort of remember it as an idyllic childhood, which I also as an idyllic childhood, which I also as an idyllic childhood, which I also think is quite the foreshadow of kind of think is quite the foreshadow of kind of think is quite the foreshadow of kind of the Disney versionification of things in the Disney versionification of things in the Disney versionification of things in the future, it is both remembered as the future, it is both remembered as the future, it is both remembered as idyllic but also was hard as the real idyllic but also was hard as the real idyllic but also was hard as the real world is. Yes. And I think it's because world is. Yes. And I think it's because world is. Yes. And I think it's because of the age wall was when he was there. of the age wall was when he was there. of the age wall was when he was there. So they lived in Marceline only from So they lived in Marceline only from So they lived in Marceline only from when he was like 4 [snorts] to 8 or nine when he was like 4 [snorts] to 8 or nine when he was like 4 [snorts] to 8 or nine years old before he gets really put to years old before he gets really put to years old before he gets really put to work. So he gets to just enjoy, you work. So he gets to just enjoy, you work. So he gets to just enjoy, you know, all this bliss around him. Yeah. know, all this bliss around him. Yeah. know, all this bliss around him. Yeah. The reality is it's pretty tough for the The reality is it's pretty tough for the The reality is it's pretty tough for the family to make a living. And in fact, family to make a living. And in fact, family to make a living. And in fact, they can't. So Elias adds farming to his they can't. So Elias adds farming to his they can't. So Elias adds farming to his list of entrepreneurial failures. And list of entrepreneurial failures. And list of entrepreneurial failures. And when Walt is 9 years old, they have to when Walt is 9 years old, they have to when Walt is 9 years old, they have to move the family again out of Marceline move the family again out of Marceline move the family again out of Marceline to Kansas City where Elias decides he's to Kansas City where Elias decides he's to Kansas City where Elias decides he's going to purchase a paper delivery route going to purchase a paper delivery route going to purchase a paper delivery route for the Kansas City Star newspaper and for the Kansas City Star newspaper and for the Kansas City Star newspaper and he's going to put the family to work he's going to put the family to work he's going to put the family to work [laughter] [laughter] [laughter] delivering papers. delivering papers. delivering papers. >> There are so many protagonists that we >> There are so many protagonists that we >> There are so many protagonists that we study unacquired who started their study unacquired who started their study unacquired who started their career as newspaper boys. I was going to career as newspaper boys. I was going to career as newspaper boys. I was going to say just like Jack Bogle from Vanguard say just like Jack Bogle from Vanguard say just like Jack Bogle from Vanguard delivering papers in his youth and delivering papers in his youth and delivering papers in his youth and having to get up at 4 in the morning and having to get up at 4 in the morning and having to get up at 4 in the morning and falling asleep at school because he has falling asleep at school because he has falling asleep at school because he has to work so hard. Like this is quite the to work so hard. Like this is quite the to work so hard. Like this is quite the reversal here for Walt from Marceline. reversal here for Walt from Marceline. reversal here for Walt from Marceline. But he never stops drawing and he never But he never stops drawing and he never But he never stops drawing and he never stops making money from it. In Kansas stops making money from it. In Kansas stops making money from it. In Kansas City, he would draw frames for the local City, he would draw frames for the local City, he would draw frames for the local barber shop who would pay him either a barber shop who would pay him either a barber shop who would pay him either a nickel or a free haircut for each. And nickel or a free haircut for each. And nickel or a free haircut for each. And that would, you know, be Walt's spending that would, you know, be Walt's spending that would, you know, be Walt's spending money growing up that he would earn from money growing up that he would earn from money growing up that he would earn from his art. his art. his art. >> Yep. So later when Walt enters high >> Yep. So later when Walt enters high >> Yep. So later when Walt enters high school, Elias moves the family back to school, Elias moves the family back to school, Elias moves the family back to Chicago again, this time for the Jelly Chicago again, this time for the Jelly Chicago again, this time for the Jelly Factory, which ends up failing, where Factory, which ends up failing, where Factory, which ends up failing, where Walt becomes the cartoonist for his high Walt becomes the cartoonist for his high Walt becomes the cartoonist for his high school newspaper. But he's not there school newspaper. But he's not there school newspaper. But he's not there long before he leaves high school to go long before he leaves high school to go long before he leaves high school to go join the Red Cross and get shipped off join the Red Cross and get shipped off join the Red Cross and get shipped off to France as an ambulance driver during to France as an ambulance driver during to France as an ambulance driver during World War I where unfortunately he would World War I where unfortunately he would World War I where unfortunately he would acquire a chain smoking habit that he acquire a chain smoking habit that he acquire a chain smoking habit that he would keep up for the rest of his life would keep up for the rest of his life would keep up for the rest of his life and eventually would kill him way too and eventually would kill him way too and eventually would kill him way too young. Yep. But Walt's not in France for young. Yep. But Walt's not in France for young. Yep. But Walt's not in France for long before the war ends. And in the long before the war ends. And in the long before the war ends. And in the fall of 1919, he lands back in Kansas fall of 1919, he lands back in Kansas fall of 1919, he lands back in Kansas City where Roy Disney, his older City where Roy Disney, his older City where Roy Disney, his older brother, who is, I think, eight years brother, who is, I think, eight years brother, who is, I think, eight years his senior. his senior. his senior. >> Nine years, maybe. >> Nine years, maybe. >> Nine years, maybe. >> Eight, nine years older. >> Eight, nine years older. >> Eight, nine years older. >> Yeah. Much older. >> Yeah. Much older. >> Yeah. Much older. >> Yep. Is living. And Walt has a plan that >> Yep. Is living. And Walt has a plan that >> Yep. Is living. And Walt has a plan that he's going to seek his fortune finally he's going to seek his fortune finally he's going to seek his fortune finally as a true professional cartoonist. So, as a true professional cartoonist. So, as a true professional cartoonist. So, through Roy, he gets introduced to an through Roy, he gets introduced to an through Roy, he gets introduced to an advertising art shop that's looking for advertising art shop that's looking for advertising art shop that's looking for apprentices to help draw like flyers for apprentices to help draw like flyers for apprentices to help draw like flyers for the upcoming holiday rush. And Walt the upcoming holiday rush. And Walt the upcoming holiday rush. And Walt works there for six weeks through works there for six weeks through works there for six weeks through Christmas time and then gets Christmas time and then gets Christmas time and then gets unceremoniously laid off. But he gets unceremoniously laid off. But he gets unceremoniously laid off. But he gets two things out of this brief experience two things out of this brief experience two things out of this brief experience as an employee. One, he gets a as an employee. One, he gets a as an employee. One, he gets a credential. He can now say that he is a credential. He can now say that he is a credential. He can now say that he is a professional artist. professional artist. professional artist. >> All you have to do is get paid to do >> All you have to do is get paid to do >> All you have to do is get paid to do something and then you become a something and then you become a something and then you become a professional. professional. professional. >> Exactly. Exactly. And you get something >> Exactly. Exactly. And you get something >> Exactly. Exactly. And you get something else, a co-founder, else, a co-founder, else, a co-founder, another young apprentice from the art another young apprentice from the art another young apprentice from the art shop named Eyeworks. shop named Eyeworks. shop named Eyeworks. >> I sort of think of as the Steve Waznjak >> I sort of think of as the Steve Waznjak >> I sort of think of as the Steve Waznjak of Disney. of Disney. of Disney. >> Yes, absolutely. Walt is like the >> Yes, absolutely. Walt is like the >> Yes, absolutely. Walt is like the original Steve Jobs. And I think you can original Steve Jobs. And I think you can original Steve Jobs. And I think you can definitely make the case that is the definitely make the case that is the definitely make the case that is the Steve Waznjak. Steve Waznjak. Steve Waznjak. >> Although I think Walt was more hands-on. >> Although I think Walt was more hands-on. >> Although I think Walt was more hands-on. Yes, Walt was also an animator. was just Yes, Walt was also an animator. was just Yes, Walt was also an animator. was just a better animator and Walt was a camera a better animator and Walt was a camera a better animator and Walt was a camera operator and Walt was building stuff, operator and Walt was building stuff, operator and Walt was building stuff, doing things with his hand and he was in doing things with his hand and he was in doing things with his hand and he was in the primary technology and artistic the primary technology and artistic the primary technology and artistic trade that his business was in. So after trade that his business was in. So after trade that his business was in. So after the two of them get laid off, Walt the two of them get laid off, Walt the two of them get laid off, Walt suggests that rather than go look for suggests that rather than go look for suggests that rather than go look for jobs again, they should just start their jobs again, they should just start their jobs again, they should just start their own studio together. I mean, hey, own studio together. I mean, hey, own studio together. I mean, hey, they're professional artists. Like, why they're professional artists. Like, why they're professional artists. Like, why not? [laughter and gasps] So, they not? [laughter and gasps] So, they not? [laughter and gasps] So, they create I works Disney Commercial Artists create I works Disney Commercial Artists create I works Disney Commercial Artists Incorporated. Incorporated. Incorporated. supposedly in that naming order so that supposedly in that naming order so that supposedly in that naming order so that it didn't sound like a optometrist shop it didn't sound like a optometrist shop it didn't sound like a optometrist shop like Disney Eyeworks. like Disney Eyeworks. like Disney Eyeworks. >> How amazing is this? In the first >> How amazing is this? In the first >> How amazing is this? In the first Eyeworks and Disney partnership, in Walt Eyeworks and Disney partnership, in Walt Eyeworks and Disney partnership, in Walt Disney's first business, he was not the Disney's first business, he was not the Disney's first business, he was not the main name on the door. At least he was main name on the door. At least he was main name on the door. At least he was not the first one. not the first one. not the first one. >> Yes. Not the main name on the door, but >> Yes. Not the main name on the door, but >> Yes. Not the main name on the door, but he is the driving force behind the he is the driving force behind the he is the driving force behind the business. So he goes out to pitch business. So he goes out to pitch business. So he goes out to pitch prospective clients around Kansas City prospective clients around Kansas City prospective clients around Kansas City for the uh services of this new I works for the uh services of this new I works for the uh services of this new I works Disney commercial artist firm and one of Disney commercial artist firm and one of Disney commercial artist firm and one of the clients that he goes to pitch is a the clients that he goes to pitch is a the clients that he goes to pitch is a upandcoming company called the Kansas upandcoming company called the Kansas upandcoming company called the Kansas City Slide Company which happens to have City Slide Company which happens to have City Slide Company which happens to have become the country's largest producer of become the country's largest producer of become the country's largest producer of advertising slides and short commercials advertising slides and short commercials advertising slides and short commercials that would get shown in movie theaters that would get shown in movie theaters that would get shown in movie theaters feature films and the slide has so much feature films and the slide has so much feature films and the slide has so much work at this point in time as films and work at this point in time as films and work at this point in time as films and movie theaters are are taking off around movie theaters are are taking off around movie theaters are are taking off around the country that they say hey you guys the country that they say hey you guys the country that they say hey you guys seem talented we don't want to just seem talented we don't want to just seem talented we don't want to just contract with you why don't you come contract with you why don't you come contract with you why don't you come work here full-time so Walt and first work here full-time so Walt and first work here full-time so Walt and first entrepreneurial venture quickly comes to entrepreneurial venture quickly comes to entrepreneurial venture quickly comes to an end and they go join the slide an end and they go join the slide an end and they go join the slide company now the reason that they company now the reason that they company now the reason that they specifically wanted Walt and is that specifically wanted Walt and is that specifically wanted Walt and is that they have a relatively new business line they have a relatively new business line they have a relatively new business line at the slide co which is producing at the slide co which is producing at the slide co which is producing animated commercials to run in movie animated commercials to run in movie animated commercials to run in movie theaters before films and this is what theaters before films and this is what theaters before films and this is what Walt and end up getting put to work Walt and end up getting put to work Walt and end up getting put to work doing and they both just fall in love doing and they both just fall in love doing and they both just fall in love with this new art form of animation. with this new art form of animation. with this new art form of animation. It's like everything that Walt and Obubu It's like everything that Walt and Obubu It's like everything that Walt and Obubu loves about drawing but it's more than loves about drawing but it's more than loves about drawing but it's more than just art. It's technology. You know, you just art. It's technology. You know, you just art. It's technology. You know, you need cameras, you need film, you need need cameras, you need film, you need need cameras, you need film, you need all these new inventions to make all these new inventions to make all these new inventions to make animation happen. animation happen. animation happen. >> Yep. And at this point, animation was >> Yep. And at this point, animation was >> Yep. And at this point, animation was really primarily used in advertising, really primarily used in advertising, really primarily used in advertising, right? There wasn't really a successful right? There wasn't really a successful right? There wasn't really a successful thriving industry yet as entertainment thriving industry yet as entertainment thriving industry yet as entertainment of its own based on animation. It was of its own based on animation. It was of its own based on animation. It was like very very early and to the extent like very very early and to the extent like very very early and to the extent that it did exist as entertainment and that it did exist as entertainment and that it did exist as entertainment and shorts, short films, cartoons on its shorts, short films, cartoons on its shorts, short films, cartoons on its own, it was all based in New York, like own, it was all based in New York, like own, it was all based in New York, like not in Kansas City, not in Kansas City, not in Kansas City, >> right? >> right? >> right? >> But the whole industry is only like >> But the whole industry is only like >> But the whole industry is only like barely 20 years old at this point in barely 20 years old at this point in barely 20 years old at this point in time because you couldn't produce time because you couldn't produce time because you couldn't produce animation on any sort of scale until you animation on any sort of scale until you animation on any sort of scale until you had widespread commercially available had widespread commercially available had widespread commercially available film cameras and film projectors. Like film cameras and film projectors. Like film cameras and film projectors. Like this whole art form is brand new. It this whole art form is brand new. It this whole art form is brand new. It couldn't exist before the technological couldn't exist before the technological couldn't exist before the technological innovation of film. innovation of film. innovation of film. >> Yep. It's exactly right. >> Yep. It's exactly right. >> Yep. It's exactly right. >> So, part of the reason that cartoons are >> So, part of the reason that cartoons are >> So, part of the reason that cartoons are working well in advertising right now working well in advertising right now working well in advertising right now for the slide co is that it's this for the slide co is that it's this for the slide co is that it's this novelty, you know, almost gimmick. It novelty, you know, almost gimmick. It novelty, you know, almost gimmick. It captures people's attention. captures people's attention. captures people's attention. >> Yep. >> Yep. >> Yep. >> Even though they have no color, no >> Even though they have no color, no >> Even though they have no color, no sound, no story, it's just a series of sound, no story, it's just a series of sound, no story, it's just a series of like visual novelties. like visual novelties. like visual novelties. >> It's something they never seen before. >> It's something they never seen before. >> It's something they never seen before. Of course, it's interesting. Of course, it's interesting. Of course, it's interesting. >> Yep. And in Walt's mind, who really is >> Yep. And in Walt's mind, who really is >> Yep. And in Walt's mind, who really is always thinking about how can I, you always thinking about how can I, you always thinking about how can I, you know, make a business out a career out know, make a business out a career out know, make a business out a career out of this, this is also what makes it of this, this is also what makes it of this, this is also what makes it super attractive to him, because the super attractive to him, because the super attractive to him, because the whole industry is so new of animation, whole industry is so new of animation, whole industry is so new of animation, he figures that he can quickly become as he figures that he can quickly become as he figures that he can quickly become as good or better than anyone else in the good or better than anyone else in the good or better than anyone else in the world at it. Unlike if he's going to try world at it. Unlike if he's going to try world at it. Unlike if he's going to try and be the best commercial artist in the and be the best commercial artist in the and be the best commercial artist in the world, you know, good luck, young Walt world, you know, good luck, young Walt world, you know, good luck, young Walt Disney in Kansas City, Missouri. Disney in Kansas City, Missouri. Disney in Kansas City, Missouri. >> Oil painting is thousands of years old. >> Oil painting is thousands of years old. >> Oil painting is thousands of years old. >> Right. Right. Right. But becoming the >> Right. Right. Right. But becoming the >> Right. Right. Right. But becoming the best cartoon animator, best cartoon animator, best cartoon animator, >> small pool. Yeah, he and might have a >> small pool. Yeah, he and might have a >> small pool. Yeah, he and might have a shot here. shot here. shot here. >> Yep. >> Yep. >> Yep. >> So, Walt and start experimenting on >> So, Walt and start experimenting on >> So, Walt and start experimenting on nights and weekends with their own work, nights and weekends with their own work, nights and weekends with their own work, just trying out creating their own just trying out creating their own just trying out creating their own animations using the Slide Co. equipment animations using the Slide Co. equipment animations using the Slide Co. equipment and cameras. And Walt puts together a and cameras. And Walt puts together a and cameras. And Walt puts together a few short cartoons that he creates all few short cartoons that he creates all few short cartoons that he creates all himself. He brands them as quote himself. He brands them as quote himself. He brands them as quote laughogs laughogs laughogs and he ends up selling them on the side and he ends up selling them on the side and he ends up selling them on the side to a local movie theater chain to run to a local movie theater chain to run to a local movie theater chain to run before features and the laughs become a before features and the laughs become a before features and the laughs become a hit in Kansas City. Audiences love them. hit in Kansas City. Audiences love them. hit in Kansas City. Audiences love them. >> I love that the thing that led to the >> I love that the thing that led to the >> I love that the thing that led to the Walt Disney Company is called Laugh Oog. Walt Disney Company is called Laugh Oog. Walt Disney Company is called Laugh Oog. It reminds me of uh what was the Rolex It reminds me of uh what was the Rolex It reminds me of uh what was the Rolex watch? The Turnograph. watch? The Turnograph. watch? The Turnograph. >> Oh yeah. Yeah. Yeah. That's such a like >> Oh yeah. Yeah. Yeah. That's such a like >> Oh yeah. Yeah. Yeah. That's such a like hokey name for, you know, what ends up hokey name for, you know, what ends up hokey name for, you know, what ends up becoming becoming becoming >> well, this doesn't become Disney, but >> well, this doesn't become Disney, but >> well, this doesn't become Disney, but the spirit of which becomes Disney here. the spirit of which becomes Disney here. the spirit of which becomes Disney here. >> And the thing that they're doing, >> And the thing that they're doing, >> And the thing that they're doing, they're so primitive. There's no sound, they're so primitive. There's no sound, they're so primitive. There's no sound, there's no voices, there's no color, there's no voices, there's no color, there's no voices, there's no color, there's barely backgrounds. there's barely backgrounds. there's barely backgrounds. >> Yeah. It's so different from what you're >> Yeah. It's so different from what you're >> Yeah. It's so different from what you're used to today. Because of those used to today. Because of those used to today. Because of those limitations, you can't create a story or limitations, you can't create a story or limitations, you can't create a story or a real sense of character for any of the a real sense of character for any of the a real sense of character for any of the characters that are in there. Like you characters that are in there. Like you characters that are in there. Like you can't build a relationship with the can't build a relationship with the can't build a relationship with the cartoons that are being made at this cartoons that are being made at this cartoons that are being made at this time like you can with Mickey Mouse or time like you can with Mickey Mouse or time like you can with Mickey Mouse or Donald or Goofy or Minnie. Donald or Goofy or Minnie. Donald or Goofy or Minnie. >> The only emotion you can invoke is >> The only emotion you can invoke is >> The only emotion you can invoke is humor. And the only real way to do humor humor. And the only real way to do humor humor. And the only real way to do humor is slapstick. So it's just these like is slapstick. So it's just these like is slapstick. So it's just these like super exaggerated, they call them gags, super exaggerated, they call them gags, super exaggerated, they call them gags, like things that a character does that like things that a character does that like things that a character does that isn't necessarily consistent with isn't necessarily consistent with isn't necessarily consistent with anything else that they've done within a anything else that they've done within a anything else that they've done within a few minutes of starting gag happening few minutes of starting gag happening few minutes of starting gag happening and ending or or or sometimes even a few and ending or or or sometimes even a few and ending or or or sometimes even a few seconds. Yep. And honestly, that's seconds. Yep. And honestly, that's seconds. Yep. And honestly, that's actually not that different than film actually not that different than film actually not that different than film itself overall at this point in time. itself overall at this point in time. itself overall at this point in time. Like Charlie Chaplan is the big star in Like Charlie Chaplan is the big star in Like Charlie Chaplan is the big star in America and around the world, the big America and around the world, the big America and around the world, the big movie star right now in the silent era. movie star right now in the silent era. movie star right now in the silent era. >> And most of his movies are exactly what >> And most of his movies are exactly what >> And most of his movies are exactly what you described, Ben. you described, Ben. you described, Ben. >> Honestly, it's all physical comedy, sort >> Honestly, it's all physical comedy, sort >> Honestly, it's all physical comedy, sort of slapstick. It's the stuff that my of slapstick. It's the stuff that my of slapstick. It's the stuff that my toddler laughs at. You could resummarize toddler laughs at. You could resummarize toddler laughs at. You could resummarize every scene of every comic and most every scene of every comic and most every scene of every comic and most movies by going, "Oh, he fell down. movies by going, "Oh, he fell down. movies by going, "Oh, he fell down. >> [laughter] >> [laughter] >> [laughter] >> Exactly. >> Exactly. >> Exactly. [gasps] [gasps] [gasps] Ah, so in May of 1922 at 20 years old, Ah, so in May of 1922 at 20 years old, Ah, so in May of 1922 at 20 years old, Walt decides that these laughs that he's Walt decides that these laughs that he's Walt decides that these laughs that he's making are having enough success that making are having enough success that making are having enough success that he's ready to leave the slide company, he's ready to leave the slide company, he's ready to leave the slide company, go out on his own again and he founds go out on his own again and he founds go out on his own again and he founds Laugh Films, Inc. And once again, he Laugh Films, Inc. And once again, he Laugh Films, Inc. And once again, he convinces a bi works to quit and come convinces a bi works to quit and come convinces a bi works to quit and come along too along with a few other along too along with a few other along too along with a few other animators from the slide company. And animators from the slide company. And animators from the slide company. And it's another failure because despite the it's another failure because despite the it's another failure because despite the laugh's local popularity there in Kansas laugh's local popularity there in Kansas laugh's local popularity there in Kansas City, by the time we get into 22, 1923, City, by the time we get into 22, 1923, City, by the time we get into 22, 1923, animation and cartoons in general around animation and cartoons in general around animation and cartoons in general around the country are starting to lose their the country are starting to lose their the country are starting to lose their appeal. The novelty is wearing off. the appeal. The novelty is wearing off. the appeal. The novelty is wearing off. the fad is dying down. There's actually a fad is dying down. There's actually a fad is dying down. There's actually a survey of theater managers right around survey of theater managers right around survey of theater managers right around this time in like 1922 or 1923 where one this time in like 1922 or 1923 where one this time in like 1922 or 1923 where one of the questions is what filler options of the questions is what filler options of the questions is what filler options do your audiences like to see around the do your audiences like to see around the do your audiences like to see around the feature film that you're showing because feature film that you're showing because feature film that you're showing because it also would be news reels or live it also would be news reels or live it also would be news reels or live comedies or short serals. Remember, comedies or short serals. Remember, comedies or short serals. Remember, there's no television. There's not even there's no television. There's not even there's no television. There's not even really radio at this point in time. If really radio at this point in time. If really radio at this point in time. If you want to get news or any kind of you want to get news or any kind of you want to get news or any kind of entertainment, you go to the movie entertainment, you go to the movie entertainment, you go to the movie theater. theater. theater. >> All right, I got a stat on this. In the >> All right, I got a stat on this. In the >> All right, I got a stat on this. In the 1920s, the average American went over 40 1920s, the average American went over 40 1920s, the average American went over 40 times per year to the theater. times per year to the theater. times per year to the theater. >> Wow. >> Wow. >> Wow. >> This is what you did every week for >> This is what you did every week for >> This is what you did every week for entertainment. entertainment. entertainment. >> Wow. Yeah. Compare that to today where >> Wow. Yeah. Compare that to today where >> Wow. Yeah. Compare that to today where like maybe you go once a year. like maybe you go once a year. like maybe you go once a year. >> It's two the American the average >> It's two the American the average >> It's two the American the average American goes to a movie theater twice a American goes to a movie theater twice a American goes to a movie theater twice a year now. year now. year now. >> Yeah. I mean, back then it was like you >> Yeah. I mean, back then it was like you >> Yeah. I mean, back then it was like you could go to the movie theater or you could go to the movie theater or you could go to the movie theater or you could go see a live show, ballet or could go see a live show, ballet or could go see a live show, ballet or opera or or like a sporting event like a opera or or like a sporting event like a opera or or like a sporting event like a baseball game or you go to the movie baseball game or you go to the movie baseball game or you go to the movie theater. That's it. And when you go to theater. That's it. And when you go to theater. That's it. And when you go to the theater, it was a bundle. I mean, the theater, it was a bundle. I mean, the theater, it was a bundle. I mean, yeah, you were there for a production, yeah, you were there for a production, yeah, you were there for a production, but I think the point you're trying to but I think the point you're trying to but I think the point you're trying to make is there were also these cartoons make is there were also these cartoons make is there were also these cartoons with gags. There were news reels. There with gags. There were news reels. There with gags. There were news reels. There was the feature you're there to see, but was the feature you're there to see, but was the feature you're there to see, but it's sort of this like bundle of all it's sort of this like bundle of all it's sort of this like bundle of all right, let's see what the theater has in right, let's see what the theater has in right, let's see what the theater has in store for me today. store for me today. store for me today. >> Yeah, exactly. So, this survey of >> Yeah, exactly. So, this survey of >> Yeah, exactly. So, this survey of theater managers, only 23% of theater managers, only 23% of theater managers, only 23% of respondents say that they show cartoons respondents say that they show cartoons respondents say that they show cartoons as part of the bundle and that their as part of the bundle and that their as part of the bundle and that their audiences like it, which is by far the audiences like it, which is by far the audiences like it, which is by far the lowest of any of the other filler lowest of any of the other filler lowest of any of the other filler options. So, Laugh can't really find a options. So, Laugh can't really find a options. So, Laugh can't really find a market outside of their local popularity market outside of their local popularity market outside of their local popularity in Kansas City. And in 1923, the company in Kansas City. And in 1923, the company in Kansas City. And in 1923, the company goes bankrupt and shuts down. And Walt goes bankrupt and shuts down. And Walt goes bankrupt and shuts down. And Walt is now this sort of 1.5 times disgraced is now this sort of 1.5 times disgraced is now this sort of 1.5 times disgraced entrepreneur here in Kansas City. entrepreneur here in Kansas City. entrepreneur here in Kansas City. >> Right in his dad's footsteps. >> Right in his dad's footsteps. >> Right in his dad's footsteps. >> Yeah. Yeah. Yeah. Exactly. >> Yeah. Yeah. Yeah. Exactly. >> Yeah. Yeah. Yeah. Exactly. >> And he raised money from people in >> And he raised money from people in >> And he raised money from people in Kansas City, friends, family. He he went Kansas City, friends, family. He he went Kansas City, friends, family. He he went and lost people's loan capital that they and lost people's loan capital that they and lost people's loan capital that they gave him. gave him. gave him. >> Yep. So Walt goes to rich uncle Robert >> Yep. So Walt goes to rich uncle Robert >> Yep. So Walt goes to rich uncle Robert for advice on what to do given his for advice on what to do given his for advice on what to do given his failure. And Robert says, "You know, failure. And Robert says, "You know, failure. And Robert says, "You know, kid, best thing to do if I were you, I kid, best thing to do if I were you, I kid, best thing to do if I were you, I would just skip town. Get [laughter] out would just skip town. Get [laughter] out would just skip town. Get [laughter] out of there." of there." of there." Which actually is really sound advice Which actually is really sound advice Which actually is really sound advice for back then. You know, people's for back then. You know, people's for back then. You know, people's reputations did not travel with them. reputations did not travel with them. reputations did not travel with them. >> Nope. Your credit was the credit locally >> Nope. Your credit was the credit locally >> Nope. Your credit was the credit locally that you had with the people in your that you had with the people in your that you had with the people in your town and no other way to find you town and no other way to find you town and no other way to find you otherwise. Now, it just so happens that otherwise. Now, it just so happens that otherwise. Now, it just so happens that both Robert and Walt's older brother, both Robert and Walt's older brother, both Robert and Walt's older brother, Roy, have just also skipped town from Roy, have just also skipped town from Roy, have just also skipped town from Kansas City and moved out west to Los Kansas City and moved out west to Los Kansas City and moved out west to Los Angeles. So, Walt packs his belongings, Angeles. So, Walt packs his belongings, Angeles. So, Walt packs his belongings, which is basically nothing at this point which is basically nothing at this point which is basically nothing at this point in time, hops aboard the Santa Fe train in time, hops aboard the Santa Fe train in time, hops aboard the Santa Fe train bound for LA, and joins them in bound for LA, and joins them in bound for LA, and joins them in Hollywood. And when he arrives there in Hollywood. And when he arrives there in Hollywood. And when he arrives there in the summer of 1923, he's 21 years old. the summer of 1923, he's 21 years old. the summer of 1923, he's 21 years old. He stays with Uncle Robert and He stays with Uncle Robert and He stays with Uncle Robert and initially, you really can't make this initially, you really can't make this initially, you really can't make this up. I I couldn't believe this when I up. I I couldn't believe this when I up. I I couldn't believe this when I read it. Wall at first thinks that he's read it. Wall at first thinks that he's read it. Wall at first thinks that he's come to Hollywood. He's going to get a a come to Hollywood. He's going to get a a come to Hollywood. He's going to get a a directing job in Hollywood at one of the directing job in Hollywood at one of the directing job in Hollywood at one of the studios there. studios there. studios there. >> Well, yeah, he has abandoned the idea of >> Well, yeah, he has abandoned the idea of >> Well, yeah, he has abandoned the idea of animation. He basically thinks he's too animation. He basically thinks he's too animation. He basically thinks he's too late. He's seen some of the stuff that late. He's seen some of the stuff that late. He's seen some of the stuff that comes out of the New York cartooning comes out of the New York cartooning comes out of the New York cartooning scene and he's like, "Well, I'll never scene and he's like, "Well, I'll never scene and he's like, "Well, I'll never be as good as them, so I need to go be as good as them, so I need to go be as good as them, so I need to go start over something completely new, start over something completely new, start over something completely new, right?" Which is sort of, you know, right?" Which is sort of, you know, right?" Which is sort of, you know, silly and wrong in of its own. But also silly and wrong in of its own. But also silly and wrong in of its own. But also like the hubris that he thinks that he like the hubris that he thinks that he like the hubris that he thinks that he could just show up in Hollywood with no could just show up in Hollywood with no could just show up in Hollywood with no directorial experience and become the directorial experience and become the directorial experience and become the next DW Griffith. That is Walt for you. next DW Griffith. That is Walt for you. next DW Griffith. That is Walt for you. >> Do you know the story of the Universal >> Do you know the story of the Universal >> Do you know the story of the Universal Lot? Lot? Lot? >> No. No. No. So, he rolls up to the >> No. No. No. So, he rolls up to the >> No. No. No. So, he rolls up to the Universal lot after getting there, Universal lot after getting there, Universal lot after getting there, having no job, no money, borrowing a having no job, no money, borrowing a having no job, no money, borrowing a bed, and he goes and has fake business bed, and he goes and has fake business bed, and he goes and has fake business cards made that says he is with cards made that says he is with cards made that says he is with Universal. He's just the Kansas City Universal. He's just the Kansas City Universal. He's just the Kansas City representative, so no one at Universal representative, so no one at Universal representative, so no one at Universal would really know who he is. And he would really know who he is. And he would really know who he is. And he gives it to the receptionist on the gives it to the receptionist on the gives it to the receptionist on the Universal lot. And he walks in. And so Universal lot. And he walks in. And so Universal lot. And he walks in. And so he spends at least a day from what I he spends at least a day from what I he spends at least a day from what I could tell roaming around and learning could tell roaming around and learning could tell roaming around and learning as much as he could about film as much as he could about film as much as he could about film production and like internalizes a lot production and like internalizes a lot production and like internalizes a lot of those lessons. And then he tries to of those lessons. And then he tries to of those lessons. And then he tries to come back in future days and say like, come back in future days and say like, come back in future days and say like, "Oh yeah, I'm sort of like with "Oh yeah, I'm sort of like with "Oh yeah, I'm sort of like with Universal and now I have experience and Universal and now I have experience and Universal and now I have experience and can you give me a job?" And he ends up can you give me a job?" And he ends up can you give me a job?" And he ends up running out of money and doesn't get a running out of money and doesn't get a running out of money and doesn't get a job. job. job. >> That is amazing. I didn't [laughter] >> That is amazing. I didn't [laughter] >> That is amazing. I didn't [laughter] know that story. know that story. know that story. So once he inevitably gets rejected at So once he inevitably gets rejected at So once he inevitably gets rejected at all the major Hollywood studios, he says all the major Hollywood studios, he says all the major Hollywood studios, he says later, "When things began to look later, "When things began to look later, "When things began to look hopeless, I got my cartoon things out hopeless, I got my cartoon things out hopeless, I got my cartoon things out again." And he sets up shop animating again." And he sets up shop animating again." And he sets up shop animating again. He's like, "Well, as you said, again. He's like, "Well, as you said, again. He's like, "Well, as you said, Ben, this is the one thing I know how to Ben, this is the one thing I know how to Ben, this is the one thing I know how to do. I should try that." And at this do. I should try that." And at this do. I should try that." And at this point, pretty much the only popular point, pretty much the only popular point, pretty much the only popular cartoon left in the industry is Felix cartoon left in the industry is Felix cartoon left in the industry is Felix the Cat. the Cat. the Cat. >> Yep. >> Yep. >> Yep. >> Which is created by Pat Sullivan out of >> Which is created by Pat Sullivan out of >> Which is created by Pat Sullivan out of New York and distributed by the New York and distributed by the New York and distributed by the pioneering Margaret Winkler, also in New pioneering Margaret Winkler, also in New pioneering Margaret Winkler, also in New York. So Walt has one thing, one asset York. So Walt has one thing, one asset York. So Walt has one thing, one asset left over from his failed laugh days, left over from his failed laugh days, left over from his failed laugh days, which is a real of a hybrid liveaction which is a real of a hybrid liveaction which is a real of a hybrid liveaction cartoon short that he had created with cartoon short that he had created with cartoon short that he had created with right before he left Kansas City called right before he left Kansas City called right before he left Kansas City called Alice's Wonderland about a real life Alice's Wonderland about a real life Alice's Wonderland about a real life little girl who interacts on screen with little girl who interacts on screen with little girl who interacts on screen with cartoons that they've drawn over the cartoons that they've drawn over the cartoons that they've drawn over the film. which is like completely film. which is like completely film. which is like completely pioneering technology. The the other pioneering technology. The the other pioneering technology. The the other people who were doing animation at this people who were doing animation at this people who were doing animation at this time were just doing cartoons. These time were just doing cartoons. These time were just doing cartoons. These Alice comedies as they came to be called Alice comedies as they came to be called Alice comedies as they came to be called were a new process by which you could go were a new process by which you could go were a new process by which you could go and film a real life actor and then have and film a real life actor and then have and film a real life actor and then have them interact on screen with cartoon them interact on screen with cartoon them interact on screen with cartoon characters and put them in the cartoon. characters and put them in the cartoon. characters and put them in the cartoon. >> Yes. Very cool. and also had the unique >> Yes. Very cool. and also had the unique >> Yes. Very cool. and also had the unique property of being cheaper to produce property of being cheaper to produce property of being cheaper to produce than full animation because you only had than full animation because you only had than full animation because you only had to animate the characters, not all the to animate the characters, not all the to animate the characters, not all the backgrounds and everything. backgrounds and everything. backgrounds and everything. >> Right. >> Right. >> Right. >> Right. Yeah. There is this funny >> Right. Yeah. There is this funny >> Right. Yeah. There is this funny counterintuitive thing that live counterintuitive thing that live counterintuitive thing that live production is much faster and cheaper production is much faster and cheaper production is much faster and cheaper than animation. You just have a film than animation. You just have a film than animation. You just have a film camera and you point it at something in camera and you point it at something in camera and you point it at something in the world that exists and you kind of the world that exists and you kind of the world that exists and you kind of get everything that you're pointing it get everything that you're pointing it get everything that you're pointing it at for free. like the interring around you and you taking these around you and you taking these exposures in a video camera. exposures in a video camera. exposures in a video camera. >> Yep. >> Yep. >> Yep. >> So, Walt sends Alice's Wonderland off to >> So, Walt sends Alice's Wonderland off to >> So, Walt sends Alice's Wonderland off to Winkler and she likes it. So, she Winkler and she likes it. So, she Winkler and she likes it. So, she commisss Walt to create 12 more Alice commisss Walt to create 12 more Alice commisss Walt to create 12 more Alice comedies for like 15 to $1,800 each. comedies for like 15 to $1,800 each. comedies for like 15 to $1,800 each. >> She does. And David, did you know we >> She does. And David, did you know we >> She does. And David, did you know we have seen this contract? [laughter] have seen this contract? [laughter] have seen this contract? [laughter] >> Was this in the documents that we saw in >> Was this in the documents that we saw in >> Was this in the documents that we saw in the Disney archives? the Disney archives? the Disney archives? >> Yes. So, listeners, for this episode, >> Yes. So, listeners, for this episode, >> Yes. So, listeners, for this episode, David and I went and spent a few days David and I went and spent a few days David and I went and spent a few days down in Burbank looking through the down in Burbank looking through the down in Burbank looking through the corporate archives. And one of the corporate archives. And one of the corporate archives. And one of the things that the archavist pulled for us things that the archavist pulled for us things that the archavist pulled for us was this contract. And I have a photo of was this contract. And I have a photo of was this contract. And I have a photo of it. I'm looking at it right now. it. I'm looking at it right now. it. I'm looking at it right now. agreement entered into this 16th day of agreement entered into this 16th day of agreement entered into this 16th day of October 1923 between Walt Disney of 4406 October 1923 between Walt Disney of 4406 October 1923 between Walt Disney of 4406 Kingswell Avenue, Hollywood, California, Kingswell Avenue, Hollywood, California, Kingswell Avenue, Hollywood, California, blah blah blah blah blah. And yeah, blah blah blah blah blah. And yeah, blah blah blah blah blah. And yeah, you're exactly right for 12 negatives of you're exactly right for 12 negatives of you're exactly right for 12 negatives of subject series and then in all caps subject series and then in all caps subject series and then in all caps Alice comedies and Alice comedies and Alice comedies and >> amazing >> amazing >> amazing >> this we I also have a picture of this on >> this we I also have a picture of this on >> this we I also have a picture of this on the last page of this contract cuz this the last page of this contract cuz this the last page of this contract cuz this is effectively the contract that puts is effectively the contract that puts is effectively the contract that puts Disney in business. I mean this becomes Disney in business. I mean this becomes Disney in business. I mean this becomes the Walt Disney Company. the Walt Disney Company. the Walt Disney Company. >> Yeah, this is the moment. This is the >> Yeah, this is the moment. This is the >> Yeah, this is the moment. This is the beginning of Disney. You can see his beginning of Disney. You can see his beginning of Disney. You can see his signature which is much less flowery signature which is much less flowery signature which is much less flowery than the version that you see in the the than the version that you see in the the than the version that you see in the the Disney logo. He would sort of evolve it Disney logo. He would sort of evolve it Disney logo. He would sort of evolve it over time. over time. over time. >> But yeah, this is the moment. Disney >> But yeah, this is the moment. Disney >> But yeah, this is the moment. Disney Walt is in business. It's his first Walt is in business. It's his first Walt is in business. It's his first actual commercial big-time deal. actual commercial big-time deal. actual commercial big-time deal. >> Yes. And I think when Walt sort of gets >> Yes. And I think when Walt sort of gets >> Yes. And I think when Walt sort of gets word from Margaret, he runs into his word from Margaret, he runs into his word from Margaret, he runs into his brother's room. His brother Roy actually brother's room. His brother Roy actually brother's room. His brother Roy actually has tuberculosis at this time. It is in has tuberculosis at this time. It is in has tuberculosis at this time. It is in like a hospital ward. and he sort of like a hospital ward. and he sort of like a hospital ward. and he sort of runs in, shows him the contract, and runs in, shows him the contract, and runs in, shows him the contract, and says, "We got it. We got it. We got it. says, "We got it. We got it. We got it. says, "We got it. We got it. We got it. We're in business. We're doing it." And, We're in business. We're doing it." And, We're in business. We're doing it." And, you know, $15 to $1,800 a film is a lot you know, $15 to $1,800 a film is a lot you know, $15 to $1,800 a film is a lot of money at this time. And Roy talks of money at this time. And Roy talks of money at this time. And Roy talks through with him, and says, "Okay, let's through with him, and says, "Okay, let's through with him, and says, "Okay, let's get right to work." And he literally get right to work." And he literally get right to work." And he literally stands up and leaves the hospital ward. stands up and leaves the hospital ward. stands up and leaves the hospital ward. He's like, "All right, my tuberculosis He's like, "All right, my tuberculosis He's like, "All right, my tuberculosis is behind me." is behind me." is behind me." >> And the two of them found the Disney >> And the two of them found the Disney >> And the two of them found the Disney Brothers cartoon studio right there in Brothers cartoon studio right there in Brothers cartoon studio right there in October 1923. October 1923. October 1923. as a true partnership between the as a true partnership between the as a true partnership between the brothers. Roy manages the business and brothers. Roy manages the business and brothers. Roy manages the business and the finance. Walt manages the creative the finance. Walt manages the creative the finance. Walt manages the creative and they get to work. and they get to work. and they get to work. >> Yep. >> Yep. >> Yep. >> So Walt of course writes I works back in >> So Walt of course writes I works back in >> So Walt of course writes I works back in Kansas City and several of the other Kansas City and several of the other Kansas City and several of the other talented animators that they knew there talented animators that they knew there talented animators that they knew there and says, "All right, guys. [laughter] and says, "All right, guys. [laughter] and says, "All right, guys. [laughter] I I got it this time. Come on out to I I got it this time. Come on out to I I got it this time. Come on out to California. We finally got a deal. We're California. We finally got a deal. We're California. We finally got a deal. We're going to build a real company and a real going to build a real company and a real going to build a real company and a real animation studio. animation studio. animation studio. >> And they do. The behemoth we know as >> And they do. The behemoth we know as >> And they do. The behemoth we know as Disney today is the Disney Brothers Disney today is the Disney Brothers Disney today is the Disney Brothers cartoon studio and a whole bunch of cartoon studio and a whole bunch of cartoon studio and a whole bunch of Kansas City guys that moved out to join Kansas City guys that moved out to join Kansas City guys that moved out to join Walt to start cranking away. Walt to start cranking away. Walt to start cranking away. >> Yep. And the Alice comedies become a >> Yep. And the Alice comedies become a >> Yep. And the Alice comedies become a moderate success in the marketplace. moderate success in the marketplace. moderate success in the marketplace. Again, I think the novelty of cartoons Again, I think the novelty of cartoons Again, I think the novelty of cartoons plus live animation. and audiences are plus live animation. and audiences are plus live animation. and audiences are entertained for a few years. Ultimately, entertained for a few years. Ultimately, entertained for a few years. Ultimately, the Disney Brothers Studio produces 57 the Disney Brothers Studio produces 57 the Disney Brothers Studio produces 57 of the Alice comedies from 1923 to 1927. of the Alice comedies from 1923 to 1927. of the Alice comedies from 1923 to 1927. And then in 1927, And then in 1927, And then in 1927, Winkler's relatively new husband, Winkler's relatively new husband, Winkler's relatively new husband, Charles Mintz, who actually got to start Charles Mintz, who actually got to start Charles Mintz, who actually got to start working for her in the business. By this working for her in the business. By this working for her in the business. By this point in time, he has taken over as sort point in time, he has taken over as sort point in time, he has taken over as sort of head of the business. He is no longer of head of the business. He is no longer of head of the business. He is no longer getting along with Pat Sullivan, the getting along with Pat Sullivan, the getting along with Pat Sullivan, the creator of Felix the Cat. creator of Felix the Cat. creator of Felix the Cat. >> Big opportunity. >> Big opportunity. >> Big opportunity. >> Big opportunity. And And he has brokered >> Big opportunity. And And he has brokered >> Big opportunity. And And he has brokered a little arrangement with Universal a little arrangement with Universal a little arrangement with Universal Pictures, the big New York film Pictures, the big New York film Pictures, the big New York film distributor, to on the Sly create a new distributor, to on the Sly create a new distributor, to on the Sly create a new character to rival Felix. Now, now mind character to rival Felix. Now, now mind character to rival Felix. Now, now mind you, he and Winkler are still the you, he and Winkler are still the you, he and Winkler are still the distributor for Felix, for Sullivan, and distributor for Felix, for Sullivan, and distributor for Felix, for Sullivan, and they're creating a new character to they're creating a new character to they're creating a new character to compete with him on the side. compete with him on the side. compete with him on the side. >> Sort of like they're building their own >> Sort of like they're building their own >> Sort of like they're building their own chips while still buying Nvidia. chips while still buying Nvidia. chips while still buying Nvidia. >> Yeah. [laughter] >> Yeah. [laughter] >> Yeah. [laughter] Uh, and so he turns around and haps Uh, and so he turns around and haps Uh, and so he turns around and haps Disney says, "Hey, Walt, can you make us Disney says, "Hey, Walt, can you make us Disney says, "Hey, Walt, can you make us a new series and a new character? You a new series and a new character? You a new series and a new character? You know, like Felix, but but not Felix. know, like Felix, but but not Felix. know, like Felix, but but not Felix. Like like maybe not a cat, Like like maybe not a cat, Like like maybe not a cat, >> right? We needed to be plausibly >> right? We needed to be plausibly >> right? We needed to be plausibly different while still having everything different while still having everything different while still having everything that made Felix successful. that made Felix successful. that made Felix successful. >> Yes. So, Walt and cast about what can we >> Yes. So, Walt and cast about what can we >> Yes. So, Walt and cast about what can we come up with that's like a cat but maybe come up with that's like a cat but maybe come up with that's like a cat but maybe shares a lot of the same recognizable shares a lot of the same recognizable shares a lot of the same recognizable attributes like, you know, a lot of attributes like, you know, a lot of attributes like, you know, a lot of white fur, a tail, some big ears, easy white fur, a tail, some big ears, easy white fur, a tail, some big ears, easy to draw in black and white. And they to draw in black and white. And they to draw in black and white. And they come up not with Mickey Mouse, but with come up not with Mickey Mouse, but with come up not with Mickey Mouse, but with Oswald the Lucky Rabbit. Oswald the Lucky Rabbit. Oswald the Lucky Rabbit. And Oswald is a big hit. It's got the And Oswald is a big hit. It's got the And Oswald is a big hit. It's got the backing of Universal distribution behind backing of Universal distribution behind backing of Universal distribution behind it. It's a big hit for Universal, a big it. It's a big hit for Universal, a big it. It's a big hit for Universal, a big hit for Winkler and Mintz, and a big hit hit for Winkler and Mintz, and a big hit hit for Winkler and Mintz, and a big hit for the Disney Brothers cartoon studio. for the Disney Brothers cartoon studio. for the Disney Brothers cartoon studio. And it's not surprising because if you And it's not surprising because if you And it's not surprising because if you give the creative brief to Walt and take give the creative brief to Walt and take give the creative brief to Walt and take something that's kind of working, but something that's kind of working, but something that's kind of working, but apply your style. Their style was great. apply your style. Their style was great. apply your style. Their style was great. I mean, they were emotional animators. I mean, they were emotional animators. I mean, they were emotional animators. There's a great quote in the book Walt There's a great quote in the book Walt There's a great quote in the book Walt Disney and American Original by Bob Disney and American Original by Bob Disney and American Original by Bob Thomas that says, "Before Disney, Thomas that says, "Before Disney, Thomas that says, "Before Disney, cartoons were slapdash. Two-dimensional cartoons were slapdash. Two-dimensional cartoons were slapdash. Two-dimensional characters in bizarre movement before characters in bizarre movement before characters in bizarre movement before elemental backgrounds. Disney insisted elemental backgrounds. Disney insisted elemental backgrounds. Disney insisted on rounded humanized figures. He wanted on rounded humanized figures. He wanted on rounded humanized figures. He wanted the humor to come out of the character, the humor to come out of the character, the humor to come out of the character, not the outrageous action." So, it's not the outrageous action." So, it's not the outrageous action." So, it's sort of like, hey, here's the template, sort of like, hey, here's the template, sort of like, hey, here's the template, but dnify it or I workify it in a way but dnify it or I workify it in a way but dnify it or I workify it in a way that really can speak to people. Well, I that really can speak to people. Well, I that really can speak to people. Well, I think it really was the partnership of think it really was the partnership of think it really was the partnership of the two of them. I think I works had the two of them. I think I works had the two of them. I think I works had like immense artistic talent as an like immense artistic talent as an like immense artistic talent as an animator and was able to do that and animator and was able to do that and animator and was able to do that and Walt had taste like he recognized it and Walt had taste like he recognized it and Walt had taste like he recognized it and he knew when and where to apply it. he knew when and where to apply it. he knew when and where to apply it. >> Yep. So on the back of the Oswald >> Yep. So on the back of the Oswald >> Yep. So on the back of the Oswald success, the Disney Brothers cartoon success, the Disney Brothers cartoon success, the Disney Brothers cartoon studio grows pretty quickly from this studio grows pretty quickly from this studio grows pretty quickly from this ragtag group from Kansas City to like a ragtag group from Kansas City to like a ragtag group from Kansas City to like a real operation, like a real, you know, real operation, like a real, you know, real operation, like a real, you know, at this point bordering on major at this point bordering on major at this point bordering on major animation studio. They hire about 25 animation studio. They hire about 25 animation studio. They hire about 25 employees and start turnurning out employees and start turnurning out employees and start turnurning out Oswald cartoons. Yep. They move into a Oswald cartoons. Yep. They move into a Oswald cartoons. Yep. They move into a real studio building on Hyperion Avenue real studio building on Hyperion Avenue real studio building on Hyperion Avenue in the Silver Lake neighborhood of Los in the Silver Lake neighborhood of Los in the Silver Lake neighborhood of Los Angeles. And when they move there, Walt Angeles. And when they move there, Walt Angeles. And when they move there, Walt and Roy decide at a unclear which and Roy decide at a unclear which and Roy decide at a unclear which brothers instigation that they need to brothers instigation that they need to brothers instigation that they need to rename the company and the studio from rename the company and the studio from rename the company and the studio from the Disney Brothers Cartoon Studio to the Disney Brothers Cartoon Studio to the Disney Brothers Cartoon Studio to the Walt Disney Studio. So, there's two the Walt Disney Studio. So, there's two the Walt Disney Studio. So, there's two stories about this. stories about this. stories about this. >> I was going to say I've seen both. >> I was going to say I've seen both. >> I was going to say I've seen both. >> One is that it was actually Royy's idea. >> One is that it was actually Royy's idea. >> One is that it was actually Royy's idea. >> Yes. [laughter] because he's like, "Hey, >> Yes. [laughter] because he's like, "Hey, >> Yes. [laughter] because he's like, "Hey, you know, we need to start building a you know, we need to start building a you know, we need to start building a brand and like people need to know who brand and like people need to know who brand and like people need to know who is making these Oswalds and it should be is making these Oswalds and it should be is making these Oswalds and it should be the Walt Disney Studio the Walt Disney Studio the Walt Disney Studio >> and you're very clearly the frontman. >> and you're very clearly the frontman. >> and you're very clearly the frontman. You know, you're selling. You're the You know, you're selling. You're the You know, you're selling. You're the visionary. You're the sort of creative visionary. You're the sort of creative visionary. You're the sort of creative talent and this is a creative company. talent and this is a creative company. talent and this is a creative company. Of course, it should be you." Of course, it should be you." Of course, it should be you." >> Yep. The other story is that Waltz >> Yep. The other story is that Waltz >> Yep. The other story is that Waltz always had a dream since he got to always had a dream since he got to always had a dream since he got to Hollywood of having his name up on a Hollywood of having his name up on a Hollywood of having his name up on a neon sign. neon sign. neon sign. >> [laughter] >> [laughter] >> [laughter] >> now that they have their own real >> now that they have their own real >> now that they have their own real studio. He wants a neon sign constructed studio. He wants a neon sign constructed studio. He wants a neon sign constructed that says the Walt Disney Studio, that says the Walt Disney Studio, that says the Walt Disney Studio, [laughter] [laughter] [laughter] which I think does happen. which I think does happen. which I think does happen. >> Yes, we'll put the photo in the email. >> Yes, we'll put the photo in the email. >> Yes, we'll put the photo in the email. The Hyperion Avenue studio has this The Hyperion Avenue studio has this The Hyperion Avenue studio has this really cool sign or did for a long time really cool sign or did for a long time really cool sign or did for a long time before it got knocked down and I think before it got knocked down and I think before it got knocked down and I think it's a strip mall or something today. it's a strip mall or something today. it's a strip mall or something today. And in that vein, now that the studio And in that vein, now that the studio And in that vein, now that the studio has become a real operation, Walt moves has become a real operation, Walt moves has become a real operation, Walt moves from actually doing a lot of the from actually doing a lot of the from actually doing a lot of the animation and camera work mostly to animation and camera work mostly to animation and camera work mostly to overseeing the studio, which you have to overseeing the studio, which you have to overseeing the studio, which you have to with an operation of 25 artists and with an operation of 25 artists and with an operation of 25 artists and creative people and camera folks. You creative people and camera folks. You creative people and camera folks. You need someone who has an overall vision need someone who has an overall vision need someone who has an overall vision and taste to drive everything. Yep. and taste to drive everything. Yep. and taste to drive everything. Yep. >> Now, as Walt is transitioning from, you >> Now, as Walt is transitioning from, you >> Now, as Walt is transitioning from, you know, sort of doer to really studio head know, sort of doer to really studio head know, sort of doer to really studio head >> and worth knowing, the ownership of Walt >> and worth knowing, the ownership of Walt >> and worth knowing, the ownership of Walt Disney Studios that would become Walt Disney Studios that would become Walt Disney Studios that would become Walt Disney Productions that would become the Disney Productions that would become the Disney Productions that would become the Walt Disney Company was at this point Walt Disney Company was at this point Walt Disney Company was at this point 60% owned by Walt and his wife and 40% 60% owned by Walt and his wife and 40% 60% owned by Walt and his wife and 40% owned by Roy and his wife. owned by Roy and his wife. owned by Roy and his wife. >> Yep. So Mintz, the husband of Winkler >> Yep. So Mintz, the husband of Winkler >> Yep. So Mintz, the husband of Winkler back in New York, who has, you know, back in New York, who has, you know, back in New York, who has, you know, sort of already proved his stripes by sort of already proved his stripes by sort of already proved his stripes by his dealings with Felix the Cat and Pat his dealings with Felix the Cat and Pat his dealings with Felix the Cat and Pat Sullivan, he senses another opportunity. Sullivan, he senses another opportunity. Sullivan, he senses another opportunity. He thinks that Walt has become He thinks that Walt has become He thinks that Walt has become superfluous and that it's actually just superfluous and that it's actually just superfluous and that it's actually just the animators who really matter. And the animators who really matter. And the animators who really matter. And because the Walt Disney Studio doesn't because the Walt Disney Studio doesn't because the Walt Disney Studio doesn't actually own the IP of Oswald the Lucky actually own the IP of Oswald the Lucky actually own the IP of Oswald the Lucky Rabbit, Universal does, Rabbit, Universal does, Rabbit, Universal does, >> although the Walt Disney Studio was was >> although the Walt Disney Studio was was >> although the Walt Disney Studio was was acting like this was sort of their acting like this was sort of their acting like this was sort of their creation that they owned. creation that they owned. creation that they owned. >> Yeah. I don't think Walt uh or Roy >> Yeah. I don't think Walt uh or Roy >> Yeah. I don't think Walt uh or Roy really read the fine print on the really read the fine print on the really read the fine print on the contracts here. So, in early 1928, contracts here. So, in early 1928, contracts here. So, in early 1928, Walt and his wife Lillian, who Lillian Walt and his wife Lillian, who Lillian Walt and his wife Lillian, who Lillian also was an early studio employee also was an early studio employee also was an early studio employee >> in the Ink and Paint Department. That's >> in the Ink and Paint Department. That's >> in the Ink and Paint Department. That's right. right. right. >> We'll get to that. >> We'll get to that. >> We'll get to that. >> They make a fateful trip as a couple to >> They make a fateful trip as a couple to >> They make a fateful trip as a couple to New York, where one of the items on the New York, where one of the items on the New York, where one of the items on the agenda is for Walt to go meet with Mintz agenda is for Walt to go meet with Mintz agenda is for Walt to go meet with Mintz and ask for a raise in the amount that and ask for a raise in the amount that and ask for a raise in the amount that the studio is getting paid per Oswald the studio is getting paid per Oswald the studio is getting paid per Oswald Short. So Walt sits down with Mintz and Short. So Walt sits down with Mintz and Short. So Walt sits down with Mintz and Mintz is like, "Well, Mintz is like, "Well, Mintz is like, "Well, I don't know about paying you more. I I don't know about paying you more. I I don't know about paying you more. I don't think I like that idea. In fact, don't think I like that idea. In fact, don't think I like that idea. In fact, I'm not even really sure, Walt, what you I'm not even really sure, Walt, what you I'm not even really sure, Walt, what you are doing around here any longer. But I are doing around here any longer. But I are doing around here any longer. But I tell you what, I'm a nice guy. I'm tell you what, I'm a nice guy. I'm tell you what, I'm a nice guy. I'm willing to let you and your little willing to let you and your little willing to let you and your little studio stay involved here and keep studio stay involved here and keep studio stay involved here and keep making the Oswalds, but we're going to making the Oswalds, but we're going to making the Oswalds, but we're going to have to pay you less, not more. like have to pay you less, not more. like have to pay you less, not more. like $500 per cartoon $500 per cartoon $500 per cartoon less, less, less, >> which my understanding is that basically >> which my understanding is that basically >> which my understanding is that basically wiped out the margin and they were wiped out the margin and they were wiped out the margin and they were saying we'll pay you cost to make these saying we'll pay you cost to make these saying we'll pay you cost to make these Oswald cartoons. Oswald cartoons. Oswald cartoons. >> Yeah, I think Mintz had basically >> Yeah, I think Mintz had basically >> Yeah, I think Mintz had basically calculated, okay, if Walt takes this, calculated, okay, if Walt takes this, calculated, okay, if Walt takes this, then I'm willing to let his studio keep then I'm willing to let his studio keep then I'm willing to let his studio keep making it, and if he doesn't take it, making it, and if he doesn't take it, making it, and if he doesn't take it, then it's all equal to me. I'm just then it's all equal to me. I'm just then it's all equal to me. I'm just going to steal his animators and go make going to steal his animators and go make going to steal his animators and go make it myself. And crucially, before this it myself. And crucially, before this it myself. And crucially, before this meeting even happens, meeting even happens, meeting even happens, >> he's already stolen the animators. >> he's already stolen the animators. >> he's already stolen the animators. >> Mint has an ace in the hole. He has, I >> Mint has an ace in the hole. He has, I >> Mint has an ace in the hole. He has, I think, signed contracts with nearly all think, signed contracts with nearly all think, signed contracts with nearly all the animators except Eyeworks. He has the animators except Eyeworks. He has the animators except Eyeworks. He has sort of through an act of subtrafuge sort of through an act of subtrafuge sort of through an act of subtrafuge gotten in touch with each of them gotten in touch with each of them gotten in touch with each of them individually and brought them over. individually and brought them over. individually and brought them over. >> Yeah. only and and I think maybe two or >> Yeah. only and and I think maybe two or >> Yeah. only and and I think maybe two or three other animators refused to sign three other animators refused to sign three other animators refused to sign these secret deals with Mintz and stayed these secret deals with Mintz and stayed these secret deals with Mintz and stayed loyal to to Walt and to Roy. Once Walt loyal to to Walt and to Roy. Once Walt loyal to to Walt and to Roy. Once Walt realizes this, there's nothing he can realizes this, there's nothing he can realizes this, there's nothing he can do. Like, it's a free country. He can't do. Like, it's a free country. He can't do. Like, it's a free country. He can't force his animators to stay. He doesn't force his animators to stay. He doesn't force his animators to stay. He doesn't have employment contracts with them. And have employment contracts with them. And have employment contracts with them. And he also doesn't have any control or he also doesn't have any control or he also doesn't have any control or rights to the actual Oswald IP. So, he rights to the actual Oswald IP. So, he rights to the actual Oswald IP. So, he has no leverage. He's got nothing. He's has no leverage. He's got nothing. He's has no leverage. He's got nothing. He's got no customer contract. He's got no got no customer contract. He's got no got no customer contract. He's got no employees. He's got no intellectual employees. He's got no intellectual employees. He's got no intellectual properties. Suddenly, the enterprise properties. Suddenly, the enterprise properties. Suddenly, the enterprise value, so that the the entire value of value, so that the the entire value of value, so that the the entire value of Walt Disney Studios is effectively zero. Walt Disney Studios is effectively zero. Walt Disney Studios is effectively zero. Yep. It is a extremely bitter lesson for Yep. It is a extremely bitter lesson for Yep. It is a extremely bitter lesson for Walt and for Roy. And it is one that you Walt and for Roy. And it is one that you Walt and for Roy. And it is one that you can bet they never forget for the rest can bet they never forget for the rest can bet they never forget for the rest of their lives. And really like of their lives. And really like of their lives. And really like everything in Disney's history and all everything in Disney's history and all everything in Disney's history and all of the enterprise value that Disney has of the enterprise value that Disney has of the enterprise value that Disney has built that we will see all across the built that we will see all across the built that we will see all across the rest of this episode traces back to this rest of this episode traces back to this rest of this episode traces back to this moment. moment. moment. >> It's a hard reaction to this lesson. >> It's a hard reaction to this lesson. >> It's a hard reaction to this lesson. >> Totally. I have a fun bit of trivia for >> Totally. I have a fun bit of trivia for >> Totally. I have a fun bit of trivia for you, Ben. you, Ben. you, Ben. >> Oo. >> Oo. >> Oo. >> So, as I think you know, Disney >> So, as I think you know, Disney >> So, as I think you know, Disney eventually does get the rights to Oswald eventually does get the rights to Oswald eventually does get the rights to Oswald back. back. back. >> This is gonna be my trivia for you, >> This is gonna be my trivia for you, >> This is gonna be my trivia for you, [laughter] [laughter] [laughter] >> right? Actually, ask your question. We >> right? Actually, ask your question. We >> right? Actually, ask your question. We might have different takes on it. Disney might have different takes on it. Disney might have different takes on it. Disney eventually does get the rights to Oswald eventually does get the rights to Oswald eventually does get the rights to Oswald back in 2006. back in 2006. back in 2006. >> Bob Iger, one of his first acts as CEO, >> Bob Iger, one of his first acts as CEO, >> Bob Iger, one of his first acts as CEO, did the deal. did the deal. did the deal. >> Yes. Do you know how Bob got Oswald back >> Yes. Do you know how Bob got Oswald back >> Yes. Do you know how Bob got Oswald back for Disney? for Disney? for Disney? >> So, let's see. By this point, Disney had >> So, let's see. By this point, Disney had >> So, let's see. By this point, Disney had acquired ABC. acquired ABC. acquired ABC. >> Yep. >> Yep. >> Yep. >> And had acquired ESPN. >> And had acquired ESPN. >> And had acquired ESPN. >> And who owned Oswald at this point? It >> And who owned Oswald at this point? It >> And who owned Oswald at this point? It was Universal, which was owned by NBC, was Universal, which was owned by NBC, was Universal, which was owned by NBC, which is now owned by Comcast. which is now owned by Comcast. which is now owned by Comcast. >> Correct. So, there's a ABC asset that >> Correct. So, there's a ABC asset that >> Correct. So, there's a ABC asset that Bob effectively trades in exchange for Bob effectively trades in exchange for Bob effectively trades in exchange for Oswald. And I think that ABC ESPN Monday Oswald. And I think that ABC ESPN Monday Oswald. And I think that ABC ESPN Monday Night Football asset is Al Michaels. Night Football asset is Al Michaels. Night Football asset is Al Michaels. >> Al Michaels, the Monday Night Football >> Al Michaels, the Monday Night Football >> Al Michaels, the Monday Night Football commentator, [laughter] commentator, [laughter] commentator, [laughter] like a sports team trade to NBC in like a sports team trade to NBC in like a sports team trade to NBC in exchange for the IP rights to Oswald the exchange for the IP rights to Oswald the exchange for the IP rights to Oswald the Rabbit. Rabbit. Rabbit. >> And Oswald is repatriated and NBC gets >> And Oswald is repatriated and NBC gets >> And Oswald is repatriated and NBC gets Al Michaels and all is right in the Al Michaels and all is right in the Al Michaels and all is right in the world. Amazing. world. Amazing. world. Amazing. So, back to 1928. Walt and Roy are So, back to 1928. Walt and Roy are So, back to 1928. Walt and Roy are basically back at square one here. They basically back at square one here. They basically back at square one here. They have not really just nothing. They have not really just nothing. They have not really just nothing. They actually have less than nothing because actually have less than nothing because actually have less than nothing because Mintz ever the uh well really just kind Mintz ever the uh well really just kind Mintz ever the uh well really just kind of weasel is the right word. of weasel is the right word. of weasel is the right word. >> Yeah. >> Yeah. >> Yeah. He makes Walt and Walt Disney Studios He makes Walt and Walt Disney Studios He makes Walt and Walt Disney Studios finish out the current Oswald contract, finish out the current Oswald contract, finish out the current Oswald contract, which still had a few cartoons left to which still had a few cartoons left to which still had a few cartoons left to animate on it, and pay all of the animate on it, and pay all of the animate on it, and pay all of the animators who had all betrayed him and animators who had all betrayed him and animators who had all betrayed him and were all about to defect. Mince is like, were all about to defect. Mince is like, were all about to defect. Mince is like, "No, no, you've got a contract. You're "No, no, you've got a contract. You're "No, no, you've got a contract. You're going to keep paying these folks while going to keep paying these folks while going to keep paying these folks while they finish up the last couple shorts on they finish up the last couple shorts on they finish up the last couple shorts on this brutal contract." Just brutal. this brutal contract." Just brutal. this brutal contract." Just brutal. absolutely absolutely absolutely humiliating for Walt. And so then, as humiliating for Walt. And so then, as humiliating for Walt. And so then, as legend has it, on the long, long train legend has it, on the long, long train legend has it, on the long, long train ride back home from New York, Walt is ride back home from New York, Walt is ride back home from New York, Walt is struck by a bolt of inspiration. And he struck by a bolt of inspiration. And he struck by a bolt of inspiration. And he scribbles a sketch for a new cartoon scribbles a sketch for a new cartoon scribbles a sketch for a new cartoon character right there on his drawing pad character right there on his drawing pad character right there on his drawing pad on the train trip. a character that on the train trip. a character that on the train trip. a character that wouldn't just reverse all the woes of wouldn't just reverse all the woes of wouldn't just reverse all the woes of the Oswalds and turn around the the Oswalds and turn around the the Oswalds and turn around the company's fortune, but would maybe company's fortune, but would maybe company's fortune, but would maybe become become become one of, if not the most recognized one of, if not the most recognized one of, if not the most recognized figure in all of human history. But figure in all of human history. But figure in all of human history. But before we tell the story of Mickey before we tell the story of Mickey before we tell the story of Mickey Mouse, now is a great time to thank our Mouse, now is a great time to thank our Mouse, now is a great time to thank our friends at JP Morgan. friends at JP Morgan. friends at JP Morgan. >> Yes, our presenting partner. So today we >> Yes, our presenting partner. So today we >> Yes, our presenting partner. So today we are sharing a story from one of JP are sharing a story from one of JP are sharing a story from one of JP Morgan's partners and a company that you Morgan's partners and a company that you Morgan's partners and a company that you may know, Bill, which is formerly may know, Bill, which is formerly may know, Bill, which is formerly Bill.com. Right. Bill is the financial Bill.com. Right. Bill is the financial Bill.com. Right. Bill is the financial operations platform for half a million operations platform for half a million operations platform for half a million small and midsize businesses, what they small and midsize businesses, what they small and midsize businesses, what they call the Fortune 5 million. They help call the Fortune 5 million. They help call the Fortune 5 million. They help manage and maximize cash flow for SMB manage and maximize cash flow for SMB manage and maximize cash flow for SMB companies. And Bill's Divvyard product companies. And Bill's Divvyard product companies. And Bill's Divvyard product is what employees at those businesses is what employees at those businesses is what employees at those businesses use to fund their operations day-to-day. use to fund their operations day-to-day. use to fund their operations day-to-day. So, uh, here's a scenario that many So, uh, here's a scenario that many So, uh, here's a scenario that many listeners may have experienced. Someone listeners may have experienced. Someone listeners may have experienced. Someone on your team maxes out the credit line on your team maxes out the credit line on your team maxes out the credit line on their corporate card with an on their corporate card with an on their corporate card with an unexpected purchase. You send a wire to unexpected purchase. You send a wire to unexpected purchase. You send a wire to pay off the card so you can continue pay off the card so you can continue pay off the card so you can continue using it, but it takes 2 to 3 days to using it, but it takes 2 to 3 days to using it, but it takes 2 to 3 days to clear. Meanwhile, your team can't clear. Meanwhile, your team can't clear. Meanwhile, your team can't transact. Yeah, Bill solved that for its transact. Yeah, Bill solved that for its transact. Yeah, Bill solved that for its half a million customers using an half a million customers using an half a million customers using an embedded payment solution from JP embedded payment solution from JP embedded payment solution from JP Morgan. With API based subleddgering, Morgan. With API based subleddgering, Morgan. With API based subleddgering, they can manage millions of payments in they can manage millions of payments in they can manage millions of payments in real time on any platform, all with one real time on any platform, all with one real time on any platform, all with one bank account. Every bill customer gets a bank account. Every bill customer gets a bank account. Every bill customer gets a unique virtual account number. So the unique virtual account number. So the unique virtual account number. So the moment a payment is received, the credit moment a payment is received, the credit moment a payment is received, the credit line is restored. The result is a way line is restored. The result is a way line is restored. The result is a way simpler way to receive and route simpler way to receive and route simpler way to receive and route payments at scale. And the actual payments at scale. And the actual payments at scale. And the actual numbers are awesome. Payment posting numbers are awesome. Payment posting numbers are awesome. Payment posting went from 2 to 3 days to seconds. went from 2 to 3 days to seconds. went from 2 to 3 days to seconds. Inquiries dropped 83%. Even Bill's own Inquiries dropped 83%. Even Bill's own Inquiries dropped 83%. Even Bill's own Treasury team reclaimed 20 hours a week Treasury team reclaimed 20 hours a week Treasury team reclaimed 20 hours a week from manual reconciliation. For decades, from manual reconciliation. For decades, from manual reconciliation. For decades, these were Fortune 500 only these were Fortune 500 only these were Fortune 500 only capabilities. But Bill and JP Morgan capabilities. But Bill and JP Morgan capabilities. But Bill and JP Morgan figured out how to deliver that same figured out how to deliver that same figured out how to deliver that same infrastructure to the Fortune 5 million infrastructure to the Fortune 5 million infrastructure to the Fortune 5 million while also improving Bill's internal while also improving Bill's internal while also improving Bill's internal operations. You can read the full case operations. You can read the full case operations. You can read the full case study as always at study as always at study as always at jpmorggan.com/acquired. jpmorggan.com/acquired. jpmorggan.com/acquired. And something else, if you want to join And something else, if you want to join And something else, if you want to join us and JP Morgan in person, we'll be on us and JP Morgan in person, we'll be on us and JP Morgan in person, we'll be on stage at the We Are Developers World stage at the We Are Developers World stage at the We Are Developers World Congress in San Jose this September. Congress in San Jose this September. Congress in San Jose this September. Click the link in the show notes to Click the link in the show notes to Click the link in the show notes to learn more. learn more. learn more. >> Okay, so David, how does this Oswald >> Okay, so David, how does this Oswald >> Okay, so David, how does this Oswald catastrophe lead to Mickey Mouse? All catastrophe lead to Mickey Mouse? All catastrophe lead to Mickey Mouse? All right. So, here's the story of Mickey right. So, here's the story of Mickey right. So, here's the story of Mickey Mouse, as Walt would tell it. It's March Mouse, as Walt would tell it. It's March Mouse, as Walt would tell it. It's March 1928. He and Lillian are on the long 1928. He and Lillian are on the long 1928. He and Lillian are on the long train ride back home to LA from New train ride back home to LA from New train ride back home to LA from New York. He's struck by the bolt of York. He's struck by the bolt of York. He's struck by the bolt of inspiration for a new cartoon scenario inspiration for a new cartoon scenario inspiration for a new cartoon scenario about a pluckucky mouse named Mortimer about a pluckucky mouse named Mortimer about a pluckucky mouse named Mortimer who is attempting to fly an airplane who is attempting to fly an airplane who is attempting to fly an airplane just like his hero Charles Lindberg. And just like his hero Charles Lindberg. And just like his hero Charles Lindberg. And this would go on to become the Mickey this would go on to become the Mickey this would go on to become the Mickey cartoon Plane Crazy. So Walt shows his cartoon Plane Crazy. So Walt shows his cartoon Plane Crazy. So Walt shows his sketches that he's making to Lillian and sketches that he's making to Lillian and sketches that he's making to Lillian and Lillian says, "I like it, but Mortimer, Lillian says, "I like it, but Mortimer, Lillian says, "I like it, but Mortimer, that's too a name. How about that's too a name. How about that's too a name. How about Mickey?" And thus Mickey Mouse is born. Mickey?" And thus Mickey Mouse is born. Mickey?" And thus Mickey Mouse is born. Now, the real story is more likely that Now, the real story is more likely that Now, the real story is more likely that Walt and Lillian get back to LA and Walt Walt and Lillian get back to LA and Walt Walt and Lillian get back to LA and Walt is like sweating. So he and Roy and the is like sweating. So he and Roy and the is like sweating. So he and Roy and the couple other animators who stayed loyal couple other animators who stayed loyal couple other animators who stayed loyal to them hole up and they start to them hole up and they start to them hole up and they start brainstorming ideas for some kind of new brainstorming ideas for some kind of new brainstorming ideas for some kind of new idea or new character that they can idea or new character that they can idea or new character that they can create to replace Oswald and turn around create to replace Oswald and turn around create to replace Oswald and turn around the studios fortunes. the studios fortunes. the studios fortunes. >> And also when you see Mickey and you see >> And also when you see Mickey and you see >> And also when you see Mickey and you see Oswald, it's not hard to imagine where Oswald, it's not hard to imagine where Oswald, it's not hard to imagine where Mickey Mouse came from. It's like kind Mickey Mouse came from. It's like kind Mickey Mouse came from. It's like kind of like shorten the ears, make them of like shorten the ears, make them of like shorten the ears, make them circles, you know, they both kind of circles, you know, they both kind of circles, you know, they both kind of have this white face and the black have this white face and the black have this white face and the black outline. outline. outline. >> I mean, it's really just the same brief >> I mean, it's really just the same brief >> I mean, it's really just the same brief that created Oswald. It was like, "Hey, that created Oswald. It was like, "Hey, that created Oswald. It was like, "Hey, take Felix and take Felix and take Felix and >> do something like Felix." Except this >> do something like Felix." Except this >> do something like Felix." Except this time it's time it's time it's >> take Oswald and do something like Oswald >> take Oswald and do something like Oswald >> take Oswald and do something like Oswald >> and make damn sure we own it. >> and make damn sure we own it. >> and make damn sure we own it. >> Yes. Exactly. So, they land on the idea >> Yes. Exactly. So, they land on the idea >> Yes. Exactly. So, they land on the idea of a mouse. of a mouse. of a mouse. >> And didn't Walt claim that he sort of >> And didn't Walt claim that he sort of >> And didn't Walt claim that he sort of like always had a fondness for mice cuz like always had a fondness for mice cuz like always had a fondness for mice cuz there were mice that would like jump in there were mice that would like jump in there were mice that would like jump in his trash can in Kansas City while he his trash can in Kansas City while he his trash can in Kansas City while he was animating. And was animating. And was animating. And >> sure, whatever. [laughter] >> You know, it's all it's all just part of >> You know, it's all it's all just part of the Walt myth. the Walt myth. the Walt myth. >> Yes. And at least according to the Neil >> Yes. And at least according to the Neil >> Yes. And at least according to the Neil Gabler book, most likely Gabler book, most likely Gabler book, most likely is the one who first draws Mickey, not is the one who first draws Mickey, not is the one who first draws Mickey, not Walt on the Train. But Walt on the Train. But Walt on the Train. But >> either way, >> either way, >> either way, definitely was the primary animator of definitely was the primary animator of definitely was the primary animator of the first Mickey's for the whole first the first Mickey's for the whole first the first Mickey's for the whole first series of Mickey's, including Steamboat series of Mickey's, including Steamboat series of Mickey's, including Steamboat Willie. So, by the summer of 1928, we've Willie. So, by the summer of 1928, we've Willie. So, by the summer of 1928, we've finished out the Oswald contract and finished out the Oswald contract and finished out the Oswald contract and Walt and the small little merry crew Walt and the small little merry crew Walt and the small little merry crew have gotten two Mickey shorts ready for have gotten two Mickey shorts ready for have gotten two Mickey shorts ready for production. Plain crazy and the Gallop production. Plain crazy and the Gallop production. Plain crazy and the Gallop and Gala show. And Walt takes them and Gala show. And Walt takes them and Gala show. And Walt takes them around to distributors. You know, the around to distributors. You know, the around to distributors. You know, the Walt Disney Studio is well known at this Walt Disney Studio is well known at this Walt Disney Studio is well known at this point. This seems like it would be point. This seems like it would be point. This seems like it would be promising new IP. promising new IP. promising new IP. And none of the major distributors are And none of the major distributors are And none of the major distributors are interested. They're like, "Yeah, I don't interested. They're like, "Yeah, I don't interested. They're like, "Yeah, I don't know. This is Mickey. It's like Oswald, know. This is Mickey. It's like Oswald, know. This is Mickey. It's like Oswald, but but but >> without all the, you know, thousands or >> without all the, you know, thousands or >> without all the, you know, thousands or hundreds of thousands of raving fans for hundreds of thousands of raving fans for hundreds of thousands of raving fans for it." So, it." So, it." So, >> Exactly. Exactly. >> Exactly. Exactly. >> Exactly. Exactly. And then comes the Eureka Breakthrough And then comes the Eureka Breakthrough And then comes the Eureka Breakthrough idea. One of the gang recalls that the idea. One of the gang recalls that the idea. One of the gang recalls that the Jazz Singer, the famous first popular Jazz Singer, the famous first popular Jazz Singer, the famous first popular talky, you know, movie with dialogue and talky, you know, movie with dialogue and talky, you know, movie with dialogue and sound that had just come out the sound that had just come out the sound that had just come out the previous fall, when they went to see it, previous fall, when they went to see it, previous fall, when they went to see it, that there was a cartoon screened that there was a cartoon screened that there was a cartoon screened alongside it. And Walt, when he hears alongside it. And Walt, when he hears alongside it. And Walt, when he hears this, puts the two ideas together in his this, puts the two ideas together in his this, puts the two ideas together in his mind of a cartoon and sound. And mind of a cartoon and sound. And mind of a cartoon and sound. And supposedly he says, "That's it. That's supposedly he says, "That's it. That's supposedly he says, "That's it. That's it. That's what we've got to do. Stop it. That's what we've got to do. Stop it. That's what we've got to do. Stop all these silent pictures. Now, at this all these silent pictures. Now, at this all these silent pictures. Now, at this point, people had made cartoons with point, people had made cartoons with point, people had made cartoons with sound, but nobody had ever made a sound, but nobody had ever made a sound, but nobody had ever made a cartoon with sound like the jazz singer cartoon with sound like the jazz singer cartoon with sound like the jazz singer had sound. had sound. had sound. >> Synchronized sound. >> Synchronized sound. >> Synchronized sound. >> Synchronized. Yes. Exactly. Where what >> Synchronized. Yes. Exactly. Where what >> Synchronized. Yes. Exactly. Where what was happening in real time in the was happening in real time in the was happening in real time in the cartoon was then played in sound. cartoon was then played in sound. cartoon was then played in sound. Exactly. Synchronized in the movie Exactly. Synchronized in the movie Exactly. Synchronized in the movie theater. theater. theater. >> Yeah. The concept before was there's >> Yeah. The concept before was there's >> Yeah. The concept before was there's music that plays, but it's only loosely music that plays, but it's only loosely music that plays, but it's only loosely attached. And this is to the frame and attached. And this is to the frame and attached. And this is to the frame and to the beat of the music. Like if you to the beat of the music. Like if you to the beat of the music. Like if you see Mickey on screen bop into something, see Mickey on screen bop into something, see Mickey on screen bop into something, then you might hear a xylophone on the then you might hear a xylophone on the then you might hear a xylophone on the exact same downbeat play a note. exact same downbeat play a note. exact same downbeat play a note. >> Yeah. It's not just that like there's >> Yeah. It's not just that like there's >> Yeah. It's not just that like there's some music accompanying this cartoon some music accompanying this cartoon some music accompanying this cartoon that you're watching. It's that what is that you're watching. It's that what is that you're watching. It's that what is happening in the cartoon feels like it happening in the cartoon feels like it happening in the cartoon feels like it is producing the sound. is producing the sound. is producing the sound. >> Yes. There's a great business model >> Yes. There's a great business model >> Yes. There's a great business model lesson in this, which is with the first lesson in this, which is with the first lesson in this, which is with the first two Mickey's flopping, if you just do two Mickey's flopping, if you just do two Mickey's flopping, if you just do the same thing as an existing competitor the same thing as an existing competitor the same thing as an existing competitor who already has distribution, brand, who already has distribution, brand, who already has distribution, brand, customers, it's not enough. You need to customers, it's not enough. You need to customers, it's not enough. You need to go do something leveraging a new piece go do something leveraging a new piece go do something leveraging a new piece of technology or a new platform. You got of technology or a new platform. You got of technology or a new platform. You got to come at it from an orthogonal way in to come at it from an orthogonal way in to come at it from an orthogonal way in order to leaprog and make people pay order to leaprog and make people pay order to leaprog and make people pay attention to you. Otherwise, you're just attention to you. Otherwise, you're just attention to you. Otherwise, you're just a like smaller, worse, also ran. a like smaller, worse, also ran. a like smaller, worse, also ran. >> Totally. And and that could be anything. >> Totally. And and that could be anything. >> Totally. And and that could be anything. I mean, the only reason that the Oswalds I mean, the only reason that the Oswalds I mean, the only reason that the Oswalds worked, even though they were a ripoff worked, even though they were a ripoff worked, even though they were a ripoff of Felix was because they came built in of Felix was because they came built in of Felix was because they came built in with the Universal distribution, but with the Universal distribution, but with the Universal distribution, but yeah, Walt taking out the Mickey's yeah, Walt taking out the Mickey's yeah, Walt taking out the Mickey's before bringing sound. Like, he's got before bringing sound. Like, he's got before bringing sound. Like, he's got nothing to bring to the table here. nothing to bring to the table here. nothing to bring to the table here. >> Yep. >> Yep. >> Yep. >> So, Walt lines up access to the >> So, Walt lines up access to the >> So, Walt lines up access to the Cinnaphhone sound recording system from Cinnaphhone sound recording system from Cinnaphhone sound recording system from a character named Pat Powers, who had a character named Pat Powers, who had a character named Pat Powers, who had actually helped create Universal, you actually helped create Universal, you actually helped create Universal, you know, some number of decades earlier. know, some number of decades earlier. know, some number of decades earlier. and then had gone on to become a sound and then had gone on to become a sound and then had gone on to become a sound accolade and entrepreneur developing a accolade and entrepreneur developing a accolade and entrepreneur developing a sound system for this new movie sound system for this new movie sound system for this new movie technology. And so Walt and crew animate technology. And so Walt and crew animate technology. And so Walt and crew animate a test sequence of a Mickey with sound a test sequence of a Mickey with sound a test sequence of a Mickey with sound and they screen it for all their wives and they screen it for all their wives and they screen it for all their wives and girlfriends and writes later of what and girlfriends and writes later of what and girlfriends and writes later of what happened next when they screen the happened next when they screen the happened next when they screen the synchronized sound Mickey for the first synchronized sound Mickey for the first synchronized sound Mickey for the first time. I never saw such a reaction in an time. I never saw such a reaction in an time. I never saw such a reaction in an audience in my life. The scheme worked audience in my life. The scheme worked audience in my life. The scheme worked perfectly. The sound itself gave the perfectly. The sound itself gave the perfectly. The sound itself gave the illusion of something emanating directly illusion of something emanating directly illusion of something emanating directly from the screen. Walt kept crying, "This from the screen. Walt kept crying, "This from the screen. Walt kept crying, "This is it. This is it. We've got it." is it. This is it. We've got it." is it. This is it. We've got it." [laughter and gasps] [laughter and gasps] [laughter and gasps] It turned out that sound was the It turned out that sound was the It turned out that sound was the critical enabling technology for critical enabling technology for critical enabling technology for animation to go beyond a novelty and animation to go beyond a novelty and animation to go beyond a novelty and allow the characters that are on screen allow the characters that are on screen allow the characters that are on screen to actually have personality that to actually have personality that to actually have personality that audiences connect with. audiences connect with. audiences connect with. >> So interesting. And it's not obvious >> So interesting. And it's not obvious >> So interesting. And it's not obvious at first. It's obvious in retrospect, at first. It's obvious in retrospect, at first. It's obvious in retrospect, but you can totally see how when Walt but you can totally see how when Walt but you can totally see how when Walt had this insight and then they made the had this insight and then they made the had this insight and then they made the investment cuz doing a test animation investment cuz doing a test animation investment cuz doing a test animation and synchronizing the sound, like even and synchronizing the sound, like even and synchronizing the sound, like even to show a little screener must have been to show a little screener must have been to show a little screener must have been really hard at the time cuz none of the really hard at the time cuz none of the really hard at the time cuz none of the tools existed. They sort of had to tools existed. They sort of had to tools existed. They sort of had to invent the way to synchronize the invent the way to synchronize the invent the way to synchronize the drawings with the music and the systems. drawings with the music and the systems. drawings with the music and the systems. It's sort of a big bet even to try and It's sort of a big bet even to try and It's sort of a big bet even to try and see if that creates personality. see if that creates personality. see if that creates personality. >> Right. Right. And sound did the same >> Right. Right. And sound did the same >> Right. Right. And sound did the same thing for liveaction movies, but it's thing for liveaction movies, but it's thing for liveaction movies, but it's not that big a leap to have humans not that big a leap to have humans not that big a leap to have humans talking. Like humans talk, you know, talking. Like humans talk, you know, talking. Like humans talk, you know, sound just made it way better. Sound for sound just made it way better. Sound for sound just made it way better. Sound for cartoons was this giant leap. These cartoons was this giant leap. These cartoons was this giant leap. These characters, this art can now be actual characters, this art can now be actual characters, this art can now be actual characters with personalities. characters with personalities. characters with personalities. >> Yeah. >> Yeah. >> Yeah. >> In a way that they couldn't before. >> In a way that they couldn't before. >> In a way that they couldn't before. >> Non-obvious at the time, completely >> Non-obvious at the time, completely >> Non-obvious at the time, completely obvious in retrospect. obvious in retrospect. obvious in retrospect. >> Yep. So, they make Steamboat Willie as >> Yep. So, they make Steamboat Willie as >> Yep. So, they make Steamboat Willie as the third Mickey, but the first with the third Mickey, but the first with the third Mickey, but the first with synchronized sound, synchronized sound, synchronized sound, >> which we're going to skip over the whole >> which we're going to skip over the whole >> which we're going to skip over the whole headache nightmare of creating this headache nightmare of creating this headache nightmare of creating this thing. But it was like Walt constantly thing. But it was like Walt constantly thing. But it was like Walt constantly going back and forth to New York, going back and forth to New York, going back and forth to New York, betting every last dollar that he had, betting every last dollar that he had, betting every last dollar that he had, inventing all these new processes, inventing all these new processes, inventing all these new processes, trying different ways to get an trying different ways to get an trying different ways to get an orchestra synced to the sound. orchestra synced to the sound. orchestra synced to the sound. >> Oh, yeah. They like animated a little >> Oh, yeah. They like animated a little >> Oh, yeah. They like animated a little ball on the screen that would sync to ball on the screen that would sync to ball on the screen that would sync to the orchestra as they were playing. the orchestra as they were playing. the orchestra as they were playing. >> Yes. and he couldn't get the original >> Yes. and he couldn't get the original >> Yes. and he couldn't get the original conductor of the orchestra to actually conductor of the orchestra to actually conductor of the orchestra to actually use his method. The orchestra guy was use his method. The orchestra guy was use his method. The orchestra guy was like, "Ah, trust me." And then it was like, "Ah, trust me." And then it was like, "Ah, trust me." And then it was all out of sync with the screen. The the all out of sync with the screen. The the all out of sync with the screen. The the net of it is it's a giant painful net of it is it's a giant painful net of it is it's a giant painful operational struggle to get this thing operational struggle to get this thing operational struggle to get this thing out, but my god does it hit. out, but my god does it hit. out, but my god does it hit. >> Yes. Well, [laughter] >> Yes. Well, [laughter] >> Yes. Well, [laughter] [gasps] you know, this is the nature of [gasps] you know, this is the nature of [gasps] you know, this is the nature of the New York distributors. They get it the New York distributors. They get it the New York distributors. They get it made. Walt takes it and shops it around made. Walt takes it and shops it around made. Walt takes it and shops it around all the big folks in New York. And all the big folks in New York. And all the big folks in New York. And they're so conservative. They're like, they're so conservative. They're like, they're so conservative. They're like, "Well, this is cool, but um I don't know "Well, this is cool, but um I don't know "Well, this is cool, but um I don't know how audiences are going to react to how audiences are going to react to how audiences are going to react to this. We kind of want to see a test this. We kind of want to see a test this. We kind of want to see a test first." first." first." >> I don't want to be first in line. >> I don't want to be first in line. >> I don't want to be first in line. >> Yeah. Exactly. Exactly. kind of like VCs >> Yeah. Exactly. Exactly. kind of like VCs >> Yeah. Exactly. Exactly. kind of like VCs like [laughter] so Walt decides that he's going to take so Walt decides that he's going to take matters into his own hands and he goes matters into his own hands and he goes matters into his own hands and he goes directly to the manager of the Colony directly to the manager of the Colony directly to the manager of the Colony Theater in New York City and cuts a deal Theater in New York City and cuts a deal Theater in New York City and cuts a deal for $1,000 for $1,000 for $1,000 to run Steamboat Willie before the to run Steamboat Willie before the to run Steamboat Willie before the features that they're showing in the features that they're showing in the features that they're showing in the Colony Theater. So going around Colony Theater. So going around Colony Theater. So going around distributors just to get this in one distributors just to get this in one distributors just to get this in one theater as a test. theater as a test. theater as a test. >> Yep. And so Steamboat Willie premieres >> Yep. And so Steamboat Willie premieres >> Yep. And so Steamboat Willie premieres in New York City on November 18th, 1928 in New York City on November 18th, 1928 in New York City on November 18th, 1928 before the film Gang War. Nobody really before the film Gang War. Nobody really before the film Gang War. Nobody really remembers Gang War because Steamboat remembers Gang War because Steamboat remembers Gang War because Steamboat Willie is a revolution. Critics love it. Willie is a revolution. Critics love it. Willie is a revolution. Critics love it. Audiences love it. Audiences love it. Audiences love it. >> Yeah. Isn't there some famous story of >> Yeah. Isn't there some famous story of >> Yeah. Isn't there some famous story of people sort of standing up and people sort of standing up and people sort of standing up and screaming, "We want Steamboat Willie screaming, "We want Steamboat Willie screaming, "We want Steamboat Willie again instead of playing the the main again instead of playing the the main again instead of playing the the main feature." feature." feature." >> Yeah. Yeah. Exactly. Exactly. But still, >> Yeah. Yeah. Exactly. Exactly. But still, >> Yeah. Yeah. Exactly. Exactly. But still, you know, Disney now needs to find a you know, Disney now needs to find a you know, Disney now needs to find a distributor. And now he's got the proof distributor. And now he's got the proof distributor. And now he's got the proof point. [laughter] point. [laughter] point. [laughter] These New York distributors, they're These New York distributors, they're These New York distributors, they're still so conservative. They're like, still so conservative. They're like, still so conservative. They're like, "Well, you had one hit. I don't know "Well, you had one hit. I don't know "Well, you had one hit. I don't know that like we can really trust that this that like we can really trust that this that like we can really trust that this isn't just a fad that the future sounds isn't just a fad that the future sounds isn't just a fad that the future sounds are also going to be a hit and that you are also going to be a hit and that you are also going to be a hit and that you can repeat the magic." And famously, one can repeat the magic." And famously, one can repeat the magic." And famously, one distributor while Walt is meeting with distributor while Walt is meeting with distributor while Walt is meeting with him here and he's trying to explain to him here and he's trying to explain to him here and he's trying to explain to Walt why he's going to pass again on the Walt why he's going to pass again on the Walt why he's going to pass again on the Mickey deal picks up a package of Mickey deal picks up a package of Mickey deal picks up a package of Lifesavers candy. And he says to Walt, Lifesavers candy. And he says to Walt, Lifesavers candy. And he says to Walt, "The public knows the Lifesavers brand. "The public knows the Lifesavers brand. "The public knows the Lifesavers brand. They know what these are. They don't They know what these are. They don't They know what these are. They don't know Walt Disney and they don't know know Walt Disney and they don't know know Walt Disney and they don't know your mouse." [laughter] >> I I can only imagine Walt sitting here >> I I can only imagine Walt sitting here just seething. just seething. just seething. >> Yeah. But this makes a huge impression >> Yeah. But this makes a huge impression >> Yeah. But this makes a huge impression on him. I think this is an important on him. I think this is an important on him. I think this is an important thing about Walt. He definitely has a thing about Walt. He definitely has a thing about Walt. He definitely has a huge ego, right? But he is very willing huge ego, right? But he is very willing huge ego, right? But he is very willing to learn even from pretty obnoxious to learn even from pretty obnoxious to learn even from pretty obnoxious people. He's like, "You know what? people. He's like, "You know what? people. He's like, "You know what? You're right." You're right." You're right." >> Oh, I think he's motivated by learning. >> Oh, I think he's motivated by learning. >> Oh, I think he's motivated by learning. He's motivated. He's motivated. He's motivated. >> I think he's an engineer. I think he's >> I think he's an engineer. I think he's >> I think he's an engineer. I think he's uh he loves picking things apart and uh he loves picking things apart and uh he loves picking things apart and learning the way they work. I think he's learning the way they work. I think he's learning the way they work. I think he's motivated to make the best art he can in motivated to make the best art he can in motivated to make the best art he can in addition to making the best business he addition to making the best business he addition to making the best business he can. So, if someone's going to offer him can. So, if someone's going to offer him can. So, if someone's going to offer him >> a lesson, >> a lesson, >> a lesson, >> a way to learn something. Yeah. >> a way to learn something. Yeah. >> a way to learn something. Yeah. >> Yeah. He'll take it. he'll take it even >> Yeah. He'll take it. he'll take it even >> Yeah. He'll take it. he'll take it even if he might be mad at the person. So he if he might be mad at the person. So he if he might be mad at the person. So he writes about this moment later. From now writes about this moment later. From now writes about this moment later. From now on, the audience was going to know if on, the audience was going to know if on, the audience was going to know if they like the picture, they were going they like the picture, they were going they like the picture, they were going to know Walt Disney's name. Ultimately, to know Walt Disney's name. Ultimately, to know Walt Disney's name. Ultimately, what Walt does is he turns to Pat what Walt does is he turns to Pat what Walt does is he turns to Pat Powers, his partner in the sound Powers, his partner in the sound Powers, his partner in the sound technology, who had been one of the, you technology, who had been one of the, you technology, who had been one of the, you know, original Universal executives, and know, original Universal executives, and know, original Universal executives, and they cut a deal where Powers will be they cut a deal where Powers will be they cut a deal where Powers will be Disney's direct distribution agent in Disney's direct distribution agent in Disney's direct distribution agent in return for just 10% of the gross revenue return for just 10% of the gross revenue return for just 10% of the gross revenue on the Mickey's, which seems like a on the Mickey's, which seems like a on the Mickey's, which seems like a pretty good deal. pretty good deal. pretty good deal. >> Yeah. And indeed, it was kind of a too >> Yeah. And indeed, it was kind of a too >> Yeah. And indeed, it was kind of a too good to be true deal because Powers, good to be true deal because Powers, good to be true deal because Powers, like all these New York guys, like all these New York guys, like all these New York guys, was basically plotting to do the exact was basically plotting to do the exact was basically plotting to do the exact same thing as Mintz to Disney. He wanted same thing as Mintz to Disney. He wanted same thing as Mintz to Disney. He wanted to start working with Walt, give him a to start working with Walt, give him a to start working with Walt, give him a sweetheart deal, and then lure away the sweetheart deal, and then lure away the sweetheart deal, and then lure away the animation talent because Powers, animation talent because Powers, animation talent because Powers, remember, has the sound technology that remember, has the sound technology that remember, has the sound technology that he's given to Walt. So he's thinking, if he's given to Walt. So he's thinking, if he's given to Walt. So he's thinking, if I get the animators, right, I get the animators, right, I get the animators, right, >> what do we need Walt for? >> what do we need Walt for? >> what do we need Walt for? >> So this explains the sweetheart deal on >> So this explains the sweetheart deal on >> So this explains the sweetheart deal on distribution because that wasn't the distribution because that wasn't the distribution because that wasn't the real prize he was after. real prize he was after. real prize he was after. >> And >> And >> And just a year later in 1930, Powers does just a year later in 1930, Powers does just a year later in 1930, Powers does the unthinkable. the unthinkable. the unthinkable. He convinces Eyeworks to quit and leave He convinces Eyeworks to quit and leave He convinces Eyeworks to quit and leave Disney. He says, "U, we're going to get Disney. He says, "U, we're going to get Disney. He says, "U, we're going to get you set up with your own studio. You're you set up with your own studio. You're you set up with your own studio. You're going to work with me. we were to create going to work with me. we were to create going to work with me. we were to create new characters. It's the exact same new characters. It's the exact same new characters. It's the exact same thing that Mintz did to Disney last thing that Mintz did to Disney last thing that Mintz did to Disney last time. time. time. >> Absolutely brutal. >> Absolutely brutal. >> Absolutely brutal. >> Except it plays out the exact opposite >> Except it plays out the exact opposite >> Except it plays out the exact opposite way. way. way. >> Cuz Walt's learned his lesson. >> Cuz Walt's learned his lesson. >> Cuz Walt's learned his lesson. >> Walt has learned his lesson. By the time >> Walt has learned his lesson. By the time >> Walt has learned his lesson. By the time this happens, over a dozen Mickey shorts this happens, over a dozen Mickey shorts this happens, over a dozen Mickey shorts with sound have come out. Every single with sound have come out. Every single with sound have come out. Every single one of them branded prominently up front one of them branded prominently up front one of them branded prominently up front and at the end a Walt Disney comic. And and at the end a Walt Disney comic. And and at the end a Walt Disney comic. And they had become huge hits. So even they had become huge hits. So even they had become huge hits. So even though Power Steals Eye Works away, though Power Steals Eye Works away, though Power Steals Eye Works away, nobody cares. Everybody still wants the nobody cares. Everybody still wants the nobody cares. Everybody still wants the Mickey's. Everybody still wants Walt Mickey's. Everybody still wants Walt Mickey's. Everybody still wants Walt Disney Comics. Disney has made himself Disney Comics. Disney has made himself Disney Comics. Disney has made himself the lifesavers of animation. the lifesavers of animation. the lifesavers of animation. >> Disney first switches to Columbia for >> Disney first switches to Columbia for >> Disney first switches to Columbia for distribution and then to United Artists. distribution and then to United Artists. distribution and then to United Artists. And audiences just keep loving Mickey. And audiences just keep loving Mickey. And audiences just keep loving Mickey. In fact, they love him so much that it In fact, they love him so much that it In fact, they love him so much that it leads to the discovery of a whole new leads to the discovery of a whole new leads to the discovery of a whole new business model for Disney and the business model for Disney and the business model for Disney and the company, the intellectual property company, the intellectual property company, the intellectual property flywheel. And it starts with the Mickey flywheel. And it starts with the Mickey flywheel. And it starts with the Mickey Mouse Club. This is wild. I had no idea Mouse Club. This is wild. I had no idea Mouse Club. This is wild. I had no idea about the origins of the Mickey Mouse about the origins of the Mickey Mouse about the origins of the Mickey Mouse Club. Club. Club. >> Basically discovered by Disney by >> Basically discovered by Disney by >> Basically discovered by Disney by accident, right? accident, right? accident, right? >> Totally by accident. [laughter] >> Totally by accident. [laughter] >> Totally by accident. [laughter] So, in the summer of 1929, So, in the summer of 1929, So, in the summer of 1929, just a few months after Steamboat Willie just a few months after Steamboat Willie just a few months after Steamboat Willie and the first sort of nationally and the first sort of nationally and the first sort of nationally distributed Mickeyy's, the manager of distributed Mickeyy's, the manager of distributed Mickeyy's, the manager of the Fox Dome Theater in Ocean Park, the Fox Dome Theater in Ocean Park, the Fox Dome Theater in Ocean Park, California, contacts Walt with an idea. California, contacts Walt with an idea. California, contacts Walt with an idea. Why don't we partner to start a Mickey Why don't we partner to start a Mickey Why don't we partner to start a Mickey Mouse club for kids? I've got like a Mouse club for kids? I've got like a Mouse club for kids? I've got like a thousand kids who keep showing up here thousand kids who keep showing up here thousand kids who keep showing up here at the theater every weekend and all at the theater every weekend and all at the theater every weekend and all they want to do is watch the Mickey's they want to do is watch the Mickey's they want to do is watch the Mickey's again and again and again. I think we again and again and again. I think we again and again and again. I think we should capitalize on this. We can create should capitalize on this. We can create should capitalize on this. We can create a club like a kids club and we can a club like a kids club and we can a club like a kids club and we can charge parents a membership fee. The charge parents a membership fee. The charge parents a membership fee. The kids will love it. The parents will get kids will love it. The parents will get kids will love it. The parents will get them out of the house every weekend. them out of the house every weekend. them out of the house every weekend. It'll be great. and we can pilot it here It'll be great. and we can pilot it here It'll be great. and we can pilot it here at the Foxdome Theater and then if it at the Foxdome Theater and then if it at the Foxdome Theater and then if it works I think we can franchise this works I think we can franchise this works I think we can franchise this nationally. And so this is exactly what nationally. And so this is exactly what nationally. And so this is exactly what Walt and this theater manager do. The Walt and this theater manager do. The Walt and this theater manager do. The way it works when they take it national way it works when they take it national way it works when they take it national is that theaters would buy a quote is that theaters would buy a quote is that theaters would buy a quote Mickey Mouse Club charter from the Mickey Mouse Club charter from the Mickey Mouse Club charter from the company from the Walt Disney Studio. company from the Walt Disney Studio. company from the Walt Disney Studio. >> It's like a franchise. >> It's like a franchise. >> It's like a franchise. >> Yeah, like a franchise right >> Yeah, like a franchise right >> Yeah, like a franchise right >> for $25. And then as part of the club, >> for $25. And then as part of the club, >> for $25. And then as part of the club, the kids and their parents would gain the kids and their parents would gain the kids and their parents would gain the right to buy exclusive Mickey the right to buy exclusive Mickey the right to buy exclusive Mickey merchandise. merchandise. merchandise. >> I mean, it's kind of amazing, right? Pay >> I mean, it's kind of amazing, right? Pay >> I mean, it's kind of amazing, right? Pay to become a member of a club to dedicate to become a member of a club to dedicate to become a member of a club to dedicate yourself to fandom. So, you have the yourself to fandom. So, you have the yourself to fandom. So, you have the right to buy more things. right to buy more things. right to buy more things. >> The right to buy more things. Yes. So, >> The right to buy more things. Yes. So, >> The right to buy more things. Yes. So, like hats, buttons, banners, etc. And like hats, buttons, banners, etc. And like hats, buttons, banners, etc. And all of this revenue is getting split all of this revenue is getting split all of this revenue is getting split back with Disney. the $25 club charter back with Disney. the $25 club charter back with Disney. the $25 club charter and then all the merchandise revenue. and then all the merchandise revenue. and then all the merchandise revenue. >> Pretty quickly, there are 800 >> Pretty quickly, there are 800 >> Pretty quickly, there are 800 Mickey Mouse clubs across the country Mickey Mouse clubs across the country Mickey Mouse clubs across the country with more than 1 million total members. with more than 1 million total members. with more than 1 million total members. That is more members than the Boy and That is more members than the Boy and That is more members than the Boy and Girl Scouts of America combined at this Girl Scouts of America combined at this Girl Scouts of America combined at this point in time. point in time. point in time. >> That's insane scale and insane speed of >> That's insane scale and insane speed of >> That's insane scale and insane speed of adoption pre- internet. adoption pre- internet. adoption pre- internet. >> Right. Right. pre- internet, pre-cable, >> Right. Right. pre- internet, pre-cable, >> Right. Right. pre- internet, pre-cable, pre-bro TV, the ability to get a million pre-bro TV, the ability to get a million pre-bro TV, the ability to get a million Americans doing something within a few Americans doing something within a few Americans doing something within a few years is uh like how did that even work? years is uh like how did that even work? years is uh like how did that even work? I mean, I'm trying to think how word I mean, I'm trying to think how word I mean, I'm trying to think how word could even spread that quickly. I guess could even spread that quickly. I guess could even spread that quickly. I guess through theaters, Disney's distributors through theaters, Disney's distributors through theaters, Disney's distributors >> to the theaters. >> to the theaters. >> to the theaters. >> Well, this is like a no-brainer >> Well, this is like a no-brainer >> Well, this is like a no-brainer proposition for a movie theater proposition for a movie theater proposition for a movie theater operator. You're going to take your operator. You're going to take your operator. You're going to take your Saturday or Sunday afternoons, which are Saturday or Sunday afternoons, which are Saturday or Sunday afternoons, which are probably reserved mostly for kids probably reserved mostly for kids probably reserved mostly for kids anyway. all your matinea showings, anyway. all your matinea showings, anyway. all your matinea showings, right? You're going to convert it into a right? You're going to convert it into a right? You're going to convert it into a Mickey Mouse club. Mickey Mouse club. Mickey Mouse club. >> Kids are going to love it. They're going >> Kids are going to love it. They're going >> Kids are going to love it. They're going to buy a bunch of stuff [laughter] to buy a bunch of stuff [laughter] to buy a bunch of stuff [laughter] that you otherwise wouldn't have the that you otherwise wouldn't have the that you otherwise wouldn't have the opportunity to sell to them. Parents are opportunity to sell to them. Parents are opportunity to sell to them. Parents are going to love it because they get rid of going to love it because they get rid of going to love it because they get rid of the kids. And then for Disney, they're the kids. And then for Disney, they're the kids. And then for Disney, they're just getting this turbocharged just getting this turbocharged just getting this turbocharged distribution and brand recognition of distribution and brand recognition of distribution and brand recognition of Disney the company and Mickey Mouse the Disney the company and Mickey Mouse the Disney the company and Mickey Mouse the character. character. character. >> Yeah, it's amazing. Okay, so they take >> Yeah, it's amazing. Okay, so they take >> Yeah, it's amazing. Okay, so they take the learnings from the Mickey Mouse the learnings from the Mickey Mouse the learnings from the Mickey Mouse Club, right? And they kind of lean into Club, right? And they kind of lean into Club, right? And they kind of lean into Mickey in a in a big way at the Mickey in a in a big way at the Mickey in a in a big way at the corporate level. corporate level. corporate level. >> Totally. So just a few months after the >> Totally. So just a few months after the >> Totally. So just a few months after the Mickey Mouse Club kicks off in January Mickey Mouse Club kicks off in January Mickey Mouse Club kicks off in January 1930, they launch a daily Mickey comic 1930, they launch a daily Mickey comic 1930, they launch a daily Mickey comic strip with King Features Syndicate in strip with King Features Syndicate in strip with King Features Syndicate in newspapers around the country. It gets newspapers around the country. It gets newspapers around the country. It gets published daily in 60 US newspapers and published daily in 60 US newspapers and published daily in 60 US newspapers and then also internationally in 20 more then also internationally in 20 more then also internationally in 20 more countries around the world. So Disney is countries around the world. So Disney is countries around the world. So Disney is getting paid getting paid getting paid to produce a Mickey comic strip, which to produce a Mickey comic strip, which to produce a Mickey comic strip, which only cost them the salary of the one only cost them the salary of the one only cost them the salary of the one animator that they have making it every animator that they have making it every animator that they have making it every day, a 24-year-old named Floyd day, a 24-year-old named Floyd day, a 24-year-old named Floyd Gotfredson, who would do it every day Gotfredson, who would do it every day Gotfredson, who would do it every day for 45 years. for 45 years. for 45 years. >> Wow. Wild. So, not only are they getting >> Wow. Wild. So, not only are they getting >> Wow. Wild. So, not only are they getting revenue for this, they're getting free revenue for this, they're getting free revenue for this, they're getting free daily advertising and IP exposure to daily advertising and IP exposure to daily advertising and IP exposure to probably a 100 million plus people probably a 100 million plus people probably a 100 million plus people through this newspaper comic through this newspaper comic through this newspaper comic distribution every single day. distribution every single day. distribution every single day. >> And even if they weren't getting paid >> And even if they weren't getting paid >> And even if they weren't getting paid for it, the marketing on that so that for it, the marketing on that so that for it, the marketing on that so that people go see Mickey films. people go see Mickey films. people go see Mickey films. >> Exactly. Yeah. It never becomes a huge >> Exactly. Yeah. It never becomes a huge >> Exactly. Yeah. It never becomes a huge revenue or profit driver for them, but revenue or profit driver for them, but revenue or profit driver for them, but like that free daily marketing in most like that free daily marketing in most like that free daily marketing in most major newspapers around the country is major newspapers around the country is major newspapers around the country is incredible. incredible. incredible. >> Yep. Interesting to know Oswald actually >> Yep. Interesting to know Oswald actually >> Yep. Interesting to know Oswald actually was on a candy bar back in the day, but was on a candy bar back in the day, but was on a candy bar back in the day, but when Walt, who at the time saw he owned when Walt, who at the time saw he owned when Walt, who at the time saw he owned Oswald, had the opportunity to monetize Oswald, had the opportunity to monetize Oswald, had the opportunity to monetize it, he was like, I I didn't even it, he was like, I I didn't even it, he was like, I I didn't even consider it. It it doesn't need to be an consider it. It it doesn't need to be an consider it. It it doesn't need to be an additional revenue stream. It's just additional revenue stream. It's just additional revenue stream. It's just really good for me if Oswald is on the really good for me if Oswald is on the really good for me if Oswald is on the candy bar. Right. So, that's sort of uh candy bar. Right. So, that's sort of uh candy bar. Right. So, that's sort of uh they're getting the seeds of like, okay, they're getting the seeds of like, okay, they're getting the seeds of like, okay, we're making some money on the comics, we're making some money on the comics, we're making some money on the comics, but it it it really is like a massive but it it it really is like a massive but it it it really is like a massive marketing engine. marketing engine. marketing engine. >> Well, uh you're teeing up the big one >> Well, uh you're teeing up the big one >> Well, uh you're teeing up the big one here, which is merch and consumer here, which is merch and consumer here, which is merch and consumer products. products. products. >> Yep. So pretty quickly after Steamboat >> Yep. So pretty quickly after Steamboat >> Yep. So pretty quickly after Steamboat Willie, Walt is walking the street in Willie, Walt is walking the street in Willie, Walt is walking the street in New York and a man comes up to him, like New York and a man comes up to him, like New York and a man comes up to him, like comes up to Walt Disney on the street comes up to Walt Disney on the street comes up to Walt Disney on the street and offers Walt $300 and offers Walt $300 and offers Walt $300 to license the Mickey character to put to license the Mickey character to put to license the Mickey character to put it on a series of children's writing it on a series of children's writing it on a series of children's writing workbooks that he's producing there in workbooks that he's producing there in workbooks that he's producing there in New York. And this is like really early New York. And this is like really early New York. And this is like really early days. Mickey's just starting to work. days. Mickey's just starting to work. days. Mickey's just starting to work. The studio still needs money. So Walt's The studio still needs money. So Walt's The studio still needs money. So Walt's like, "Uh, sure. Yeah, I'll take 300 like, "Uh, sure. Yeah, I'll take 300 like, "Uh, sure. Yeah, I'll take 300 bucks. Why not?" bucks. Why not?" bucks. Why not?" >> And 300 bucks in 1929, it's a lot of >> And 300 bucks in 1929, it's a lot of >> And 300 bucks in 1929, it's a lot of money. I mean, this is the beginning of money. I mean, this is the beginning of money. I mean, this is the beginning of the Great Depression. the Great Depression. the Great Depression. >> Yes. Yes. Mi Mickey takes off during the >> Yes. Yes. Mi Mickey takes off during the >> Yes. Yes. Mi Mickey takes off during the depression. In fact, he sort of becomes depression. In fact, he sort of becomes depression. In fact, he sort of becomes like a national champion. It's part of like a national champion. It's part of like a national champion. It's part of his success that people view Plucky his success that people view Plucky his success that people view Plucky Mickey's success as a mouse, as the Mickey's success as a mouse, as the Mickey's success as a mouse, as the underdog, as like something that underdog, as like something that underdog, as like something that >> Americans can identify with through the >> Americans can identify with through the >> Americans can identify with through the depression. depression. depression. >> And life is hard. I mean, having a sort >> And life is hard. I mean, having a sort >> And life is hard. I mean, having a sort of way to disassociate a little bit and of way to disassociate a little bit and of way to disassociate a little bit and then just enjoy a like funloving, then just enjoy a like funloving, then just enjoy a like funloving, problemfree cartoon. I don't think problemfree cartoon. I don't think problemfree cartoon. I don't think people know this. Mickey's role in these people know this. Mickey's role in these people know this. Mickey's role in these early comics is exactly what you're early comics is exactly what you're early comics is exactly what you're saying, the underdog. He's getting saying, the underdog. He's getting saying, the underdog. He's getting himself into these tricky situations by himself into these tricky situations by himself into these tricky situations by someone that seems bigger and stronger someone that seems bigger and stronger someone that seems bigger and stronger and he's able to figure it out and and he's able to figure it out and and he's able to figure it out and emerge. It's the American spirit. emerge. It's the American spirit. emerge. It's the American spirit. >> Yep. Yep. Yep. So, back to the writing >> Yep. Yep. Yep. So, back to the writing >> Yep. Yep. Yep. So, back to the writing tablets, tablets, tablets, they take off and do huge, huge sales. they take off and do huge, huge sales. they take off and do huge, huge sales. Disney doesn't even know how much sales Disney doesn't even know how much sales Disney doesn't even know how much sales because all they have is 300 a handshake because all they have is 300 a handshake because all they have is 300 a handshake from this guy. [laughter] from this guy. [laughter] from this guy. [laughter] So, Walt and Roy figure, "All right, we So, Walt and Roy figure, "All right, we So, Walt and Roy figure, "All right, we need to get smarter about merch." So, need to get smarter about merch." So, need to get smarter about merch." So, they contact an adman in Kansas City they contact an adman in Kansas City they contact an adman in Kansas City that Walt admired named K. Cayman who that Walt admired named K. Cayman who that Walt admired named K. Cayman who had owned an advertising firm and they had owned an advertising firm and they had owned an advertising firm and they agree to do a deal where Kay becomes the agree to do a deal where Kay becomes the agree to do a deal where Kay becomes the exclusive exclusive exclusive commercial products agent for all Disney commercial products agent for all Disney commercial products agent for all Disney merchandise licensing beginning in 1933. merchandise licensing beginning in 1933. merchandise licensing beginning in 1933. And the deal they do is that Disney And the deal they do is that Disney And the deal they do is that Disney would get 60% of the first $100,000 in would get 60% of the first $100,000 in would get 60% of the first $100,000 in royalties that Kay is able to generate royalties that Kay is able to generate royalties that Kay is able to generate from licensing Disney brands and from licensing Disney brands and from licensing Disney brands and mascots. And then after the first 100k, mascots. And then after the first 100k, mascots. And then after the first 100k, they would split every dollar of they would split every dollar of they would split every dollar of licensing revenue 5050 licensing revenue 5050 licensing revenue 5050 >> and there would be a lot of dollars >> and there would be a lot of dollars >> and there would be a lot of dollars after the first 100k. This is a huge after the first 100k. This is a huge after the first 100k. This is a huge moment. I mean there there is a real moment. I mean there there is a real moment. I mean there there is a real case to be made that besides Walt and case to be made that besides Walt and case to be made that besides Walt and Roy and and of I works too, but at least Roy and and of I works too, but at least Roy and and of I works too, but at least on the business side besides Walt and on the business side besides Walt and on the business side besides Walt and Roy K. Cayman was the third most Roy K. Cayman was the third most Roy K. Cayman was the third most important person in the first, you know, important person in the first, you know, important person in the first, you know, half century of Disney. half century of Disney. half century of Disney. >> All right. So, make your case. What what >> All right. So, make your case. What what >> All right. So, make your case. What what what goes on to happen here? what goes on to happen here? what goes on to happen here? >> So, within 6 months, Kay takes Disney >> So, within 6 months, Kay takes Disney >> So, within 6 months, Kay takes Disney merchandising from this hodgepodge of merchandising from this hodgepodge of merchandising from this hodgepodge of random licenses of guys that Walt met on random licenses of guys that Walt met on random licenses of guys that Walt met on the street the street the street >> and many of which were a lot more than >> and many of which were a lot more than >> and many of which were a lot more than $300. $300. $300. >> Yes. Yes. to a real professional >> Yes. Yes. to a real professional >> Yes. Yes. to a real professional operation operation operation doing $6 million doing $6 million doing $6 million of gross merchandise sales within six of gross merchandise sales within six of gross merchandise sales within six months. That then grows over the next months. That then grows over the next months. That then grows over the next two years to $70 million annually of two years to $70 million annually of two years to $70 million annually of gross merchandise sales all around the gross merchandise sales all around the gross merchandise sales all around the globe from over 40 separate super high globe from over 40 separate super high globe from over 40 separate super high quality consumer product partners. So quality consumer product partners. So quality consumer product partners. So the most successful and famous example the most successful and famous example the most successful and famous example of this is the deal that Kay does in of this is the deal that Kay does in of this is the deal that Kay does in 1933 right after he takes over with the 1933 right after he takes over with the 1933 right after he takes over with the Ingresol Watt company. This is crazy Ingresol Watt company. This is crazy Ingresol Watt company. This is crazy that within just a few years they can be that within just a few years they can be that within just a few years they can be at a $70 million level in 1935 at a $70 million level in 1935 at a $70 million level in 1935 of merch. I mean, there's so much pent of merch. I mean, there's so much pent of merch. I mean, there's so much pent up demand to buy Mickey Mouse stuff that up demand to buy Mickey Mouse stuff that up demand to buy Mickey Mouse stuff that you can sort of explode out of the gate. you can sort of explode out of the gate. you can sort of explode out of the gate. I don't even really understand how Kay I don't even really understand how Kay I don't even really understand how Kay lined up 40 merchants and got all this lined up 40 merchants and got all this lined up 40 merchants and got all this stuff manufactured and distributed in stuff manufactured and distributed in stuff manufactured and distributed in such a short period of time. such a short period of time. such a short period of time. >> Well, I think part of it though is that >> Well, I think part of it though is that >> Well, I think part of it though is that he's like a real professional and well he's like a real professional and well he's like a real professional and well respected in the industry with contacts. respected in the industry with contacts. respected in the industry with contacts. But yeah, to your point, Ben, there's But yeah, to your point, Ben, there's But yeah, to your point, Ben, there's just so much demand for Disney merch. So just so much demand for Disney merch. So just so much demand for Disney merch. So the $70 million is a like gross sales to the $70 million is a like gross sales to the $70 million is a like gross sales to the end consumer number. So most deals the end consumer number. So most deals the end consumer number. So most deals that K would do would be for 5% that K would do would be for 5% that K would do would be for 5% royalties on the wholesale price of the royalties on the wholesale price of the royalties on the wholesale price of the goods and the $70 million was retail. So goods and the $70 million was retail. So goods and the $70 million was retail. So if you assume 100% retail markup, that's if you assume 100% retail markup, that's if you assume 100% retail markup, that's $35 million in wholesale revenue. Y $35 million in wholesale revenue. Y $35 million in wholesale revenue. Y >> Disney and Cayman are splitting 5% of >> Disney and Cayman are splitting 5% of >> Disney and Cayman are splitting 5% of that number between them, but even that that number between them, but even that that number between them, but even that is $1.75 million is $1.75 million is $1.75 million split 50/50 between Disney and K. This split 50/50 between Disney and K. This split 50/50 between Disney and K. This is like an astronomical number and it is is like an astronomical number and it is is like an astronomical number and it is a way way bigger and better business a way way bigger and better business a way way bigger and better business than the cartoons themselves at this than the cartoons themselves at this than the cartoons themselves at this point in time. point in time. point in time. >> It's funny. I I found the comment on the >> It's funny. I I found the comment on the >> It's funny. I I found the comment on the Disney Family Museum site that by the Disney Family Museum site that by the Disney Family Museum site that by the late 1930s, royalty income from late 1930s, royalty income from late 1930s, royalty income from merchandise had exceeded revenue from merchandise had exceeded revenue from merchandise had exceeded revenue from film rentals. But film rentals. But film rentals. But >> it wasn't even by the late 1930s, it was >> it wasn't even by the late 1930s, it was >> it wasn't even by the late 1930s, it was 1934. 1934. 1934. >> It was quick and it was by a lot. >> It was quick and it was by a lot. >> It was quick and it was by a lot. >> Yes. Yes. So, just to illustrate the >> Yes. Yes. So, just to illustrate the >> Yes. Yes. So, just to illustrate the difference, the distribution deal that difference, the distribution deal that difference, the distribution deal that Disney does with United Artists for the Disney does with United Artists for the Disney does with United Artists for the Mickey films and for the Silly Mickey films and for the Silly Mickey films and for the Silly Symphonies, which is the second cartoon Symphonies, which is the second cartoon Symphonies, which is the second cartoon series that Disney starts in the 30s, series that Disney starts in the 30s, series that Disney starts in the 30s, Disney gets an advance of $15,000 per Disney gets an advance of $15,000 per Disney gets an advance of $15,000 per film, but Walt is always investing film, but Walt is always investing film, but Walt is always investing ever more and more in the production of ever more and more in the production of ever more and more in the production of the cartoons themselves. the cartoons themselves. the cartoons themselves. By this point in time in the mid30s, By this point in time in the mid30s, By this point in time in the mid30s, he's investing like $30,000 plus per he's investing like $30,000 plus per he's investing like $30,000 plus per cartoon. He's only getting a $15,000 cartoon. He's only getting a $15,000 cartoon. He's only getting a $15,000 advance. So, it's not even guaranteed advance. So, it's not even guaranteed advance. So, it's not even guaranteed that each individual cartoon would be that each individual cartoon would be that each individual cartoon would be profitable. Usually, they were, but they profitable. Usually, they were, but they profitable. Usually, they were, but they would have to earn out on the back end. would have to earn out on the back end. would have to earn out on the back end. Compare that to, you know, half of Compare that to, you know, half of Compare that to, you know, half of basically $2 million in pure margin, basically $2 million in pure margin, basically $2 million in pure margin, almost pure margin revenue coming in almost pure margin revenue coming in almost pure margin revenue coming in from K every year. It doesn't even from K every year. It doesn't even from K every year. It doesn't even matter that Walt is investing everything matter that Walt is investing everything matter that Walt is investing everything back into the cartoons. He's got this back into the cartoons. He's got this back into the cartoons. He's got this money spiggot coming in. money spiggot coming in. money spiggot coming in. >> Right. So, summarizing that, films are >> Right. So, summarizing that, films are >> Right. So, summarizing that, films are tens or low hundreds of thousands of tens or low hundreds of thousands of tens or low hundreds of thousands of dollars of profit coming in and the dollars of profit coming in and the dollars of profit coming in and the merch is on the order of a million merch is on the order of a million merch is on the order of a million dollars. dollars. dollars. >> Yep. And film profitability is highly >> Yep. And film profitability is highly >> Yep. And film profitability is highly dependent on a film by film basis. It's dependent on a film by film basis. It's dependent on a film by film basis. It's got to play out in theaters, etc., etc. got to play out in theaters, etc., etc. got to play out in theaters, etc., etc. >> All right. So, I cut you off on the >> All right. So, I cut you off on the >> All right. So, I cut you off on the Ingresol watch company. Ingresol watch company. Ingresol watch company. >> Yeah. Just as one example of like the >> Yeah. Just as one example of like the >> Yeah. Just as one example of like the deals that Kay is doing, in 1933, right deals that Kay is doing, in 1933, right deals that Kay is doing, in 1933, right after he takes over, he does a deal with after he takes over, he does a deal with after he takes over, he does a deal with the Ingresol Watch Company to the Ingresol Watch Company to the Ingresol Watch Company to manufacture the famous Mickey Mouse manufacture the famous Mickey Mouse manufacture the famous Mickey Mouse watch. That watch would sell 2 and a watch. That watch would sell 2 and a watch. That watch would sell 2 and a half million units [laughter] over the half million units [laughter] over the half million units [laughter] over the next two years. The Ingresol Watch next two years. The Ingresol Watch next two years. The Ingresol Watch Company was about to go bankrupt during Company was about to go bankrupt during Company was about to go bankrupt during the depression. It saves the company. the depression. It saves the company. the depression. It saves the company. Hm. And wasn't it the most popular watch Hm. And wasn't it the most popular watch Hm. And wasn't it the most popular watch in America? in America? in America? >> I think that's right. At least for some >> I think that's right. At least for some >> I think that's right. At least for some point in time during the 30s. point in time during the 30s. point in time during the 30s. >> It's fascinating. And of course, the the >> It's fascinating. And of course, the the >> It's fascinating. And of course, the the modern Apple Watch Mickey watch face is modern Apple Watch Mickey watch face is modern Apple Watch Mickey watch face is a reference to this cuz he's using his a reference to this cuz he's using his a reference to this cuz he's using his arms to point to the the times on that arms to point to the the times on that arms to point to the the times on that original Incorolaw watch. original Incorolaw watch. original Incorolaw watch. >> This is a whole different shape of a >> This is a whole different shape of a >> This is a whole different shape of a business than has ever existed before. I business than has ever existed before. I business than has ever existed before. I mean, it's funny. We started the episode mean, it's funny. We started the episode mean, it's funny. We started the episode comparing Disney to other Hollywood comparing Disney to other Hollywood comparing Disney to other Hollywood studios, but this is not a Hollywood studios, but this is not a Hollywood studios, but this is not a Hollywood studio. They're not shooting liveaction studio. They're not shooting liveaction studio. They're not shooting liveaction films. They're making these cartoons. films. They're making these cartoons. films. They're making these cartoons. The rest of the industry is is kind of The rest of the industry is is kind of The rest of the industry is is kind of doing slap dash ones. They're doing like doing slap dash ones. They're doing like doing slap dash ones. They're doing like really high production value sound really high production value sound really high production value sound synchronized cartoons and they're synchronized cartoons and they're synchronized cartoons and they're actually making more of their money from actually making more of their money from actually making more of their money from merchandise. They've got these Mickey merchandise. They've got these Mickey merchandise. They've got these Mickey Mouse clubs. Mouse clubs. Mouse clubs. >> Like this is a new thing that no one >> Like this is a new thing that no one >> Like this is a new thing that no one else is doing. else is doing. else is doing. >> Yep. This is the birth of the Disney >> Yep. This is the birth of the Disney >> Yep. This is the birth of the Disney flywheel and nobody else has it. So, is flywheel and nobody else has it. So, is flywheel and nobody else has it. So, is this a point where David I could make my this a point where David I could make my this a point where David I could make my pedantic aside that I've been telling pedantic aside that I've been telling pedantic aside that I've been telling you about? you about? you about? >> Yes. Yes. Yes. Go for it. [laughter] >> Yes. Yes. Yes. Go for it. [laughter] >> Yes. Yes. Yes. Go for it. [laughter] >> We had a great email from a listener a >> We had a great email from a listener a >> We had a great email from a listener a couple months ago about how flywheel, couple months ago about how flywheel, couple months ago about how flywheel, this term that everybody uses in this term that everybody uses in this term that everybody uses in business is actually completely the business is actually completely the business is actually completely the wrong term for what you're want to wrong term for what you're want to wrong term for what you're want to describe. describe. describe. >> So, Disney is famous for this concept, >> So, Disney is famous for this concept, >> So, Disney is famous for this concept, as is Amazon, and it inspired a zillion as is Amazon, and it inspired a zillion as is Amazon, and it inspired a zillion other founders to try and articulate other founders to try and articulate other founders to try and articulate their own flywheel and and draw it out. their own flywheel and and draw it out. their own flywheel and and draw it out. But hilariously, David, as you say, it But hilariously, David, as you say, it But hilariously, David, as you say, it is a misnomer. It describes the wrong is a misnomer. It describes the wrong is a misnomer. It describes the wrong physics phenomenon. People are trying to physics phenomenon. People are trying to physics phenomenon. People are trying to describe a system that has a positive describe a system that has a positive describe a system that has a positive feedback loop where inputs into one feedback loop where inputs into one feedback loop where inputs into one element of the system are amplified and element of the system are amplified and element of the system are amplified and add energy to other parts of the system. add energy to other parts of the system. add energy to other parts of the system. But that is not actually what a flywheel But that is not actually what a flywheel But that is not actually what a flywheel is. A flywheel is a primitive battery. is. A flywheel is a primitive battery. is. A flywheel is a primitive battery. It it is a way to store energy to be It it is a way to store energy to be It it is a way to store energy to be deployed later. deployed later. deployed later. >> Yeah. It's like a version of the same >> Yeah. It's like a version of the same >> Yeah. It's like a version of the same mechanism that a spring serves in a mechanism that a spring serves in a mechanism that a spring serves in a mechanical watch. mechanical watch. mechanical watch. >> Right. Exactly. But in reality, there's >> Right. Exactly. But in reality, there's >> Right. Exactly. But in reality, there's not really a better shorthand for system not really a better shorthand for system not really a better shorthand for system of integrated components that creates of integrated components that creates of integrated components that creates positive feedback loops. So uh we will positive feedback loops. So uh we will positive feedback loops. So uh we will continue alas to use the phrase continue alas to use the phrase continue alas to use the phrase flywheel. But uh the important thing flywheel. But uh the important thing flywheel. But uh the important thing here is that Walt really did sort of here is that Walt really did sort of here is that Walt really did sort of either discover or invent this business either discover or invent this business either discover or invent this business model of the intellectual property model of the intellectual property model of the intellectual property flywheel that we see replicated all over flywheel that we see replicated all over flywheel that we see replicated all over the place today. I mean, I think it the place today. I mean, I think it the place today. I mean, I think it really revealed itself to him and Roy in really revealed itself to him and Roy in really revealed itself to him and Roy in these early years of Mickey. And it's these early years of Mickey. And it's these early years of Mickey. And it's probably worth taking a moment to talk probably worth taking a moment to talk probably worth taking a moment to talk about why this works so well. So the about why this works so well. So the about why this works so well. So the most important thing, and I don't think most important thing, and I don't think most important thing, and I don't think this was premeditated in any way by this was premeditated in any way by this was premeditated in any way by Walt, but it was just something he Walt, but it was just something he Walt, but it was just something he innately cared so deeply about, is to innately cared so deeply about, is to innately cared so deeply about, is to make the highest quality, make the highest quality, make the highest quality, genuinely most compelling new IP as genuinely most compelling new IP as genuinely most compelling new IP as possible that audiences can build a deep possible that audiences can build a deep possible that audiences can build a deep relationship with. This is like what relationship with. This is like what relationship with. This is like what Walt was building to and too through all Walt was building to and too through all Walt was building to and too through all of his early years in animation. all the of his early years in animation. all the of his early years in animation. all the technical innovations, every step was technical innovations, every step was technical innovations, every step was getting to a character that audiences getting to a character that audiences getting to a character that audiences can fall in love with. can fall in love with. can fall in love with. >> Yeah. >> Yeah. >> Yeah. >> Now, critically for Disney, and again, I >> Now, critically for Disney, and again, I >> Now, critically for Disney, and again, I think completely accidentally discovered think completely accidentally discovered think completely accidentally discovered by Walt, the IP that works best for by Walt, the IP that works best for by Walt, the IP that works best for Flywheel Dynamics almost has to be Flywheel Dynamics almost has to be Flywheel Dynamics almost has to be animated, i.e. not live action. Because animated, i.e. not live action. Because animated, i.e. not live action. Because with live action characters, the with live action characters, the with live action characters, the characters are too bound up in the characters are too bound up in the characters are too bound up in the actors that play them. And that creates actors that play them. And that creates actors that play them. And that creates all sorts of problems. Like one, all sorts of problems. Like one, all sorts of problems. Like one, especially today, it makes your especially today, it makes your especially today, it makes your economics as a studio just like way economics as a studio just like way economics as a studio just like way worse because you got to pay the stars worse because you got to pay the stars worse because you got to pay the stars so much, so much, so much, >> right? There's wholesale transfer >> right? There's wholesale transfer >> right? There's wholesale transfer pricing. A huge amount of the margin you pricing. A huge amount of the margin you pricing. A huge amount of the margin you could get ends up getting paid out to could get ends up getting paid out to could get ends up getting paid out to effectively your partner in creating the effectively your partner in creating the effectively your partner in creating the character, the actual actor. character, the actual actor. character, the actual actor. >> Whereas Mickey works for free. No, like >> Whereas Mickey works for free. No, like >> Whereas Mickey works for free. No, like you you got to like pay the animators you you got to like pay the animators you you got to like pay the animators and they get paid very well to animate and they get paid very well to animate and they get paid very well to animate them. It's them. It's them. It's >> that's on the value capture side, but on >> that's on the value capture side, but on >> that's on the value capture side, but on the value creation side, which I think the value creation side, which I think the value creation side, which I think is the more important thing, Mickey is is the more important thing, Mickey is is the more important thing, Mickey is always available to work. always available to work. always available to work. >> Yes. Yes. >> Yes. Yes. >> Yes. Yes. >> And Mickey doesn't age. >> And Mickey doesn't age. >> And Mickey doesn't age. >> Yes. Exactly. You can create a eternal >> Yes. Exactly. You can create a eternal >> Yes. Exactly. You can create a eternal character through animation in a way character through animation in a way character through animation in a way that you just can't when you're using that you just can't when you're using that you just can't when you're using real people. I mean, Star Wars, as great real people. I mean, Star Wars, as great real people. I mean, Star Wars, as great as Star Wars is, and we'll talk about it as Star Wars is, and we'll talk about it as Star Wars is, and we'll talk about it later in the episode, is going to have a later in the episode, is going to have a later in the episode, is going to have a problem when Mark Hamill and Harrison problem when Mark Hamill and Harrison problem when Mark Hamill and Harrison Ford die. I mean, I guess unless AI gets Ford die. I mean, I guess unless AI gets Ford die. I mean, I guess unless AI gets really good. really good. really good. >> And live action is sort of dated to a >> And live action is sort of dated to a >> And live action is sort of dated to a time and place in a way that cartoons time and place in a way that cartoons time and place in a way that cartoons can sort of transcend. Like Mickey can can sort of transcend. Like Mickey can can sort of transcend. Like Mickey can always exist in the present always exist in the present always exist in the present >> in a way that we're going to talk about >> in a way that we're going to talk about >> in a way that we're going to talk about Davy Crockett later, but at some point Davy Crockett later, but at some point Davy Crockett later, but at some point it became completely uninteresting to it became completely uninteresting to it became completely uninteresting to watch Davy Crockett. Even though he was watch Davy Crockett. Even though he was watch Davy Crockett. Even though he was like a complete heartthrob obsession like a complete heartthrob obsession like a complete heartthrob obsession that was great IP for the moment, it that was great IP for the moment, it that was great IP for the moment, it just wasn't as durable. just wasn't as durable. just wasn't as durable. >> Yeah. Live action IP with very few >> Yeah. Live action IP with very few >> Yeah. Live action IP with very few exceptions tends not to have the staying exceptions tends not to have the staying exceptions tends not to have the staying power over decades and generations that power over decades and generations that power over decades and generations that animation does. animation does. animation does. >> Yeah. few exceptions being like James >> Yeah. few exceptions being like James >> Yeah. few exceptions being like James Bond, but god have they tried to do all Bond, but god have they tried to do all Bond, but god have they tried to do all sorts of crazy stuff in order to let sorts of crazy stuff in order to let sorts of crazy stuff in order to let that IP keep living. I mean, like that IP keep living. I mean, like that IP keep living. I mean, like there's been six, seven James Bonds, you there's been six, seven James Bonds, you there's been six, seven James Bonds, you know, and they have to keep rebooting know, and they have to keep rebooting know, and they have to keep rebooting the story over and over. the story over and over. the story over and over. >> Exactly. Okay, so that's step one. >> Exactly. Okay, so that's step one. >> Exactly. Okay, so that's step one. Genuinely great IP that audiences fall Genuinely great IP that audiences fall Genuinely great IP that audiences fall in love with has to be at the core. in love with has to be at the core. in love with has to be at the core. Then step two, you need to maximize the Then step two, you need to maximize the Then step two, you need to maximize the distribution for that IP as wide and as distribution for that IP as wide and as distribution for that IP as wide and as far as possible in its primary delivery far as possible in its primary delivery far as possible in its primary delivery vehicle. So like Mickey in those films, vehicle. So like Mickey in those films, vehicle. So like Mickey in those films, get those films into as many theaters as get those films into as many theaters as get those films into as many theaters as possible to just completely saturate the possible to just completely saturate the possible to just completely saturate the world. It's sort of a scale economies world. It's sort of a scale economies world. It's sort of a scale economies thing. If you're going to invest a whole thing. If you're going to invest a whole thing. If you're going to invest a whole bunch in making it the very best you bunch in making it the very best you bunch in making it the very best you can, then you need to distribute it can, then you need to distribute it can, then you need to distribute it everywhere in order to maximize the everywhere in order to maximize the everywhere in order to maximize the impact from that huge upfront impact from that huge upfront impact from that huge upfront investment. investment. investment. >> Which of course applies to any film and >> Which of course applies to any film and >> Which of course applies to any film and any IP. But for Disney in the flywheel any IP. But for Disney in the flywheel any IP. But for Disney in the flywheel business model, they're willing to make business model, they're willing to make business model, they're willing to make every sacrifice possible to maximize every sacrifice possible to maximize every sacrifice possible to maximize distribution because they know that distribution because they know that distribution because they know that they're going to monetize through the they're going to monetize through the they're going to monetize through the flywheel in a way that nobody else can. flywheel in a way that nobody else can. flywheel in a way that nobody else can. If they saturate all of America or all If they saturate all of America or all If they saturate all of America or all of the English speaking world with a of the English speaking world with a of the English speaking world with a character, then that character, that character, then that character, that character, then that character, that movie can become a shared cultural movie can become a shared cultural movie can become a shared cultural memory. memory. memory. >> So then that leads right into the third >> So then that leads right into the third >> So then that leads right into the third thing, which is the ancillary nodes of thing, which is the ancillary nodes of thing, which is the ancillary nodes of the flywheel itself. Once you've got the the flywheel itself. Once you've got the the flywheel itself. Once you've got the great IP, once you've distributed it as great IP, once you've distributed it as great IP, once you've distributed it as widely as possible, then you want to get widely as possible, then you want to get widely as possible, then you want to get that IP into as many other arenas as that IP into as many other arenas as that IP into as many other arenas as possible. And this is exactly what possible. And this is exactly what possible. And this is exactly what Disney was doing, Disney was doing, Disney was doing, >> right? Other mediums, >> right? Other mediums, >> right? Other mediums, >> merch, clubs, comics, books, magazines. >> merch, clubs, comics, books, magazines. >> merch, clubs, comics, books, magazines. The beauty here and the discovery that The beauty here and the discovery that The beauty here and the discovery that Disney makes is that when you put the IP Disney makes is that when you put the IP Disney makes is that when you put the IP into these other ancillary nodes, it into these other ancillary nodes, it into these other ancillary nodes, it doesn't cannibalize the core IP. Like doesn't cannibalize the core IP. Like doesn't cannibalize the core IP. Like you're not going to oversaturate Mickey you're not going to oversaturate Mickey you're not going to oversaturate Mickey by having a Mickey comic strip and daily by having a Mickey comic strip and daily by having a Mickey comic strip and daily exposure in the way that if you released exposure in the way that if you released exposure in the way that if you released a new Mickey film every single day, a new Mickey film every single day, a new Mickey film every single day, people would get tired of Mickey's. people would get tired of Mickey's. people would get tired of Mickey's. >> If you structure the nodes of the >> If you structure the nodes of the >> If you structure the nodes of the flywheel, right, flywheel, right, flywheel, right, >> the additional exposure reinforces the >> the additional exposure reinforces the >> the additional exposure reinforces the core IP. That's really interesting. So core IP. That's really interesting. So core IP. That's really interesting. So you do need some scarcity of the you do need some scarcity of the you do need some scarcity of the character in its main medium where you character in its main medium where you character in its main medium where you need like a really high quality bar and need like a really high quality bar and need like a really high quality bar and not oversaturate there but in your not oversaturate there but in your not oversaturate there but in your secondary mediums then you can cover the secondary mediums then you can cover the secondary mediums then you can cover the earth and be like everywhere all the earth and be like everywhere all the earth and be like everywhere all the time. time. time. >> Exactly. And so then if you flash >> Exactly. And so then if you flash >> Exactly. And so then if you flash forward to today and like the problems forward to today and like the problems forward to today and like the problems that Hollywood and most other studios that Hollywood and most other studios that Hollywood and most other studios have and Disney too, especially with have and Disney too, especially with have and Disney too, especially with Marvel, if you come out with sequels all Marvel, if you come out with sequels all Marvel, if you come out with sequels all the time at this like everinccreasing the time at this like everinccreasing the time at this like everinccreasing cadence of the core IP and the core cadence of the core IP and the core cadence of the core IP and the core delivery vehicle, people get tired of delivery vehicle, people get tired of delivery vehicle, people get tired of it. it. it. >> That's super interesting. >> That's super interesting. >> That's super interesting. >> But the flywheel lets you get that >> But the flywheel lets you get that >> But the flywheel lets you get that constant exposure without oversaturating constant exposure without oversaturating constant exposure without oversaturating the core IP. It's like absolutely the core IP. It's like absolutely the core IP. It's like absolutely brilliant. Not to mention releasing brilliant. Not to mention releasing brilliant. Not to mention releasing films is actually not and never has been films is actually not and never has been films is actually not and never has been a great business model. It's just not a great business model. It's just not a great business model. It's just not that high margin. It's not that that high margin. It's not that that high margin. It's not that repeatable or predictable in its repeatable or predictable in its repeatable or predictable in its success. So you kind of success. So you kind of success. So you kind of >> you have to invest years ahead in >> you have to invest years ahead in >> you have to invest years ahead in production before you get any payout. production before you get any payout. production before you get any payout. >> Right. Right. That and any studio that >> Right. Right. That and any studio that >> Right. Right. That and any studio that is purely a studio is in for a rough go. is purely a studio is in for a rough go. is purely a studio is in for a rough go. But if you're you're trying to basically But if you're you're trying to basically But if you're you're trying to basically create this like durable platform of create this like durable platform of create this like durable platform of profit with all of these ancillary profit with all of these ancillary profit with all of these ancillary businesses, then you can focus on businesses, then you can focus on businesses, then you can focus on scarcity, quality, innovation in the scarcity, quality, innovation in the scarcity, quality, innovation in the kind of primary medium. kind of primary medium. kind of primary medium. >> Yep. Because you know you're going to >> Yep. Because you know you're going to >> Yep. Because you know you're going to drive revenue basically in perpetuity drive revenue basically in perpetuity drive revenue basically in perpetuity out of it through the flywheel. out of it through the flywheel. out of it through the flywheel. >> Do you think I'm thinking about this as >> Do you think I'm thinking about this as >> Do you think I'm thinking about this as it pertains to acquired, we're so it pertains to acquired, we're so it pertains to acquired, we're so obsessed with quality and just being in obsessed with quality and just being in obsessed with quality and just being in one medium. Do you think that it is okay one medium. Do you think that it is okay one medium. Do you think that it is okay to lower the quality bar outside the to lower the quality bar outside the to lower the quality bar outside the primary medium? Like, can Disney throw primary medium? Like, can Disney throw primary medium? Like, can Disney throw Mickey Mouse on all sorts of crap Mickey Mouse on all sorts of crap Mickey Mouse on all sorts of crap without diminishing the brand of Mickey without diminishing the brand of Mickey without diminishing the brand of Mickey Mouse as long as the primary medium of Mouse as long as the primary medium of Mouse as long as the primary medium of film stays really high quality. film stays really high quality. film stays really high quality. >> Basically, I think the answer to that is >> Basically, I think the answer to that is >> Basically, I think the answer to that is yes. yes. yes. >> Huh. >> Huh. >> Huh. >> At least for Disney. I don't know about >> At least for Disney. I don't know about >> At least for Disney. I don't know about acquired. [laughter] acquired. [laughter] acquired. [laughter] >> Yeah. I don't I don't know if it applies >> Yeah. I don't I don't know if it applies >> Yeah. I don't I don't know if it applies to premium brands or luxury brands, but to premium brands or luxury brands, but to premium brands or luxury brands, but >> you got to be really careful about what >> you got to be really careful about what >> you got to be really careful about what the mediums are. This is why comics is the mediums are. This is why comics is the mediums are. This is why comics is so perfect for the flywheel because so perfect for the flywheel because so perfect for the flywheel because people are used to consuming a daily bit people are used to consuming a daily bit people are used to consuming a daily bit of content in a comic strip and they of content in a comic strip and they of content in a comic strip and they don't have expectations that it's going don't have expectations that it's going don't have expectations that it's going to be, you know, a great masterpiece to be, you know, a great masterpiece to be, you know, a great masterpiece like Snow White or Steamboat Willie each like Snow White or Steamboat Willie each like Snow White or Steamboat Willie each time. time. time. >> Right. And when you read the noncanon >> Right. And when you read the noncanon >> Right. And when you read the noncanon Star Wars books, Star Wars books, Star Wars books, >> Yes. it doesn't detract from the canon. >> Yes. it doesn't detract from the canon. >> Yes. it doesn't detract from the canon. >> That's exactly right. But it does deepen >> That's exactly right. But it does deepen >> That's exactly right. But it does deepen your fandom. your fandom. your fandom. >> Yes. Exactly. Exactly. >> Yes. Exactly. Exactly. >> Yes. Exactly. Exactly. >> Huh. So all of this as Walt starts to >> Huh. So all of this as Walt starts to >> Huh. So all of this as Walt starts to understand the business model power of understand the business model power of understand the business model power of what they've created leads him right to what they've created leads him right to what they've created leads him right to the natural conclusion that Disney the natural conclusion that Disney the natural conclusion that Disney should basically always invest as much should basically always invest as much should basically always invest as much time and money as possible in the time and money as possible in the time and money as possible in the creation of new core IP. And Walt is creation of new core IP. And Walt is creation of new core IP. And Walt is starting to get a crazy idea of how he starting to get a crazy idea of how he starting to get a crazy idea of how he might be able to do that, which is to might be able to do that, which is to might be able to do that, which is to create Hollywood's first fulllength create Hollywood's first fulllength create Hollywood's first fulllength animated animated animated feature film, feature film, feature film, Snow White. Yeah. And David, you put it Snow White. Yeah. And David, you put it Snow White. Yeah. And David, you put it in such a capitalist way there that it's in such a capitalist way there that it's in such a capitalist way there that it's it's to maximize the amount of of it's to maximize the amount of of it's to maximize the amount of of dollars that you sink into making the dollars that you sink into making the dollars that you sink into making the quality so that it federates onto this quality so that it federates onto this quality so that it federates onto this flywheel. flywheel. flywheel. I'm sure there was an element of that. I'm sure there was an element of that. I'm sure there was an element of that. There also is an artist with Walt where There also is an artist with Walt where There also is an artist with Walt where he's been creating these cartoons. He's he's been creating these cartoons. He's he's been creating these cartoons. He's starting to like really identify with starting to like really identify with starting to like really identify with the artistic community, with the fine the artistic community, with the fine the artistic community, with the fine artists of the time, build a lot of artists of the time, build a lot of artists of the time, build a lot of those relationships. and he wants to those relationships. and he wants to those relationships. and he wants to create something that is sort of seen as create something that is sort of seen as create something that is sort of seen as not only a technology breakthrough but not only a technology breakthrough but not only a technology breakthrough but like an art breakthrough. Can can he like an art breakthrough. Can can he like an art breakthrough. Can can he create a masterpiece in this new medium create a masterpiece in this new medium create a masterpiece in this new medium >> and can he play with your emotions? I >> and can he play with your emotions? I >> and can he play with your emotions? I mean, we we know that cartoon characters mean, we we know that cartoon characters mean, we we know that cartoon characters in a slapstick way can make you laugh, in a slapstick way can make you laugh, in a slapstick way can make you laugh, but there is this like total open but there is this like total open but there is this like total open question in the world of can you create question in the world of can you create question in the world of can you create animation so realistic and characters so animation so realistic and characters so animation so realistic and characters so compelling that you can make audiences compelling that you can make audiences compelling that you can make audiences cry. cry. cry. >> Yeah, >> Yeah, >> Yeah, >> that's the other side of the ludicrously >> that's the other side of the ludicrously >> that's the other side of the ludicrously capitalist big investment into Snow capitalist big investment into Snow capitalist big investment into Snow White. White. White. >> You're totally right. I'm looking at it >> You're totally right. I'm looking at it >> You're totally right. I'm looking at it through like a business model, through like a business model, through like a business model, capitalist lens. And uh I I don't think capitalist lens. And uh I I don't think capitalist lens. And uh I I don't think Walt was thinking about it that way Walt was thinking about it that way Walt was thinking about it that way specifically. specifically. specifically. >> He did want to build the most successful >> He did want to build the most successful >> He did want to build the most successful company that he possibly could that company that he possibly could that company that he possibly could that could take bigger and bigger swings. could take bigger and bigger swings. could take bigger and bigger swings. >> Yes. >> Yes. >> Yes. >> So listeners, before we tell you the >> So listeners, before we tell you the >> So listeners, before we tell you the story of Snow White and how it came to story of Snow White and how it came to story of Snow White and how it came to be, now is a great time to tell you be, now is a great time to tell you be, now is a great time to tell you about one of our favorite companies, about one of our favorite companies, about one of our favorite companies, Versel. So building software in the Versel. So building software in the Versel. So building software in the agentic AI era demands a completely agentic AI era demands a completely agentic AI era demands a completely different kind of infrastructure. So different kind of infrastructure. So different kind of infrastructure. So that's exactly what Verscell has been that's exactly what Verscell has been that's exactly what Verscell has been building. Their tools in their agent building. Their tools in their agent building. Their tools in their agent stack have been huge for companies like stack have been huge for companies like stack have been huge for companies like Notion, Brex, and Neon for shipping Notion, Brex, and Neon for shipping Notion, Brex, and Neon for shipping agents to production. And they just made agents to production. And they just made agents to production. And they just made some really big announcements on stage some really big announcements on stage some really big announcements on stage at their annual conference called Ship, at their annual conference called Ship, at their annual conference called Ship, which uh David and I actually spoke at which uh David and I actually spoke at which uh David and I actually spoke at last year. Yes. One of the biggest last year. Yes. One of the biggest last year. Yes. One of the biggest announcements is Eve, Verscell's open- announcements is Eve, Verscell's open- announcements is Eve, Verscell's open- source agent framework. source agent framework. source agent framework. >> Yep. Eve is the glue that ties their >> Yep. Eve is the glue that ties their >> Yep. Eve is the glue that ties their agent stack together. Building an agent stack together. Building an agent stack together. Building an enterprisegrade agent used to take enterprisegrade agent used to take enterprisegrade agent used to take weeks. With Eve, it now just takes weeks. With Eve, it now just takes weeks. With Eve, it now just takes minutes. Think of it as like the next.js minutes. Think of it as like the next.js minutes. Think of it as like the next.js for agents, opinionated, open- source, for agents, opinionated, open- source, for agents, opinionated, open- source, and it runs everywhere. And Verscell and it runs everywhere. And Verscell and it runs everywhere. And Verscell uses it for their whole business. Their uses it for their whole business. Their uses it for their whole business. Their data agent gives the whole company data agent gives the whole company data agent gives the whole company ondemand analytics scoped to each ondemand analytics scoped to each ondemand analytics scoped to each person's permissions. their sales agent person's permissions. their sales agent person's permissions. their sales agent nearly doubled pipeline coverage and nearly doubled pipeline coverage and nearly doubled pipeline coverage and their autonomous AI sales rep platforms their autonomous AI sales rep platforms their autonomous AI sales rep platforms is in the top 10% of their human reps uh is in the top 10% of their human reps uh is in the top 10% of their human reps uh you know for only a few thousand dollars you know for only a few thousand dollars you know for only a few thousand dollars a year. They also rolled out new support a year. They also rolled out new support a year. They also rolled out new support for enterprise apps and agents because for enterprise apps and agents because for enterprise apps and agents because here's what every executive is realizing here's what every executive is realizing here's what every executive is realizing once everyone can build an agent. The once everyone can build an agent. The once everyone can build an agent. The hard part is knowing who can access what hard part is knowing who can access what hard part is knowing who can access what and what every agent is actually doing. and what every agent is actually doing. and what every agent is actually doing. Wouldn't it be nice to run your agents Wouldn't it be nice to run your agents Wouldn't it be nice to run your agents and apps inside your own cloud so that and apps inside your own cloud so that and apps inside your own cloud so that everything you build stays within your everything you build stays within your everything you build stays within your own security boundary? Verscell does own security boundary? Verscell does own security boundary? Verscell does exactly that. exactly that. exactly that. >> Versel's your one-stop shop for the >> Versel's your one-stop shop for the >> Versel's your one-stop shop for the Agentic era. Tools, frameworks, Agentic era. Tools, frameworks, Agentic era. Tools, frameworks, infrastructure, all engineered to work infrastructure, all engineered to work infrastructure, all engineered to work together and built for enterprises. And together and built for enterprises. And together and built for enterprises. And one last cool thing, their ship one last cool thing, their ship one last cool thing, their ship conference is hitting more cities conference is hitting more cities conference is hitting more cities worldwide. So you can find out more at worldwide. So you can find out more at worldwide. So you can find out more at verscell.com/acquired. verscell.com/acquired. verscell.com/acquired. That's verel.com/acquired. That's verel.com/acquired. That's verel.com/acquired. And just tell them that Ben and David And just tell them that Ben and David And just tell them that Ben and David sent you. All right. So, David, before sent you. All right. So, David, before sent you. All right. So, David, before we tell the story of how Snow White came we tell the story of how Snow White came we tell the story of how Snow White came to be, we got to tell the nickname of to be, we got to tell the nickname of to be, we got to tell the nickname of Snow White, the project that was going Snow White, the project that was going Snow White, the project that was going around Hollywood. Do you know what that around Hollywood. Do you know what that around Hollywood. Do you know what that was? was? was? >> Disney's folly. >> Disney's folly. >> Disney's folly. >> Yes. Yes. I think it was maybe Walt's >> Yes. Yes. I think it was maybe Walt's >> Yes. Yes. I think it was maybe Walt's folly, but either way, it's the exact folly, but either way, it's the exact folly, but either way, it's the exact same thing that people said about Trip same thing that people said about Trip same thing that people said about Trip Hawkins when he was working on Madden, Hawkins when he was working on Madden, Hawkins when he was working on Madden, about Jack Bogle with Bogle's folly with about Jack Bogle with Bogle's folly with about Jack Bogle with Bogle's folly with creating the Vanguard index funds. We creating the Vanguard index funds. We creating the Vanguard index funds. We got to like start a a folly tracker here got to like start a a folly tracker here got to like start a a folly tracker here on tracker. [laughter] on tracker. [laughter] on tracker. [laughter] >> But yeah, I mean even for Walt Disney, >> But yeah, I mean even for Walt Disney, >> But yeah, I mean even for Walt Disney, as successful as he and the studio have as successful as he and the studio have as successful as he and the studio have become, the idea of a featurelength become, the idea of a featurelength become, the idea of a featurelength animated film was crazy in 1930s animated film was crazy in 1930s animated film was crazy in 1930s Hollywood. Hollywood. Hollywood. >> And it had never been tried before. >> And it had never been tried before. >> And it had never been tried before. >> I mean, Roy tried to persuade him not to >> I mean, Roy tried to persuade him not to >> I mean, Roy tried to persuade him not to do it. He argues that it's going to do it. He argues that it's going to do it. He argues that it's going to bankrupt the studio. bankrupt the studio. bankrupt the studio. >> Yeah, this is a multi-million dollar >> Yeah, this is a multi-million dollar >> Yeah, this is a multi-million dollar undertaking. When David, as you were undertaking. When David, as you were undertaking. When David, as you were talking about before, the shorts were talking about before, the shorts were talking about before, the shorts were like $15,000, $30,000 undertakings. like $15,000, $30,000 undertakings. like $15,000, $30,000 undertakings. >> Yep. Walt would say later about Snow >> Yep. Walt would say later about Snow >> Yep. Walt would say later about Snow White, we had decided there was only one White, we had decided there was only one White, we had decided there was only one way we could successfully do Snow White, way we could successfully do Snow White, way we could successfully do Snow White, and that was to go for broke, shoot the and that was to go for broke, shoot the and that was to go for broke, shoot the works. There would be no compromise on works. There would be no compromise on works. There would be no compromise on money, talent, or time. We did not know money, talent, or time. We did not know money, talent, or time. We did not know whether the public would go for a whether the public would go for a whether the public would go for a cartoon feature, but we were darn sure cartoon feature, but we were darn sure cartoon feature, but we were darn sure that audiences would not buy a bad that audiences would not buy a bad that audiences would not buy a bad cartoon feature. [laughter] cartoon feature. [laughter] cartoon feature. [laughter] So good. It had to be a masterpiece or So good. It had to be a masterpiece or So good. It had to be a masterpiece or the whole thing was going to fall apart. the whole thing was going to fall apart. the whole thing was going to fall apart. >> Okay. So, why was this so expensive? Why >> Okay. So, why was this so expensive? Why >> Okay. So, why was this so expensive? Why was such a giant undertaking to create a was such a giant undertaking to create a was such a giant undertaking to create a animated feature fulllength film? animated feature fulllength film? animated feature fulllength film? Listeners, I thought it'd be fun on this Listeners, I thought it'd be fun on this Listeners, I thought it'd be fun on this episode to dive into the process and episode to dive into the process and episode to dive into the process and give everyone a little primer on what give everyone a little primer on what give everyone a little primer on what are the steps to create an animated are the steps to create an animated are the steps to create an animated film. film. film. >> Yes, it's a true technical wonder and >> Yes, it's a true technical wonder and >> Yes, it's a true technical wonder and you and I got to actually do it when we you and I got to actually do it when we you and I got to actually do it when we went to visit the Disney studio. It was went to visit the Disney studio. It was went to visit the Disney studio. It was so fun. so fun. so fun. >> Well, one part of one frame of >> Well, one part of one frame of >> Well, one part of one frame of [laughter] it. Yes. [laughter] it. Yes. [laughter] it. Yes. >> One tiny part of inking and painting. >> One tiny part of inking and painting. >> One tiny part of inking and painting. >> Listeners, we'll include some behind the >> Listeners, we'll include some behind the >> Listeners, we'll include some behind the scenes ink and paint photos of David and scenes ink and paint photos of David and scenes ink and paint photos of David and I in the email. So, let's start with the I in the email. So, let's start with the I in the email. So, let's start with the goal. The goal is to create the illusion goal. The goal is to create the illusion goal. The goal is to create the illusion of motion with a series of still frames. of motion with a series of still frames. of motion with a series of still frames. Like a ton of still frames, 24 still Like a ton of still frames, 24 still Like a ton of still frames, 24 still frames per second. frames per second. frames per second. So that requires a lot of clever tricks So that requires a lot of clever tricks So that requires a lot of clever tricks to make it economically possible, to to make it economically possible, to to make it economically possible, to make it consistent, and to make it make it consistent, and to make it make it consistent, and to make it enjoyable. And if you really do your enjoyable. And if you really do your enjoyable. And if you really do your job, to make it emotional for the job, to make it emotional for the job, to make it emotional for the viewer. viewer. viewer. >> And to be clear, liveaction film is the >> And to be clear, liveaction film is the >> And to be clear, liveaction film is the same thing. It's an illusion, but as we same thing. It's an illusion, but as we same thing. It's an illusion, but as we talked about earlier, it doesn't cost talked about earlier, it doesn't cost talked about earlier, it doesn't cost anything to animate the humans, anything to animate the humans, anything to animate the humans, >> and you get physics for free. So >> and you get physics for free. So >> and you get physics for free. So believability comes for free. You don't believability comes for free. You don't believability comes for free. You don't have to do clever things like figure out have to do clever things like figure out have to do clever things like figure out how do things stretch and squish when how do things stretch and squish when how do things stretch and squish when someone bounces on the ground. It all someone bounces on the ground. It all someone bounces on the ground. It all just sort of happens because you're just sort of happens because you're just sort of happens because you're shooting it in the real world. Yep. shooting it in the real world. Yep. shooting it in the real world. Yep. >> So, where does it all start? It starts >> So, where does it all start? It starts >> So, where does it all start? It starts with a good story. So, there's something with a good story. So, there's something with a good story. So, there's something called the story department that kicks called the story department that kicks called the story department that kicks off the process with little sketches off the process with little sketches off the process with little sketches that are sort of pinned to corkboards. that are sort of pinned to corkboards. that are sort of pinned to corkboards. And so, these story meetings are great. And so, these story meetings are great. And so, these story meetings are great. You have people acting out alongside the You have people acting out alongside the You have people acting out alongside the drawings to illustrate their idea, how drawings to illustrate their idea, how drawings to illustrate their idea, how the characters move and interact and the characters move and interact and the characters move and interact and talk. And Walt was famously amazing to talk. And Walt was famously amazing to talk. And Walt was famously amazing to watch when he did this acting. So this watch when he did this acting. So this watch when he did this acting. So this then gets put into a story reel of then gets put into a story reel of then gets put into a story reel of static sketches just kind of static sketches just kind of static sketches just kind of illustrating the main flow of the story. illustrating the main flow of the story. illustrating the main flow of the story. At this point, it is super easy to edit, At this point, it is super easy to edit, At this point, it is super easy to edit, reorder, change dialogue, anything. reorder, change dialogue, anything. reorder, change dialogue, anything. >> I see [snorts] where you're going with >> I see [snorts] where you're going with >> I see [snorts] where you're going with this. at this point. this. at this point. this. at this point. >> at this point. So then the sound >> at this point. So then the sound >> at this point. So then the sound department gets involved and that's both department gets involved and that's both department gets involved and that's both music and voice. So first you'll have music and voice. So first you'll have music and voice. So first you'll have oftentimes a temp voice over so the oftentimes a temp voice over so the oftentimes a temp voice over so the animators have something to animate to animators have something to animate to animators have something to animate to if you don't have the real actors laying if you don't have the real actors laying if you don't have the real actors laying down the vocal track yet. You also have down the vocal track yet. You also have down the vocal track yet. You also have the music scored and recorded at this the music scored and recorded at this the music scored and recorded at this phase. And the way that animation and phase. And the way that animation and phase. And the way that animation and sound are synced at this point is sound are synced at this point is sound are synced at this point is through something called bar sheets or through something called bar sheets or through something called bar sheets or exposure sheets where the entire film, exposure sheets where the entire film, exposure sheets where the entire film, this is going to sound insane, is broken this is going to sound insane, is broken this is going to sound insane, is broken down by frame, by syllable of dialogue down by frame, by syllable of dialogue down by frame, by syllable of dialogue and by beat of the music and these are and by beat of the music and these are and by beat of the music and these are mapped together. So this way the mapped together. So this way the mapped together. So this way the animator can do their drawings exactly animator can do their drawings exactly animator can do their drawings exactly to the music and dialogue. Now you can to the music and dialogue. Now you can to the music and dialogue. Now you can kind of understand the insanity of what kind of understand the insanity of what kind of understand the insanity of what Steamboat Willie was trying to do and Steamboat Willie was trying to do and Steamboat Willie was trying to do and why that was so difficult. The the why that was so difficult. The the why that was so difficult. The the Disney studio kind of had to invent this Disney studio kind of had to invent this Disney studio kind of had to invent this process. process. process. >> Yeah. And that was what 7 8 minutes >> Yeah. And that was what 7 8 minutes >> Yeah. And that was what 7 8 minutes long. long. long. >> Yes. Meanwhile, you have the layout >> Yes. Meanwhile, you have the layout >> Yes. Meanwhile, you have the layout department who is doing the staging, the department who is doing the staging, the department who is doing the staging, the camera framing, the composition of these camera framing, the composition of these camera framing, the composition of these shots, the lighting for every scene. shots, the lighting for every scene. shots, the lighting for every scene. Now, when I say things like staging, Now, when I say things like staging, Now, when I say things like staging, there's there's no stage. camera there's there's no stage. camera there's there's no stage. camera framing. There is a camera, but that's framing. There is a camera, but that's framing. There is a camera, but that's not even the camera this is referring not even the camera this is referring not even the camera this is referring to. This is where the synthetic camera to. This is where the synthetic camera to. This is where the synthetic camera is aiming in the synthetic action is aiming in the synthetic action is aiming in the synthetic action composition, lighting. This isn't like composition, lighting. This isn't like composition, lighting. This isn't like lighting the way you think of lighting. lighting the way you think of lighting. lighting the way you think of lighting. This is this very abstract art of This is this very abstract art of This is this very abstract art of imagining what it would look like if imagining what it would look like if imagining what it would look like if these characters were real and there these characters were real and there these characters were real and there were real lights and figuring out how to were real lights and figuring out how to were real lights and figuring out how to draw that scene. draw that scene. draw that scene. Then this gets forked into two parallel Then this gets forked into two parallel Then this gets forked into two parallel processes where background painters are processes where background painters are processes where background painters are doing their work on these gorgeous doing their work on these gorgeous doing their work on these gorgeous watercolors on paper and oil paintings watercolors on paper and oil paintings watercolors on paper and oil paintings on these super wide panes of glass to on these super wide panes of glass to on these super wide panes of glass to allow for the panning across the scene. allow for the panning across the scene. allow for the panning across the scene. Whenever you go into the Disney Whenever you go into the Disney Whenever you go into the Disney archives, you can see these I don't know archives, you can see these I don't know archives, you can see these I don't know 4 foot wide by something like 8 in tall 4 foot wide by something like 8 in tall 4 foot wide by something like 8 in tall backgrounds because the camera has to backgrounds because the camera has to backgrounds because the camera has to pan around as the characters move around pan around as the characters move around pan around as the characters move around against the background. And then the against the background. And then the against the background. And then the other side of the fork is the animators other side of the fork is the animators other side of the fork is the animators who are doing their work on the who are doing their work on the who are doing their work on the characters themselves. characters themselves. characters themselves. >> Yep. Yeah. The backgrounds are just >> Yep. Yeah. The backgrounds are just >> Yep. Yeah. The backgrounds are just beautiful when you see them in person. beautiful when you see them in person. beautiful when you see them in person. That was my favorite part about the That was my favorite part about the That was my favorite part about the archive to get to see the backgrounds of archive to get to see the backgrounds of archive to get to see the backgrounds of Snow White or Cinderella or the other Snow White or Cinderella or the other Snow White or Cinderella or the other great Disney classics. You just look at great Disney classics. You just look at great Disney classics. You just look at them and think, "Oh my god, these are them and think, "Oh my god, these are them and think, "Oh my god, these are right up there with Rembrandt or right up there with Rembrandt or right up there with Rembrandt or Picassos or Da. They should be in a Picassos or Da. They should be in a Picassos or Da. They should be in a museum." museum." museum." >> And they are basically in a museum. >> And they are basically in a museum. >> And they are basically in a museum. Disney has 11 rooms in the animation Disney has 11 rooms in the animation Disney has 11 rooms in the animation research library which are temperature research library which are temperature research library which are temperature controlled and humidity controlled. And controlled and humidity controlled. And controlled and humidity controlled. And they've got all these UV filters all they've got all these UV filters all they've got all these UV filters all over everything. And there's these over everything. And there's these over everything. And there's these drawers and drawers and drawers inside. drawers and drawers and drawers inside. drawers and drawers and drawers inside. It almost looks like data centers where It almost looks like data centers where It almost looks like data centers where they have all of these old background they have all of these old background they have all of these old background paintings and all the drawings we're paintings and all the drawings we're paintings and all the drawings we're about to talk about. about to talk about. about to talk about. >> Yep. So, the animation department then >> Yep. So, the animation department then >> Yep. So, the animation department then develops what's called a character model develops what's called a character model develops what's called a character model sheet that shows the character from sheet that shows the character from sheet that shows the character from several different angles and positions several different angles and positions several different angles and positions they're likely to be in throughout the they're likely to be in throughout the they're likely to be in throughout the film. This is distributed to each film. This is distributed to each film. This is distributed to each animator who works on that character cuz animator who works on that character cuz animator who works on that character cuz often and by necessity there are often and by necessity there are often and by necessity there are multiple since that character is going multiple since that character is going multiple since that character is going to exist on film for you know 80 90 100 to exist on film for you know 80 90 100 to exist on film for you know 80 90 100 minutes. There's a lot of drawing to do. minutes. There's a lot of drawing to do. minutes. There's a lot of drawing to do. Then there's the model department who Then there's the model department who Then there's the model department who makes something called a mckette. The makes something called a mckette. The makes something called a mckette. The animators who are drawing a character animators who are drawing a character animators who are drawing a character hundreds and hundreds or thousands of hundreds and hundreds or thousands of hundreds and hundreds or thousands of times or tens of thousands of times need times or tens of thousands of times need times or tens of thousands of times need a consistent physical reference that a consistent physical reference that a consistent physical reference that they can hold and rotate and examined they can hold and rotate and examined they can hold and rotate and examined under a lamp. So these are, you know, 8 under a lamp. So these are, you know, 8 under a lamp. So these are, you know, 8 in tall versions of the characters that in tall versions of the characters that in tall versions of the characters that are are are >> little statues, >> little statues, >> little statues, >> right? They're perfect so that you can >> right? They're perfect so that you can >> right? They're perfect so that you can kind of say how would they look from kind of say how would they look from kind of say how would they look from that angle? How would they look if I that angle? How would they look if I that angle? How would they look if I stood 8 ft away? Then you have animation stood 8 ft away? Then you have animation stood 8 ft away? Then you have animation itself. So, it starts with sketching on itself. So, it starts with sketching on itself. So, it starts with sketching on paper with a pencil or with charcoal, paper with a pencil or with charcoal, paper with a pencil or with charcoal, and they're literally sketching one and they're literally sketching one and they're literally sketching one frame at a time. And they are flipping frame at a time. And they are flipping frame at a time. And they are flipping pages on their pad of paper back and pages on their pad of paper back and pages on their pad of paper back and forth, back and forth, over and over forth, back and forth, over and over forth, back and forth, over and over again to get a feel for how the emotion again to get a feel for how the emotion again to get a feel for how the emotion of the drawing is coming through frame of the drawing is coming through frame of the drawing is coming through frame to frame. Does this character move like to frame. Does this character move like to frame. Does this character move like I think they should move? Are they I think they should move? Are they I think they should move? Are they consistent in their motion? Is their consistent in their motion? Is their consistent in their motion? Is their clothing sort of twirling the right way clothing sort of twirling the right way clothing sort of twirling the right way when they turn left? It's an insane art. when they turn left? It's an insane art. when they turn left? It's an insane art. >> Are their mouths speaking correctly? >> Are their mouths speaking correctly? >> Are their mouths speaking correctly? Yeah. Yeah. Yeah. >> Right. As the character drifts closer to >> Right. As the character drifts closer to >> Right. As the character drifts closer to the synthetic camera, are they getting the synthetic camera, are they getting the synthetic camera, are they getting big in a way that feels consistent with big in a way that feels consistent with big in a way that feels consistent with the laws of physics? My mind is so blown the laws of physics? My mind is so blown the laws of physics? My mind is so blown by the skill and talent of these people. by the skill and talent of these people. by the skill and talent of these people. So 24 frames per second means 12 to 14 So 24 frames per second means 12 to 14 So 24 frames per second means 12 to 14 drawings per second. So think a,000ish drawings per second. So think a,000ish drawings per second. So think a,000ish per minute. That's around 80,000 in a per minute. That's around 80,000 in a per minute. That's around 80,000 in a featurelength film of this era. And of featurelength film of this era. And of featurelength film of this era. And of course that's if there's only one course that's if there's only one course that's if there's only one character doing one thing on one layer. character doing one thing on one layer. character doing one thing on one layer. >> Yes. There's usually about what? Double >> Yes. There's usually about what? Double >> Yes. There's usually about what? Double that. that. that. >> Triple quadruple. Yeah. >> Triple quadruple. Yeah. >> Triple quadruple. Yeah. >> So there's two ways that this can >> So there's two ways that this can >> So there's two ways that this can happen. One is the most clean and happen. One is the most clean and happen. One is the most clean and obvious one straight ahead which is obvious one straight ahead which is obvious one straight ahead which is where an animator draws every frame in where an animator draws every frame in where an animator draws every frame in order. Or there's something called order. Or there's something called order. Or there's something called inbetweeners where lead animators draw inbetweeners where lead animators draw inbetweeners where lead animators draw the key frames with the essential poses the key frames with the essential poses the key frames with the essential poses or major character movements and then or major character movements and then or major character movements and then the assistants or the inbetweeners go to the assistants or the inbetweeners go to the assistants or the inbetweeners go to the drawings and they sort of bridge the drawings and they sort of bridge the drawings and they sort of bridge between those frames and the goal of between those frames and the goal of between those frames and the goal of doing this is to make the most efficient doing this is to make the most efficient doing this is to make the most efficient use of the skilled artists time on the use of the skilled artists time on the use of the skilled artists time on the film. Now, over a time, a division of film. Now, over a time, a division of film. Now, over a time, a division of labor started to emerge where, which labor started to emerge where, which labor started to emerge where, which kind of makes sense, a super skilled kind of makes sense, a super skilled kind of makes sense, a super skilled animator would do work kind of fast and animator would do work kind of fast and animator would do work kind of fast and loose with sketches that had little loose with sketches that had little loose with sketches that had little extra lines hanging off everywhere. extra lines hanging off everywhere. extra lines hanging off everywhere. There'd be like revisions on top of There'd be like revisions on top of There'd be like revisions on top of their original drawing without actually their original drawing without actually their original drawing without actually cleaning up the the the mistakes cleaning up the the the mistakes cleaning up the the the mistakes underneath. And then it was handed over underneath. And then it was handed over underneath. And then it was handed over to a cleanup artist to trace their to a cleanup artist to trace their to a cleanup artist to trace their drawings with a single line versus the drawings with a single line versus the drawings with a single line versus the hairy mess to kind of get it ready for hairy mess to kind of get it ready for hairy mess to kind of get it ready for the next stage. But again preserving the the next stage. But again preserving the the next stage. But again preserving the same correct emotion, flow, bounciness, same correct emotion, flow, bounciness, same correct emotion, flow, bounciness, shape, form of the lines. Both the shape, form of the lines. Both the shape, form of the lines. Both the inbetweeners and the cleanup artists inbetweeners and the cleanup artists inbetweeners and the cleanup artists were kind of a result of the were kind of a result of the were kind of a result of the industrialization of the animation industrialization of the animation industrialization of the animation process versus the early days in the process versus the early days in the process versus the early days in the early Mickey ones of a kind of a single early Mickey ones of a kind of a single early Mickey ones of a kind of a single artist animating the entire thing. artist animating the entire thing. artist animating the entire thing. >> Yeah. By this point, as they're heading >> Yeah. By this point, as they're heading >> Yeah. By this point, as they're heading into Snow White, this had become a real into Snow White, this had become a real into Snow White, this had become a real scale production process. I mean, it scale production process. I mean, it scale production process. I mean, it wasn't quite like an assembly line. This wasn't quite like an assembly line. This wasn't quite like an assembly line. This is still art here, but it's a lot closer is still art here, but it's a lot closer is still art here, but it's a lot closer to Henry Ford than it is to Picasso in to Henry Ford than it is to Picasso in to Henry Ford than it is to Picasso in his studio, his studio, his studio, >> right? At least you do need to sort of >> right? At least you do need to sort of >> right? At least you do need to sort of synchronize and coordinate teams and synchronize and coordinate teams and synchronize and coordinate teams and make the highest use of the most make the highest use of the most make the highest use of the most valuable scarce resources, stuff like valuable scarce resources, stuff like valuable scarce resources, stuff like that. that. that. >> Yep. >> Yep. >> Yep. >> So, then there's ink and paint. So, >> So, then there's ink and paint. So, >> So, then there's ink and paint. So, let's talk about inkers. Back in 1914, let's talk about inkers. Back in 1914, let's talk about inkers. Back in 1914, Earl Herd had invented a concept known Earl Herd had invented a concept known Earl Herd had invented a concept known as cell animation, CEL, where you would as cell animation, CEL, where you would as cell animation, CEL, where you would draw with ink on the front of a piece of draw with ink on the front of a piece of draw with ink on the front of a piece of transparent plastic or cell in the transparent plastic or cell in the transparent plastic or cell in the business, short for celluloid. And that business, short for celluloid. And that business, short for celluloid. And that way you could keep redrawing just the way you could keep redrawing just the way you could keep redrawing just the character in each frame and the character in each frame and the character in each frame and the background could stay static. That background could stay static. That background could stay static. That essentially made animation possible at essentially made animation possible at essentially made animation possible at all. In 1914, you could imagine if you all. In 1914, you could imagine if you all. In 1914, you could imagine if you had to just redraw every line on every had to just redraw every line on every had to just redraw every line on every frame every time. One, it would look frame every time. One, it would look frame every time. One, it would look crappy because things would sort of crappy because things would sort of crappy because things would sort of wiggle all over the place when the film wiggle all over the place when the film wiggle all over the place when the film was actually playing, but two, it just was actually playing, but two, it just was actually playing, but two, it just was economically infeasible to draw was economically infeasible to draw was economically infeasible to draw every line every time. every line every time. every line every time. >> Yeah. It was not scalable. So it had >> Yeah. It was not scalable. So it had >> Yeah. It was not scalable. So it had evolved since then where there were now evolved since then where there were now evolved since then where there were now armies of people who were almost armies of people who were almost armies of people who were almost exclusively women at this point in exclusively women at this point in exclusively women at this point in history who would literally duplicate history who would literally duplicate history who would literally duplicate every line that the animators drew on every line that the animators drew on every line that the animators drew on paper with pencil and they would trace paper with pencil and they would trace paper with pencil and they would trace over their entire drawing with ink on over their entire drawing with ink on over their entire drawing with ink on cell every single frame. cell every single frame. cell every single frame. >> Yes. So, what you would see on screen is >> Yes. So, what you would see on screen is >> Yes. So, what you would see on screen is in a film is actually not the direct in a film is actually not the direct in a film is actually not the direct work of an animator, but it's the work of an animator, but it's the work of an animator, but it's the painstaking work of an inker who traces painstaking work of an inker who traces painstaking work of an inker who traces over the animator's line on the over the animator's line on the over the animator's line on the transparent celluloid instead of on transparent celluloid instead of on transparent celluloid instead of on paper. paper. paper. >> Yep. And then the inkers would flip the >> Yep. And then the inkers would flip the >> Yep. And then the inkers would flip the cells over and pass them off to the cells over and pass them off to the cells over and pass them off to the painters. painters. painters. >> Yes. So, this is how they get color in. >> Yes. So, this is how they get color in. >> Yes. So, this is how they get color in. You want your outlines on the front so You want your outlines on the front so You want your outlines on the front so it it masks any colors that sort of it it masks any colors that sort of it it masks any colors that sort of overflow out of, you know, the dwarf's overflow out of, you know, the dwarf's overflow out of, you know, the dwarf's shirt or Mickey's shoe. And then on the shirt or Mickey's shoe. And then on the shirt or Mickey's shoe. And then on the back, that's where you do your painting. back, that's where you do your painting. back, that's where you do your painting. You put all the colors on. Uh, and You put all the colors on. Uh, and You put all the colors on. Uh, and David, what you were referring to is is David, what you were referring to is is David, what you were referring to is is you and I uh did did some painting on a you and I uh did did some painting on a you and I uh did did some painting on a pre-inked Mickey Mouse. pre-inked Mickey Mouse. pre-inked Mickey Mouse. >> Hey, we did a little bit of inking on >> Hey, we did a little bit of inking on >> Hey, we did a little bit of inking on the first. the first. the first. >> We did a little bit inking. Ink >> We did a little bit inking. Ink >> We did a little bit inking. Ink [laughter] inking is hard. [laughter] inking is hard. [laughter] inking is hard. >> Inking is harder than painting. >> Inking is harder than painting. >> Inking is harder than painting. >> Painting is forgiving. >> Painting is forgiving. >> Painting is forgiving. >> Yeah. But Disney has this room with >> Yeah. But Disney has this room with >> Yeah. But Disney has this room with thousands and thousands of colors of thousands and thousands of colors of thousands and thousands of colors of handmade on-site paint that is a handmade on-site paint that is a handmade on-site paint that is a production facility for paint color and production facility for paint color and production facility for paint color and applying that color to animation cells. applying that color to animation cells. applying that color to animation cells. >> It used to be called the Rainbow Room. >> It used to be called the Rainbow Room. >> It used to be called the Rainbow Room. Those colors, that paint went into Snow Those colors, that paint went into Snow Those colors, that paint went into Snow White, Cinderella, Peter Pan, Alice in White, Cinderella, Peter Pan, Alice in White, Cinderella, Peter Pan, Alice in Wonderland. Wonderland. Wonderland. >> Thousands of people each making >> Thousands of people each making >> Thousands of people each making thousands of drawings. It multiplies thousands of drawings. It multiplies thousands of drawings. It multiplies fast. So then you've got your special fast. So then you've got your special fast. So then you've got your special effects layer. So like Tinkerbell's effects layer. So like Tinkerbell's effects layer. So like Tinkerbell's wings use effectively spray paint like a wings use effectively spray paint like a wings use effectively spray paint like a a little paint gun so it can be a little paint gun so it can be a little paint gun so it can be partially translucent or the dwarf's partially translucent or the dwarf's partially translucent or the dwarf's glasses or sparkles or another thing in glasses or sparkles or another thing in glasses or sparkles or another thing in special effects is like water effects. special effects is like water effects. special effects is like water effects. What if you want to make it look like What if you want to make it look like What if you want to make it look like there's a little bit of a ripple in the there's a little bit of a ripple in the there's a little bit of a ripple in the water or some depth of field on some water or some depth of field on some water or some depth of field on some leaves that are closer to the camera? So leaves that are closer to the camera? So leaves that are closer to the camera? So before any of this inking and painting before any of this inking and painting before any of this inking and painting which was super expensive and which was super expensive and which was super expensive and timeconuming they would do something timeconuming they would do something timeconuming they would do something called a pencil test where they would called a pencil test where they would called a pencil test where they would take the pencil sketch drawings on paper take the pencil sketch drawings on paper take the pencil sketch drawings on paper and put them all through the camera so and put them all through the camera so and put them all through the camera so the animators in Walt could look at the the animators in Walt could look at the the animators in Walt could look at the rough action and see if it felt right. rough action and see if it felt right. rough action and see if it felt right. See if it had the right physics See if it had the right physics See if it had the right physics correctly represented each character's correctly represented each character's correctly represented each character's tone and emotions. It's almost like a tone and emotions. It's almost like a tone and emotions. It's almost like a higher fidelity prototype than the one higher fidelity prototype than the one higher fidelity prototype than the one that we first talked about that came out that we first talked about that came out that we first talked about that came out of the story meetings. It was a way to of the story meetings. It was a way to of the story meetings. It was a way to catch things that weren't working before catch things that weren't working before catch things that weren't working before you got all the way to full fidelity. you got all the way to full fidelity. you got all the way to full fidelity. Then camera. This is like the coolest Then camera. This is like the coolest Then camera. This is like the coolest part of the whole thing. part of the whole thing. part of the whole thing. >> The multiplane. This is incredible. >> The multiplane. This is incredible. >> The multiplane. This is incredible. >> So Disney and Bill Gity took the idea of >> So Disney and Bill Gity took the idea of >> So Disney and Bill Gity took the idea of a multiplane camera that had existed a multiplane camera that had existed a multiplane camera that had existed before Disney. Eyeworks actually built before Disney. Eyeworks actually built before Disney. Eyeworks actually built one of the first advanced multiplane one of the first advanced multiplane one of the first advanced multiplane cameras back in 33 while he was away cameras back in 33 while he was away cameras back in 33 while he was away from the company doing his own thing from the company doing his own thing from the company doing his own thing using parts from an old Chevy. using parts from an old Chevy. using parts from an old Chevy. >> Yes. [laughter] Yes. And then Walt >> Yes. [laughter] Yes. And then Walt >> Yes. [laughter] Yes. And then Walt rehired I works later to come back and rehired I works later to come back and rehired I works later to come back and lead within Disney. lead within Disney. lead within Disney. >> Yep. Like process improvement for how we >> Yep. Like process improvement for how we >> Yep. Like process improvement for how we do animation. So Disney created the do animation. So Disney created the do animation. So Disney created the first one to be used in a feature film. first one to be used in a feature film. first one to be used in a feature film. It is unbelievably cool. It has an It is unbelievably cool. It has an It is unbelievably cool. It has an entire massive room to itself. There's a entire massive room to itself. There's a entire massive room to itself. There's a team of operators to make it work. You team of operators to make it work. You team of operators to make it work. You had to climb a ladder to get all the way had to climb a ladder to get all the way had to climb a ladder to get all the way to the top. So here's how it works. to the top. So here's how it works. to the top. So here's how it works. There's a stillframe photo camera There's a stillframe photo camera There's a stillframe photo camera mounted on the top of this thing pointed mounted on the top of this thing pointed mounted on the top of this thing pointed straight down. straight down. straight down. >> Yeah, it's like what? Probably 15t tall. >> Yeah, it's like what? Probably 15t tall. >> Yeah, it's like what? Probably 15t tall. >> That feels high. 10, 12, yeah, but >> That feels high. 10, 12, yeah, but >> That feels high. 10, 12, yeah, but something like that. There were up to something like that. There were up to something like that. There were up to seven planes that you could use. So, seven planes that you could use. So, seven planes that you could use. So, you've got these horizontal planes you've got these horizontal planes you've got these horizontal planes between the floor and where the camera between the floor and where the camera between the floor and where the camera is mounted, you know, up 12 ft in the is mounted, you know, up 12 ft in the is mounted, you know, up 12 ft in the air. Typically, with the character on air. Typically, with the character on air. Typically, with the character on the celluloid almost all the way close the celluloid almost all the way close the celluloid almost all the way close to the top of the camera, unless you had to the top of the camera, unless you had to the top of the camera, unless you had like special effects or some foreground like special effects or some foreground like special effects or some foreground obscuring the character or something obscuring the character or something obscuring the character or something like that. And then all the elements of like that. And then all the elements of like that. And then all the elements of the background at various sort of the background at various sort of the background at various sort of different depths away from the character different depths away from the character different depths away from the character are painted on panes of glass and paper are painted on panes of glass and paper are painted on panes of glass and paper below that. And you'd want the below that. And you'd want the below that. And you'd want the background broken out onto multiple background broken out onto multiple background broken out onto multiple panes. So you could do things like a panes. So you could do things like a panes. So you could do things like a parallax effect if they were sort of parallax effect if they were sort of parallax effect if they were sort of panning by. Or if you wanted to do like panning by. Or if you wanted to do like panning by. Or if you wanted to do like an establishing shot to zoom in on a an establishing shot to zoom in on a an establishing shot to zoom in on a subject from far away, you could subject from far away, you could subject from far away, you could progressively in every single photo that progressively in every single photo that progressively in every single photo that the camera took every frame bring the the camera took every frame bring the the camera took every frame bring the panes of glass closer to the camera at panes of glass closer to the camera at panes of glass closer to the camera at different calculated rates. So the different calculated rates. So the different calculated rates. So the distance between the planes could be distance between the planes could be distance between the planes could be adjusted to really sell the the adjusted to really sell the the adjusted to really sell the the animation. David, you and I saw one of animation. David, you and I saw one of animation. David, you and I saw one of these in the corporate archives in these in the corporate archives in these in the corporate archives in Burbank. You've actually seen two of the Burbank. You've actually seen two of the Burbank. You've actually seen two of the three that exist, right? three that exist, right? three that exist, right? >> Yes. Yes. One of the other ones is at >> Yes. Yes. One of the other ones is at >> Yes. Yes. One of the other ones is at the Walt Disney Family Museum in the the Walt Disney Family Museum in the the Walt Disney Family Museum in the Prescidio in San Francisco, which is an Prescidio in San Francisco, which is an Prescidio in San Francisco, which is an incredible museum and resource that incredible museum and resource that incredible museum and resource that informed a lot of this episode. informed a lot of this episode. informed a lot of this episode. >> Worth calling out, this is a photo >> Worth calling out, this is a photo >> Worth calling out, this is a photo camera, not a movie camera. So, it would camera, not a movie camera. So, it would camera, not a movie camera. So, it would just photograph one frame at a time, and just photograph one frame at a time, and just photograph one frame at a time, and then all the technicians would adjust then all the technicians would adjust then all the technicians would adjust all the knobs and layer placements for all the knobs and layer placements for all the knobs and layer placements for the next frame. So when you look at the the next frame. So when you look at the the next frame. So when you look at the level of invention required to create a level of invention required to create a level of invention required to create a multiplane camera and operate it, you multiplane camera and operate it, you multiplane camera and operate it, you kind of start to understand how these kind of start to understand how these kind of start to understand how these guys in the animation department could guys in the animation department could guys in the animation department could evolve into Imagineers. evolve into Imagineers. evolve into Imagineers. >> Yes. >> Yes. >> Yes. >> Like this. There's a lot of physicality >> Like this. There's a lot of physicality >> Like this. There's a lot of physicality involved in animation that I don't think involved in animation that I don't think involved in animation that I don't think I really understood until diving into I really understood until diving into I really understood until diving into this process. this process. this process. >> You know what? What's happening at >> You know what? What's happening at >> You know what? What's happening at Disney isn't just the intersection of Disney isn't just the intersection of Disney isn't just the intersection of art and commerce. It's the three-way art and commerce. It's the three-way art and commerce. It's the three-way intersection of art and commerce and intersection of art and commerce and intersection of art and commerce and engineering. and always has been. engineering. and always has been. engineering. and always has been. >> Yep, I think that's right. All right, so >> Yep, I think that's right. All right, so >> Yep, I think that's right. All right, so that's the animation process. That is that's the animation process. That is that's the animation process. That is why this is such a giant difficult why this is such a giant difficult why this is such a giant difficult undertaking to create something like undertaking to create something like undertaking to create something like Snow White. Snow White. Snow White. >> Absolutely enormous undertaking. So when >> Absolutely enormous undertaking. So when >> Absolutely enormous undertaking. So when all is said and done, it takes $1.5 all is said and done, it takes $1.5 all is said and done, it takes $1.5 million million million of investment over three years of studio of investment over three years of studio of investment over three years of studio work to create Snow White. Remember, work to create Snow White. Remember, work to create Snow White. Remember, this is at the same time as Disney is this is at the same time as Disney is this is at the same time as Disney is making short cartoons for like, I don't making short cartoons for like, I don't making short cartoons for like, I don't know, 20 $30,000. And even that is way know, 20 $30,000. And even that is way know, 20 $30,000. And even that is way above what anybody else in the industry above what anybody else in the industry above what anybody else in the industry is spending. This is $35 million is spending. This is $35 million is spending. This is $35 million inflation adjusted. And yeah, movies are inflation adjusted. And yeah, movies are inflation adjusted. And yeah, movies are like $300 million budgets today, but like $300 million budgets today, but like $300 million budgets today, but imagine nobody's doing that. And you imagine nobody's doing that. And you imagine nobody's doing that. And you have the first idea to create an have the first idea to create an have the first idea to create an animated movie and you're like, I'd like animated movie and you're like, I'd like animated movie and you're like, I'd like $35 million of budget to make that, $35 million of budget to make that, $35 million of budget to make that, >> right? When Roy said that he was worried >> right? When Roy said that he was worried >> right? When Roy said that he was worried it was going to bankrupt the studio, it was going to bankrupt the studio, it was going to bankrupt the studio, like Roy was being the rational one like Roy was being the rational one like Roy was being the rational one here. [laughter] here. [laughter] here. [laughter] [gasps] [gasps] [gasps] >> They have to take out a whole series of >> They have to take out a whole series of >> They have to take out a whole series of loans from Bank of America in order to loans from Bank of America in order to loans from Bank of America in order to finance production. Even with all the finance production. Even with all the finance production. Even with all the money they have coming in from the money they have coming in from the money they have coming in from the Flywheel and Consumer Products and the Flywheel and Consumer Products and the Flywheel and Consumer Products and the Mickey Mouse Club, etc. Ben, as you were Mickey Mouse Club, etc. Ben, as you were Mickey Mouse Club, etc. Ben, as you were saying, all the art and the work that saying, all the art and the work that saying, all the art and the work that goes into it, 2 million sketches and goes into it, 2 million sketches and goes into it, 2 million sketches and 250,000 250,000 250,000 finished drawings and cells go into Snow finished drawings and cells go into Snow finished drawings and cells go into Snow White. This is at a scale so beyond what White. This is at a scale so beyond what White. This is at a scale so beyond what anybody else in the entire entertainment anybody else in the entire entertainment anybody else in the entire entertainment industry is doing. Gabler in his book industry is doing. Gabler in his book industry is doing. Gabler in his book uses the analogy of it was like a gothic uses the analogy of it was like a gothic uses the analogy of it was like a gothic cathedral in animation. That is like the cathedral in animation. That is like the cathedral in animation. That is like the only kind of analogy that makes sense only kind of analogy that makes sense only kind of analogy that makes sense here. They staffed up to 750 studio here. They staffed up to 750 studio here. They staffed up to 750 studio artists and did three years of non-stop artists and did three years of non-stop artists and did three years of non-stop work on production. work on production. work on production. >> Yeah. Incredible. >> Yeah. Incredible. >> Yeah. Incredible. >> They actually went so far as to hire >> They actually went so far as to hire >> They actually went so far as to hire actors to play each of the roles and put actors to play each of the roles and put actors to play each of the roles and put them in full costumes so they could film them in full costumes so they could film them in full costumes so they could film them for inspiration just so the them for inspiration just so the them for inspiration just so the animators could watch and see the animators could watch and see the animators could watch and see the natural motion so it would look as natural motion so it would look as natural motion so it would look as lifelike as possible to sell the lifelike as possible to sell the lifelike as possible to sell the illusion. This is so much different than illusion. This is so much different than illusion. This is so much different than animating a cartoon mouse. the massive animating a cartoon mouse. the massive animating a cartoon mouse. the massive investment in all the little details investment in all the little details investment in all the little details just to make the viewer buy in just to make the viewer buy in just to make the viewer buy in emotionally to these characters. My emotionally to these characters. My emotionally to these characters. My favorite one of these little tidbits is favorite one of these little tidbits is favorite one of these little tidbits is that the actress who played Snow White that the actress who played Snow White that the actress who played Snow White even wore a hair helmet since the drawn even wore a hair helmet since the drawn even wore a hair helmet since the drawn character's proportions were actually character's proportions were actually character's proportions were actually pretty different than a real life woman pretty different than a real life woman pretty different than a real life woman so that they could kind of get a sense so that they could kind of get a sense so that they could kind of get a sense from watching the test footage how the from watching the test footage how the from watching the test footage how the character moved around in the world. character moved around in the world. character moved around in the world. >> Yeah. Yeah. I mean, you made the point a >> Yeah. Yeah. I mean, you made the point a >> Yeah. Yeah. I mean, you made the point a few minutes ago, Ben, that Walt Disney few minutes ago, Ben, that Walt Disney few minutes ago, Ben, that Walt Disney wasn't doing this because he was some wasn't doing this because he was some wasn't doing this because he was some capitalist. I think he really did capitalist. I think he really did capitalist. I think he really did recognize the incredible recognize the incredible recognize the incredible flywheel business model that he had sort flywheel business model that he had sort flywheel business model that he had sort of accidentally created and leaned into of accidentally created and leaned into of accidentally created and leaned into it. But like that's not going to it. But like that's not going to it. But like that's not going to motivate him to film a whole liveaction motivate him to film a whole liveaction motivate him to film a whole liveaction version in costume just so that they can version in costume just so that they can version in costume just so that they can make sure they get the spirit right. make sure they get the spirit right. make sure they get the spirit right. Like this is art that they're creating. Like this is art that they're creating. Like this is art that they're creating. >> An obsession with quality. >> An obsession with quality. >> An obsession with quality. >> Absolutely. So, the movie finally >> Absolutely. So, the movie finally >> Absolutely. So, the movie finally premieres in Hollywood on December 21st, premieres in Hollywood on December 21st, premieres in Hollywood on December 21st, 1937. 1937. 1937. And I mean, it's one of the greatest And I mean, it's one of the greatest And I mean, it's one of the greatest films ever made. The Academy Awards films ever made. The Academy Awards films ever made. The Academy Awards creates a special Oscar for Snow White, creates a special Oscar for Snow White, creates a special Oscar for Snow White, a special award. a special award. a special award. >> Yeah, cuz they didn't think it could be >> Yeah, cuz they didn't think it could be >> Yeah, cuz they didn't think it could be eligible for best picture. This movie, I eligible for best picture. This movie, I eligible for best picture. This movie, I don't want to bury the lead. It was the don't want to bury the lead. It was the don't want to bury the lead. It was the highest grossing film, not only of the highest grossing film, not only of the highest grossing film, not only of the year, but ever. It did $8 million of year, but ever. It did $8 million of year, but ever. It did $8 million of rental revenue on a $1.5 million rental revenue on a $1.5 million rental revenue on a $1.5 million production cost. And like the category production cost. And like the category production cost. And like the category was so new and different that they were was so new and different that they were was so new and different that they were like, uh, instead of being eligible to like, uh, instead of being eligible to like, uh, instead of being eligible to be nominated for best picture, let's be nominated for best picture, let's be nominated for best picture, let's just create a special new category for just create a special new category for just create a special new category for >> So the the the Oscar statue that they >> So the the the Oscar statue that they >> So the the the Oscar statue that they give Walt and Disney for Snow White is give Walt and Disney for Snow White is give Walt and Disney for Snow White is the only one that's ever been made. It the only one that's ever been made. It the only one that's ever been made. It is a large Oscar. It is Snow White and is a large Oscar. It is Snow White and is a large Oscar. It is Snow White and then seven little Oscars below it. then seven little Oscars below it. then seven little Oscars below it. [laughter] [laughter] [laughter] Walt personally would go on to win more Walt personally would go on to win more Walt personally would go on to win more Academy Awards than anyone in history. Academy Awards than anyone in history. Academy Awards than anyone in history. Walt has 26 Academy Awards. The next Walt has 26 Academy Awards. The next Walt has 26 Academy Awards. The next highest is 13. Yes. I mean, the audience highest is 13. Yes. I mean, the audience highest is 13. Yes. I mean, the audience reception was incredible. Like you said, reception was incredible. Like you said, reception was incredible. Like you said, Ben, it was the highest grossing film Ben, it was the highest grossing film Ben, it was the highest grossing film ever made of of any kind, animated or ever made of of any kind, animated or ever made of of any kind, animated or otherwise, in history to that point. The otherwise, in history to that point. The otherwise, in history to that point. The critics's reception is equally glowing. critics's reception is equally glowing. critics's reception is equally glowing. Time magazine writes prophetically that Time magazine writes prophetically that Time magazine writes prophetically that Snow White is an authentic masterpiece Snow White is an authentic masterpiece Snow White is an authentic masterpiece to be shown in theaters and beloved by to be shown in theaters and beloved by to be shown in theaters and beloved by new generations long after the current new generations long after the current new generations long after the current crop of Hollywood stars, writers, and crop of Hollywood stars, writers, and crop of Hollywood stars, writers, and directors are sleeping where no prince's directors are sleeping where no prince's directors are sleeping where no prince's kiss can wake them. [laughter] kiss can wake them. [laughter] kiss can wake them. [laughter] Of course, foreshadowing the Disney Of course, foreshadowing the Disney Of course, foreshadowing the Disney vault. vault. vault. Snow White is alive and well today, as Snow White is alive and well today, as Snow White is alive and well today, as my two young daughters will attest. my two young daughters will attest. my two young daughters will attest. >> [laughter] >> [laughter] >> [laughter] >> Yeah. The uh an interesting thing about >> Yeah. The uh an interesting thing about >> Yeah. The uh an interesting thing about this story, I'm curious since you have this story, I'm curious since you have this story, I'm curious since you have daughters who watch it, David, is it's daughters who watch it, David, is it's daughters who watch it, David, is it's kind of dark and Walt did meaningfully kind of dark and Walt did meaningfully kind of dark and Walt did meaningfully change the Brothers Grimm stories that change the Brothers Grimm stories that change the Brothers Grimm stories that he sort of adapted it from. It's very he sort of adapted it from. It's very he sort of adapted it from. It's very interesting that all of these early interesting that all of these early interesting that all of these early Disney's cartoon movies animations are Disney's cartoon movies animations are Disney's cartoon movies animations are adapted fairy tales or adapted existing adapted fairy tales or adapted existing adapted fairy tales or adapted existing lore that Disney sort of changes. The lore that Disney sort of changes. The lore that Disney sort of changes. The film was not really made as a children's film was not really made as a children's film was not really made as a children's movie. No. movie. No. movie. No. >> Yes, it was animated, but it's dark. >> Yes, it was animated, but it's dark. >> Yes, it was animated, but it's dark. >> No. And in fact, a lot of those >> No. And in fact, a lot of those >> No. And in fact, a lot of those decisions, like giving each of the seven decisions, like giving each of the seven decisions, like giving each of the seven dwarves personalities, dwarves personalities, dwarves personalities, in part were motivated to soften the in part were motivated to soften the in part were motivated to soften the darkness of the fairy tale. And Walt darkness of the fairy tale. And Walt darkness of the fairy tale. And Walt would always say that he didn't make would always say that he didn't make would always say that he didn't make movies for children, but of course, he movies for children, but of course, he movies for children, but of course, he wanted children to be able to watch wanted children to be able to watch wanted children to be able to watch them, too. But some of the decisions them, too. But some of the decisions them, too. But some of the decisions were actually made with the flywheel in were actually made with the flywheel in were actually made with the flywheel in mind. And the dwarves personalities is mind. And the dwarves personalities is mind. And the dwarves personalities is one of these. one of these. one of these. >> They wanted to sell a lot of seven >> They wanted to sell a lot of seven >> They wanted to sell a lot of seven dwarves merchandise. [laughter] dwarves merchandise. [laughter] dwarves merchandise. [laughter] And what better way to do that than to And what better way to do that than to And what better way to do that than to give them all distinct personalities. give them all distinct personalities. give them all distinct personalities. >> It's true. When you go to Disneyland, >> It's true. When you go to Disneyland, >> It's true. When you go to Disneyland, there's a lot of people walking around there's a lot of people walking around there's a lot of people walking around with like dopey and grumpy. with like dopey and grumpy. with like dopey and grumpy. >> Exactly. Exactly. So, as we said, the >> Exactly. Exactly. So, as we said, the >> Exactly. Exactly. So, as we said, the movie itself extremely profitable. It movie itself extremely profitable. It movie itself extremely profitable. It does $8 million in film rental revenue does $8 million in film rental revenue does $8 million in film rental revenue against the $1.5 million production cost against the $1.5 million production cost against the $1.5 million production cost just in its first theatrical run, just in its first theatrical run, just in its first theatrical run, >> which dramatically changes the studio's >> which dramatically changes the studio's >> which dramatically changes the studio's financial position. financial position. financial position. >> Yes. Yes. Now, it is a bit of a >> Yes. Yes. Now, it is a bit of a >> Yes. Yes. Now, it is a bit of a misconception that the profits from Snow misconception that the profits from Snow misconception that the profits from Snow White, the film itself, White, the film itself, White, the film itself, would end up paying for the new Burbank would end up paying for the new Burbank would end up paying for the new Burbank studio that well, it's about to studio that well, it's about to studio that well, it's about to construct. That's not entirely true. I construct. That's not entirely true. I construct. That's not entirely true. I think most of the film profits from Snow think most of the film profits from Snow think most of the film profits from Snow White went to repay all the loans to White went to repay all the loans to White went to repay all the loans to Bank of America. Yes. So listeners, it's Bank of America. Yes. So listeners, it's Bank of America. Yes. So listeners, it's worth diving into a little bit of the worth diving into a little bit of the worth diving into a little bit of the complexity of how each of the parties in complexity of how each of the parties in complexity of how each of the parties in the value chain of making and the value chain of making and the value chain of making and distributing movies work. There's the distributing movies work. There's the distributing movies work. There's the studio like Disney who makes the actual studio like Disney who makes the actual studio like Disney who makes the actual movie. There's a distributor like United movie. There's a distributor like United movie. There's a distributor like United Artists or RKO who does a lot of stuff. Artists or RKO who does a lot of stuff. Artists or RKO who does a lot of stuff. They take the finished film. They create They take the finished film. They create They take the finished film. They create all the prints that'll go to theaters. all the prints that'll go to theaters. all the prints that'll go to theaters. They have the salesforce that sells the They have the salesforce that sells the They have the salesforce that sells the film to theaters. They plan the film's film to theaters. They plan the film's film to theaters. They plan the film's marketing. They also ship the films and marketing. They also ship the films and marketing. They also ship the films and handle all of the billing and payments. handle all of the billing and payments. handle all of the billing and payments. And then of course there's the theater And then of course there's the theater And then of course there's the theater or the exhibitor as they're called. And or the exhibitor as they're called. And or the exhibitor as they're called. And so Disney has this 1944 annual report so Disney has this 1944 annual report so Disney has this 1944 annual report for employees that David actually found for employees that David actually found for employees that David actually found when we were in the archives. We were when we were in the archives. We were when we were in the archives. We were flipping through annual reports and you flipping through annual reports and you flipping through annual reports and you were like, "What is this? There there's were like, "What is this? There there's were like, "What is this? There there's two reports for 1944. What's going on two reports for 1944. What's going on two reports for 1944. What's going on here?" And they actually did a different here?" And they actually did a different here?" And they actually did a different one for employees than for shareholders. one for employees than for shareholders. one for employees than for shareholders. The annual report for employees has this The annual report for employees has this The annual report for employees has this great graphic that says where does the great graphic that says where does the great graphic that says where does the money come from and has a breakdown of money come from and has a breakdown of money come from and has a breakdown of if for a dollar getting spent at the box if for a dollar getting spent at the box if for a dollar getting spent at the box office, what are the splits? And so 65% office, what are the splits? And so 65% office, what are the splits? And so 65% actually gets retained at the exhibitor actually gets retained at the exhibitor actually gets retained at the exhibitor or the theater, 13% goes to the or the theater, 13% goes to the or the theater, 13% goes to the distributor, and 22% goes to the studio. distributor, and 22% goes to the studio. distributor, and 22% goes to the studio. And so when we've been saying rentals, And so when we've been saying rentals, And so when we've been saying rentals, here's the interesting thing about that. here's the interesting thing about that. here's the interesting thing about that. The distributor and the studio come The distributor and the studio come The distributor and the studio come together and they actually rent their together and they actually rent their together and they actually rent their collectively owned film. Yes. collectively owned film. Yes. collectively owned film. Yes. >> To the exhibitor. So this $8 million is >> To the exhibitor. So this $8 million is >> To the exhibitor. So this $8 million is actually even higher than you think it actually even higher than you think it actually even higher than you think it is. The gross box office would be is. The gross box office would be is. The gross box office would be significantly higher than $8 million, significantly higher than $8 million, significantly higher than $8 million, like 2.5x or something. And that 8 like 2.5x or something. And that 8 like 2.5x or something. And that 8 million is the 13% plus the 22%. million is the 13% plus the 22%. million is the 13% plus the 22%. >> Right. It's the share of Disney the >> Right. It's the share of Disney the >> Right. It's the share of Disney the studio plus their distributor. studio plus their distributor. studio plus their distributor. >> That's exactly right. And so then I know >> That's exactly right. And so then I know >> That's exactly right. And so then I know I'm doing some financial gymnastics I'm doing some financial gymnastics I'm doing some financial gymnastics here. here. here. >> Well, hey, all of this Hollywood >> Well, hey, all of this Hollywood >> Well, hey, all of this Hollywood accounting, even through to this very accounting, even through to this very accounting, even through to this very day, is so obscure and arcane. I think day, is so obscure and arcane. I think day, is so obscure and arcane. I think on purpose so that neophites to the on purpose so that neophites to the on purpose so that neophites to the business don't really understand the business don't really understand the business don't really understand the deals that they're making. If you go deals that they're making. If you go deals that they're making. If you go look at what is really the source of look at what is really the source of look at what is really the source of truth here, the 1940 IPO prospectus, truth here, the 1940 IPO prospectus, truth here, the 1940 IPO prospectus, which we are going to get to, you can which we are going to get to, you can which we are going to get to, you can very clearly see that over a oneyear and very clearly see that over a oneyear and very clearly see that over a oneyear and 9-month period, they make $4.5 million 9-month period, they make $4.5 million 9-month period, they make $4.5 million in film rental income, the producers in film rental income, the producers in film rental income, the producers share, so this is just Disney's from share, so this is just Disney's from share, so this is just Disney's from Snow White and the Seven Dwarfves. So Snow White and the Seven Dwarfves. So Snow White and the Seven Dwarfves. So that's our real source of truth that we that's our real source of truth that we that's our real source of truth that we know, $4.5 million. Now, they had about know, $4.5 million. Now, they had about know, $4.5 million. Now, they had about $2.3 million of debt from the $1.5 $2.3 million of debt from the $1.5 $2.3 million of debt from the $1.5 million of production costs plus the million of production costs plus the million of production costs plus the interest that they owed Bank of America. interest that they owed Bank of America. interest that they owed Bank of America. >> Yep. So, a huge portion of the net that >> Yep. So, a huge portion of the net that >> Yep. So, a huge portion of the net that they're taking home just from the box they're taking home just from the box they're taking home just from the box office of Snow White is going to repay office of Snow White is going to repay office of Snow White is going to repay the debt, let alone operating expenses the debt, let alone operating expenses the debt, let alone operating expenses for the studio, etc., etc. So yes, it's for the studio, etc., etc. So yes, it's for the studio, etc., etc. So yes, it's like great for the company, but it's not like great for the company, but it's not like great for the company, but it's not quite as transformative from the box quite as transformative from the box quite as transformative from the box office alone as people would think, office alone as people would think, office alone as people would think, >> right? So they they effectively have >> right? So they they effectively have >> right? So they they effectively have $2.2 million left over after paying the $2.2 million left over after paying the $2.2 million left over after paying the theater, paying the distributor, paying theater, paying the distributor, paying theater, paying the distributor, paying back the principal on the loan, and back the principal on the loan, and back the principal on the loan, and paying the interest. Okay. $2.2 million paying the interest. Okay. $2.2 million paying the interest. Okay. $2.2 million in 1937. Still a lot of money, in 1937. Still a lot of money, in 1937. Still a lot of money, >> but uh they want to go build a gigantic >> but uh they want to go build a gigantic >> but uh they want to go build a gigantic campus. Yes, but Ben, of course, Disney campus. Yes, but Ben, of course, Disney campus. Yes, but Ben, of course, Disney isn't just making $2.2 million in isn't just making $2.2 million in isn't just making $2.2 million in profits from Snow White. There's all profits from Snow White. There's all profits from Snow White. There's all that good good Flywheel revenue to come that good good Flywheel revenue to come that good good Flywheel revenue to come along with it. So, you know, if Walt along with it. So, you know, if Walt along with it. So, you know, if Walt thought that the flywheel worked well thought that the flywheel worked well thought that the flywheel worked well for Mickey Mouse, Snow White is like a for Mickey Mouse, Snow White is like a for Mickey Mouse, Snow White is like a whole another level. So before the film whole another level. So before the film whole another level. So before the film is even widely released around the is even widely released around the is even widely released around the country, they have their next major country, they have their next major country, they have their next major flywheel node, their next business model flywheel node, their next business model flywheel node, their next business model innovation already in market, innovation already in market, innovation already in market, the movie soundtrack. I couldn't believe the movie soundtrack. I couldn't believe the movie soundtrack. I couldn't believe this when I learned it. Snow White was this when I learned it. Snow White was this when I learned it. Snow White was the very first movie soundtrack ever the very first movie soundtrack ever the very first movie soundtrack ever created and sold to the public. It all created and sold to the public. It all created and sold to the public. It all started with Snow White. There were no started with Snow White. There were no started with Snow White. There were no sound movie soundtrack albums before sound movie soundtrack albums before sound movie soundtrack albums before then and it is a huge hit both because then and it is a huge hit both because then and it is a huge hit both because you know it's a great soundtrack but you know it's a great soundtrack but you know it's a great soundtrack but like before this album there was never like before this album there was never like before this album there was never anything that audiences could take home anything that audiences could take home anything that audiences could take home actually of the picture that they saw in actually of the picture that they saw in actually of the picture that they saw in theaters. There's no home video, right? theaters. There's no home video, right? theaters. There's no home video, right? There's no streaming. There's no There's no streaming. There's no There's no streaming. There's no television. You go to see something in television. You go to see something in television. You go to see something in the movie theater. Sure, you could buy a the movie theater. Sure, you could buy a the movie theater. Sure, you could buy a piece of merch like a doll or a costume piece of merch like a doll or a costume piece of merch like a doll or a costume and there were a lot of those out there and there were a lot of those out there and there were a lot of those out there for Snow White, but you couldn't take for Snow White, but you couldn't take for Snow White, but you couldn't take home the movie except in the form of the home the movie except in the form of the home the movie except in the form of the soundtrack soundtrack soundtrack >> and the songs are are quite catchy >> and the songs are are quite catchy >> and the songs are are quite catchy whistle. So, the soundtrack is huge. Beyond that, So, the soundtrack is huge. Beyond that, there supposedly there supposedly there supposedly [gasps] I read are 2,183 separate SKUs of Snow White merchandise separate SKUs of Snow White merchandise that get pumped into the global markets that get pumped into the global markets that get pumped into the global markets by KKman's consumer products by KKman's consumer products by KKman's consumer products organization. Unreal. The New York Times organization. Unreal. The New York Times organization. Unreal. The New York Times actually writes this that quote, "Sales actually writes this that quote, "Sales actually writes this that quote, "Sales of Snow White products might be of Snow White products might be of Snow White products might be America's path out of the depression." America's path out of the depression." America's path out of the depression." [laughter] [laughter] [laughter] >> Wow. >> Wow. >> Wow. >> That's how successful it was. I mean, >> That's how successful it was. I mean, >> That's how successful it was. I mean, this movie was such a grand success this movie was such a grand success this movie was such a grand success artistically for Walt filmwise, for the artistically for Walt filmwise, for the artistically for Walt filmwise, for the studio, for the whole medium of studio, for the whole medium of studio, for the whole medium of animation and legitimizing it right animation and legitimizing it right animation and legitimizing it right alongside live action alongside live action alongside live action and for the flywheel business model of and for the flywheel business model of and for the flywheel business model of Disney. So, all of this enables Walt to Disney. So, all of this enables Walt to Disney. So, all of this enables Walt to pursue his next dream, which is that he pursue his next dream, which is that he pursue his next dream, which is that he wants to build a brand new wants to build a brand new wants to build a brand new state-of-the-art state-of-the-art state-of-the-art animators paradise. Ben, as you alluded animators paradise. Ben, as you alluded animators paradise. Ben, as you alluded to, the new Disney Burbank animation to, the new Disney Burbank animation to, the new Disney Burbank animation studio, still the uh corporate studio, still the uh corporate studio, still the uh corporate headquarters of the company to this very headquarters of the company to this very headquarters of the company to this very day, day, day, >> right? He basically sees the success of >> right? He basically sees the success of >> right? He basically sees the success of Snow White and thinks, "Oh, yeah. We're Snow White and thinks, "Oh, yeah. We're Snow White and thinks, "Oh, yeah. We're going to do a lot lot more of these. going to do a lot lot more of these. going to do a lot lot more of these. Let's let's build all the infrastructure Let's let's build all the infrastructure Let's let's build all the infrastructure to like really do that, right? to like really do that, right? to like really do that, right? >> Yes. So, Walt's goal with the new >> Yes. So, Walt's goal with the new >> Yes. So, Walt's goal with the new Burbank studio was to be able to house Burbank studio was to be able to house Burbank studio was to be able to house 1,200 plus animators and staff up from 1,200 plus animators and staff up from 1,200 plus animators and staff up from call it 300 before Snow White and then call it 300 before Snow White and then call it 300 before Snow White and then Ben, what did you say 750 that the ranks Ben, what did you say 750 that the ranks Ben, what did you say 750 that the ranks had swellled to during Snow White? Yep. had swellled to during Snow White? Yep. had swellled to during Snow White? Yep. >> And he thinks that with this new campus, >> And he thinks that with this new campus, >> And he thinks that with this new campus, everything that they're going to install everything that they're going to install everything that they're going to install there, and all the additional staff, there, and all the additional staff, there, and all the additional staff, that Disney will now be able to produce that Disney will now be able to produce that Disney will now be able to produce two new feature animated releases every two new feature animated releases every two new feature animated releases every single year, plus shorts. So, like, it single year, plus shorts. So, like, it single year, plus shorts. So, like, it took three years to make Snow White. took three years to make Snow White. took three years to make Snow White. With all the learning from that, all the With all the learning from that, all the With all the learning from that, all the innovations of the new campus, all the innovations of the new campus, all the innovations of the new campus, all the new staff, he thinks they're now going new staff, he thinks they're now going new staff, he thinks they're now going to be able to pump out great new feature to be able to pump out great new feature to be able to pump out great new feature films every six months, films every six months, films every six months, >> which was a complete pipe dream and they >> which was a complete pipe dream and they >> which was a complete pipe dream and they never were able to do. never were able to do. never were able to do. >> Walt also in his mind think comes to see >> Walt also in his mind think comes to see >> Walt also in his mind think comes to see this Burbank campus as really a utopian this Burbank campus as really a utopian this Burbank campus as really a utopian like place kind of almost like a college like place kind of almost like a college like place kind of almost like a college campus. I mean, Walt didn't even campus. I mean, Walt didn't even campus. I mean, Walt didn't even graduate high school, let alone go to graduate high school, let alone go to graduate high school, let alone go to college, but he intentionally places it college, but he intentionally places it college, but he intentionally places it in Burbank, which back then was like the in Burbank, which back then was like the in Burbank, which back then was like the sticks outside of LA. sticks outside of LA. sticks outside of LA. >> He wanted the Disney lot, the Disney >> He wanted the Disney lot, the Disney >> He wanted the Disney lot, the Disney studio to be this special place kind of studio to be this special place kind of studio to be this special place kind of away from all these other studios away from all these other studios away from all these other studios controlled by their distributor bosses controlled by their distributor bosses controlled by their distributor bosses back in New York. And he kind of I think back in New York. And he kind of I think back in New York. And he kind of I think really wanted to create this band of really wanted to create this band of really wanted to create this band of merry men and women type feeling where merry men and women type feeling where merry men and women type feeling where they could achieve the impossible like they could achieve the impossible like they could achieve the impossible like producing two feature animated films a producing two feature animated films a producing two feature animated films a year. year. year. >> Well, the thing he sort of didn't factor >> Well, the thing he sort of didn't factor >> Well, the thing he sort of didn't factor in is that you might be able to make in is that you might be able to make in is that you might be able to make Snow White faster in the future, but Snow White faster in the future, but Snow White faster in the future, but every idea that you have is going to be every idea that you have is going to be every idea that you have is going to be a different new idea that's going to be a different new idea that's going to be a different new idea that's going to be more ambitious and have more cost and more ambitious and have more cost and more ambitious and have more cost and require more people. And so this Burbank require more people. And so this Burbank require more people. And so this Burbank studio was necessary even to keep the studio was necessary even to keep the studio was necessary even to keep the same same same >> producing films every 3 years. >> producing films every 3 years. >> producing films every 3 years. >> Yes. >> Yes. >> Yes. >> But the the the lot itself is >> But the the the lot itself is >> But the the the lot itself is unbelievable. It's 51 acres. There are unbelievable. It's 51 acres. There are unbelievable. It's 51 acres. There are sports fields, a cafeteria. There's art sports fields, a cafeteria. There's art sports fields, a cafeteria. There's art classes. There's massages available. classes. There's massages available. classes. There's massages available. There's sunbathing in the penthouse There's sunbathing in the penthouse There's sunbathing in the penthouse club. In many ways, this is like the club. In many ways, this is like the club. In many ways, this is like the Google Plex before the Google Plex. Google Plex before the Google Plex. Google Plex before the Google Plex. >> Yeah. This is 1940 when they opened >> Yeah. This is 1940 when they opened >> Yeah. This is 1940 when they opened this. this. this. >> Yes. And you're right. It's it's kind of >> Yes. And you're right. It's it's kind of >> Yes. And you're right. It's it's kind of designed to keep you there. Why would designed to keep you there. Why would designed to keep you there. Why would you need to go anywhere else? And really you need to go anywhere else? And really you need to go anywhere else? And really there's nowhere else to go around here. there's nowhere else to go around here. there's nowhere else to go around here. It reminds me a little bit of uh Epic It reminds me a little bit of uh Epic It reminds me a little bit of uh Epic Systems, too. Systems, too. Systems, too. >> Yeah. Yeah. Yeah. Yeah. Very similar. >> Yeah. Yeah. Yeah. Yeah. Very similar. >> Yeah. Yeah. Yeah. Yeah. Very similar. Very similar. Very similar. Very similar. >> So, here's an example of the lengths >> So, here's an example of the lengths >> So, here's an example of the lengths that they went to on this campus. that they went to on this campus. that they went to on this campus. >> So, I was looking at Google Maps >> So, I was looking at Google Maps >> So, I was looking at Google Maps planning our visit, David, and it looks planning our visit, David, and it looks planning our visit, David, and it looks weird. It's it's offset from the Burbank weird. It's it's offset from the Burbank weird. It's it's offset from the Burbank Street grid at an angle. And we asked Street grid at an angle. And we asked Street grid at an angle. And we asked the person who were showing David and I the person who were showing David and I the person who were showing David and I around listeners uh why this is. And he around listeners uh why this is. And he around listeners uh why this is. And he said that it was Walt's priority when said that it was Walt's priority when said that it was Walt's priority when they were building it to offer the exact they were building it to offer the exact they were building it to offer the exact perfect conditions for lighting to perfect conditions for lighting to perfect conditions for lighting to animators, which of course, David, you animators, which of course, David, you animators, which of course, David, you know the the spoiler here. know the the spoiler here. know the the spoiler here. >> Yes. To have offices that face north >> Yes. To have offices that face north >> Yes. To have offices that face north because northern light is true light. because northern light is true light. because northern light is true light. >> Do you know why northern light is >> Do you know why northern light is >> Do you know why northern light is preferable? preferable? preferable? >> No, I just know that that's what our our >> No, I just know that that's what our our >> No, I just know that that's what our our very kind tour guide told us. very kind tour guide told us. very kind tour guide told us. >> So if you are in the northern >> So if you are in the northern >> So if you are in the northern hemisphere, the sun moves across the hemisphere, the sun moves across the hemisphere, the sun moves across the south sky. So if you're north facing south sky. So if you're north facing south sky. So if you're north facing windows, your window offers the most windows, your window offers the most windows, your window offers the most consistent and nondirect light. And so consistent and nondirect light. And so consistent and nondirect light. And so every animator got a window and they every animator got a window and they every animator got a window and they built the building shape so that there's built the building shape so that there's built the building shape so that there's a whole ton of north facing sides. Like a whole ton of north facing sides. Like a whole ton of north facing sides. Like the whole thing almost looks like a CPU the whole thing almost looks like a CPU the whole thing almost looks like a CPU heat sink. It's like got fins so that heat sink. It's like got fins so that heat sink. It's like got fins so that it's got all these north facing windows. it's got all these north facing windows. it's got all these north facing windows. It's for the time it's an architectural It's for the time it's an architectural It's for the time it's an architectural marvel. It's one of the first buildings marvel. It's one of the first buildings marvel. It's one of the first buildings with air conditioning in Southern with air conditioning in Southern with air conditioning in Southern California. The windows had customuilt California. The windows had customuilt California. The windows had customuilt sort of slats that were adjustable so sort of slats that were adjustable so sort of slats that were adjustable so the animator could let in the exact the animator could let in the exact the animator could let in the exact right amount of sunlight, indirect right amount of sunlight, indirect right amount of sunlight, indirect sunlight that they wanted into that sunlight that they wanted into that sunlight that they wanted into that room. And once they sort of got this room. And once they sort of got this room. And once they sort of got this building architecturally laid out on the building architecturally laid out on the building architecturally laid out on the campus, they're like, "Yeah, let's build campus, they're like, "Yeah, let's build campus, they're like, "Yeah, let's build the entire campus around this." And to the entire campus around this." And to the entire campus around this." And to me, it really symbolizes that me, it really symbolizes that me, it really symbolizes that >> animators are the crown of Disney in >> animators are the crown of Disney in >> animators are the crown of Disney in this era. in the way that at Google it's this era. in the way that at Google it's this era. in the way that at Google it's engineers and at Apple it's designers engineers and at Apple it's designers engineers and at Apple it's designers and at at Microsoft it's PMs. Uh and at at Microsoft it's PMs. Uh and at at Microsoft it's PMs. Uh [laughter] the the animators to the [laughter] the the animators to the [laughter] the the animators to the extent that anyone but Walt has the extent that anyone but Walt has the extent that anyone but Walt has the power the animators are sort of the most power the animators are sort of the most power the animators are sort of the most valuable resource. valuable resource. valuable resource. >> Yes. Yes. It's an animationdriven >> Yes. Yes. It's an animationdriven >> Yes. Yes. It's an animationdriven company. company. company. >> Yes. So it's got this like utopian vibe >> Yes. So it's got this like utopian vibe >> Yes. So it's got this like utopian vibe but there were trade-offs. I mean this but there were trade-offs. I mean this but there were trade-offs. I mean this was huge compared to the old Hyperion was huge compared to the old Hyperion was huge compared to the old Hyperion site. People are more sectioned off to site. People are more sectioned off to site. People are more sectioned off to do their specific work. You had less do their specific work. You had less do their specific work. You had less access to Walt to know exactly what was access to Walt to know exactly what was access to Walt to know exactly what was going on upstairs if you were the rank going on upstairs if you were the rank going on upstairs if you were the rank and file. But to achieve all this, Walt and file. But to achieve all this, Walt and file. But to achieve all this, Walt does need capital. does need capital. does need capital. >> Yes. Oh, yes, he does. >> Yes. Oh, yes, he does. >> Yes. Oh, yes, he does. >> He doesn't want to give up any control, >> He doesn't want to give up any control, >> He doesn't want to give up any control, but eventually he and Roy decide, we've but eventually he and Roy decide, we've but eventually he and Roy decide, we've only ever taken on bank loans. Maybe we only ever taken on bank loans. Maybe we only ever taken on bank loans. Maybe we need another source of capital. need another source of capital. need another source of capital. >> Yep. I've got the numbers on all of >> Yep. I've got the numbers on all of >> Yep. I've got the numbers on all of this. So, the Burbank campus this. So, the Burbank campus this. So, the Burbank campus construction costs alone were $3 construction costs alone were $3 construction costs alone were $3 million. So that's more than the money million. So that's more than the money million. So that's more than the money they had left over from Snow White they had left over from Snow White they had left over from Snow White proceeds after they repaid the Bank of proceeds after they repaid the Bank of proceeds after they repaid the Bank of America debt. But obviously they had all America debt. But obviously they had all America debt. But obviously they had all the, you know, the revenue from the the, you know, the revenue from the the, you know, the revenue from the soundtrack and the consumer products and soundtrack and the consumer products and soundtrack and the consumer products and all the flywheel revenue coming. all the flywheel revenue coming. all the flywheel revenue coming. >> But still, they're they're planning to >> But still, they're they're planning to >> But still, they're they're planning to do Pinocchio. They're planning to do do Pinocchio. They're planning to do do Pinocchio. They're planning to do Fantasia, Fantasia, Fantasia, >> right? So the 3 million is just to build >> right? So the 3 million is just to build >> right? So the 3 million is just to build the facility. Then they got to staff it the facility. Then they got to staff it the facility. Then they got to staff it with 1,200 animators. So that's an extra with 1,200 animators. So that's an extra with 1,200 animators. So that's an extra 450 450 450 new animation staff they need to hire. new animation staff they need to hire. new animation staff they need to hire. And to feed Walt's vision of having And to feed Walt's vision of having And to feed Walt's vision of having multiple films in production at the same multiple films in production at the same multiple films in production at the same time, he greenlights production on time, he greenlights production on time, he greenlights production on Pinocchio, Bambi, and Fantasia all at Pinocchio, Bambi, and Fantasia all at Pinocchio, Bambi, and Fantasia all at the same time. the same time. the same time. >> And all of these were completely >> And all of these were completely >> And all of these were completely different animation styles. Yes. And different animation styles. Yes. And different animation styles. Yes. And completely different from Snow White. If completely different from Snow White. If completely different from Snow White. If you look at these films, we sort of have you look at these films, we sort of have you look at these films, we sort of have this notion today of like, oh, it's the this notion today of like, oh, it's the this notion today of like, oh, it's the Disney style that is not really Disney style that is not really Disney style that is not really reflective in the darkness of Snow White reflective in the darkness of Snow White reflective in the darkness of Snow White in Fantasia's really experimental in Fantasia's really experimental in Fantasia's really experimental artistic vignette style set to classical artistic vignette style set to classical artistic vignette style set to classical music. And Bambi is again another music. And Bambi is again another music. And Bambi is again another completely different take of a very completely different take of a very completely different take of a very naturalist film. These are wildly naturalist film. These are wildly naturalist film. These are wildly different skill sets and bigger and different skill sets and bigger and different skill sets and bigger and bigger investments using completely new bigger investments using completely new bigger investments using completely new techniques. So you're not really just techniques. So you're not really just techniques. So you're not really just like making more snow whites. like making more snow whites. like making more snow whites. >> You're doing like discontinuous unknown >> You're doing like discontinuous unknown >> You're doing like discontinuous unknown high-risisk bets. high-risisk bets. high-risisk bets. >> Walt can't help himself. >> Walt can't help himself. >> Walt can't help himself. >> Yes. So in total between the $3 million >> Yes. So in total between the $3 million >> Yes. So in total between the $3 million for the campus and then these three for the campus and then these three for the campus and then these three movies that they all have in production movies that they all have in production movies that they all have in production which collectively cost about $5 million which collectively cost about $5 million which collectively cost about $5 million in so-called negative costs before they in so-called negative costs before they in so-called negative costs before they get released. So before they earn a get released. So before they earn a get released. So before they earn a dollar of revenue by early 1940 Disney's dollar of revenue by early 1940 Disney's dollar of revenue by early 1940 Disney's yeah in this new campus and set up for yeah in this new campus and set up for yeah in this new campus and set up for this next phase of the company, but this next phase of the company, but this next phase of the company, but they're $8 million in the hole. So, Bank they're $8 million in the hole. So, Bank they're $8 million in the hole. So, Bank of America had loaned them another $4 of America had loaned them another $4 of America had loaned them another $4 and a half million dollars. and a half million dollars. and a half million dollars. >> They just keep going to Bank of America >> They just keep going to Bank of America >> They just keep going to Bank of America over and over again, just reorggaging over and over again, just reorggaging over and over again, just reorggaging the company. the company. the company. >> And then the hope was that Pinocchio, >> And then the hope was that Pinocchio, >> And then the hope was that Pinocchio, the first of the new films to come out, the first of the new films to come out, the first of the new films to come out, would be a hit and earn profits quickly. would be a hit and earn profits quickly. would be a hit and earn profits quickly. Unfortunately, World War II had started Unfortunately, World War II had started Unfortunately, World War II had started in Europe by early 1940 when Pinocchio in Europe by early 1940 when Pinocchio in Europe by early 1940 when Pinocchio gets released. So international box gets released. So international box gets released. So international box office is basically zero and Pinocchio office is basically zero and Pinocchio office is basically zero and Pinocchio ends up losing money like a lot of money ends up losing money like a lot of money ends up losing money like a lot of money over a million dollars in losses on over a million dollars in losses on over a million dollars in losses on Pinocchio alone. Pinocchio alone. Pinocchio alone. >> Yeah. In a scale economy's business if >> Yeah. In a scale economy's business if >> Yeah. In a scale economy's business if you lose out on potential eyeballs and you lose out on potential eyeballs and you lose out on potential eyeballs and potential revenue but your fixed costs potential revenue but your fixed costs potential revenue but your fixed costs stay the same. That's super super bad stay the same. That's super super bad stay the same. That's super super bad news. I mean you you there's no ability news. I mean you you there's no ability news. I mean you you there's no ability to retroactively scale back how to retroactively scale back how to retroactively scale back how ambitious you're being with investing in ambitious you're being with investing in ambitious you're being with investing in a film. you know, you've already spent a film. you know, you've already spent a film. you know, you've already spent all the money to create it and now you all the money to create it and now you all the money to create it and now you find out that you can't distribute it to find out that you can't distribute it to find out that you can't distribute it to half of your audience. half of your audience. half of your audience. >> Yeah. Not good. >> Yeah. Not good. >> Yeah. Not good. >> Yeah. Not to mention the impact on all >> Yeah. Not to mention the impact on all >> Yeah. Not to mention the impact on all the rest of the flywheel businesses. the rest of the flywheel businesses. the rest of the flywheel businesses. Like not a lot of Pinocchio merch Like not a lot of Pinocchio merch Like not a lot of Pinocchio merch getting sold in Europe in summer of getting sold in Europe in summer of getting sold in Europe in summer of 1940. 1940. 1940. >> No. >> No. >> No. >> So after Pinocchio is a flop, Walt and >> So after Pinocchio is a flop, Walt and >> So after Pinocchio is a flop, Walt and Roy decide they basically only have one Roy decide they basically only have one Roy decide they basically only have one recourse at this point because Bank of recourse at this point because Bank of recourse at this point because Bank of America is not going to loan them any America is not going to loan them any America is not going to loan them any more money. They need to sell equity in more money. They need to sell equity in more money. They need to sell equity in the company for the first time. So in the company for the first time. So in the company for the first time. So in April 1940, Disney retains investment April 1940, Disney retains investment April 1940, Disney retains investment bankers and sells 3.875 bankers and sells 3.875 bankers and sells 3.875 million of convertible preferred stock million of convertible preferred stock million of convertible preferred stock with a 6% dividend, which technically is with a 6% dividend, which technically is with a 6% dividend, which technically is Disney's IPO. Is it technically? It Disney's IPO. Is it technically? It Disney's IPO. Is it technically? It doesn't go on a stock exchange. It's doesn't go on a stock exchange. It's doesn't go on a stock exchange. It's just over the counter. It's a public just over the counter. It's a public just over the counter. It's a public offering, I guess, but it's a pretty offering, I guess, but it's a pretty offering, I guess, but it's a pretty small group of the public. small group of the public. small group of the public. >> Exactly. Exactly. It is a non-exchangeed >> Exactly. Exactly. It is a non-exchangeed >> Exactly. Exactly. It is a non-exchangeed public offering, public offering, public offering, >> and it's got this 6% cumulative dividend >> and it's got this 6% cumulative dividend >> and it's got this 6% cumulative dividend attached to it. So, the expectation when attached to it. So, the expectation when attached to it. So, the expectation when you're investing is this company is you're investing is this company is you're investing is this company is going to pay me 6% of my investment back going to pay me 6% of my investment back going to pay me 6% of my investment back every year. Yep. every year. Yep. every year. Yep. >> So, it's it's actually a pretty sweet >> So, it's it's actually a pretty sweet >> So, it's it's actually a pretty sweet deal for the investors. They sell 30% of deal for the investors. They sell 30% of deal for the investors. They sell 30% of the company to do this to raise that. the company to do this to raise that. the company to do this to raise that. It's funny you said 3.875 875. A little It's funny you said 3.875 875. A little It's funny you said 3.875 875. A little bit of that went to the bankers. There bit of that went to the bankers. There bit of that went to the bankers. There was some [laughter] transaction fees. was some [laughter] transaction fees. was some [laughter] transaction fees. So, they only raise about $3.5 million So, they only raise about $3.5 million So, they only raise about $3.5 million directly to their balance sheet, but directly to their balance sheet, but directly to their balance sheet, but they give up 30% of the company to do they give up 30% of the company to do they give up 30% of the company to do that. And it comes with that 6% that. And it comes with that 6% that. And it comes with that 6% cumulative dividend to those cumulative dividend to those cumulative dividend to those shareholders. shareholders. shareholders. >> Wow. So, this means they're flying even >> Wow. So, this means they're flying even >> Wow. So, this means they're flying even closer to the sun than I realize cuz closer to the sun than I realize cuz closer to the sun than I realize cuz they've got the $8 million in sort of they've got the $8 million in sort of they've got the $8 million in sort of investments that they need to fund and investments that they need to fund and investments that they need to fund and they have $4.5 million from Bank of they have $4.5 million from Bank of they have $4.5 million from Bank of America and then if they're only getting America and then if they're only getting America and then if they're only getting three.5 million in proceeds from the three.5 million in proceeds from the three.5 million in proceeds from the IPO, that's exactly $8 million. IPO, that's exactly $8 million. IPO, that's exactly $8 million. >> They are shaving off every piece of >> They are shaving off every piece of >> They are shaving off every piece of their current self and future cash flows their current self and future cash flows their current self and future cash flows to rebet the farm. That is the the way to rebet the farm. That is the the way to rebet the farm. That is the the way to think about this. So that summer in to think about this. So that summer in to think about this. So that summer in 1940, Walt has a rather ominous get 1940, Walt has a rather ominous get 1940, Walt has a rather ominous get together with Henry Ford of the Ford together with Henry Ford of the Ford together with Henry Ford of the Ford Motor Company. Uh just sort of as like a Motor Company. Uh just sort of as like a Motor Company. Uh just sort of as like a friendly meeting of these two American friendly meeting of these two American friendly meeting of these two American business titans. And while they're business titans. And while they're business titans. And while they're together, Walt mentions to Henry about together, Walt mentions to Henry about together, Walt mentions to Henry about uh the IPO that they just did. And uh the IPO that they just did. And uh the IPO that they just did. And reportedly Ford tells him, "Walt, if you reportedly Ford tells him, "Walt, if you reportedly Ford tells him, "Walt, if you sold any of it, you should have sold all sold any of it, you should have sold all sold any of it, you should have sold all of it." [laughter] of it." [laughter] of it." [laughter] Ominous. Ominous. A real board of Ominous. Ominous. A real board of Ominous. Ominous. A real board of directors gets established for the first directors gets established for the first directors gets established for the first time as part of this and the preferred time as part of this and the preferred time as part of this and the preferred get a director on the board. So an get a director on the board. So an get a director on the board. So an outside voice in the company who outside voice in the company who outside voice in the company who certainly is not going to share Walt's certainly is not going to share Walt's certainly is not going to share Walt's vision here. So by the end of the year vision here. So by the end of the year vision here. So by the end of the year in 1940, despite the capital raised from in 1940, despite the capital raised from in 1940, despite the capital raised from the stock offering, Disney's in a cash the stock offering, Disney's in a cash the stock offering, Disney's in a cash crunch. Uh Walt before the IPO had even crunch. Uh Walt before the IPO had even crunch. Uh Walt before the IPO had even set up a kind of like proto employee set up a kind of like proto employee set up a kind of like proto employee ownership system where they set aside ownership system where they set aside ownership system where they set aside 20% of the company's equity and used 20% of the company's equity and used 20% of the company's equity and used that stake's profit distribution to fund that stake's profit distribution to fund that stake's profit distribution to fund an annual employee bonus pool. They have an annual employee bonus pool. They have an annual employee bonus pool. They have to eliminate that like months basically to eliminate that like months basically to eliminate that like months basically after Walt institutes it. And what they after Walt institutes it. And what they after Walt institutes it. And what they end up doing as a result is they raise end up doing as a result is they raise end up doing as a result is they raise salaries of the few top animators in the salaries of the few top animators in the salaries of the few top animators in the firm and then they keep the same or they firm and then they keep the same or they firm and then they keep the same or they lower salaries for everybody else in the lower salaries for everybody else in the lower salaries for everybody else in the Burbank lot. And this causes huge Burbank lot. And this causes huge Burbank lot. And this causes huge resentment and unrest in the animation resentment and unrest in the animation resentment and unrest in the animation workforce. workforce. workforce. >> Yeah. I I mean I bet that's going to >> Yeah. I I mean I bet that's going to >> Yeah. I I mean I bet that's going to make no one happy. But this is the like make no one happy. But this is the like make no one happy. But this is the like literal trade-off. This is we spent a literal trade-off. This is we spent a literal trade-off. This is we spent a bunch of money on Pinocchio. Yep. We bunch of money on Pinocchio. Yep. We bunch of money on Pinocchio. Yep. We didn't have Europe, so we lost a bunch didn't have Europe, so we lost a bunch didn't have Europe, so we lost a bunch of money on that. We still have big of money on that. We still have big of money on that. We still have big ambitions. ambitions. ambitions. And like this is Walt's implicit choice And like this is Walt's implicit choice And like this is Walt's implicit choice here with going out and raising all this here with going out and raising all this here with going out and raising all this debt, raising all this equity, betting debt, raising all this equity, betting debt, raising all this equity, betting the farm again. the farm again. the farm again. >> Yep. This is the downside of Walt's uh >> Yep. This is the downside of Walt's uh >> Yep. This is the downside of Walt's uh always go for broke and shoot the works always go for broke and shoot the works always go for broke and shoot the works philosophy. philosophy. philosophy. >> Yep. >> Yep. >> Yep. >> And it leads probably to the darkest >> And it leads probably to the darkest >> And it leads probably to the darkest moment of Walt's life moment of Walt's life moment of Walt's life >> that would change his relationship with >> that would change his relationship with >> that would change his relationship with the company forever. forever and the company forever. forever and the company forever. forever and irreparably irreparably irreparably his relationship with Disney animation. his relationship with Disney animation. his relationship with Disney animation. The strike. So on May 29th, 1941, the The strike. So on May 29th, 1941, the The strike. So on May 29th, 1941, the Screen Cartoonist Guild, which is a Screen Cartoonist Guild, which is a Screen Cartoonist Guild, which is a union that had unionized every other union that had unionized every other union that had unionized every other major animation studio in Hollywood and major animation studio in Hollywood and major animation studio in Hollywood and New York over the couple years leading New York over the couple years leading New York over the couple years leading up to this, up to this, up to this, >> which there were several of at this >> which there were several of at this >> which there were several of at this point in time. We've been sort of very point in time. We've been sort of very point in time. We've been sort of very Disneycentric, but there is an industry Disneycentric, but there is an industry Disneycentric, but there is an industry around this. around this. around this. >> Yep. decides finally to target Disney >> Yep. decides finally to target Disney >> Yep. decides finally to target Disney employees. Now, there's a reason why the employees. Now, there's a reason why the employees. Now, there's a reason why the Screen Cartoonist Guild had stayed away Screen Cartoonist Guild had stayed away Screen Cartoonist Guild had stayed away from Disney despite it obviously being from Disney despite it obviously being from Disney despite it obviously being the leader in animation up until this the leader in animation up until this the leader in animation up until this point, which is I think Walt's utopian point, which is I think Walt's utopian point, which is I think Walt's utopian dream more or less was true or at least dream more or less was true or at least dream more or less was true or at least true enough. Like, he established the true enough. Like, he established the true enough. Like, he established the bonus pool for animation. He constructed bonus pool for animation. He constructed bonus pool for animation. He constructed this campus. everything you were talking this campus. everything you were talking this campus. everything you were talking about earlier, Ben, but here with the about earlier, Ben, but here with the about earlier, Ben, but here with the cash crunch, that all comes crashing cash crunch, that all comes crashing cash crunch, that all comes crashing down. down. down. >> Yeah. There's a great excerpt from the >> Yeah. There's a great excerpt from the >> Yeah. There's a great excerpt from the book The Animated Man by Michael book The Animated Man by Michael book The Animated Man by Michael Barrier. In the spring of 1941, under Barrier. In the spring of 1941, under Barrier. In the spring of 1941, under pressure from the Bank of America and pressure from the Bank of America and pressure from the Bank of America and holders of preferred stock, Walt Disney holders of preferred stock, Walt Disney holders of preferred stock, Walt Disney Productions agreed to scale back its Productions agreed to scale back its Productions agreed to scale back its production cost to about $15,000 a week. production cost to about $15,000 a week. production cost to about $15,000 a week. According to Walt Disney himself, that According to Walt Disney himself, that According to Walt Disney himself, that meant he had to hold the negative cost meant he had to hold the negative cost meant he had to hold the negative cost of new features to about $700,000 or of new features to about $700,000 or of new features to about $700,000 or onethird the cost of Pinocchio or onethird the cost of Pinocchio or onethird the cost of Pinocchio or Fantasia, which was also in development Fantasia, which was also in development Fantasia, which was also in development at the time. Since labor costs made up at the time. Since labor costs made up at the time. Since labor costs made up 85 to 90% of Disney's total costs, 85 to 90% of Disney's total costs, 85 to 90% of Disney's total costs, implementing such severe economies would implementing such severe economies would implementing such severe economies would mean laying off more than half the mean laying off more than half the mean laying off more than half the staff. staff. staff. >> O, so you've got cost reduction in some >> O, so you've got cost reduction in some >> O, so you've got cost reduction in some of the people sticking around. And of the people sticking around. And of the people sticking around. And you've got big layoffs because Pinocchio you've got big layoffs because Pinocchio you've got big layoffs because Pinocchio didn't pay back. didn't pay back. didn't pay back. >> Yeah. Well, layoffs coming. they haven't >> Yeah. Well, layoffs coming. they haven't >> Yeah. Well, layoffs coming. they haven't happened yet and this is part of why the happened yet and this is part of why the happened yet and this is part of why the organization and the strike happens. So organization and the strike happens. So organization and the strike happens. So hundreds of employees end up striking. hundreds of employees end up striking. hundreds of employees end up striking. They pick it the Burbank campus. They They pick it the Burbank campus. They They pick it the Burbank campus. They march all day. They carry signs with march all day. They carry signs with march all day. They carry signs with slogans like Snow White and the 700 slogans like Snow White and the 700 slogans like Snow White and the 700 dwarves or uh what is a drawing of dwarves or uh what is a drawing of dwarves or uh what is a drawing of Pinocchio with the caption no strings on Pinocchio with the caption no strings on Pinocchio with the caption no strings on me. The strike lasts for three and a me. The strike lasts for three and a me. The strike lasts for three and a half months and it's a completely half months and it's a completely half months and it's a completely shattering event for Walt personally and shattering event for Walt personally and shattering event for Walt personally and for the company. As the union is for the company. As the union is for the company. As the union is organizing the employee base in the days organizing the employee base in the days organizing the employee base in the days and weeks leading up to the strike, Walt and weeks leading up to the strike, Walt and weeks leading up to the strike, Walt decides that he's going to make a speech decides that he's going to make a speech decides that he's going to make a speech and address the entire company, which he and address the entire company, which he and address the entire company, which he thinks, well, he will explain his thinks, well, he will explain his thinks, well, he will explain his position and the challenging state that position and the challenging state that position and the challenging state that the company's in and it will resolve the company's in and it will resolve the company's in and it will resolve everything and the employees will rally everything and the employees will rally everything and the employees will rally around him and the company. around him and the company. around him and the company. Unfortunately, it has the opposite Unfortunately, it has the opposite Unfortunately, it has the opposite effect. It is a complete disaster. He effect. It is a complete disaster. He effect. It is a complete disaster. He lectures the entire company for nearly 3 lectures the entire company for nearly 3 lectures the entire company for nearly 3 hours. Some of his lines from the hours. Some of his lines from the hours. Some of his lines from the speech, which he had written out ahead speech, which he had written out ahead speech, which he had written out ahead of time, so it's preserved, are, "My of time, so it's preserved, are, "My of time, so it's preserved, are, "My first recommendation to the lot of you first recommendation to the lot of you first recommendation to the lot of you is this. Put your own house in order. is this. Put your own house in order. is this. Put your own house in order. You can't accomplish a damn thing by You can't accomplish a damn thing by You can't accomplish a damn thing by sitting around and waiting to be told sitting around and waiting to be told sitting around and waiting to be told everything. If you're not progressing as everything. If you're not progressing as everything. If you're not progressing as you should, instead of grumbling and you should, instead of grumbling and you should, instead of grumbling and growling, do something about it." And growling, do something about it." And growling, do something about it." And then don't forget this. It's the law of then don't forget this. It's the law of then don't forget this. It's the law of the universe that the strong shall the universe that the strong shall the universe that the strong shall survive and the weak must fall by the survive and the weak must fall by the survive and the weak must fall by the way. And I don't give a damn what way. And I don't give a damn what way. And I don't give a damn what idealistic plan is cooked up. Nothing idealistic plan is cooked up. Nothing idealistic plan is cooked up. Nothing can change that. can change that. can change that. Probably not what you want to tell your Probably not what you want to tell your Probably not what you want to tell your employee base after you just slash their employee base after you just slash their employee base after you just slash their salaries. Yeah. Yeah. A labor magazine salaries. Yeah. Yeah. A labor magazine salaries. Yeah. Yeah. A labor magazine would write afterwards, "Walt Disney's would write afterwards, "Walt Disney's would write afterwards, "Walt Disney's speech recruited more members for the speech recruited more members for the speech recruited more members for the Screen Cartoonist Guild than a year of Screen Cartoonist Guild than a year of Screen Cartoonist Guild than a year of campaigning. campaigning. campaigning. >> [sighs and gasps] >> [sighs and gasps] >> [sighs and gasps] >> Yeah, about the worst reaction that you >> Yeah, about the worst reaction that you >> Yeah, about the worst reaction that you could possibly have. And Walt, I don't could possibly have. And Walt, I don't could possibly have. And Walt, I don't know if you found this in your research, know if you found this in your research, know if you found this in your research, but it seems like he's kind of deluded but it seems like he's kind of deluded but it seems like he's kind of deluded here into thinking, well, it's not here into thinking, well, it's not here into thinking, well, it's not actually my employees that are doing actually my employees that are doing actually my employees that are doing this. It's these communist, very few this. It's these communist, very few this. It's these communist, very few communist agitators who have undercover communist agitators who have undercover communist agitators who have undercover become my employees and they're riing up become my employees and they're riing up become my employees and they're riing up the rest of them. and Walt's like kind the rest of them. and Walt's like kind the rest of them. and Walt's like kind of removed himself and he's in denial of removed himself and he's in denial of removed himself and he's in denial that this is actually what his workforce that this is actually what his workforce that this is actually what his workforce wants. The the the family atmosphere wants. The the the family atmosphere wants. The the the family atmosphere that we had at Hyperion is now a like that we had at Hyperion is now a like that we had at Hyperion is now a like real corporate, you know, have and have real corporate, you know, have and have real corporate, you know, have and have knots here on Burbank campus. knots here on Burbank campus. knots here on Burbank campus. >> Yeah. >> Yeah. >> Yeah. >> Yeah. Yeah. It's a mess. And then it >> Yeah. Yeah. It's a mess. And then it >> Yeah. Yeah. It's a mess. And then it gets worse. So in the middle of the gets worse. So in the middle of the gets worse. So in the middle of the strike, which again lasts for three and strike, which again lasts for three and strike, which again lasts for three and a half months, that hundreds of a half months, that hundreds of a half months, that hundreds of employees are gone from their jobs that employees are gone from their jobs that employees are gone from their jobs that are not working and marching and are not working and marching and are not working and marching and protesting outside the company protesting outside the company protesting outside the company >> while they're trying to make Bambi, >> while they're trying to make Bambi, >> while they're trying to make Bambi, which is equally ambitious, which is equally ambitious, which is equally ambitious, >> right? Walt is just so depressed and in >> right? Walt is just so depressed and in >> right? Walt is just so depressed and in denial and upset about the whole thing denial and upset about the whole thing denial and upset about the whole thing that in August of 1941, he agrees to go that in August of 1941, he agrees to go that in August of 1941, he agrees to go on a goodwill trip to Latin America with on a goodwill trip to Latin America with on a goodwill trip to Latin America with Nelson Rockefeller's office of the Nelson Rockefeller's office of the Nelson Rockefeller's office of the coordinator of interamerican affairs. coordinator of interamerican affairs. coordinator of interamerican affairs. This is the trip that ultimately results This is the trip that ultimately results This is the trip that ultimately results in the Disney films Saludos amigos and in the Disney films Saludos amigos and in the Disney films Saludos amigos and the three cabayeros. If you've seen the three cabayeros. If you've seen the three cabayeros. If you've seen those or been to the three cabarios ride those or been to the three cabarios ride those or been to the three cabarios ride in Disney World in Epcot, it's actually in Disney World in Epcot, it's actually in Disney World in Epcot, it's actually great. great. great. >> It also results in Roy having to resolve >> It also results in Roy having to resolve >> It also results in Roy having to resolve the strike because Walt is uninterested the strike because Walt is uninterested the strike because Walt is uninterested in dealing with it. in dealing with it. in dealing with it. >> Yeah. The real reason Walt goes on this >> Yeah. The real reason Walt goes on this >> Yeah. The real reason Walt goes on this trip and he would write about he would trip and he would write about he would trip and he would write about he would call it a quote godsend and say that it call it a quote godsend and say that it call it a quote godsend and say that it gives him a chance to get away from this gives him a chance to get away from this gives him a chance to get away from this god-awful nightmare in Burbank. god-awful nightmare in Burbank. god-awful nightmare in Burbank. Yeah. He basically just leaves the Yeah. He basically just leaves the Yeah. He basically just leaves the country and walks out on the whole thing country and walks out on the whole thing country and walks out on the whole thing and tells Roy to settle it. I'm leaving and tells Roy to settle it. I'm leaving and tells Roy to settle it. I'm leaving for 10 weeks. Do your best. for 10 weeks. Do your best. for 10 weeks. Do your best. >> Yep. So, while Walt is gone in Latin >> Yep. So, while Walt is gone in Latin >> Yep. So, while Walt is gone in Latin America, Roy does settle the strike America, Roy does settle the strike America, Roy does settle the strike after federal mediation. Disney ends up after federal mediation. Disney ends up after federal mediation. Disney ends up recognizing the Screen Cartoonist Guild recognizing the Screen Cartoonist Guild recognizing the Screen Cartoonist Guild union. They raise salaries for the union. They raise salaries for the union. They raise salaries for the remaining employees and they agree to a remaining employees and they agree to a remaining employees and they agree to a negotiated layoff of over 500 negotiated layoff of over 500 negotiated layoff of over 500 employees. So, taking total headcount employees. So, taking total headcount employees. So, taking total headcount before the strike down from 1,200 to before the strike down from 1,200 to before the strike down from 1,200 to under 700. These are the layoffs, Ben, under 700. These are the layoffs, Ben, under 700. These are the layoffs, Ben, that you referred to. that you referred to. that you referred to. >> The studio would never fully recover >> The studio would never fully recover >> The studio would never fully recover from this. Certainly not under Walt and from this. Certainly not under Walt and from this. Certainly not under Walt and not for many, many years afterwards. not for many, many years afterwards. not for many, many years afterwards. Really, not at all in the period of Really, not at all in the period of Really, not at all in the period of classical animation before computer classical animation before computer classical animation before computer animation comes along. And sort of animation comes along. And sort of animation comes along. And sort of equally as importantly, Walt would never equally as importantly, Walt would never equally as importantly, Walt would never recover from this as it pertains to his recover from this as it pertains to his recover from this as it pertains to his relationship with the company Walt relationship with the company Walt relationship with the company Walt Disney Productions. Yes. Disney Productions. Yes. Disney Productions. Yes. >> It no longer feels like his family. It >> It no longer feels like his family. It >> It no longer feels like his family. It feels like a creation he's made that has feels like a creation he's made that has feels like a creation he's made that has sort of run away from his control. sort of run away from his control. sort of run away from his control. >> Yep. He ultimately does decide that the >> Yep. He ultimately does decide that the >> Yep. He ultimately does decide that the company Disney and he Walt Disney have a company Disney and he Walt Disney have a company Disney and he Walt Disney have a creative and business future. But yeah, creative and business future. But yeah, creative and business future. But yeah, he never has the same relationship to he never has the same relationship to he never has the same relationship to the studio or animation after this. the studio or animation after this. the studio or animation after this. >> Yep. He apparently according to Don >> Yep. He apparently according to Don >> Yep. He apparently according to Don Lusk, who was an animator there, made a Lusk, who was an animator there, made a Lusk, who was an animator there, made a list of everyone who went out on strike list of everyone who went out on strike list of everyone who went out on strike and said that uh everyone on this list and said that uh everyone on this list and said that uh everyone on this list isn't true to Disney and one day will isn't true to Disney and one day will isn't true to Disney and one day will not be here. not be here. not be here. >> Yeah. So Ben, you mentioned uh Walt's >> Yeah. So Ben, you mentioned uh Walt's >> Yeah. So Ben, you mentioned uh Walt's sort of anti-communist streak that comes sort of anti-communist streak that comes sort of anti-communist streak that comes out of this. Yeah. For the rest of his out of this. Yeah. For the rest of his out of this. Yeah. For the rest of his life, he would blame all of this on life, he would blame all of this on life, he would blame all of this on communist influences in Hollywood. He communist influences in Hollywood. He communist influences in Hollywood. He would actually testify after World War would actually testify after World War would actually testify after World War II in front of the House on American II in front of the House on American II in front of the House on American Activities Committee, you know, Huak as Activities Committee, you know, Huak as Activities Committee, you know, Huak as a friendly witness corroborating a friendly witness corroborating a friendly witness corroborating communist infiltration in Hollywood. He communist infiltration in Hollywood. He communist infiltration in Hollywood. He named names of people who he said were named names of people who he said were named names of people who he said were communists based on things he had heard communists based on things he had heard communists based on things he had heard about them like no even proof. And about them like no even proof. And about them like no even proof. And you've got like a major figurehead of a you've got like a major figurehead of a you've got like a major figurehead of a big US corporation testifying. There's big US corporation testifying. There's big US corporation testifying. There's all this video of it of him saying I all this video of it of him saying I all this video of it of him saying I believe so and so is a communist. believe so and so is a communist. believe so and so is a communist. >> Yeah. And of course this would lead to >> Yeah. And of course this would lead to >> Yeah. And of course this would lead to the famous Hollywood blacklist and you the famous Hollywood blacklist and you the famous Hollywood blacklist and you know all the terrible stuff that comes know all the terrible stuff that comes know all the terrible stuff that comes out of that. One thing later sort of by out of that. One thing later sort of by out of that. One thing later sort of by association with this uh people would association with this uh people would association with this uh people would accuse Walt of being anti-Semitic since accuse Walt of being anti-Semitic since accuse Walt of being anti-Semitic since much of the communist movement in in the much of the communist movement in in the much of the communist movement in in the US and especially in Hollywood was in US and especially in Hollywood was in US and especially in Hollywood was in the Jewish community. Gabler the Jewish community. Gabler the Jewish community. Gabler investigates this pretty thoroughly in investigates this pretty thoroughly in investigates this pretty thoroughly in his book and concludes that there's not his book and concludes that there's not his book and concludes that there's not any evidence that Wald ever really was any evidence that Wald ever really was any evidence that Wald ever really was anti-Semitic. I turned over every stone anti-Semitic. I turned over every stone anti-Semitic. I turned over every stone I possibly could on this company and we I possibly could on this company and we I possibly could on this company and we spent I don't know the better part of spent I don't know the better part of spent I don't know the better part of the year so far researching this and I the year so far researching this and I the year so far researching this and I found zero evidence of that. found zero evidence of that. found zero evidence of that. >> Yeah, same definitely anti-communist for >> Yeah, same definitely anti-communist for >> Yeah, same definitely anti-communist for sure. Uh yep, sure. Uh yep, sure. Uh yep, >> but um anyway, so [sighs] speaking of >> but um anyway, so [sighs] speaking of >> but um anyway, so [sighs] speaking of the [snorts] war, the [snorts] war, the [snorts] war, >> by the way, this is like four giant >> by the way, this is like four giant >> by the way, this is like four giant blows to the company in a row. You've blows to the company in a row. You've blows to the company in a row. You've got Europe dropping even before the US got Europe dropping even before the US got Europe dropping even before the US enters the war. You've got the the enters the war. You've got the the enters the war. You've got the the European distribution falling off. European distribution falling off. European distribution falling off. There's a thing we didn't talk about There's a thing we didn't talk about There's a thing we didn't talk about which was Fantasia tried to make this which was Fantasia tried to make this which was Fantasia tried to make this giant bet in a new type of sound for giant bet in a new type of sound for giant bet in a new type of sound for movies called Santa sound. movies called Santa sound. movies called Santa sound. >> This alone almost killed the company. >> This alone almost killed the company. >> This alone almost killed the company. The budget for Fantasia was 50% bigger The budget for Fantasia was 50% bigger The budget for Fantasia was 50% bigger than Snow White. than Snow White. than Snow White. >> And in the first run at the box office, >> And in the first run at the box office, >> And in the first run at the box office, they tried to use Fanta Sound, this new they tried to use Fanta Sound, this new they tried to use Fanta Sound, this new sound technology they had invented, and sound technology they had invented, and sound technology they had invented, and distributors didn't pick it up to do distributors didn't pick it up to do distributors didn't pick it up to do like a real first run. And so out of the like a real first run. And so out of the like a real first run. And so out of the $2.3 million budget in that first year $2.3 million budget in that first year $2.3 million budget in that first year it came out in 1941 they recouped it came out in 1941 they recouped it came out in 1941 they recouped 325,000. 325,000. 325,000. >> Wow. That is a giant loss on Fantasia. I >> Wow. That is a giant loss on Fantasia. I >> Wow. That is a giant loss on Fantasia. I think Disney was also funding the think Disney was also funding the think Disney was also funding the development and and distribution of development and and distribution of development and and distribution of Fantasound. So you've got those two then Fantasound. So you've got those two then Fantasound. So you've got those two then the strike. Now the US enters the war. the strike. Now the US enters the war. the strike. Now the US enters the war. >> Yeah. One more note on Fantasia though. >> Yeah. One more note on Fantasia though. >> Yeah. One more note on Fantasia though. Uh before we talk about the impact of Uh before we talk about the impact of Uh before we talk about the impact of the US entering the war, do you know the US entering the war, do you know the US entering the war, do you know what ultimately ended up happening with what ultimately ended up happening with what ultimately ended up happening with Fantasia? Fantasia? Fantasia? >> They made Fantasia 2000, 60 years later? >> They made Fantasia 2000, 60 years later? >> They made Fantasia 2000, 60 years later? No. [laughter] No. [laughter] No. [laughter] >> Yes, that is true, but that is not what >> Yes, that is true, but that is not what >> Yes, that is true, but that is not what I was getting at. So yeah, the initial I was getting at. So yeah, the initial I was getting at. So yeah, the initial release of Fantasia, as you said, was a release of Fantasia, as you said, was a release of Fantasia, as you said, was a total flop. They couldn't exhibit it total flop. They couldn't exhibit it total flop. They couldn't exhibit it anywhere, lost tons and tons of money. anywhere, lost tons and tons of money. anywhere, lost tons and tons of money. Later, it has this huge resurgence. I Later, it has this huge resurgence. I Later, it has this huge resurgence. I mean, I remember when I was growing up mean, I remember when I was growing up mean, I remember when I was growing up as a kid, my parents loved Fantasia. as a kid, my parents loved Fantasia. as a kid, my parents loved Fantasia. >> Yeah. I actually thought Fantasia was a >> Yeah. I actually thought Fantasia was a >> Yeah. I actually thought Fantasia was a modern movie. It's crazy to me that it modern movie. It's crazy to me that it modern movie. It's crazy to me that it was Disney's second. was Disney's second. was Disney's second. >> Right. Right. Right. I think it was like >> Right. Right. Right. I think it was like >> Right. Right. Right. I think it was like the 60s and the hippies that thought the 60s and the hippies that thought the 60s and the hippies that thought like, "Oh, this is like the coolest like, "Oh, this is like the coolest like, "Oh, this is like the coolest [laughter] thing." So, Fantasia, if you [laughter] thing." So, Fantasia, if you [laughter] thing." So, Fantasia, if you look today at the list of look today at the list of look today at the list of inflationadjusted inflationadjusted inflationadjusted top films in history by box office top films in history by box office top films in history by box office gross, inflation adjusted, Fantasia is gross, inflation adjusted, Fantasia is gross, inflation adjusted, Fantasia is the 24th highest grossing film in the 24th highest grossing film in the 24th highest grossing film in Hollywood history. [laughter] >> Unbelievable. >> Unbelievable. >> So, it has all >> So, it has all >> So, it has all >> and kind of timeless. >> and kind of timeless. >> and kind of timeless. >> Totally. It's an amazing amazing >> Totally. It's an amazing amazing >> Totally. It's an amazing amazing production. I mean, the music, the production. I mean, the music, the production. I mean, the music, the symphonies, the sound, it's go watch symphonies, the sound, it's go watch symphonies, the sound, it's go watch Fantasia if you've never seen it. It is Fantasia if you've never seen it. It is Fantasia if you've never seen it. It is [laughter] well worth your time. [laughter] well worth your time. [laughter] well worth your time. >> And now a hard cut over to World War II, >> And now a hard cut over to World War II, >> And now a hard cut over to World War II, right? right? right? Okay, so back to 1941. Okay, so back to 1941. Okay, so back to 1941. No sooner does Roy settle the strike No sooner does Roy settle the strike No sooner does Roy settle the strike than Pearl Harbor happens and the US now than Pearl Harbor happens and the US now than Pearl Harbor happens and the US now enters World War II. And unlike many of enters World War II. And unlike many of enters World War II. And unlike many of the other great American companies of the other great American companies of the other great American companies of that era that we've covered on this show that era that we've covered on this show that era that we've covered on this show before where World War II was great for before where World War II was great for before where World War II was great for their business like Coca-Cola or Mars or their business like Coca-Cola or Mars or their business like Coca-Cola or Mars or Lockheed, Lockheed, Lockheed, World War II is a disaster for Disney. World War II is a disaster for Disney. World War II is a disaster for Disney. Nothing of value gets built for Disney Nothing of value gets built for Disney Nothing of value gets built for Disney during the war. It basically breaks during the war. It basically breaks during the war. It basically breaks every single node in the flywheel. And every single node in the flywheel. And every single node in the flywheel. And on top of the strike, it just completely on top of the strike, it just completely on top of the strike, it just completely grinds to a halt. All new core IP grinds to a halt. All new core IP grinds to a halt. All new core IP production for the studio. production for the studio. production for the studio. >> Yeah. So, the first thing that happens >> Yeah. So, the first thing that happens >> Yeah. So, the first thing that happens is within hours and then days of Pearl is within hours and then days of Pearl is within hours and then days of Pearl Harbor getting bombed, the US military Harbor getting bombed, the US military Harbor getting bombed, the US military moves into the studio. They look at moves into the studio. They look at moves into the studio. They look at Burbank and they think, "This is a great Burbank and they think, "This is a great Burbank and they think, "This is a great asset." And so hundreds of troops, there asset." And so hundreds of troops, there asset." And so hundreds of troops, there are two reasons that set up shop using are two reasons that set up shop using are two reasons that set up shop using the sound stages to work on all the the sound stages to work on all the the sound stages to work on all the optical systems for anti-aircraft. Sound optical systems for anti-aircraft. Sound optical systems for anti-aircraft. Sound systems are awesome. There's no windows. systems are awesome. There's no windows. systems are awesome. There's no windows. It's a giant room. I mean, like it's It's a giant room. I mean, like it's It's a giant room. I mean, like it's it's the the thing you would want for it's the the thing you would want for it's the the thing you would want for stuff like this. The second reason that stuff like this. The second reason that stuff like this. The second reason that I suspect you're hinting at, David, is I suspect you're hinting at, David, is I suspect you're hinting at, David, is it is real close to Lockheed. it is real close to Lockheed. it is real close to Lockheed. >> Yes. real close specifically to Lockheed >> Yes. real close specifically to Lockheed >> Yes. real close specifically to Lockheed Skunkworks department Skunkworks department Skunkworks department >> which is in Burbank. The secret Lockheed >> which is in Burbank. The secret Lockheed >> which is in Burbank. The secret Lockheed Skunk Works Skunk Works Skunk Works >> airplane hangers and and department was >> airplane hangers and and department was >> airplane hangers and and department was in Burbank because Burbank was the in Burbank because Burbank was the in Burbank because Burbank was the sticks back then and Disney is right sticks back then and Disney is right sticks back then and Disney is right next door. So that's probably the bigger next door. So that's probably the bigger next door. So that's probably the bigger reason why the military requisitions the reason why the military requisitions the reason why the military requisitions the Disney lot is to protect Skunk Works. Disney lot is to protect Skunk Works. Disney lot is to protect Skunk Works. >> Fascinating. Yeah. >> Fascinating. Yeah. >> Fascinating. Yeah. >> So you've got that happening. You've got >> So you've got that happening. You've got >> So you've got that happening. You've got a whole bunch of the animators getting a whole bunch of the animators getting a whole bunch of the animators getting drafted. drafted. drafted. >> Yep. >> Yep. >> Yep. >> I mean, so you're you're you're down >> I mean, so you're you're you're down >> I mean, so you're you're you're down manpower. You're just coming out of the manpower. You're just coming out of the manpower. You're just coming out of the strike. You have these huge failures in strike. You have these huge failures in strike. You have these huge failures in Pinocchio, Fantasia. And also Bambi. Pinocchio, Fantasia. And also Bambi. Pinocchio, Fantasia. And also Bambi. Again, you've lost European Again, you've lost European Again, you've lost European distribution. distribution. distribution. >> Yep. >> Yep. >> Yep. >> And so the appetite for >> And so the appetite for >> And so the appetite for making more things like those three making more things like those three making more things like those three movies drops to like zero. I mean, at movies drops to like zero. I mean, at movies drops to like zero. I mean, at this point, there's a financial reality this point, there's a financial reality this point, there's a financial reality that Disney owes a dividend to these uh that Disney owes a dividend to these uh that Disney owes a dividend to these uh shareholders, which interestingly shareholders, which interestingly shareholders, which interestingly enough, it actually suspended in 1942. enough, it actually suspended in 1942. enough, it actually suspended in 1942. They actually didn't pay out the They actually didn't pay out the They actually didn't pay out the dividend, but they do have to pay Bank dividend, but they do have to pay Bank dividend, but they do have to pay Bank of America. The films aren't going to be of America. The films aren't going to be of America. The films aren't going to be the thing doing it. And conveniently, the thing doing it. And conveniently, the thing doing it. And conveniently, they've got the US government saying, they've got the US government saying, they've got the US government saying, "Can you help us with some propaganda "Can you help us with some propaganda "Can you help us with some propaganda films? Can you help us encourage people films? Can you help us encourage people films? Can you help us encourage people to pay their taxes and buy war bonds and to pay their taxes and buy war bonds and to pay their taxes and buy war bonds and support the troops?" And so Disney kind support the troops?" And so Disney kind support the troops?" And so Disney kind of looks at everything, how it's all of looks at everything, how it's all of looks at everything, how it's all playing out, and says, "Yeah, that's playing out, and says, "Yeah, that's playing out, and says, "Yeah, that's what we're going to be doing for the what we're going to be doing for the what we're going to be doing for the war." war." war." >> So all of the studio production work >> So all of the studio production work >> So all of the studio production work during the US's time as an active during the US's time as an active during the US's time as an active participant in World War II. Yeah. participant in World War II. Yeah. participant in World War II. Yeah. Basically just gets repurposed to Basically just gets repurposed to Basically just gets repurposed to propaganda and training materials for propaganda and training materials for propaganda and training materials for the government. the government. the government. >> And insanely they do use Disney IP. like >> And insanely they do use Disney IP. like >> And insanely they do use Disney IP. like you see all these crazy old posters with you see all these crazy old posters with you see all these crazy old posters with like you know Donald Duck holding a gun like you know Donald Duck holding a gun like you know Donald Duck holding a gun and I mean the stuff you sort of would and I mean the stuff you sort of would and I mean the stuff you sort of would never see with these characters today never see with these characters today never see with these characters today but not only did Disney say we're work but not only did Disney say we're work but not only did Disney say we're work for hire they said we can use the Disney for hire they said we can use the Disney for hire they said we can use the Disney IP but interestingly David do you know IP but interestingly David do you know IP but interestingly David do you know about Mickey Mouse's role about Mickey Mouse's role about Mickey Mouse's role >> no >> no >> no >> they really did not employ Mickey Mouse >> they really did not employ Mickey Mouse >> they really did not employ Mickey Mouse >> they protected Mickey Mouse from the war >> they protected Mickey Mouse from the war >> they protected Mickey Mouse from the war image and Donald Duck sort of led the image and Donald Duck sort of led the image and Donald Duck sort of led the charge. charge. charge. >> Interesting. >> Interesting. >> Interesting. >> On all the the the war films. >> On all the the the war films. >> On all the the the war films. >> Well, part of this was because uh >> Well, part of this was because uh >> Well, part of this was because uh canonically Donald Duck is a sailor, canonically Donald Duck is a sailor, canonically Donald Duck is a sailor, right? right? right? >> Oh, okay. That makes sense. >> Oh, okay. That makes sense. >> Oh, okay. That makes sense. >> Yeah. Yeah. But then it makes sense to >> Yeah. Yeah. But then it makes sense to >> Yeah. Yeah. But then it makes sense to protect Mickey, too. protect Mickey, too. protect Mickey, too. >> And Donald's also the more like fighter >> And Donald's also the more like fighter >> And Donald's also the more like fighter of a [laughter] character. of a [laughter] character. of a [laughter] character. >> Yeah. Mickey started off as this >> Yeah. Mickey started off as this >> Yeah. Mickey started off as this troublemaker, but then kind of became troublemaker, but then kind of became troublemaker, but then kind of became the like nice protagonist. the like nice protagonist. the like nice protagonist. >> Yeah. The goody two shoes. And then >> Yeah. The goody two shoes. And then >> Yeah. The goody two shoes. And then Donald was the foil. Donald was the foil. Donald was the foil. >> Yeah. >> Yeah. >> Yeah. >> Yeah. So all of this though to our point >> Yeah. So all of this though to our point >> Yeah. So all of this though to our point earlier does nothing either for the earlier does nothing either for the earlier does nothing either for the flywheel model or for generating new IP flywheel model or for generating new IP flywheel model or for generating new IP to feed it to feed it to feed it >> or pushing the envelope of technology or >> or pushing the envelope of technology or >> or pushing the envelope of technology or pushing the bounds of creativity like pushing the bounds of creativity like pushing the bounds of creativity like all the things that contribute to all the things that contribute to all the things that contribute to Disney's core that they they are Disney's core that they they are Disney's core that they they are financially floated though by the war. I financially floated though by the war. I financially floated though by the war. I mean the way that they make it through mean the way that they make it through mean the way that they make it through this period is they actually are this period is they actually are this period is they actually are generating net income reliably not a lot generating net income reliably not a lot generating net income reliably not a lot but but but >> from the government work. >> from the government work. >> from the government work. >> Exactly. And there's one other big >> Exactly. And there's one other big >> Exactly. And there's one other big innovation, an actual bright spot that innovation, an actual bright spot that innovation, an actual bright spot that comes out of this back against the wall comes out of this back against the wall comes out of this back against the wall moment during the war that the company's moment during the war that the company's moment during the war that the company's in financially. Do you know what that in financially. Do you know what that in financially. Do you know what that is? is? is? >> Ooh. >> Ooh. >> Ooh. Uh oh. The Disney vault. Uh oh. The Disney vault. Uh oh. The Disney vault. >> The vaults. Yes. >> The vaults. Yes. >> The vaults. Yes. >> Yes. So in 1944, the company is so >> Yes. So in 1944, the company is so >> Yes. So in 1944, the company is so cashstrapped that they come up with the cashstrapped that they come up with the cashstrapped that they come up with the again at the time crazy seeming idea to again at the time crazy seeming idea to again at the time crazy seeming idea to re-release Snow White in theaters re-release Snow White in theaters re-release Snow White in theaters because hey, we can't make new stuff, because hey, we can't make new stuff, because hey, we can't make new stuff, but people sure like that old movie. but people sure like that old movie. but people sure like that old movie. Let's just put it in theaters and see Let's just put it in theaters and see Let's just put it in theaters and see what happens. what happens. what happens. >> And the thing you got to remember is >> And the thing you got to remember is >> And the thing you got to remember is with no home video and no TV, no one had with no home video and no TV, no one had with no home video and no TV, no one had seen Snow White in seven years. seen Snow White in seven years. seen Snow White in seven years. >> Exactly. It truly vanished off the face >> Exactly. It truly vanished off the face >> Exactly. It truly vanished off the face of the earth except for the copies of of the earth except for the copies of of the earth except for the copies of the film that were held in the Disney the film that were held in the Disney the film that were held in the Disney vault. vault. vault. >> In the Disney vault. Yes. So in 1944 >> In the Disney vault. Yes. So in 1944 >> In the Disney vault. Yes. So in 1944 they re-release Snow White in theaters they re-release Snow White in theaters they re-release Snow White in theaters and it brings in $3 million and it brings in $3 million and it brings in $3 million in revenue to Disney on just a like a in revenue to Disney on just a like a in revenue to Disney on just a like a few hundred,000 in cost. They basically few hundred,000 in cost. They basically few hundred,000 in cost. They basically just got to print a few new copies of just got to print a few new copies of just got to print a few new copies of the film and then distributed it out to the film and then distributed it out to the film and then distributed it out to theaters. theaters. theaters. >> Right. The theaters get their normal >> Right. The theaters get their normal >> Right. The theaters get their normal cut, the distributor gets their normal cut, the distributor gets their normal cut, the distributor gets their normal cut, but Disney's cost to develop the cut, but Disney's cost to develop the cut, but Disney's cost to develop the film is like zero. film is like zero. film is like zero. >> Yeah, they've already developed it. It's >> Yeah, they've already developed it. It's >> Yeah, they've already developed it. It's already done. This is an enormous boost already done. This is an enormous boost already done. This is an enormous boost for the company. And Ben, to your point for the company. And Ben, to your point for the company. And Ben, to your point about the 7-year gap since the initial about the 7-year gap since the initial about the 7-year gap since the initial release, it turns out conveniently that release, it turns out conveniently that release, it turns out conveniently that 7 years is just about the right amount 7 years is just about the right amount 7 years is just about the right amount of time for a new generation of children of time for a new generation of children of time for a new generation of children to come along and reach an age uh where to come along and reach an age uh where to come along and reach an age uh where they would be interested in consuming they would be interested in consuming they would be interested in consuming Snow White that haven't seen it before Snow White that haven't seen it before Snow White that haven't seen it before and they discover it for the first time and they discover it for the first time and they discover it for the first time and yet it's infrequent enough that it and yet it's infrequent enough that it and yet it's infrequent enough that it doesn't dilute the IP. So Walt's got an doesn't dilute the IP. So Walt's got an doesn't dilute the IP. So Walt's got an amazing quote on this actually from the amazing quote on this actually from the amazing quote on this actually from the second re-release in 1951 of Snow White. second re-release in 1951 of Snow White. second re-release in 1951 of Snow White. In the 8 years since then, our first In the 8 years since then, our first In the 8 years since then, our first re-release, our potential audience has re-release, our potential audience has re-release, our potential audience has been increased by 25 million children been increased by 25 million children been increased by 25 million children who either were not born or were too who either were not born or were too who either were not born or were too young to attend a motion picture theater young to attend a motion picture theater young to attend a motion picture theater in 1944. You're an adult much longer in 1944. You're an adult much longer in 1944. You're an adult much longer than you're a kid. than you're a kid. than you're a kid. >> It's so amazing. And they totally >> It's so amazing. And they totally >> It's so amazing. And they totally stumble into the seven-year thing. Like stumble into the seven-year thing. Like stumble into the seven-year thing. Like it's not like they intended when they it's not like they intended when they it's not like they intended when they made Snow White to say, "Okay, we're made Snow White to say, "Okay, we're made Snow White to say, "Okay, we're going to put it in the vault and then going to put it in the vault and then going to put it in the vault and then seven years from now we're going to take seven years from now we're going to take seven years from now we're going to take it out." It just happened that seven it out." It just happened that seven it out." It just happened that seven years later they had a big cash crunch. years later they had a big cash crunch. years later they had a big cash crunch. They needed some easy profits and they They needed some easy profits and they They needed some easy profits and they put Snow White back in theaters. And 7 put Snow White back in theaters. And 7 put Snow White back in theaters. And 7 years, you know, give or take a couple years, you know, give or take a couple years, you know, give or take a couple years basically becomes the core Disney years basically becomes the core Disney years basically becomes the core Disney IP cadence to this very day. And Disney IP cadence to this very day. And Disney IP cadence to this very day. And Disney could uniquely do it versus other could uniquely do it versus other could uniquely do it versus other studios because their IP was more studios because their IP was more studios because their IP was more timeless. It's animated and it's based timeless. It's animated and it's based timeless. It's animated and it's based on these timeless sort of lessons and on these timeless sort of lessons and on these timeless sort of lessons and these fairy tales of old. Like there these fairy tales of old. Like there these fairy tales of old. Like there there are these there are these there are these simple but resonant stories and it simple but resonant stories and it simple but resonant stories and it carries through right to today. What is carries through right to today. What is carries through right to today. What is the cadence between Disney's Frozen the cadence between Disney's Frozen the cadence between Disney's Frozen movies today? movies today? movies today? >> Frozen 1 comes out 2013. >> Frozen 1 comes out 2013. >> Frozen 1 comes out 2013. >> Frozen 2 comes out 2019. >> Frozen 2 comes out 2019. >> Frozen 2 comes out 2019. >> Frozen 3 slated for release next year >> Frozen 3 slated for release next year >> Frozen 3 slated for release next year 2027. 2027. 2027. six to eight years like clockwork. six to eight years like clockwork. six to eight years like clockwork. >> It's interesting they've applied it to >> It's interesting they've applied it to >> It's interesting they've applied it to sequels now, too. sequels now, too. sequels now, too. >> Yep. >> Yep. >> Yep. >> All right. So, now we've got four >> All right. So, now we've got four >> All right. So, now we've got four components to the flywheel business. components to the flywheel business. components to the flywheel business. Your original three, genuinely Your original three, genuinely Your original three, genuinely compelling new intellectual property compelling new intellectual property compelling new intellectual property with characters that you resonate with. with characters that you resonate with. with characters that you resonate with. Two, maximize distribution of each Two, maximize distribution of each Two, maximize distribution of each element in the primary delivery vehicle. element in the primary delivery vehicle. element in the primary delivery vehicle. You've got three, feed that IP into as You've got three, feed that IP into as You've got three, feed that IP into as many ancillary profitable flywheel nodes many ancillary profitable flywheel nodes many ancillary profitable flywheel nodes as possible. And now we've got four. as possible. And now we've got four. as possible. And now we've got four. Yep. Yep. Yep. >> The vault, the re-releases. >> The vault, the re-releases. >> The vault, the re-releases. >> Strategically re-release it every seven >> Strategically re-release it every seven >> Strategically re-release it every seven or so years. Frequently enough to or so years. Frequently enough to or so years. Frequently enough to capture each new generation of children, capture each new generation of children, capture each new generation of children, but not too frequently lest you dilute but not too frequently lest you dilute but not too frequently lest you dilute its impact its impact its impact >> with effectively evergreen content. >> with effectively evergreen content. >> with effectively evergreen content. >> Yep. [laughter] Roy has a great quote >> Yep. [laughter] Roy has a great quote >> Yep. [laughter] Roy has a great quote that he would tell the Wall Street that he would tell the Wall Street that he would tell the Wall Street Journal many years later. Our product is Journal many years later. Our product is Journal many years later. Our product is practically eternal. practically eternal. practically eternal. [laughter] [laughter] [laughter] And it's so true. And it's so true. And it's so true. >> Yep. >> Yep. >> Yep. >> So despite this genuine innovation of >> So despite this genuine innovation of >> So despite this genuine innovation of adding the vault concept to the adding the vault concept to the adding the vault concept to the flywheel, by the time the war ends in flywheel, by the time the war ends in flywheel, by the time the war ends in 1945, 1945, 1945, Disney is not in a good place. The Disney is not in a good place. The Disney is not in a good place. The flywheel is basically completely broken. flywheel is basically completely broken. flywheel is basically completely broken. There hasn't been any compelling IP There hasn't been any compelling IP There hasn't been any compelling IP generated for the past several years. generated for the past several years. generated for the past several years. And worst of all, Walt himself is And worst of all, Walt himself is And worst of all, Walt himself is disengaged and disillusioned. disengaged and disillusioned. disengaged and disillusioned. >> Yeah. But clearly something happened >> Yeah. But clearly something happened >> Yeah. But clearly something happened because the Disney [laughter] we know because the Disney [laughter] we know because the Disney [laughter] we know today is quite successful. today is quite successful. today is quite successful. >> Yes. But before we continue the story. >> Yes. But before we continue the story. >> Yes. But before we continue the story. >> Yes. Listeners, this is a great time to >> Yes. Listeners, this is a great time to >> Yes. Listeners, this is a great time to thank our friends at Service Now, thank our friends at Service Now, thank our friends at Service Now, longtime friends of the show. So if you longtime friends of the show. So if you longtime friends of the show. So if you are managing a large enterprise today, are managing a large enterprise today, are managing a large enterprise today, you've got AI everywhere. You've got you've got AI everywhere. You've got you've got AI everywhere. You've got co-pilots and models and agents all co-pilots and models and agents all co-pilots and models and agents all running across every team. And the running across every team. And the running across every team. And the promise was simple. Add AI and the promise was simple. Add AI and the promise was simple. Add AI and the results will follow. But enterprises are results will follow. But enterprises are results will follow. But enterprises are now realizing that the hard part was now realizing that the hard part was now realizing that the hard part was never adding AI. It's making it work, never adding AI. It's making it work, never adding AI. It's making it work, >> right? It's got to have the right >> right? It's got to have the right >> right? It's got to have the right context and connect to the workflows context and connect to the workflows context and connect to the workflows that matter. Plus, it's got to be that matter. Plus, it's got to be that matter. Plus, it's got to be secure, stay governable, and still be secure, stay governable, and still be secure, stay governable, and still be able to take real actions. You get all able to take real actions. You get all able to take real actions. You get all that working together, and that's when that working together, and that's when that working together, and that's when magic happens. magic happens. magic happens. >> Yes. And for those like two of you out >> Yes. And for those like two of you out >> Yes. And for those like two of you out there who've never been to Disneyland, there who've never been to Disneyland, there who've never been to Disneyland, [laughter] [laughter] [laughter] the magic isn't just from one great the magic isn't just from one great the magic isn't just from one great ride. It's from the whole experience ride. It's from the whole experience ride. It's from the whole experience being seamless. The daily parades, the being seamless. The daily parades, the being seamless. The daily parades, the sightelines, the characters appearing sightelines, the characters appearing sightelines, the characters appearing exactly at the right moment. It looks exactly at the right moment. It looks exactly at the right moment. It looks effortless, but behind the scenes, effortless, but behind the scenes, effortless, but behind the scenes, thousands of moving parts are being thousands of moving parts are being thousands of moving parts are being coordinated in real time from a control coordinated in real time from a control coordinated in real time from a control center that nobody ever sees. And that's center that nobody ever sees. And that's center that nobody ever sees. And that's what Service Now has been building for what Service Now has been building for what Service Now has been building for over 20 years. The foundation AI needs over 20 years. The foundation AI needs over 20 years. The foundation AI needs to succeed. And they've done it at to succeed. And they've done it at to succeed. And they've done it at scale. Over a 100red billion workflows, scale. Over a 100red billion workflows, scale. Over a 100red billion workflows, trillions of transactions, and the trillions of transactions, and the trillions of transactions, and the operational knowledge of how work operational knowledge of how work operational knowledge of how work actually gets done. That's why more than actually gets done. That's why more than actually gets done. That's why more than 85% of the Fortune 500 work with Service 85% of the Fortune 500 work with Service 85% of the Fortune 500 work with Service Now. Now. Now. >> And as the AI control tower, they're >> And as the AI control tower, they're >> And as the AI control tower, they're giving companies a single place to giving companies a single place to giving companies a single place to manage all of it. Not just agents, but manage all of it. Not just agents, but manage all of it. Not just agents, but every AI system across your business. So every AI system across your business. So every AI system across your business. So listeners, if you are wrangling AI listeners, if you are wrangling AI listeners, if you are wrangling AI across your company, go check out across your company, go check out across your company, go check out service.com/acquired service.com/acquired service.com/acquired and just tell them that Ben and David and just tell them that Ben and David and just tell them that Ben and David sent you. All right, so we're coming out sent you. All right, so we're coming out sent you. All right, so we're coming out of the war. There's sort of [laughter] a of the war. There's sort of [laughter] a of the war. There's sort of [laughter] a few moving parts here at Disney right few moving parts here at Disney right few moving parts here at Disney right now. So the revenue from the government now. So the revenue from the government now. So the revenue from the government has dried up. So that the thing that was has dried up. So that the thing that was has dried up. So that the thing that was putting them on sound financial footing putting them on sound financial footing putting them on sound financial footing is not there for the sort of quick is not there for the sort of quick is not there for the sort of quick revenue hits. The long-term stuff other revenue hits. The long-term stuff other revenue hits. The long-term stuff other than the re-releases, they haven't than the re-releases, they haven't than the re-releases, they haven't stoked the fire in a while. stoked the fire in a while. stoked the fire in a while. >> So the strategy over these next few >> So the strategy over these next few >> So the strategy over these next few years is to sort of kickstart to try to years is to sort of kickstart to try to years is to sort of kickstart to try to do stuff that doesn't cost a lot of do stuff that doesn't cost a lot of do stuff that doesn't cost a lot of money but might have a lot of return. money but might have a lot of return. money but might have a lot of return. >> And so they try a bunch of stuff on the >> And so they try a bunch of stuff on the >> And so they try a bunch of stuff on the animation side. They do packages where animation side. They do packages where animation side. They do packages where they take a bunch of shorts and they they take a bunch of shorts and they they take a bunch of shorts and they package them together as feature films. package them together as feature films. package them together as feature films. These are movies that you almost These are movies that you almost These are movies that you almost assuredly have never seen called like assuredly have never seen called like assuredly have never seen called like Make Mine Music or Fun and Fancyfree. Make Mine Music or Fun and Fancyfree. Make Mine Music or Fun and Fancyfree. Not big successes. The other thing they Not big successes. The other thing they Not big successes. The other thing they try in animation is to go back to the try in animation is to go back to the try in animation is to go back to the original Alice's idea of combining original Alice's idea of combining original Alice's idea of combining animation and live action. The result of animation and live action. The result of animation and live action. The result of that is the movie Song of the South. that is the movie Song of the South. that is the movie Song of the South. Yeah. which historians look back on as Yeah. which historians look back on as Yeah. which historians look back on as racist and deeply problematic. And uh racist and deeply problematic. And uh racist and deeply problematic. And uh Disney has never released on home video Disney has never released on home video Disney has never released on home video or streaming. So uh not a big success or streaming. So uh not a big success or streaming. So uh not a big success for the flywheel there either. And for for the flywheel there either. And for for the flywheel there either. And for the first time in animation, there's now the first time in animation, there's now the first time in animation, there's now actually real competition in the actually real competition in the actually real competition in the marketplace. So before the war, Warner marketplace. So before the war, Warner marketplace. So before the war, Warner Brothers had started Looney Tunes, you Brothers had started Looney Tunes, you Brothers had started Looney Tunes, you know, with like Daffy Duck and Porky Pig know, with like Daffy Duck and Porky Pig know, with like Daffy Duck and Porky Pig and then Elmer Fud and of course and then Elmer Fud and of course and then Elmer Fud and of course >> Bugs Bunny. >> Bugs Bunny. >> Bugs Bunny. >> Ironically, it's a former Disney story >> Ironically, it's a former Disney story >> Ironically, it's a former Disney story department employee, Charles Thorson, department employee, Charles Thorson, department employee, Charles Thorson, that does the initial designs for Bugs that does the initial designs for Bugs that does the initial designs for Bugs Bunny. Bunny. Bunny. >> And then in 1940, you know, same year it >> And then in 1940, you know, same year it >> And then in 1940, you know, same year it all started to fall apart for Disney, all started to fall apart for Disney, all started to fall apart for Disney, Joseph Barbara and William Hannah start Joseph Barbara and William Hannah start Joseph Barbara and William Hannah start working together. They produce Tom and working together. They produce Tom and working together. They produce Tom and Jerry for MGM. So the other major Jerry for MGM. So the other major Jerry for MGM. So the other major studios studios studios >> and the Flintstones. >> and the Flintstones. >> and the Flintstones. >> Yeah. The Flintstones, of course. Yeah. >> Yeah. The Flintstones, of course. Yeah. >> Yeah. The Flintstones, of course. Yeah. The other major studios are starting to The other major studios are starting to The other major studios are starting to creep in on the animation game. And so creep in on the animation game. And so creep in on the animation game. And so by this post-war period, these other by this post-war period, these other by this post-war period, these other studios had grown in popularity and were studios had grown in popularity and were studios had grown in popularity and were really starting to rival Disney. really starting to rival Disney. really starting to rival Disney. Meanwhile, Disney, they go the other way Meanwhile, Disney, they go the other way Meanwhile, Disney, they go the other way and they get into live action. and they get into live action. and they get into live action. >> Yeah. They somehow had a bunch of cash >> Yeah. They somehow had a bunch of cash >> Yeah. They somehow had a bunch of cash tied up in Europe that they couldn't tied up in Europe that they couldn't tied up in Europe that they couldn't repatriate, so they needed to spend it repatriate, so they needed to spend it repatriate, so they needed to spend it in London. So, they went and shot a in London. So, they went and shot a in London. So, they went and shot a liveaction film, Treasure Island, in liveaction film, Treasure Island, in liveaction film, Treasure Island, in London, which did well for them. Live London, which did well for them. Live London, which did well for them. Live action is far less expensive to create. action is far less expensive to create. action is far less expensive to create. You can do it fast, and they needed to You can do it fast, and they needed to You can do it fast, and they needed to do something with this cash. But, you do something with this cash. But, you do something with this cash. But, you know, you're not buying a lot of know, you're not buying a lot of know, you're not buying a lot of Treasure Island merch today. It's not Treasure Island merch today. It's not Treasure Island merch today. It's not durable like the the animated stuff. durable like the the animated stuff. durable like the the animated stuff. >> As we talked about earlier, live action >> As we talked about earlier, live action >> As we talked about earlier, live action doesn't feed the flywheel, at least for doesn't feed the flywheel, at least for doesn't feed the flywheel, at least for Disney, in quite the same way. Disney, in quite the same way. Disney, in quite the same way. >> Yep. They started doing nature >> Yep. They started doing nature >> Yep. They started doing nature documentaries. They did one called Seal documentaries. They did one called Seal documentaries. They did one called Seal Island shot in Alaska. They also started Island shot in Alaska. They also started Island shot in Alaska. They also started studying the emerging TV medium to see studying the emerging TV medium to see studying the emerging TV medium to see if they should do something here, but at if they should do something here, but at if they should do something here, but at this point in time decide, nah, this point in time decide, nah, this point in time decide, nah, basically not. But we'll watch it and basically not. But we'll watch it and basically not. But we'll watch it and see. We're very interested. But Walt see. We're very interested. But Walt see. We're very interested. But Walt Hart really was in animation. He wanted Hart really was in animation. He wanted Hart really was in animation. He wanted to get back to making animated feature to get back to making animated feature to get back to making animated feature films that push the envelope. Roy, films that push the envelope. Roy, films that push the envelope. Roy, meanwhile, hates this idea since the meanwhile, hates this idea since the meanwhile, hates this idea since the studio is not on good financial footing. studio is not on good financial footing. studio is not on good financial footing. It has lots of debt. Walt ultimately has It has lots of debt. Walt ultimately has It has lots of debt. Walt ultimately has to give an ultimatum that if we don't to give an ultimatum that if we don't to give an ultimatum that if we don't get back to this, then we should just get back to this, then we should just get back to this, then we should just sell the company. Like, what are we even sell the company. Like, what are we even sell the company. Like, what are we even doing here? doing here? doing here? >> In 1950, Roy capitulates and the company >> In 1950, Roy capitulates and the company >> In 1950, Roy capitulates and the company went and raised another $2 million to went and raised another $2 million to went and raised another $2 million to finance their next film, which was finance their next film, which was finance their next film, which was Cinderella. Cinderella. Cinderella. >> The first bright spot in a long time >> The first bright spot in a long time >> The first bright spot in a long time >> and their first fulllength feature film >> and their first fulllength feature film >> and their first fulllength feature film in eight years since Bambi in 1942. in eight years since Bambi in 1942. in eight years since Bambi in 1942. >> And the way they made Cinderella was >> And the way they made Cinderella was >> And the way they made Cinderella was quite different, right? Yeah. So Walt quite different, right? Yeah. So Walt quite different, right? Yeah. So Walt pounds the table to make this thing and pounds the table to make this thing and pounds the table to make this thing and then he kind of realizes the way they then he kind of realizes the way they then he kind of realizes the way they are going to make it feels compromised are going to make it feels compromised are going to make it feels compromised to him because the budget just can't be to him because the budget just can't be to him because the budget just can't be what they were blowing before in those what they were blowing before in those what they were blowing before in those early 40s to try to really push the early 40s to try to really push the early 40s to try to really push the envelope. envelope. envelope. >> Yeah. There's a great quote from the >> Yeah. There's a great quote from the >> Yeah. There's a great quote from the animator Frank Thomas who worked on animator Frank Thomas who worked on animator Frank Thomas who worked on Cinderella. We planned Cinderella more Cinderella. We planned Cinderella more Cinderella. We planned Cinderella more carefully and shot it all in live action carefully and shot it all in live action carefully and shot it all in live action first so we could judge it. This was first so we could judge it. This was first so we could judge it. This was without costumes or a set. just go on a without costumes or a set. just go on a without costumes or a set. just go on a sound stage and see whether that scene's sound stage and see whether that scene's sound stage and see whether that scene's going to work. Walt said, "We can't going to work. Walt said, "We can't going to work. Walt said, "We can't afford to animate it and then change it. afford to animate it and then change it. afford to animate it and then change it. The animation has to be right the first The animation has to be right the first The animation has to be right the first time." Yeah. Not the mindset that they time." Yeah. Not the mindset that they time." Yeah. Not the mindset that they took into Snow White. took into Snow White. took into Snow White. >> And this basically flips the like >> And this basically flips the like >> And this basically flips the like liveaction animation thing from a source liveaction animation thing from a source liveaction animation thing from a source of inspiration and study to a crutch. So of inspiration and study to a crutch. So of inspiration and study to a crutch. So they were filming every scene and then they were filming every scene and then they were filming every scene and then rotoscoping effectively like tracing the rotoscoping effectively like tracing the rotoscoping effectively like tracing the liveaction footage out of the camera to liveaction footage out of the camera to liveaction footage out of the camera to make it animated which can lead to this make it animated which can lead to this make it animated which can lead to this much more rigid feeling animation. Also much more rigid feeling animation. Also much more rigid feeling animation. Also once you film it you are completely once you film it you are completely once you film it you are completely locked into that view. It's not like you locked into that view. It's not like you locked into that view. It's not like you can move the theoretical camera because can move the theoretical camera because can move the theoretical camera because you haven't really built the muscle to you haven't really built the muscle to you haven't really built the muscle to animate in that style for the film. So animate in that style for the film. So animate in that style for the film. So you're kind of stuck with this like how you're kind of stuck with this like how you're kind of stuck with this like how it looked in the camera is how we trace it looked in the camera is how we trace it looked in the camera is how we trace it on paper. It just had less of the it on paper. It just had less of the it on paper. It just had less of the like lavish detail that they put into like lavish detail that they put into like lavish detail that they put into Pinocchio and Bambi. All this ultimately Pinocchio and Bambi. All this ultimately Pinocchio and Bambi. All this ultimately leads to like Walt's hard is just not in leads to like Walt's hard is just not in leads to like Walt's hard is just not in it. He he kind of helps kickstart the it. He he kind of helps kickstart the it. He he kind of helps kickstart the whole thing but then is not engaged whole thing but then is not engaged whole thing but then is not engaged during the production of this film. It during the production of this film. It during the production of this film. It does end up being a critical and does end up being a critical and does end up being a critical and commercial huge success though. Yes. commercial huge success though. Yes. commercial huge success though. Yes. >> I believe it makes basically the same >> I believe it makes basically the same >> I believe it makes basically the same amount of money as Snow White. I think amount of money as Snow White. I think amount of money as Snow White. I think it does $8 million in film rentals in it does $8 million in film rentals in it does $8 million in film rentals in the first year. the first year. the first year. >> Yep. On a cost of 2.2 million. >> Yep. On a cost of 2.2 million. >> Yep. On a cost of 2.2 million. >> Yep. >> Yep. >> Yep. >> So really, this is the first big >> So really, this is the first big >> So really, this is the first big financial success for the company since financial success for the company since financial success for the company since before the war. It's the biggest success before the war. It's the biggest success before the war. It's the biggest success since Snow White. It got the company since Snow White. It got the company since Snow White. It got the company back on sound footing after a pretty back on sound footing after a pretty back on sound footing after a pretty gnarly uh time. gnarly uh time. gnarly uh time. >> Gnarly decade there. Yeah. But yeah, so >> Gnarly decade there. Yeah. But yeah, so >> Gnarly decade there. Yeah. But yeah, so Cinderella is is a huge bright spot. It Cinderella is is a huge bright spot. It Cinderella is is a huge bright spot. It was a onetime financial boost to the was a onetime financial boost to the was a onetime financial boost to the studio that didn't solve all the studio that didn't solve all the studio that didn't solve all the company's problems, but it did get company's problems, but it did get company's problems, but it did get animation back on the right foot animation back on the right foot animation back on the right foot creatively. Even though Walt was no creatively. Even though Walt was no creatively. Even though Walt was no longer, you know, as deeply involved as longer, you know, as deeply involved as longer, you know, as deeply involved as he was in the Snow White era, it did he was in the Snow White era, it did he was in the Snow White era, it did turn things around enough that like at turn things around enough that like at turn things around enough that like at least they were making quality work least they were making quality work least they were making quality work again. And like obviously those films again. And like obviously those films again. And like obviously those films still hold up today. Over the next few still hold up today. Over the next few still hold up today. Over the next few years, they then released Alice in years, they then released Alice in years, they then released Alice in Wonderland, which surprise ballooned Wonderland, which surprise ballooned Wonderland, which surprise ballooned over budget and did not pay back. That over budget and did not pay back. That over budget and did not pay back. That is in part because a lot of historians is in part because a lot of historians is in part because a lot of historians say it's a film that Walt felt like he say it's a film that Walt felt like he say it's a film that Walt felt like he should do because of his reverence for should do because of his reverence for should do because of his reverence for the source material. the source material. the source material. >> Yep. >> Yep. >> Yep. >> But never quite had a clear idea on >> But never quite had a clear idea on >> But never quite had a clear idea on exactly what to do with it. So, it's exactly what to do with it. So, it's exactly what to do with it. So, it's it's hard to put together these sort of it's hard to put together these sort of it's hard to put together these sort of disjoint vignettes into one cohesive disjoint vignettes into one cohesive disjoint vignettes into one cohesive film, but artistically beautiful. So, film, but artistically beautiful. So, film, but artistically beautiful. So, put a pin in that. We'll come back to put a pin in that. We'll come back to put a pin in that. We'll come back to it. But interesting comment on Alice it. But interesting comment on Alice it. But interesting comment on Alice from the 1951 annual report from Roy. from the 1951 annual report from Roy. from the 1951 annual report from Roy. >> Alice has not performed as well at the >> Alice has not performed as well at the >> Alice has not performed as well at the box office as Cinderella. Because of box office as Cinderella. Because of box office as Cinderella. Because of these circumstances, which were these circumstances, which were these circumstances, which were generally poor attendance at theaters, generally poor attendance at theaters, generally poor attendance at theaters, he actually blames the macro, which is he actually blames the macro, which is he actually blames the macro, which is interesting. And because Alice in interesting. And because Alice in interesting. And because Alice in Wonderland is our highest cost feature, Wonderland is our highest cost feature, Wonderland is our highest cost feature, it is not expected to produce a profit it is not expected to produce a profit it is not expected to produce a profit from its first release. However, it is a from its first release. However, it is a from its first release. However, it is a classic property which should be a classic property which should be a classic property which should be a valuable asset to the company valuable asset to the company valuable asset to the company indefinitely. indefinitely. indefinitely. >> And hey, he was right. >> And hey, he was right. >> And hey, he was right. >> Yep. >> Yep. >> Yep. >> All right. So, we've talked about Walt >> All right. So, we've talked about Walt >> All right. So, we've talked about Walt being disengaged here. What is he doing? being disengaged here. What is he doing? being disengaged here. What is he doing? [sighs and gasps] [sighs and gasps] [sighs and gasps] >> So, Walt >> So, Walt >> So, Walt is playing with trains. [laughter] >> I mean, [snorts] >> I mean, [snorts] >> yes, he is. That's about the best way >> yes, he is. That's about the best way >> yes, he is. That's about the best way that I can frame this is he's getting that I can frame this is he's getting that I can frame this is he's getting really into trains and really into really into trains and really into really into trains and really into miniatures. miniatures. miniatures. >> Yes. Trains, specifically model trains >> Yes. Trains, specifically model trains >> Yes. Trains, specifically model trains and miniatures like miniature furniture and miniatures like miniature furniture and miniatures like miniature furniture and like rooms in homes in miniatures. and like rooms in homes in miniatures. and like rooms in homes in miniatures. >> Yeah. I mean, gosh, I said we weren't >> Yeah. I mean, gosh, I said we weren't >> Yeah. I mean, gosh, I said we weren't going to dive into Walt's psyche on this going to dive into Walt's psyche on this going to dive into Walt's psyche on this episode, but I kind of think about this. episode, but I kind of think about this. episode, but I kind of think about this. This is me editorializing This is me editorializing This is me editorializing as as as this like soulsearching half decade this like soulsearching half decade this like soulsearching half decade where he's just looking for what is he where he's just looking for what is he where he's just looking for what is he going to get passionate about next cuz going to get passionate about next cuz going to get passionate about next cuz he's sort of bored like animation isn't he's sort of bored like animation isn't he's sort of bored like animation isn't doing it for him the way that it used to doing it for him the way that it used to doing it for him the way that it used to and he's like reaching back into his and he's like reaching back into his and he's like reaching back into his childhood for inspiration. childhood for inspiration. childhood for inspiration. >> And the way Walt would frame this is >> And the way Walt would frame this is >> And the way Walt would frame this is that he was developing these hobbies to that he was developing these hobbies to that he was developing these hobbies to keep his mind off of the problems at the keep his mind off of the problems at the keep his mind off of the problems at the studio. That's what he would always say, studio. That's what he would always say, studio. That's what he would always say, >> right? That these were nice things to do >> right? That these were nice things to do >> right? That these were nice things to do after a hard day at work. after a hard day at work. after a hard day at work. >> Y >> Y >> Y >> but they became obsessions. >> but they became obsessions. >> but they became obsessions. >> Yes. >> Yes. >> Yes. >> When I said reaching back into his >> When I said reaching back into his >> When I said reaching back into his childhood, there was a train that ran childhood, there was a train that ran childhood, there was a train that ran through Marceline, which is why through Marceline, which is why through Marceline, which is why Marceline existed. And there's this like Marceline existed. And there's this like Marceline existed. And there's this like deep-seated psyche around trains and deep-seated psyche around trains and deep-seated psyche around trains and small town America. He and some of the small town America. He and some of the small town America. He and some of the other senior animators developed this other senior animators developed this other senior animators developed this interest in largecale model trains, interest in largecale model trains, interest in largecale model trains, which are 1/8 the scale of an actual which are 1/8 the scale of an actual which are 1/8 the scale of an actual railroad train. So like big like ones railroad train. So like big like ones railroad train. So like big like ones you could ride around sitting on top of. you could ride around sitting on top of. you could ride around sitting on top of. There's amazing old footage of of Walt There's amazing old footage of of Walt There's amazing old footage of of Walt like riding around on these these 1/8 like riding around on these these 1/8 like riding around on these these 1/8 scale trains. scale trains. scale trains. >> Yep. So Walt took this extremely >> Yep. So Walt took this extremely >> Yep. So Walt took this extremely seriously. He ends up traveling to the seriously. He ends up traveling to the seriously. He ends up traveling to the 1948 and 1949 Chicago train fair and he 1948 and 1949 Chicago train fair and he 1948 and 1949 Chicago train fair and he kind of dove into this community of kind of dove into this community of kind of dove into this community of fellow train enthusiasts. I was thinking fellow train enthusiasts. I was thinking fellow train enthusiasts. I was thinking this was strange. Like I kept reading this was strange. Like I kept reading this was strange. Like I kept reading about this and I was like this is wild. about this and I was like this is wild. about this and I was like this is wild. There were six million train There were six million train There were six million train enthusiasts, like model train enthusiasts, like model train enthusiasts, like model train enthusiasts at the time. This was enthusiasts at the time. This was enthusiasts at the time. This was actually like a pretty big thing. actually like a pretty big thing. actually like a pretty big thing. >> Yeah. This isn't like billionaire >> Yeah. This isn't like billionaire >> Yeah. This isn't like billionaire hobbies today. This is like a Wald hobbies today. This is like a Wald hobbies today. This is like a Wald hanging out with other enthusiasts kind hanging out with other enthusiasts kind hanging out with other enthusiasts kind of man of the people style. of man of the people style. of man of the people style. >> Yes. And it was something that was >> Yes. And it was something that was >> Yes. And it was something that was really tangible for him to do with his really tangible for him to do with his really tangible for him to do with his hands. I mean, he was building some of hands. I mean, he was building some of hands. I mean, he was building some of the train cars himself. He he actually the train cars himself. He he actually the train cars himself. He he actually had a workspace in the machine shop in had a workspace in the machine shop in had a workspace in the machine shop in Burbank where he was building with the Burbank where he was building with the Burbank where he was building with the machine shop staff. There was a guy machine shop staff. There was a guy machine shop staff. There was a guy Roger Broki who sort of led the machine Roger Broki who sort of led the machine Roger Broki who sort of led the machine shop team who would go on to build a shop team who would go on to build a shop team who would go on to build a serious serious model train for Walt. serious serious model train for Walt. serious serious model train for Walt. Roger would also become just to Roger would also become just to Roger would also become just to foreshadow here the first Imagineer. foreshadow here the first Imagineer. foreshadow here the first Imagineer. >> Yes. Yes. Yes. Well, just to foreshadow >> Yes. Yes. Yes. Well, just to foreshadow >> Yes. Yes. Yes. Well, just to foreshadow even more all of this would lead even more all of this would lead even more all of this would lead [laughter] to Imagineering. [laughter] to Imagineering. [laughter] to Imagineering. >> Yes. So, this team in the machine shop >> Yes. So, this team in the machine shop >> Yes. So, this team in the machine shop uh and Walt end up building this train uh and Walt end up building this train uh and Walt end up building this train and and David, you were saying like man and and David, you were saying like man and and David, you were saying like man of the people style in a very not man of of the people style in a very not man of of the people style in a very not man of the people style thing. He ends up the people style thing. He ends up the people style thing. He ends up sinking $50,000 sinking $50,000 sinking $50,000 which is like a giant amount of money at which is like a giant amount of money at which is like a giant amount of money at the time and a huge amount of his the time and a huge amount of his the time and a huge amount of his personal liquidity in 1950 into building personal liquidity in 1950 into building personal liquidity in 1950 into building a train in his backyard. There was a a train in his backyard. There was a a train in his backyard. There was a half mile of track that went through a half mile of track that went through a half mile of track that went through a tunnel. That tunnel that which he dug tunnel. That tunnel that which he dug tunnel. That tunnel that which he dug under his wife's garden on its own was under his wife's garden on its own was under his wife's garden on its own was 90 ft long. 90 ft long. 90 ft long. >> Yes. When Walt gets obsessed with >> Yes. When Walt gets obsessed with >> Yes. When Walt gets obsessed with something, he he goes to un unreasonable something, he he goes to un unreasonable something, he he goes to un unreasonable extremes. extremes. extremes. >> When he and his wife were looking at >> When he and his wife were looking at >> When he and his wife were looking at houses to figure out where what property houses to figure out where what property houses to figure out where what property they were going to buy and then build a they were going to buy and then build a they were going to buy and then build a house on, a major consideration was, is house on, a major consideration was, is house on, a major consideration was, is there room for a giant train to be laid there room for a giant train to be laid there room for a giant train to be laid out? He ends up, it's on Carolwood out? He ends up, it's on Carolwood out? He ends up, it's on Carolwood Avenue, I believe, Carolwood Street, and Avenue, I believe, Carolwood Street, and Avenue, I believe, Carolwood Street, and he ends up naming it the Carolwood he ends up naming it the Carolwood he ends up naming it the Carolwood Pacific. The uh steam engine is named Pacific. The uh steam engine is named Pacific. The uh steam engine is named the Lily Bell after his wife. It's a the Lily Bell after his wife. It's a the Lily Bell after his wife. It's a whole thing. whole thing. whole thing. >> Yep. And if you go to Disneyland or >> Yep. And if you go to Disneyland or >> Yep. And if you go to Disneyland or Disney World today, most of the steam Disney World today, most of the steam Disney World today, most of the steam engines of the railroads are named in engines of the railroads are named in engines of the railroads are named in callbacks to this period and this callbacks to this period and this callbacks to this period and this inspiration in Walt's life. So, there's inspiration in Walt's life. So, there's inspiration in Walt's life. So, there's the Lily Bell engine at Walt Disney the Lily Bell engine at Walt Disney the Lily Bell engine at Walt Disney World. There's the Ward Kimble who is World. There's the Ward Kimble who is World. There's the Ward Kimble who is the original animator that gets him into the original animator that gets him into the original animator that gets him into this hobby. There's the Roger Broie as this hobby. There's the Roger Broie as this hobby. There's the Roger Broie as you're saying and uh then there's also you're saying and uh then there's also you're saying and uh then there's also the Roy Disney. the Roy Disney. the Roy Disney. >> Oh, nice. I did not know that. So, this >> Oh, nice. I did not know that. So, this >> Oh, nice. I did not know that. So, this is great quote in a PBS American is great quote in a PBS American is great quote in a PBS American Experience documentary by historian Experience documentary by historian Experience documentary by historian Nancy Conn where she's reflecting on Nancy Conn where she's reflecting on Nancy Conn where she's reflecting on Walt in this moment and her quote is, "I Walt in this moment and her quote is, "I Walt in this moment and her quote is, "I can't control my employees. Turns out I can't control my employees. Turns out I can't control my employees. Turns out I can't control the larger stage right can't control the larger stage right can't control the larger stage right now. I can't even completely control my now. I can't even completely control my now. I can't even completely control my company. So, here's a world I can company. So, here's a world I can company. So, here's a world I can recreate down to the smallest detail recreate down to the smallest detail recreate down to the smallest detail that is mine and perfect. that is mine and perfect. that is mine and perfect. >> And it would become something much >> And it would become something much >> And it would become something much bigger that would also be his and also bigger that would also be his and also bigger that would also be his and also be perfect. be perfect. be perfect. >> Yes. So, out of this stew comes >> Yes. So, out of this stew comes >> Yes. So, out of this stew comes Disneyland. Disneyland. Disneyland. >> Yes. Which is so funny because Walt >> Yes. Which is so funny because Walt >> Yes. Which is so funny because Walt would insist in interviews until his would insist in interviews until his would insist in interviews until his dying day that quote, "The idea for dying day that quote, "The idea for dying day that quote, "The idea for Disneyland came about when my daughters Disneyland came about when my daughters Disneyland came about when my daughters were very young. And as I'd sit there were very young. And as I'd sit there were very young. And as I'd sit there while they rode the merry-goround, I while they rode the merry-goround, I while they rode the merry-goround, I felt that there should be something felt that there should be something felt that there should be something built where parents and children could built where parents and children could built where parents and children could have fun together. So that's how have fun together. So that's how have fun together. So that's how Disneyland started. It all started from Disneyland started. It all started from Disneyland started. It all started from a daddy with two daughters wondering a daddy with two daughters wondering a daddy with two daughters wondering where he could take them where he could where he could take them where he could where he could take them where he could have a little fun with them, too. have a little fun with them, too. have a little fun with them, too. >> It's also that, >> It's also that, >> It's also that, >> you know, I'm sure that's part of it. >> you know, I'm sure that's part of it. >> you know, I'm sure that's part of it. >> Yeah, >> Yeah, >> Yeah, >> some of both, but really the trains. >> some of both, but really the trains. >> some of both, but really the trains. [laughter] [laughter] [laughter] >> Okay, so how did Disneyland happen? >> Okay, so how did Disneyland happen? >> Okay, so how did Disneyland happen? Well, the initial thing was actually Well, the initial thing was actually Well, the initial thing was actually pretty small. pretty small. pretty small. >> Yep. the initial idea. >> Yep. the initial idea. >> Yep. the initial idea. >> Yes, there was a name floated Mickey >> Yes, there was a name floated Mickey >> Yes, there was a name floated Mickey Mouse Village that sort of quickly Mouse Village that sort of quickly Mouse Village that sort of quickly changed to Disneyland since uh it was changed to Disneyland since uh it was changed to Disneyland since uh it was much more about his new passions, much more about his new passions, much more about his new passions, trains, Americana, and miniatures than trains, Americana, and miniatures than trains, Americana, and miniatures than it was about Mickey Mouse. And he it was about Mickey Mouse. And he it was about Mickey Mouse. And he started working with artists to sketch started working with artists to sketch started working with artists to sketch out what it would be. And the constraint out what it would be. And the constraint out what it would be. And the constraint that he had was we've got this 16 acre that he had was we've got this 16 acre that he had was we've got this 16 acre plot of land that's adjacent to the plot of land that's adjacent to the plot of land that's adjacent to the Burbank studio lot between that and the Burbank studio lot between that and the Burbank studio lot between that and the river. So that's sort of what we're river. So that's sort of what we're river. So that's sort of what we're working with here. working with here. working with here. >> Yeah. And that's the natural place you >> Yeah. And that's the natural place you >> Yeah. And that's the natural place you would put this. would put this. would put this. >> Of course. Of course. So in March of >> Of course. Of course. So in March of >> Of course. Of course. So in March of 1952, Walt announces it Disneyland to be 1952, Walt announces it Disneyland to be 1952, Walt announces it Disneyland to be constructed on that little strip of land constructed on that little strip of land constructed on that little strip of land >> for a cost of $1.5 million. >> for a cost of $1.5 million. >> for a cost of $1.5 million. >> A Snow White. >> A Snow White. >> A Snow White. >> A Snow White. Yeah, we should speak in >> A Snow White. Yeah, we should speak in >> A Snow White. Yeah, we should speak in units of Snow White. It's actually units of Snow White. It's actually units of Snow White. It's actually cheaper than a Snow White given the cheaper than a Snow White given the cheaper than a Snow White given the inflation. inflation. inflation. >> Right. Right. Right. Much cheaper than a >> Right. Right. Right. Much cheaper than a >> Right. Right. Right. Much cheaper than a Snow White. It's now been uh 15 years. Snow White. It's now been uh 15 years. Snow White. It's now been uh 15 years. So, he decides, I'd actually like to So, he decides, I'd actually like to So, he decides, I'd actually like to spend some money on a larger study for spend some money on a larger study for spend some money on a larger study for this because I've got a couple of like this because I've got a couple of like this because I've got a couple of like artist renderings here that include cool artist renderings here that include cool artist renderings here that include cool little river and a train that runs on little river and a train that runs on little river and a train that runs on this and we're going to figure out, you this and we're going to figure out, you this and we're going to figure out, you know, attractions that that go in this know, attractions that that go in this know, attractions that that go in this thing, but we really got to jam a lot in thing, but we really got to jam a lot in thing, but we really got to jam a lot in here. So, I'd like more money. here. So, I'd like more money. here. So, I'd like more money. >> Roy and the board are none too enthused >> Roy and the board are none too enthused >> Roy and the board are none too enthused about this. about this. about this. >> Yeah. Think about everything that we >> Yeah. Think about everything that we >> Yeah. Think about everything that we have said over the last, I don't know, have said over the last, I don't know, have said over the last, I don't know, hour about the state of the company. And hour about the state of the company. And hour about the state of the company. And Walt is saying, "Hey, I found a thing Walt is saying, "Hey, I found a thing Walt is saying, "Hey, I found a thing I'm interested in. Can I have some money I'm interested in. Can I have some money I'm interested in. Can I have some money to explore building this kind of like to explore building this kind of like to explore building this kind of like inarticulatable idea?" Yeah. Right next inarticulatable idea?" Yeah. Right next inarticulatable idea?" Yeah. Right next to the studio lot. to the studio lot. to the studio lot. >> Yeah. It kind of goes over like a lead >> Yeah. It kind of goes over like a lead >> Yeah. It kind of goes over like a lead balloon. balloon. balloon. >> Yes. So, the Walt Disney Company at this >> Yes. So, the Walt Disney Company at this >> Yes. So, the Walt Disney Company at this time called Walt Disney Productions does time called Walt Disney Productions does time called Walt Disney Productions does not free up the purse strings for this. not free up the purse strings for this. not free up the purse strings for this. So, what does Walt do? He kind of talks So, what does Walt do? He kind of talks So, what does Walt do? He kind of talks to Roy about it and they they they to Roy about it and they they they to Roy about it and they they they figure out a path forward. He's going to figure out a path forward. He's going to figure out a path forward. He's going to start his own company that would get start his own company that would get start his own company that would get formalized later in the year in 1952 formalized later in the year in 1952 formalized later in the year in 1952 that ends up being called Wed that ends up being called Wed that ends up being called Wed Enterprises. We wed Walter Elias Disney. Enterprises. We wed Walter Elias Disney. Enterprises. We wed Walter Elias Disney. His personal company that he can do His personal company that he can do His personal company that he can do >> weird personal stuff with. [laughter] >> Yes. [snorts] So over the course of >> Yes. [snorts] So over the course of 1952, 1952, 1952, Walt starts poaching people from Disney Walt starts poaching people from Disney Walt starts poaching people from Disney to work on this thing. to work on this thing. to work on this thing. >> And at first it's just like a halfozen >> And at first it's just like a halfozen >> And at first it's just like a halfozen people and they're set up in a building people and they're set up in a building people and they're set up in a building on the back lot at Burbank. These would on the back lot at Burbank. These would on the back lot at Burbank. These would become the first Imagineers. become the first Imagineers. become the first Imagineers. >> Yes. >> Yes. >> Yes. >> And the interesting thing is the people >> And the interesting thing is the people >> And the interesting thing is the people he's poaching, these are artists and he's poaching, these are artists and he's poaching, these are artists and they're animators. that are being hired they're animators. that are being hired they're animators. that are being hired to build a theme park and like big to build a theme park and like big to build a theme park and like big physical trains. This gives you a sense physical trains. This gives you a sense physical trains. This gives you a sense of Walt's leadership style. He would of Walt's leadership style. He would of Walt's leadership style. He would take a talented, creative person and take a talented, creative person and take a talented, creative person and he'd be perfectly willing to assign them he'd be perfectly willing to assign them he'd be perfectly willing to assign them to things that they've never done before to things that they've never done before to things that they've never done before and say, "Yeah, he'll figure it out." and say, "Yeah, he'll figure it out." and say, "Yeah, he'll figure it out." >> We also just got to pause here for a >> We also just got to pause here for a >> We also just got to pause here for a minute and really underline what's minute and really underline what's minute and really underline what's happening here. This is Walt Disney. happening here. This is Walt Disney. happening here. This is Walt Disney. >> Yes. By this point in history, he is the >> Yes. By this point in history, he is the >> Yes. By this point in history, he is the Walt Disney. He is the Walt Disney who Walt Disney. He is the Walt Disney who Walt Disney. He is the Walt Disney who has come up with a crazy new idea based has come up with a crazy new idea based has come up with a crazy new idea based on his obsessive hobby with model trains on his obsessive hobby with model trains on his obsessive hobby with model trains that the board of Disney Studios has that the board of Disney Studios has that the board of Disney Studios has basically rejected. And so he has gone basically rejected. And so he has gone basically rejected. And so he has gone full crackpot like Colonel Kurtz style full crackpot like Colonel Kurtz style full crackpot like Colonel Kurtz style [laughter] [laughter] [laughter] and started his own separate company on and started his own separate company on and started his own separate company on the Disney campus where he is poaching the Disney campus where he is poaching the Disney campus where he is poaching and recruiting some of the best Disney and recruiting some of the best Disney and recruiting some of the best Disney animators and artists to come over and animators and artists to come over and animators and artists to come over and stop doing animation and start working stop doing animation and start working stop doing animation and start working with him building a theme park. with him building a theme park. with him building a theme park. [laughter] That is what is happening [laughter] That is what is happening [laughter] That is what is happening here. I was about to make the comment, here. I was about to make the comment, here. I was about to make the comment, "Oh, this sounds a lot like Elon Musk." "Oh, this sounds a lot like Elon Musk." "Oh, this sounds a lot like Elon Musk." But none of Elon's companies have a But none of Elon's companies have a But none of Elon's companies have a board that would vote against him. And board that would vote against him. And board that would vote against him. And so that's really the only difference so that's really the only difference so that's really the only difference here is kind of the like Elon before here is kind of the like Elon before here is kind of the like Elon before Elon. Elon. Elon. >> Yes. >> Yes. >> Yes. >> So there ends up being two problems with >> So there ends up being two problems with >> So there ends up being two problems with this plan. One is Walt and the this plan. One is Walt and the this plan. One is Walt and the architecture company that he hired kind architecture company that he hired kind architecture company that he hired kind of come to the conclusion that this plot of come to the conclusion that this plot of come to the conclusion that this plot of land, it's just too small. Even with of land, it's just too small. Even with of land, it's just too small. Even with all the clever ideas to be space all the clever ideas to be space all the clever ideas to be space efficient, there's just too much that he efficient, there's just too much that he efficient, there's just too much that he wants to do with this Disneyland wants to do with this Disneyland wants to do with this Disneyland concept. It keeps growing in scope to concept. It keeps growing in scope to concept. It keeps growing in scope to accomplish all of it in that little accomplish all of it in that little accomplish all of it in that little strip of land. The second problem is strip of land. The second problem is strip of land. The second problem is after provisional approval, the Burbank after provisional approval, the Burbank after provisional approval, the Burbank City Council starts to learn more and City Council starts to learn more and City Council starts to learn more and they decline the proposal since they do they decline the proposal since they do they decline the proposal since they do not want a quote carnival-like not want a quote carnival-like not want a quote carnival-like atmosphere right there on the side of atmosphere right there on the side of atmosphere right there on the side of the river. the river. the river. >> You could describe Disneyland as lots of >> You could describe Disneyland as lots of >> You could describe Disneyland as lots of things, but carnival-like atmosphere. things, but carnival-like atmosphere. things, but carnival-like atmosphere. [laughter] Clearly, they did not get the [laughter] Clearly, they did not get the [laughter] Clearly, they did not get the vision, vision, vision, >> right? The the magic is that it isn't. >> right? The the magic is that it isn't. >> right? The the magic is that it isn't. It very easily could have been. So, they It very easily could have been. So, they It very easily could have been. So, they need to find a bigger plot of land and need to find a bigger plot of land and need to find a bigger plot of land and they need to uh work with a team that is they need to uh work with a team that is they need to uh work with a team that is really good at odd research-based tasks. really good at odd research-based tasks. really good at odd research-based tasks. And you're never going to guess, And you're never going to guess, And you're never going to guess, listeners, where he goes for this. It is listeners, where he goes for this. It is listeners, where he goes for this. It is like a a crazy nugget of history. He like a a crazy nugget of history. He like a a crazy nugget of history. He goes to SRRI, the Stanford Research goes to SRRI, the Stanford Research goes to SRRI, the Stanford Research Institute. If you've heard SRRI before, Institute. If you've heard SRRI before, Institute. If you've heard SRRI before, it is one letter off from Siri, which it is one letter off from Siri, which it is one letter off from Siri, which was a spinout of SRRI. Yes, that SRRI was a spinout of SRRI. Yes, that SRRI was a spinout of SRRI. Yes, that SRRI >> that it was I was just going to say that >> that it was I was just going to say that >> that it was I was just going to say that you you just triggered like, you know, you you just triggered like, you know, you you just triggered like, you know, probably two million phones, [laughter] probably two million phones, [laughter] probably two million phones, [laughter] >> some of which are running uh the betas, >> some of which are running uh the betas, >> some of which are running uh the betas, so they'll have the new Siri AI. so they'll have the new Siri AI. so they'll have the new Siri AI. >> Yeah. Yeah. Yeah. Uh, yes. SRS SRRI is >> Yeah. Yeah. Yeah. Uh, yes. SRS SRRI is >> Yeah. Yeah. Yeah. Uh, yes. SRS SRRI is the research firm that Walt hires to go the research firm that Walt hires to go the research firm that Walt hires to go identify what ultimately becomes identify what ultimately becomes identify what ultimately becomes Anaheim. The perfect spot. They Anaheim. The perfect spot. They Anaheim. The perfect spot. They absolutely knock it out of the park. But absolutely knock it out of the park. But absolutely knock it out of the park. But when you describe it, the site sounds when you describe it, the site sounds when you describe it, the site sounds completely nuts. 10 times bigger than completely nuts. 10 times bigger than completely nuts. 10 times bigger than the original site, a full 160 acres. the original site, a full 160 acres. the original site, a full 160 acres. >> Yep. >> Yep. >> Yep. >> 25 miles away from Los Angeles. It is >> 25 miles away from Los Angeles. It is >> 25 miles away from Los Angeles. It is currently just some orange groves. currently just some orange groves. currently just some orange groves. Anaheim itself was a small farming town. Anaheim itself was a small farming town. Anaheim itself was a small farming town. There wasn't even a highway connecting There wasn't even a highway connecting There wasn't even a highway connecting it to Los Angeles. it to Los Angeles. it to Los Angeles. >> There was a planned highway. >> There was a planned highway. >> There was a planned highway. >> Yes. So, there's a quote from the >> Yes. So, there's a quote from the >> Yes. So, there's a quote from the animated man by Michael Barrier. The animated man by Michael Barrier. The animated man by Michael Barrier. The SRRI analysis from August 1953 took into SRRI analysis from August 1953 took into SRRI analysis from August 1953 took into account a large number of factors account a large number of factors account a large number of factors including likely population growth, including likely population growth, including likely population growth, freeway construction, and the effect of freeway construction, and the effect of freeway construction, and the effect of terrain on television transmission. terrain on television transmission. terrain on television transmission. Since the idea was that TV will play an Since the idea was that TV will play an Since the idea was that TV will play an important part in the promotion and important part in the promotion and important part in the promotion and development of Disneyland, the study development of Disneyland, the study development of Disneyland, the study pointed toward a location southeast of pointed toward a location southeast of pointed toward a location southeast of Los Angeles in Anaheim in Orange County, Los Angeles in Anaheim in Orange County, Los Angeles in Anaheim in Orange County, just off the Santa Ana Freeway. That just off the Santa Ana Freeway. That just off the Santa Ana Freeway. That freeway was then under construction, but freeway was then under construction, but freeway was then under construction, but most of it between downtown Los Angeles most of it between downtown Los Angeles most of it between downtown Los Angeles and Orange County was scheduled for and Orange County was scheduled for and Orange County was scheduled for completion. The foresight of all the completion. The foresight of all the completion. The foresight of all the factors that they considered there, factors that they considered there, factors that they considered there, >> just incredible. >> just incredible. >> just incredible. >> So, uh, there is one problem though, >> So, uh, there is one problem though, >> So, uh, there is one problem though, which is great. We found the perfect which is great. We found the perfect which is great. We found the perfect site. It's 160 acres and we're going to site. It's 160 acres and we're going to site. It's 160 acres and we're going to do this much bigger and better than we do this much bigger and better than we do this much bigger and better than we were before. We're going to need some were before. We're going to need some were before. We're going to need some money. money. money. >> We're going to need a lot of money. So, >> We're going to need a lot of money. So, >> We're going to need a lot of money. So, Walt goes back to the company. Walt goes back to the company. Walt goes back to the company. >> Yes. And remember, they had no interest >> Yes. And remember, they had no interest >> Yes. And remember, they had no interest in pursuing this, which is why he had to in pursuing this, which is why he had to in pursuing this, which is why he had to set up Wed in the first place. It's set up Wed in the first place. It's set up Wed in the first place. It's becoming clear that this is happening. I becoming clear that this is happening. I becoming clear that this is happening. I mean, Walt Disney is a force of nature mean, Walt Disney is a force of nature mean, Walt Disney is a force of nature and Roy becomes supportive or at least and Roy becomes supportive or at least and Roy becomes supportive or at least as supportive as as supportive as as supportive as >> strong armed into supporting this, >> strong armed into supporting this, >> strong armed into supporting this, >> right? While still trying to protect the >> right? While still trying to protect the >> right? While still trying to protect the company. And so in 1953 in April, Walt company. And so in 1953 in April, Walt company. And so in 1953 in April, Walt Disney Productions board of directors, Disney Productions board of directors, Disney Productions board of directors, this is a public company, agreed to a this is a public company, agreed to a this is a public company, agreed to a personal services contract with Walt and personal services contract with Walt and personal services contract with Walt and contracts with WED to design and build contracts with WED to design and build contracts with WED to design and build the Disneyland Park attractions. This is the Disneyland Park attractions. This is the Disneyland Park attractions. This is done as a cost plus contract. So Wed and done as a cost plus contract. So Wed and done as a cost plus contract. So Wed and Walt personally don't have to take any Walt personally don't have to take any Walt personally don't have to take any risk at least in in this part of it. It risk at least in in this part of it. It risk at least in in this part of it. It is just like we will pay you whatever it is just like we will pay you whatever it is just like we will pay you whatever it is plus your profit margin to go build is plus your profit margin to go build is plus your profit margin to go build stuff and you know it's kind of a blank stuff and you know it's kind of a blank stuff and you know it's kind of a blank check. There are some pretty wild other check. There are some pretty wild other check. There are some pretty wild other terms in this personal services contract terms in this personal services contract terms in this personal services contract according to a 1990 article decades according to a 1990 article decades according to a 1990 article decades later in the LA Times. Walt is allowed later in the LA Times. Walt is allowed later in the LA Times. Walt is allowed to pursue outside projects which to pursue outside projects which to pursue outside projects which effectively gives him all the benefits effectively gives him all the benefits effectively gives him all the benefits of being a free agent while still of being a free agent while still of being a free agent while still drawing his $153,000 drawing his $153,000 drawing his $153,000 salary from Walt Disney Productions. salary from Walt Disney Productions. salary from Walt Disney Productions. Okay, another point. Walt argues that he Okay, another point. Walt argues that he Okay, another point. Walt argues that he should be compensated for the use of his should be compensated for the use of his should be compensated for the use of his name. He ends up getting it again, name. He ends up getting it again, name. He ends up getting it again, worked into this deal, and the contract worked into this deal, and the contract worked into this deal, and the contract awards him 10% of all merchandise sold. awards him 10% of all merchandise sold. awards him 10% of all merchandise sold. >> Wow, I actually didn't find this. This >> Wow, I actually didn't find this. This >> Wow, I actually didn't find this. This is wild. So, here's the next bullet is wild. So, here's the next bullet is wild. So, here's the next bullet point. He will now get the right to point. He will now get the right to point. He will now get the right to invest alongside Walt Disney Productions invest alongside Walt Disney Productions invest alongside Walt Disney Productions in each liveaction film project, which in each liveaction film project, which in each liveaction film project, which he would later do on Mary Poppins and he would later do on Mary Poppins and he would later do on Mary Poppins and other films. So, why did he negotiate other films. So, why did he negotiate other films. So, why did he negotiate for this? I mean, my feeling about Wald for this? I mean, my feeling about Wald for this? I mean, my feeling about Wald after doing all this research is that he after doing all this research is that he after doing all this research is that he didn't actually really care that much didn't actually really care that much didn't actually really care that much personally about money. Was he trying to personally about money. Was he trying to personally about money. Was he trying to accumulate cash so that he could fund accumulate cash so that he could fund accumulate cash so that he could fund Disneyland? Disneyland? Disneyland? >> Exactly. >> Exactly. >> Exactly. >> Exactly. There's also some like personal >> Exactly. There's also some like personal >> Exactly. There's also some like personal stuff tied up in here, his relationship stuff tied up in here, his relationship stuff tied up in here, his relationship with the company where he's like, "It's with the company where he's like, "It's with the company where he's like, "It's not really mine anymore, so I kind of not really mine anymore, so I kind of not really mine anymore, so I kind of want more out of it." That's sort of the want more out of it." That's sort of the want more out of it." That's sort of the less generous take on it. But he and Roy less generous take on it. But he and Roy less generous take on it. But he and Roy definitely kind of came to this definitely kind of came to this definitely kind of came to this understanding of, well, if Walt is going understanding of, well, if Walt is going understanding of, well, if Walt is going to have to fund a lot of this, then we to have to fund a lot of this, then we to have to fund a lot of this, then we need to figure out a way for Walt to get need to figure out a way for Walt to get need to figure out a way for Walt to get more cash so that he can do more cash so that he can do more cash so that he can do >> I see this is happening no matter what. >> I see this is happening no matter what. >> I see this is happening no matter what. So, we can do it the easy way or we can So, we can do it the easy way or we can So, we can do it the easy way or we can do it the hard way. [laughter] do it the hard way. [laughter] do it the hard way. [laughter] >> It is interesting on his relationship >> It is interesting on his relationship >> It is interesting on his relationship with money. He was interested in money with money. He was interested in money with money. He was interested in money but for the sake of deploying it. I but for the sake of deploying it. I but for the sake of deploying it. I mean, hoarding money was never his mean, hoarding money was never his mean, hoarding money was never his thing. Like, he did live extravagantly thing. Like, he did live extravagantly thing. Like, he did live extravagantly compared to most people. hit that train compared to most people. hit that train compared to most people. hit that train and you know a vacation house in Palm and you know a vacation house in Palm and you know a vacation house in Palm Springs and all that, but it's not what Springs and all that, but it's not what Springs and all that, but it's not what the other big Hollywood moguls were the other big Hollywood moguls were the other big Hollywood moguls were doing. Lillian Disney has a comment in doing. Lillian Disney has a comment in doing. Lillian Disney has a comment in 1956. She said, "I've always been 1956. She said, "I've always been 1956. She said, "I've always been worried. I have never felt secure. worried. I have never felt secure. worried. I have never felt secure. Never. Never. Never. >> He's always telling us how wealthy we >> He's always telling us how wealthy we >> He's always telling us how wealthy we are, how much we've got, and we haven't are, how much we've got, and we haven't are, how much we've got, and we haven't got anything." got anything." got anything." >> And she's kind of right >> And she's kind of right >> And she's kind of right >> because he's always putting it back in. >> because he's always putting it back in. >> because he's always putting it back in. >> Yes. And it's all tied up in the >> Yes. And it's all tied up in the >> Yes. And it's all tied up in the enterprise value of Disney, which he enterprise value of Disney, which he enterprise value of Disney, which he keeps sort of reorggaging and rebetting keeps sort of reorggaging and rebetting keeps sort of reorggaging and rebetting the farm. the farm. the farm. >> Yes. So there's that angle. He also >> Yes. So there's that angle. He also >> Yes. So there's that angle. He also always believed in the park just like he always believed in the park just like he always believed in the park just like he always believed that animation feature always believed that animation feature always believed that animation feature animation had a long runway ahead of it. animation had a long runway ahead of it. animation had a long runway ahead of it. And I I was trying to think of the best And I I was trying to think of the best And I I was trying to think of the best way to contextualize this. So to way to contextualize this. So to way to contextualize this. So to validate him there, this is a crazy stat validate him there, this is a crazy stat validate him there, this is a crazy stat and just how right he was about all of and just how right he was about all of and just how right he was about all of this. Walt built this company over his this. Walt built this company over his this. Walt built this company over his entire lifetime from age 21 until he entire lifetime from age 21 until he entire lifetime from age 21 until he died in 1966. died in 1966. died in 1966. And if you look at the company's market And if you look at the company's market And if you look at the company's market cap today compared to where it was in cap today compared to where it was in cap today compared to where it was in 1966, 1966, 1966, 99.95% 99.95% 99.95% of the value was created after Walt of the value was created after Walt of the value was created after Walt Disney died. Disney died. Disney died. >> Yep. >> Yep. >> Yep. >> There was just so much more running room >> There was just so much more running room >> There was just so much more running room with his concept than he had time on with his concept than he had time on with his concept than he had time on this earth to execute. this earth to execute. this earth to execute. >> Yep. >> Yep. >> Yep. >> Do you know how I know the 1966 market >> Do you know how I know the 1966 market >> Do you know how I know the 1966 market cap? Is this ringing any bells for you, cap? Is this ringing any bells for you, cap? Is this ringing any bells for you, David? David? David? >> No. So during the Buffett partnerships, Warren Buffett saw that Disney was an Warren Buffett saw that Disney was an underpriced asset in 1966, underpriced asset in 1966, underpriced asset in 1966, right before Walt died. So Buffett right before Walt died. So Buffett right before Walt died. So Buffett bought a bunch of the stock in ' 66 bought a bunch of the stock in ' 66 bought a bunch of the stock in ' 66 since it had a market cap under $90 since it had a market cap under $90 since it had a market cap under $90 million at the time. million at the time. million at the time. >> Under $90 million. >> Under $90 million. >> Under $90 million. >> The company was doing 21 million in >> The company was doing 21 million in >> The company was doing 21 million in pre-tax earnings. And at this point, cuz pre-tax earnings. And at this point, cuz pre-tax earnings. And at this point, cuz this is after Disneyland, this after a this is after Disneyland, this after a this is after Disneyland, this after a bunch of stuff, it had more cash than bunch of stuff, it had more cash than bunch of stuff, it had more cash than debt. debt. debt. >> Wow. This is like Ben Graham bargain >> Wow. This is like Ben Graham bargain >> Wow. This is like Ben Graham bargain investing investing investing >> and even more so like Charlie Mer >> and even more so like Charlie Mer >> and even more so like Charlie Mer investing cuz it was a great business at investing cuz it was a great business at investing cuz it was a great business at a great price. a great price. a great price. >> Yeah. Wow. >> Yeah. Wow. >> Yeah. Wow. >> A $90 million company doing 21 million >> A $90 million company doing 21 million >> A $90 million company doing 21 million in pre-tax that has Disney's flywheel. in pre-tax that has Disney's flywheel. in pre-tax that has Disney's flywheel. This is the buying opportunity of a This is the buying opportunity of a This is the buying opportunity of a lifetime when Buffett bought it. lifetime when Buffett bought it. lifetime when Buffett bought it. >> That's why he's the goat. [laughter] >> That's why he's the goat. [laughter] >> That's why he's the goat. [laughter] >> He did, of course, sell it. So, right. >> He did, of course, sell it. So, right. >> He did, of course, sell it. So, right. >> Well, that was the right move after >> Well, that was the right move after >> Well, that was the right move after Walt's death, as we will see in a few Walt's death, as we will see in a few Walt's death, as we will see in a few minutes. minutes. minutes. >> Anyway, that's sort of how I would >> Anyway, that's sort of how I would >> Anyway, that's sort of how I would characterize Walt's relationship with characterize Walt's relationship with characterize Walt's relationship with wealth and sort of what his his goal was wealth and sort of what his his goal was wealth and sort of what his his goal was in this personal services contract. This in this personal services contract. This in this personal services contract. This whole thing ultimately becomes so whole thing ultimately becomes so whole thing ultimately becomes so contentious that three board directors contentious that three board directors contentious that three board directors actually resign from the public company. actually resign from the public company. actually resign from the public company. There's also a shareholder lawsuit that There's also a shareholder lawsuit that There's also a shareholder lawsuit that gets brought and for sort of strange gets brought and for sort of strange gets brought and for sort of strange reasons, it doesn't end up going reasons, it doesn't end up going reasons, it doesn't end up going through, but the remaining board members through, but the remaining board members through, but the remaining board members end up approving it. Essentially, it was end up approving it. Essentially, it was end up approving it. Essentially, it was Royy's way of saying, "Okay, the company Royy's way of saying, "Okay, the company Royy's way of saying, "Okay, the company doesn't want to be too tied up in this doesn't want to be too tied up in this doesn't want to be too tied up in this project if it fails, but we will provide project if it fails, but we will provide project if it fails, but we will provide you a way to get more cash flows from you a way to get more cash flows from you a way to get more cash flows from the company so you can figure out how to the company so you can figure out how to the company so you can figure out how to do more of the funding of this thing do more of the funding of this thing do more of the funding of this thing yourself." yourself." yourself." >> Wow. Fascinating. >> Wow. Fascinating. >> Wow. Fascinating. >> So, like just to reflect to to this >> So, like just to reflect to to this >> So, like just to reflect to to this point in history, this is something I point in history, this is something I point in history, this is something I really never realized. The origin of really never realized. The origin of really never realized. The origin of Disneyland is, at least so far in the Disneyland is, at least so far in the Disneyland is, at least so far in the story, not about the company story, not about the company story, not about the company intentionally looking for more places to intentionally looking for more places to intentionally looking for more places to put its intellectual property. put its intellectual property. put its intellectual property. >> No, it's very intentionally not the >> No, it's very intentionally not the >> No, it's very intentionally not the flywheel in the beginning. flywheel in the beginning. flywheel in the beginning. >> Right. There are essentially zero >> Right. There are essentially zero >> Right. There are essentially zero synergies as conceptualized so far for synergies as conceptualized so far for synergies as conceptualized so far for Disneyland. Disneyland. Disneyland. >> Yep. But all of that's about to change >> Yep. But all of that's about to change >> Yep. But all of that's about to change because Disneyland, because Disneyland, because Disneyland, even post all of the budget expansion even post all of the budget expansion even post all of the budget expansion after SRRI and moving to Orange County after SRRI and moving to Orange County after SRRI and moving to Orange County and 160 acres, is getting so out of hand and 160 acres, is getting so out of hand and 160 acres, is getting so out of hand in its budget that it needs to actually in its budget that it needs to actually in its budget that it needs to actually come back to the company. come back to the company. come back to the company. >> Sort of. >> Sort of. >> Sort of. >> Sort of. [laughter] >> Sort of. [laughter] >> Sort of. [laughter] >> So, here's the corporate structure. >> So, here's the corporate structure. >> So, here's the corporate structure. Originally, they thought they would need Originally, they thought they would need Originally, they thought they would need about $5 million for the Anaheim about $5 million for the Anaheim about $5 million for the Anaheim Disneyland. spoiler, they would go way, Disneyland. spoiler, they would go way, Disneyland. spoiler, they would go way, way over that. But because they thought way over that. But because they thought way over that. But because they thought it was going to be this expensive, Walt it was going to be this expensive, Walt it was going to be this expensive, Walt went back to the company again and said, went back to the company again and said, went back to the company again and said, "Look, I know we did this personal "Look, I know we did this personal "Look, I know we did this personal services contract thing, but like I services contract thing, but like I services contract thing, but like I think it's better if this is actually a think it's better if this is actually a think it's better if this is actually a Disney thing, and let's figure out a way Disney thing, and let's figure out a way Disney thing, and let's figure out a way to really tie it all together here." At to really tie it all together here." At to really tie it all together here." At a $5 million price tag, the company a $5 million price tag, the company a $5 million price tag, the company cannot afford to fund this. If you look cannot afford to fund this. If you look cannot afford to fund this. If you look at 1952 when planning began, Walt Disney at 1952 when planning began, Walt Disney at 1952 when planning began, Walt Disney Productions made less than half a Productions made less than half a Productions made less than half a million dollars in net income. So 10 million dollars in net income. So 10 million dollars in net income. So 10 times that for the park's budget is is times that for the park's budget is is times that for the park's budget is is is not going to fly. There's not cash is not going to fly. There's not cash is not going to fly. There's not cash for it. But at this point, the company for it. But at this point, the company for it. But at this point, the company is kind of like, all right, the is kind of like, all right, the is kind of like, all right, the proverbial train is moving forward here. proverbial train is moving forward here. proverbial train is moving forward here. There is actually a good plan to There is actually a good plan to There is actually a good plan to integrate a whole bunch of Disney stuff integrate a whole bunch of Disney stuff integrate a whole bunch of Disney stuff into the park. This can be a a Walt into the park. This can be a a Walt into the park. This can be a a Walt Disney Productions thing in one way or Disney Productions thing in one way or Disney Productions thing in one way or another. We're good for $500,000, another. We're good for $500,000, another. We're good for $500,000, but we need to go find the bulk of the but we need to go find the bulk of the but we need to go find the bulk of the $5 million somewhere else. Y $5 million somewhere else. Y $5 million somewhere else. Y >> what can we do? So, in order to go get >> what can we do? So, in order to go get >> what can we do? So, in order to go get the bulk of the financing for the park, the bulk of the financing for the park, the bulk of the financing for the park, Walt comes back fully into the fold at Walt comes back fully into the fold at Walt comes back fully into the fold at the Disney studio and does something the Disney studio and does something the Disney studio and does something that no other movie executive is willing that no other movie executive is willing that no other movie executive is willing to do at this point in time. He embraces to do at this point in time. He embraces to do at this point in time. He embraces television. He goes to the TV networks television. He goes to the TV networks television. He goes to the TV networks for money. Yeah. And the fascinating for money. Yeah. And the fascinating for money. Yeah. And the fascinating thing is it's in part because they don't thing is it's in part because they don't thing is it's in part because they don't really want a pure financial partner really want a pure financial partner really want a pure financial partner for the park. Like they don't want to for the park. Like they don't want to for the park. Like they don't want to just go raise a bunch of debt that just go raise a bunch of debt that just go raise a bunch of debt that they'll then have to pay back. This has they'll then have to pay back. This has they'll then have to pay back. This has hamstrung them so many times. They're hamstrung them so many times. They're hamstrung them so many times. They're trying to think creatively of how can we trying to think creatively of how can we trying to think creatively of how can we do like a 1 + 1 equals 5 thing here do like a 1 + 1 equals 5 thing here do like a 1 + 1 equals 5 thing here where we have this Disneyland Inc. joint where we have this Disneyland Inc. joint where we have this Disneyland Inc. joint venture and someone else is, you know, venture and someone else is, you know, venture and someone else is, you know, building this thing and funding it. So building this thing and funding it. So building this thing and funding it. So yeah, at the time the prevailing yeah, at the time the prevailing yeah, at the time the prevailing sentiment in Hollywood was that TV was a sentiment in Hollywood was that TV was a sentiment in Hollywood was that TV was a threat. That if Hollywood movie studios threat. That if Hollywood movie studios threat. That if Hollywood movie studios started putting their content on TV, it started putting their content on TV, it started putting their content on TV, it would steal audiences away from the would steal audiences away from the would steal audiences away from the theaters. It's just like in our NFL theaters. It's just like in our NFL theaters. It's just like in our NFL episode where baseball was deathly episode where baseball was deathly episode where baseball was deathly afraid of television. I think the quote afraid of television. I think the quote afraid of television. I think the quote was, "Radio wetss the appetite for was, "Radio wetss the appetite for was, "Radio wetss the appetite for attending baseball games live and TV attending baseball games live and TV attending baseball games live and TV satiates it." satiates it." satiates it." >> Yes. But Walt realizes just like the NFL >> Yes. But Walt realizes just like the NFL >> Yes. But Walt realizes just like the NFL did that TV actually was a huge new did that TV actually was a huge new did that TV actually was a huge new opportunity. Walt says, "When television opportunity. Walt says, "When television opportunity. Walt says, "When television first hit, I went back to New York and I first hit, I went back to New York and I first hit, I went back to New York and I spent a week in New York just to study spent a week in New York just to study spent a week in New York just to study television. I had the feeling then that television. I had the feeling then that television. I had the feeling then that it was important and that we ought to it was important and that we ought to it was important and that we ought to get in it." The feeling of the motion get in it." The feeling of the motion get in it." The feeling of the motion picture business was that television was picture business was that television was picture business was that television was something we should fight or we should something we should fight or we should something we should fight or we should ignore it and maybe it would go away or ignore it and maybe it would go away or ignore it and maybe it would go away or some darn thing. I said television is some darn thing. I said television is some darn thing. I said television is going to be my way of going direct to going to be my way of going direct to going to be my way of going direct to the public, bypassing the middleman. I the public, bypassing the middleman. I the public, bypassing the middleman. I said, Roy, this television thing can be said, Roy, this television thing can be said, Roy, this television thing can be the greatest thing because we will be the greatest thing because we will be the greatest thing because we will be going direct to the public. going direct to the public. going direct to the public. And he also thinks it might be his And he also thinks it might be his And he also thinks it might be his ticket to financing the park. [laughter] ticket to financing the park. [laughter] ticket to financing the park. [laughter] So ABC had been wanting to do something So ABC had been wanting to do something So ABC had been wanting to do something with Walt. I mean, lobbying over and with Walt. I mean, lobbying over and with Walt. I mean, lobbying over and over and over again. Uh because Walt did over and over again. Uh because Walt did over and over again. Uh because Walt did this one special a few years before. I this one special a few years before. I this one special a few years before. I think it was on NBC, not ABC. And it it think it was on NBC, not ABC. And it it think it was on NBC, not ABC. And it it was great. Like there is something very was great. Like there is something very was great. Like there is something very compelling about Walt Disney and Disney compelling about Walt Disney and Disney compelling about Walt Disney and Disney stuff in a television special. stuff in a television special. stuff in a television special. >> Yes. Yes. AUNCular Walt Disney >> Yes. Yes. AUNCular Walt Disney >> Yes. Yes. AUNCular Walt Disney [laughter] [laughter] [laughter] beaming into living rooms around beaming into living rooms around beaming into living rooms around America. America. America. >> But ABC is the third place network. They >> But ABC is the third place network. They >> But ABC is the third place network. They don't have as many affiliates. They don't have as many affiliates. They don't have as many affiliates. They don't have as much reach. If you're don't have as much reach. If you're don't have as much reach. If you're going to get a partner for something going to get a partner for something going to get a partner for something that you really want to take advantage that you really want to take advantage that you really want to take advantage of the full reach of a television of the full reach of a television of the full reach of a television network, it's not ABC. network, it's not ABC. network, it's not ABC. >> You really want CBS or NBC. >> You really want CBS or NBC. >> You really want CBS or NBC. >> Yes. And so Walt actually goes to CBS at >> Yes. And so Walt actually goes to CBS at >> Yes. And so Walt actually goes to CBS at NBC with this pitch. I think it might be NBC with this pitch. I think it might be NBC with this pitch. I think it might be Roy actually flying to New York and Roy actually flying to New York and Roy actually flying to New York and doing this, but they're not interested doing this, but they're not interested doing this, but they're not interested at least for the whole package that Walt at least for the whole package that Walt at least for the whole package that Walt is proposing. is proposing. is proposing. >> Yes. They both say, "Hey, Walt, we would >> Yes. They both say, "Hey, Walt, we would >> Yes. They both say, "Hey, Walt, we would gladly do a regular television series gladly do a regular television series gladly do a regular television series with you, but uh I don't know about this with you, but uh I don't know about this with you, but uh I don't know about this park thing. park thing. park thing. >> You're asking for the better part of $5 >> You're asking for the better part of $5 >> You're asking for the better part of $5 million so that we can build a theme million so that we can build a theme million so that we can build a theme park with you and that's a bundled deal park with you and that's a bundled deal park with you and that's a bundled deal with a doing a TV show. This is really with a doing a TV show. This is really with a doing a TV show. This is really weird." weird." weird." >> Yep. ABC though, Ben, as you were >> Yep. ABC though, Ben, as you were >> Yep. ABC though, Ben, as you were saying, they're the newest of the saying, they're the newest of the saying, they're the newest of the networks and they're struggling to catch networks and they're struggling to catch networks and they're struggling to catch on. They need something like Disney and on. They need something like Disney and on. They need something like Disney and Disneyland to break out. So they say, Disneyland to break out. So they say, Disneyland to break out. So they say, "Yes, Walt's line on this was that ABC "Yes, Walt's line on this was that ABC "Yes, Walt's line on this was that ABC needed the show so badly that they needed the show so badly that they needed the show so badly that they bought the amusement park with it." bought the amusement park with it." bought the amusement park with it." [laughter] Do you know the structural thing with Do you know the structural thing with the television industry that was going the television industry that was going the television industry that was going on in 1952? on in 1952? on in 1952? >> No. So, back in 1948, and I promise this >> No. So, back in 1948, and I promise this >> No. So, back in 1948, and I promise this is related, back in 1948, the FCC paused is related, back in 1948, the FCC paused is related, back in 1948, the FCC paused the ability to get a new broadcast the ability to get a new broadcast the ability to get a new broadcast license while the FCC was sorting out license while the FCC was sorting out license while the FCC was sorting out some technical and policy problems. It some technical and policy problems. It some technical and policy problems. It was supposed to last like 6 to 12 was supposed to last like 6 to 12 was supposed to last like 6 to 12 months, but it ended up lasting 4 years months, but it ended up lasting 4 years months, but it ended up lasting 4 years until 1952, a freeze on the ability to until 1952, a freeze on the ability to until 1952, a freeze on the ability to get a new broadcast license. So, the get a new broadcast license. So, the get a new broadcast license. So, the existing big four networks, which are existing big four networks, which are existing big four networks, which are about to be three, NBC, CBS, and ABC, about to be three, NBC, CBS, and ABC, about to be three, NBC, CBS, and ABC, became pretty entrenched. Meanwhile, the became pretty entrenched. Meanwhile, the became pretty entrenched. Meanwhile, the number of households with TVs was number of households with TVs was number of households with TVs was absolutely exploding. It went from 9% of absolutely exploding. It went from 9% of absolutely exploding. It went from 9% of households in 1950 to 65% households in 1950 to 65% households in 1950 to 65% just 5 years later in 1955. just 5 years later in 1955. just 5 years later in 1955. [clears throat] [clears throat] [clears throat] >> Yeah. So, all these networks now have a >> Yeah. So, all these networks now have a >> Yeah. So, all these networks now have a basically governmentprotected oligopoly basically governmentprotected oligopoly basically governmentprotected oligopoly >> accidentally >> accidentally >> accidentally >> in this massive new market. >> in this massive new market. >> in this massive new market. >> Yes. So if ABC could put on a hit show, >> Yes. So if ABC could put on a hit show, >> Yes. So if ABC could put on a hit show, like there's not that many choices of like there's not that many choices of like there's not that many choices of stuff to watch at any given time because stuff to watch at any given time because stuff to watch at any given time because of this supply demand mismatch on on of this supply demand mismatch on on of this supply demand mismatch on on content. Suddenly a giant swath of content. Suddenly a giant swath of content. Suddenly a giant swath of Americans could pay attention instantly. Americans could pay attention instantly. Americans could pay attention instantly. So they're like really hungry for super So they're like really hungry for super So they're like really hungry for super compelling content. So Walt goes to ABC compelling content. So Walt goes to ABC compelling content. So Walt goes to ABC kind of knowing this and knowing they're kind of knowing this and knowing they're kind of knowing this and knowing they're in third place and says, "Okay, I will in third place and says, "Okay, I will in third place and says, "Okay, I will make this show for you, but a you're make this show for you, but a you're make this show for you, but a you're doing the park with me, and b I have doing the park with me, and b I have doing the park with me, and b I have complete say on what happens during the complete say on what happens during the complete say on what happens during the program, and I can change my mind program, and I can change my mind program, and I can change my mind anytime, and there's no part of the anytime, and there's no part of the anytime, and there's no part of the contract about what I'm making for you." contract about what I'm making for you." contract about what I'm making for you." And ABC says, "Yes, absolutely. That And ABC says, "Yes, absolutely. That And ABC says, "Yes, absolutely. That sounds fine, Mr. Disney." sounds fine, Mr. Disney." sounds fine, Mr. Disney." >> Yes. So ABC ends up investing $500,000 >> Yes. So ABC ends up investing $500,000 >> Yes. So ABC ends up investing $500,000 in equity in Disneyland Inc. same terms in equity in Disneyland Inc. same terms in equity in Disneyland Inc. same terms and amount as Disney Productions. In and amount as Disney Productions. In and amount as Disney Productions. In addition though, they also guarantee addition though, they also guarantee addition though, they also guarantee $4.5 million in bank loans. So boom, $4.5 million in bank loans. So boom, $4.5 million in bank loans. So boom, there's the rest of the financing that there's the rest of the financing that there's the rest of the financing that they think they need to get Disneyland they think they need to get Disneyland they think they need to get Disneyland off the ground in debt guaranteed by off the ground in debt guaranteed by off the ground in debt guaranteed by ABC. and they would televise the TV ABC. and they would televise the TV ABC. and they would televise the TV show, but Walt Disney Productions would show, but Walt Disney Productions would show, but Walt Disney Productions would have to produce it. But they're actually have to produce it. But they're actually have to produce it. But they're actually buying a pretty expensive TV show also. buying a pretty expensive TV show also. buying a pretty expensive TV show also. So in addition to this 500,000 and the So in addition to this 500,000 and the So in addition to this 500,000 and the 4.5 million, ABC is also going to pay $5 4.5 million, ABC is also going to pay $5 4.5 million, ABC is also going to pay $5 million per year to Walt Disney million per year to Walt Disney million per year to Walt Disney Productions to make the show that Productions to make the show that Productions to make the show that they're going to put on the air. And it they're going to put on the air. And it they're going to put on the air. And it was ABC's to air for 7 years, which made was ABC's to air for 7 years, which made was ABC's to air for 7 years, which made it the largest TV programming contract it the largest TV programming contract it the largest TV programming contract in history. in history. in history. >> Yes, this is an absolutely >> Yes, this is an absolutely >> Yes, this is an absolutely over-the-top deal. There is one other over-the-top deal. There is one other over-the-top deal. There is one other deal point which is uh ABC negotiated to deal point which is uh ABC negotiated to deal point which is uh ABC negotiated to have the right to all the profits from have the right to all the profits from have the right to all the profits from Disneyland's food and beverage for the Disneyland's food and beverage for the Disneyland's food and beverage for the first decade. [laughter and gasps] first decade. [laughter and gasps] first decade. [laughter and gasps] >> They're like, "Hey, we need something >> They're like, "Hey, we need something >> They're like, "Hey, we need something else out of this." else out of this." else out of this." >> Yes. >> Yes. >> Yes. >> Yes. But a part of this contract that is >> Yes. But a part of this contract that is >> Yes. But a part of this contract that is completely set in stone is the opening completely set in stone is the opening completely set in stone is the opening date, July 17th, 1955. Interesting. I date, July 17th, 1955. Interesting. I date, July 17th, 1955. Interesting. I didn't realize that the opening date was didn't realize that the opening date was didn't realize that the opening date was set in this contract with ABC. Either set in this contract with ABC. Either set in this contract with ABC. Either way, they do get the television show and way, they do get the television show and way, they do get the television show and it works out to be a great deal for it works out to be a great deal for it works out to be a great deal for everybody involved because Ben, to your everybody involved because Ben, to your everybody involved because Ben, to your point about supply and demand, it point about supply and demand, it point about supply and demand, it becomes a huge hit, like instantaneously becomes a huge hit, like instantaneously becomes a huge hit, like instantaneously when it launches in the fall of 1954. when it launches in the fall of 1954. when it launches in the fall of 1954. >> The content is basically a >> The content is basically a >> The content is basically a behind-the-scenes look at all the behind-the-scenes look at all the behind-the-scenes look at all the different lands and content for each. different lands and content for each. different lands and content for each. So, Tomorrowland, Frontier Land, So, Tomorrowland, Frontier Land, So, Tomorrowland, Frontier Land, Adventure Land, etc. Adventure Land, etc. Adventure Land, etc. >> Yep. So, pretty quickly, Disneyland, >> Yep. So, pretty quickly, Disneyland, >> Yep. So, pretty quickly, Disneyland, because of course they name the TV show because of course they name the TV show because of course they name the TV show the same as the park. the same as the park. the same as the park. >> Sure. I mean, if Walt gets to control >> Sure. I mean, if Walt gets to control >> Sure. I mean, if Walt gets to control all the programming, like why not just all the programming, like why not just all the programming, like why not just make it the most perfectly aligned make it the most perfectly aligned make it the most perfectly aligned advertisement every week for a whole advertisement every week for a whole advertisement every week for a whole year to get ready? year to get ready? year to get ready? >> Yes. So, it quickly becomes the second >> Yes. So, it quickly becomes the second >> Yes. So, it quickly becomes the second most popular show on television after I most popular show on television after I most popular show on television after I Love Lucy, and it's the first ABC Love Lucy, and it's the first ABC Love Lucy, and it's the first ABC program to crack the top 25 shows ever. program to crack the top 25 shows ever. program to crack the top 25 shows ever. Like it was all NBC and CBS until Like it was all NBC and CBS until Like it was all NBC and CBS until Disneyland. Disneyland. Disneyland. >> Unbelievable. Also, ABC lets Disney run >> Unbelievable. Also, ABC lets Disney run >> Unbelievable. Also, ABC lets Disney run trailers inside each episode for their trailers inside each episode for their trailers inside each episode for their current theatrical release. So, it both current theatrical release. So, it both current theatrical release. So, it both promotes Disneyland and the current promotes Disneyland and the current promotes Disneyland and the current movie slate. movie slate. movie slate. >> It it becomes a whole another no to the >> It it becomes a whole another no to the >> It it becomes a whole another no to the flywheel. flywheel. flywheel. >> Yes. And for the first time, they get >> Yes. And for the first time, they get >> Yes. And for the first time, they get repeat exposure. I mean, Disney only repeat exposure. I mean, Disney only repeat exposure. I mean, Disney only gets a touch point once every few years gets a touch point once every few years gets a touch point once every few years with a consumer with a movie. And maybe with a consumer with a movie. And maybe with a consumer with a movie. And maybe you watch their shorts. But with TV, you watch their shorts. But with TV, you watch their shorts. But with TV, it's this way to build a repeated it's this way to build a repeated it's this way to build a repeated relationship. relationship. relationship. >> They had this in a certain way with the >> They had this in a certain way with the >> They had this in a certain way with the comic strip before, but this is like comic strip before, but this is like comic strip before, but this is like that on steroids. that on steroids. that on steroids. >> Yes. >> Yes. >> Yes. >> So, in that same fall and winter of 1954 >> So, in that same fall and winter of 1954 >> So, in that same fall and winter of 1954 into 1955, into 1955, into 1955, the show has its first big like viral the show has its first big like viral the show has its first big like viral moment even before the park opens. So, moment even before the park opens. So, moment even before the park opens. So, in December of 1954, in December of 1954, in December of 1954, Disney begins a threepart liveaction Disney begins a threepart liveaction Disney begins a threepart liveaction miniseries on the show about the story miniseries on the show about the story miniseries on the show about the story of Davy Crockett. Davy Crockett. of Davy Crockett. Davy Crockett. of Davy Crockett. Davy Crockett. >> Oh, that's right. >> Oh, that's right. >> Oh, that's right. >> And America goes nuts for Davy Crockett. >> And America goes nuts for Davy Crockett. >> And America goes nuts for Davy Crockett. For listeners who don't know, Davy For listeners who don't know, Davy For listeners who don't know, Davy Crockett is like a historical American Crockett is like a historical American Crockett is like a historical American figure that fought and died in the figure that fought and died in the figure that fought and died in the Battle of the Alamo in Texas, over a Battle of the Alamo in Texas, over a Battle of the Alamo in Texas, over a century before this, century before this, century before this, >> which Disney highly fictionalizes the >> which Disney highly fictionalizes the >> which Disney highly fictionalizes the character. character. character. >> Yes, totally. But this miniseries >> Yes, totally. But this miniseries >> Yes, totally. But this miniseries becomes a massive flywheel moment for becomes a massive flywheel moment for becomes a massive flywheel moment for Disney. Totally unintentionally. Davy Disney. Totally unintentionally. Davy Disney. Totally unintentionally. Davy Crockett Coonkin caps become the Crockett Coonkin caps become the Crockett Coonkin caps become the musthave kids product of 1955. They sell musthave kids product of 1955. They sell musthave kids product of 1955. They sell 10 million caps in 1955. 10 million caps in 1955. 10 million caps in 1955. >> Unreal. >> Unreal. >> Unreal. >> Even better, the theme song, The Ballad >> Even better, the theme song, The Ballad >> Even better, the theme song, The Ballad of Davy Crockett, you know, King of the of Davy Crockett, you know, King of the of Davy Crockett, you know, King of the Wild Frontier, reaches number one on the Wild Frontier, reaches number one on the Wild Frontier, reaches number one on the Billboard charts in America and sells 7 Billboard charts in America and sells 7 Billboard charts in America and sells 7 million records. In total, Disney would million records. In total, Disney would million records. In total, Disney would go on to do around $300 million of gross go on to do around $300 million of gross go on to do around $300 million of gross sales of Davy Crockett merchandise, sales of Davy Crockett merchandise, sales of Davy Crockett merchandise, which at this point they fully in-housed which at this point they fully in-housed which at this point they fully in-housed commercial products. K. Cayman had commercial products. K. Cayman had commercial products. K. Cayman had tragically passed away in a airplane tragically passed away in a airplane tragically passed away in a airplane crash in 1949, after which they in-house crash in 1949, after which they in-house crash in 1949, after which they in-house all of this within Disney. So, if all all of this within Disney. So, if all all of this within Disney. So, if all that happened with the same splits we that happened with the same splits we that happened with the same splits we mentioned before at 5% royalties on that mentioned before at 5% royalties on that mentioned before at 5% royalties on that $300 million, assuming again 100% retail $300 million, assuming again 100% retail $300 million, assuming again 100% retail markup from wholesale, that's $7.5 markup from wholesale, that's $7.5 markup from wholesale, that's $7.5 million million million to Disney, [laughter] to Disney, [laughter] to Disney, [laughter] which uh you know, I think is more in which uh you know, I think is more in which uh you know, I think is more in actual actual actual revenue to Disney than they had earned revenue to Disney than they had earned revenue to Disney than they had earned from any film at that point in history. from any film at that point in history. from any film at that point in history. And David, this is really going to blow And David, this is really going to blow And David, this is really going to blow your mind. That is actually more than your mind. That is actually more than your mind. That is actually more than the amount of income they had received the amount of income they had received the amount of income they had received ever cumulatively from firstr run ever cumulatively from firstr run ever cumulatively from firstr run animated features. animated features. animated features. >> If you add up all the pluses and all the >> If you add up all the pluses and all the >> If you add up all the pluses and all the minuses, by 1957, minuses, by 1957, minuses, by 1957, >> the money they had made ever in profit >> the money they had made ever in profit >> the money they had made ever in profit dollars from their first release films dollars from their first release films dollars from their first release films was a hair over $7 million. [laughter] was a hair over $7 million. [laughter] was a hair over $7 million. [laughter] And they made by your estimates seven And they made by your estimates seven And they made by your estimates seven and a half million. and a half million. and a half million. >> They made more from skin caps and >> They made more from skin caps and >> They made more from skin caps and record sales than [laughter] incredible. And what timing? Right incredible. And what timing? Right before Disneyland opens. before Disneyland opens. before Disneyland opens. >> Insane. >> Insane. >> Insane. >> Amazing. >> Amazing. >> Amazing. >> Disney absolutely crushed the timing on >> Disney absolutely crushed the timing on >> Disney absolutely crushed the timing on switching their horse to TV or sort of switching their horse to TV or sort of switching their horse to TV or sort of embracing TV and embracing it in this embracing TV and embracing it in this embracing TV and embracing it in this huge way. And not just with programming, huge way. And not just with programming, huge way. And not just with programming, but directing all this attention at but directing all this attention at but directing all this attention at Disneyland. We gave that stat earlier Disneyland. We gave that stat earlier Disneyland. We gave that stat earlier all the way in the the 20s that the all the way in the the 20s that the all the way in the the 20s that the average American went to theaters over average American went to theaters over average American went to theaters over 40 times. By 1947, that number was down 40 times. By 1947, that number was down 40 times. By 1947, that number was down to about 32 times. And by 1956, the year to about 32 times. And by 1956, the year to about 32 times. And by 1956, the year after Disneyland opened, it was down to after Disneyland opened, it was down to after Disneyland opened, it was down to 14 times per year. Thanks to our friend 14 times per year. Thanks to our friend 14 times per year. Thanks to our friend Arvin at Worldly Partners for gathering Arvin at Worldly Partners for gathering Arvin at Worldly Partners for gathering all this data. all this data. all this data. >> So movie executives really had good >> So movie executives really had good >> So movie executives really had good cause to be concerned about TV. cause to be concerned about TV. cause to be concerned about TV. >> Absolutely. attention was shifting to >> Absolutely. attention was shifting to >> Absolutely. attention was shifting to television and right as it was shifting television and right as it was shifting television and right as it was shifting in droves, boom, that is right where in droves, boom, that is right where in droves, boom, that is right where Disney showed up in this like Disney showed up in this like Disney showed up in this like multiplicative way, you know. multiplicative way, you know. multiplicative way, you know. >> Yeah, man. Incredible timing. >> Yeah, man. Incredible timing. >> Yeah, man. Incredible timing. >> And Walt, as ever, had a quote on this. >> And Walt, as ever, had a quote on this. >> And Walt, as ever, had a quote on this. This is from the special that he did This is from the special that he did This is from the special that he did back in 1950 as an experiment. He said, back in 1950 as an experiment. He said, back in 1950 as an experiment. He said, "I regard television as one of our most "I regard television as one of our most "I regard television as one of our most important channels for the development important channels for the development important channels for the development of a new motion picture audience. of a new motion picture audience. of a new motion picture audience. Millions of tele viewers never go to a Millions of tele viewers never go to a Millions of tele viewers never go to a picture theater and countless others picture theater and countless others picture theater and countless others infrequently. In these highly infrequently. In these highly infrequently. In these highly competitive days, we must use the competitive days, we must use the competitive days, we must use the television screen along with every other television screen along with every other television screen along with every other promotional medium to increase our promotional medium to increase our promotional medium to increase our potential audience. potential audience. potential audience. >> Man, was he right. >> Man, was he right. >> Man, was he right. >> Man, was he right. >> Man, was he right. >> Man, was he right. >> And it's just so incredible that because >> And it's just so incredible that because >> And it's just so incredible that because he started playing with trains, he started playing with trains, he started playing with trains, Disney became a major force in Disney became a major force in Disney became a major force in television television television and of course opened the park. and of course opened the park. and of course opened the park. >> Yes. Okay. Okay. So, how does this all >> Yes. Okay. Okay. So, how does this all >> Yes. Okay. Okay. So, how does this all come together? We've got this like joint come together? We've got this like joint come together? We've got this like joint venture called Disneyland, Inc. It's got venture called Disneyland, Inc. It's got venture called Disneyland, Inc. It's got $500,000 from Walt Disney Productions. $500,000 from Walt Disney Productions. $500,000 from Walt Disney Productions. It's got $500,000 from ABC. It's got It's got $500,000 from ABC. It's got It's got $500,000 from ABC. It's got $200,000 from Western Publishing, who $200,000 from Western Publishing, who $200,000 from Western Publishing, who distributed their books. And then Walt distributed their books. And then Walt distributed their books. And then Walt himself put in $250,000. himself put in $250,000. himself put in $250,000. >> That's right. I did see that. >> That's right. I did see that. >> That's right. I did see that. >> Yes. >> Yes. >> Yes. >> And then they've got the $4.5 million of >> And then they've got the $4.5 million of >> And then they've got the $4.5 million of debt guaranteed by ABC. debt guaranteed by ABC. debt guaranteed by ABC. >> Exactly. So, there's a total of $6ish >> Exactly. So, there's a total of $6ish >> Exactly. So, there's a total of $6ish million that they have to spend to build million that they have to spend to build million that they have to spend to build the thing. Plus, there was actually the thing. Plus, there was actually the thing. Plus, there was actually another 2 million of 10-year bonds that another 2 million of 10-year bonds that another 2 million of 10-year bonds that ABC was committed to if they really ABC was committed to if they really ABC was committed to if they really really needed an extra $2 million to really needed an extra $2 million to really needed an extra $2 million to flex from a budget of six to a budget of flex from a budget of six to a budget of flex from a budget of six to a budget of eight. eight. eight. >> So, Ben, I've read a bunch of places >> So, Ben, I've read a bunch of places >> So, Ben, I've read a bunch of places this ended up costing $17 million. this ended up costing $17 million. this ended up costing $17 million. [laughter] [laughter] [laughter] >> Yes, that is correct. So the cap table >> Yes, that is correct. So the cap table >> Yes, that is correct. So the cap table is uh Walt Disney Productions and ABC is uh Walt Disney Productions and ABC is uh Walt Disney Productions and ABC each own 34%, Western Publishing owns each own 34%, Western Publishing owns each own 34%, Western Publishing owns 14% and Walt himself personally owns 17% 14% and Walt himself personally owns 17% 14% and Walt himself personally owns 17% and there's a contract between and there's a contract between and there's a contract between Disneyland Inc. and Wed Enterprises Disneyland Inc. and Wed Enterprises Disneyland Inc. and Wed Enterprises which Walt owns 100% of to actually which Walt owns 100% of to actually which Walt owns 100% of to actually build it all. So all of this leads up to build it all. So all of this leads up to build it all. So all of this leads up to July 17th, 1955, July 17th, 1955, July 17th, 1955, the opening of Disneyland that would the opening of Disneyland that would the opening of Disneyland that would change the company forever. that would change the company forever. that would change the company forever. that would change American vacations forever. Yeah. change American vacations forever. Yeah. change American vacations forever. Yeah. >> That would lay out a giant part of >> That would lay out a giant part of >> That would lay out a giant part of Disney's business model going forward, Disney's business model going forward, Disney's business model going forward, the opening of Disneyland. the opening of Disneyland. the opening of Disneyland. >> Yes. But before we do that, now is a >> Yes. But before we do that, now is a >> Yes. But before we do that, now is a great time to thank our friends at great time to thank our friends at great time to thank our friends at Statsake. Statsake. Statsake. >> Yes. So, Walt Disney had this idea that >> Yes. So, Walt Disney had this idea that >> Yes. So, Walt Disney had this idea that he would often talk about plusing. Most he would often talk about plusing. Most he would often talk about plusing. Most amusement parks would be effectively amusement parks would be effectively amusement parks would be effectively complete at opening and then they'd call complete at opening and then they'd call complete at opening and then they'd call it finished. But not Disneyland. Walt it finished. But not Disneyland. Walt it finished. But not Disneyland. Walt treated the park as something that you treated the park as something that you treated the park as something that you have to keep improving forever and he have to keep improving forever and he have to keep improving forever and he constantly looked at how guests move constantly looked at how guests move constantly looked at how guests move through it. through it. through it. >> Yep. This idea though only works if you >> Yep. This idea though only works if you >> Yep. This idea though only works if you can see what's happening. You can't can see what's happening. You can't can see what's happening. You can't improve an experience on a hunch. What improve an experience on a hunch. What improve an experience on a hunch. What mattered was how guests really behaved, mattered was how guests really behaved, mattered was how guests really behaved, not what anyone assumed in a meeting, not what anyone assumed in a meeting, not what anyone assumed in a meeting, which is largely the same problem that which is largely the same problem that which is largely the same problem that product teams have today, just at speed product teams have today, just at speed product teams have today, just at speed and scale. You can ship faster than ever and scale. You can ship faster than ever and scale. You can ship faster than ever now, but the hard part becomes knowing now, but the hard part becomes knowing now, but the hard part becomes knowing which changes actually improve the which changes actually improve the which changes actually improve the product. And now coding with AI only product. And now coding with AI only product. And now coding with AI only raises those stakes because LLMs are raises those stakes because LLMs are raises those stakes because LLMs are non-deterministic, meaning that the same non-deterministic, meaning that the same non-deterministic, meaning that the same input doesn't always produce the same input doesn't always produce the same input doesn't always produce the same output. So a small change to a prompt or output. So a small change to a prompt or output. So a small change to a prompt or model can have surprisingly large model can have surprisingly large model can have surprisingly large downstream effects. Offline evals will downstream effects. Offline evals will downstream effects. Offline evals will really only get you so far and you need really only get you so far and you need really only get you so far and you need to be getting signals from real users to be getting signals from real users to be getting signals from real users and making decisions on that. and making decisions on that. and making decisions on that. >> And that's where stats comes in. They >> And that's where stats comes in. They >> And that's where stats comes in. They offer product teams experimentation, offer product teams experimentation, offer product teams experimentation, feature flags, and product analytics all feature flags, and product analytics all feature flags, and product analytics all in one place. You can ship quickly, roll in one place. You can ship quickly, roll in one place. You can ship quickly, roll out changes safely, and measure how out changes safely, and measure how out changes safely, and measure how those changes impact users, making your those changes impact users, making your those changes impact users, making your product actually better instead of just product actually better instead of just product actually better instead of just guessing. Yes. So, just like Walt guessing. Yes. So, just like Walt guessing. Yes. So, just like Walt continuously was plusing Disneyland continuously was plusing Disneyland continuously was plusing Disneyland still today, Statig is how you improve still today, Statig is how you improve still today, Statig is how you improve your product after you've shipped it. your product after you've shipped it. your product after you've shipped it. You can learn more at You can learn more at You can learn more at statsig.com/acquired statsig.com/acquired statsig.com/acquired and just tell them that Ben and David and just tell them that Ben and David and just tell them that Ben and David sent you. All right. So, the development sent you. All right. So, the development sent you. All right. So, the development of the park, the team at WED had been of the park, the team at WED had been of the park, the team at WED had been getting inspiration and sort of getting inspiration and sort of getting inspiration and sort of concepting and iterating while all the concepting and iterating while all the concepting and iterating while all the ABC stuff is happening, while all the ABC stuff is happening, while all the ABC stuff is happening, while all the hype building around America is hype building around America is hype building around America is happening, and of course, while the happening, and of course, while the happening, and of course, while the financial negotiations are are financial negotiations are are financial negotiations are are happening. So, in September of 1953, as happening. So, in September of 1953, as happening. So, in September of 1953, as legend goes, Roy is about to walk into legend goes, Roy is about to walk into legend goes, Roy is about to walk into meetings with television executives, and meetings with television executives, and meetings with television executives, and Walt famously locks himself in a room Walt famously locks himself in a room Walt famously locks himself in a room with Herb Ryman for an entire weekend with Herb Ryman for an entire weekend with Herb Ryman for an entire weekend and says, "Herb, can you draw the first and says, "Herb, can you draw the first and says, "Herb, can you draw the first full drawing of Disneyland?" And Herb full drawing of Disneyland?" And Herb full drawing of Disneyland?" And Herb looks at him and he's like, "Dis what?" looks at him and he's like, "Dis what?" looks at him and he's like, "Dis what?" The first time hearing of this and he's The first time hearing of this and he's The first time hearing of this and he's like, "The theme park, you're going to like, "The theme park, you're going to like, "The theme park, you're going to come work on that with me." And he's come work on that with me." And he's come work on that with me." And he's like, "I don't even work here. I I used like, "I don't even work here. I I used like, "I don't even work here. I I used to work at Disney, but I I don't work to work at Disney, but I I don't work to work at Disney, but I I don't work here now. And Walt was like, "Yeah, but here now. And Walt was like, "Yeah, but here now. And Walt was like, "Yeah, but you're the guy to do this." And so Herb you're the guy to do this." And so Herb you're the guy to do this." And so Herb kind of looks at him. He says, "Can you kind of looks at him. He says, "Can you kind of looks at him. He says, "Can you tell me a little bit more about this tell me a little bit more about this tell me a little bit more about this theme park?" Walt, theme park?" Walt, theme park?" Walt, this is metaphorical, kind of locks the this is metaphorical, kind of locks the this is metaphorical, kind of locks the door. door. door. >> Yeah. He's like, "Great. I will stay >> Yeah. He's like, "Great. I will stay >> Yeah. He's like, "Great. I will stay here all weekend with you and tell you here all weekend with you and tell you here all weekend with you and tell you about the theme park." about the theme park." about the theme park." >> And out of the weekend emerges this >> And out of the weekend emerges this >> And out of the weekend emerges this beautiful drawing that we will send out beautiful drawing that we will send out beautiful drawing that we will send out in the email acquire.fm/e FM/AL that in the email acquire.fm/e FM/AL that in the email acquire.fm/e FM/AL that they can use as a sales tool for the they can use as a sales tool for the they can use as a sales tool for the first meeting with ABC. You've got a first meeting with ABC. You've got a first meeting with ABC. You've got a castle, you've got mountains, you've got castle, you've got mountains, you've got castle, you've got mountains, you've got the railroad, you've got the river. The the railroad, you've got the river. The the railroad, you've got the river. The bones are all there. bones are all there. bones are all there. >> The core vision of what Disneyland is. >> The core vision of what Disneyland is. >> The core vision of what Disneyland is. >> Yes. Yes. Other Wed employees, >> Yes. Yes. Other Wed employees, >> Yes. Yes. Other Wed employees, meanwhile, start traveling all over the meanwhile, start traveling all over the meanwhile, start traveling all over the US looking at the best existing theme US looking at the best existing theme US looking at the best existing theme parks. Walt and others travel overseas parks. Walt and others travel overseas parks. Walt and others travel overseas to places like Tivoli Gardens and to places like Tivoli Gardens and to places like Tivoli Gardens and Copenhagen to get sort of a a completely Copenhagen to get sort of a a completely Copenhagen to get sort of a a completely different take on how they could do a different take on how they could do a different take on how they could do a park with green space, much more park with green space, much more park with green space, much more pleasant, less carnival-like, safer, pleasant, less carnival-like, safer, pleasant, less carnival-like, safer, kind of a less seedy experience than you kind of a less seedy experience than you kind of a less seedy experience than you are getting in theme parks in the US. are getting in theme parks in the US. are getting in theme parks in the US. That is the goal. So, this year leading That is the goal. So, this year leading That is the goal. So, this year leading up to the park, what we were about to up to the park, what we were about to up to the park, what we were about to describe is completely insane. Remember describe is completely insane. Remember describe is completely insane. Remember I said that the date was fixed in the I said that the date was fixed in the I said that the date was fixed in the television deal in part because the TV television deal in part because the TV television deal in part because the TV show was going to culminate in a live show was going to culminate in a live show was going to culminate in a live broadcast of the actual park opening and broadcast of the actual park opening and broadcast of the actual park opening and there was all sorts of like brand new there was all sorts of like brand new there was all sorts of like brand new technology and logistics and operations technology and logistics and operations technology and logistics and operations that ABC was going to bring to bear for that ABC was going to bring to bear for that ABC was going to bring to bear for that. So they were they were planning that. So they were they were planning that. So they were they were planning around that around that around that >> and there are some sources that say that >> and there are some sources that say that >> and there are some sources that say that it was 366 days to build the park. If it was 366 days to build the park. If it was 366 days to build the park. If you actually look at physical you actually look at physical you actually look at physical construction, it was less than that. 11 construction, it was less than that. 11 construction, it was less than that. 11 months. Wow. So, they end up building months. Wow. So, they end up building months. Wow. So, they end up building Disneyland in onethird the time that it Disneyland in onethird the time that it Disneyland in onethird the time that it took to make Snow White. Incredible. took to make Snow White. Incredible. took to make Snow White. Incredible. This whole thing sounds like a fever This whole thing sounds like a fever This whole thing sounds like a fever dream when you describe it. A main dream when you describe it. A main dream when you describe it. A main street reflecting how Walt pictured the street reflecting how Walt pictured the street reflecting how Walt pictured the ideal small town from his childhood. ideal small town from his childhood. ideal small town from his childhood. Multiple rivers with different types of Multiple rivers with different types of Multiple rivers with different types of boats. There's going to be multiple boats. There's going to be multiple boats. There's going to be multiple rivers. Robotic animals coming out of rivers. Robotic animals coming out of rivers. Robotic animals coming out of the water on the Jungle Cruise. a the water on the Jungle Cruise. a the water on the Jungle Cruise. a castle. American Indians performing live castle. American Indians performing live castle. American Indians performing live shows of dances. Cars that kids, like shows of dances. Cars that kids, like shows of dances. Cars that kids, like three-year-old kids, can drive around three-year-old kids, can drive around three-year-old kids, can drive around and crash into stuff. and crash into stuff. and crash into stuff. >> Still my favorite part of Disneyland. >> Still my favorite part of Disneyland. >> Still my favorite part of Disneyland. >> Yes. Autotopia. >> Yes. Autotopia. >> Yes. Autotopia. >> An intense amount of greenery and trees >> An intense amount of greenery and trees >> An intense amount of greenery and trees that all had to be brought in. I mean, that all had to be brought in. I mean, that all had to be brought in. I mean, they're doing pine trees and they're they're doing pine trees and they're they're doing pine trees and they're doing palm trees. Absolutely exquisite doing palm trees. Absolutely exquisite doing palm trees. Absolutely exquisite landscaping to reinforce how pleasant landscaping to reinforce how pleasant landscaping to reinforce how pleasant and safe of a place that it was. A and safe of a place that it was. A and safe of a place that it was. A passenger train built from scratch on passenger train built from scratch on passenger train built from scratch on real railroad ties that had to be laid real railroad ties that had to be laid real railroad ties that had to be laid down. This thing is like Walt's down. This thing is like Walt's down. This thing is like Walt's feverdream reflection of America all in feverdream reflection of America all in feverdream reflection of America all in the most idealized, safe, clean, cheery the most idealized, safe, clean, cheery the most idealized, safe, clean, cheery way possible. They've got the past, way possible. They've got the past, way possible. They've got the past, they've got the future with Tomorrowland they've got the future with Tomorrowland they've got the future with Tomorrowland and Frontier Land and Adventure Land, and Frontier Land and Adventure Land, and Frontier Land and Adventure Land, but no sign of the present. So, you can but no sign of the present. So, you can but no sign of the present. So, you can be completely immersed and disconnected be completely immersed and disconnected be completely immersed and disconnected from your day-to-day troubles. from your day-to-day troubles. from your day-to-day troubles. >> You know what? I actually never realized >> You know what? I actually never realized >> You know what? I actually never realized that that Disneyland is 100% about the that that Disneyland is 100% about the that that Disneyland is 100% about the past and the future and 0% about the past and the future and 0% about the past and the future and 0% about the present present present >> and about the fantasy. You can go to >> and about the fantasy. You can go to >> and about the fantasy. You can go to fantasy land. That's your other option fantasy land. That's your other option fantasy land. That's your other option if you don't want the past or the if you don't want the past or the if you don't want the past or the future. future. future. >> So, the first part of construction is >> So, the first part of construction is >> So, the first part of construction is the 20 foot high burm insulating all of the 20 foot high burm insulating all of the 20 foot high burm insulating all of Disneyland from the outside world with Disneyland from the outside world with Disneyland from the outside world with the Disneyland Railroad sitting right at the Disneyland Railroad sitting right at the Disneyland Railroad sitting right at top it. To this day, I think the most top it. To this day, I think the most top it. To this day, I think the most impressive thing about Disneyland is the impressive thing about Disneyland is the impressive thing about Disneyland is the sightelines. Yeah. Despite several very sightelines. Yeah. Despite several very sightelines. Yeah. Despite several very very different environments on a very different environments on a very different environments on a relatively small plot of land, I mean relatively small plot of land, I mean relatively small plot of land, I mean from Star Wars today to Frontier Land, from Star Wars today to Frontier Land, from Star Wars today to Frontier Land, Adventure Land, Tomorrowland, Main Adventure Land, Tomorrowland, Main Adventure Land, Tomorrowland, Main Street, you really only ever see what Street, you really only ever see what Street, you really only ever see what the imagineers want you to. And it the imagineers want you to. And it the imagineers want you to. And it creates that unique experience where creates that unique experience where creates that unique experience where Main Street can feel nostalgic and Main Street can feel nostalgic and Main Street can feel nostalgic and wholly different than the jungle over at wholly different than the jungle over at wholly different than the jungle over at Adventureland and very, very different Adventureland and very, very different Adventureland and very, very different than the strip mall mania happening just than the strip mall mania happening just than the strip mall mania happening just a few acres away on any side of you. a few acres away on any side of you. a few acres away on any side of you. >> Yep. I'll just keep going on the >> Yep. I'll just keep going on the >> Yep. I'll just keep going on the insanity of building this thing. There insanity of building this thing. There insanity of building this thing. There wasn't yet any on-site buildings to wasn't yet any on-site buildings to wasn't yet any on-site buildings to fabricate the rides. So, they did fabricate the rides. So, they did fabricate the rides. So, they did construction at Burbank. construction at Burbank. construction at Burbank. >> That's right. And they trucked it all >> That's right. And they trucked it all >> That's right. And they trucked it all down. down. down. >> That's a 50minute drive if you don't hit >> That's a 50minute drive if you don't hit >> That's a 50minute drive if you don't hit traffic. And the highway was still being traffic. And the highway was still being traffic. And the highway was still being built. So, it's all on surface streets. built. So, it's all on surface streets. built. So, it's all on surface streets. It's crazy. Think of the scale of the It's crazy. Think of the scale of the It's crazy. Think of the scale of the stuff that they were building. stuff that they were building. stuff that they were building. >> Yep. >> Yep. >> Yep. >> Halfway through construction, they >> Halfway through construction, they >> Halfway through construction, they discover that Rivers of America almost discover that Rivers of America almost discover that Rivers of America almost doesn't work at all. when they filled it doesn't work at all. when they filled it doesn't work at all. when they filled it with water, the water just drained into with water, the water just drained into with water, the water just drained into the dirt underneath. And David, as you the dirt underneath. And David, as you the dirt underneath. And David, as you mentioned, cost ballooned from the mentioned, cost ballooned from the mentioned, cost ballooned from the original 5 million to a total of 17 original 5 million to a total of 17 original 5 million to a total of 17 million. But that's actually pretty million. But that's actually pretty million. But that's actually pretty cheap. cheap. cheap. >> Totally. >> Totally. >> Totally. >> I I did the inflation math. That's $210 >> I I did the inflation math. That's $210 >> I I did the inflation math. That's $210 million today. You absolutely could not million today. You absolutely could not million today. You absolutely could not build anything remotely close to build anything remotely close to build anything remotely close to Disneyland today for $200 million or in Disneyland today for $200 million or in Disneyland today for $200 million or in a single year. It a single year. It a single year. It >> is astounding how it all got built. Also >> is astounding how it all got built. Also >> is astounding how it all got built. Also very very convenient for Disney that very very convenient for Disney that very very convenient for Disney that they sold a lot of Coonkin caps as the they sold a lot of Coonkin caps as the they sold a lot of Coonkin caps as the budget was ballooning. [laughter] budget was ballooning. [laughter] budget was ballooning. [laughter] >> Yes. And found sponsors to sponsor lands >> Yes. And found sponsors to sponsor lands >> Yes. And found sponsors to sponsor lands and rides and drew on every ounce of and rides and drew on every ounce of and rides and drew on every ounce of debt they could. debt they could. debt they could. >> Yes. This is the other just like >> Yes. This is the other just like >> Yes. This is the other just like absolute galaxy brain Walt addition to absolute galaxy brain Walt addition to absolute galaxy brain Walt addition to the flywheel that he brings in with the the flywheel that he brings in with the the flywheel that he brings in with the parks. Corporate sponsorships. parks. Corporate sponsorships. parks. Corporate sponsorships. >> Yes. >> Yes. >> Yes. >> There were 65 corporate sponsors in >> There were 65 corporate sponsors in >> There were 65 corporate sponsors in Disneyland within the first few years of Disneyland within the first few years of Disneyland within the first few years of it opening. So, at opening there was it opening. So, at opening there was it opening. So, at opening there was Richfield Auto for Autotopia, Bank of Richfield Auto for Autotopia, Bank of Richfield Auto for Autotopia, Bank of America, of course they had to be there, America, of course they had to be there, America, of course they had to be there, a sponsor of Fantasy Land, Coca-Cola as a sponsor of Fantasy Land, Coca-Cola as a sponsor of Fantasy Land, Coca-Cola as well. well. well. >> You won't believe this. In addition to >> You won't believe this. In addition to >> You won't believe this. In addition to Coca-Cola, Pepsi, they had a sponsorship Coca-Cola, Pepsi, they had a sponsorship Coca-Cola, Pepsi, they had a sponsorship in Frontier Land. Coke actually didn't in Frontier Land. Coke actually didn't in Frontier Land. Coke actually didn't become the exclusive uh supplier sponsor become the exclusive uh supplier sponsor become the exclusive uh supplier sponsor until 1990. until 1990. until 1990. >> Yeah, that's right. >> Yeah, that's right. >> Yeah, that's right. >> American Motors, Santa Fe Railway, TWWA >> American Motors, Santa Fe Railway, TWWA >> American Motors, Santa Fe Railway, TWWA for the rocket to the moon, Monsanto was for the rocket to the moon, Monsanto was for the rocket to the moon, Monsanto was actually a sponsor. actually a sponsor. actually a sponsor. >> That's right. Carnation, Kodak, the list >> That's right. Carnation, Kodak, the list >> That's right. Carnation, Kodak, the list goes on. But I I do have one favorite, goes on. But I I do have one favorite, goes on. But I I do have one favorite, David. David. David. >> The National Rifle Association. >> The National Rifle Association. >> The National Rifle Association. [laughter] [laughter] [laughter] >> Wow. Frontier Land. [gasps] >> Wow. Frontier Land. [gasps] >> Wow. Frontier Land. [gasps] >> Yes. Inside the Davy Crockett Museum, >> Yes. Inside the Davy Crockett Museum, >> Yes. Inside the Davy Crockett Museum, there was a shooting gallery. There you there was a shooting gallery. There you there was a shooting gallery. There you go. go. go. >> And it's unclear from the historical >> And it's unclear from the historical >> And it's unclear from the historical records if it is technically a records if it is technically a records if it is technically a sponsorship, but the rifles were sponsorship, but the rifles were sponsorship, but the rifles were provided by the NRA. Like real rifles. provided by the NRA. Like real rifles. provided by the NRA. Like real rifles. >> There you go. Flywheel in action. >> There you go. Flywheel in action. >> There you go. Flywheel in action. >> Yes. [laughter] >> Yes. [laughter] >> Yes. [laughter] So, I was trying to do some comparison So, I was trying to do some comparison So, I was trying to do some comparison on this 17 million inflation adjusted to on this 17 million inflation adjusted to on this 17 million inflation adjusted to 210 million. The Rise of the Resistance 210 million. The Rise of the Resistance 210 million. The Rise of the Resistance Star Wars ride that they built in 2019, Star Wars ride that they built in 2019, Star Wars ride that they built in 2019, which is excellent if you've never been which is excellent if you've never been which is excellent if you've never been on it, was rumored to cost anywhere from on it, was rumored to cost anywhere from on it, was rumored to cost anywhere from 200 million to$450 million for just one 200 million to$450 million for just one 200 million to$450 million for just one ride. ride. ride. >> Right. And they built the whole park for >> Right. And they built the whole park for >> Right. And they built the whole park for less than that. less than that. less than that. >> Yes, [laughter] man. The things you >> Yes, [laughter] man. The things you >> Yes, [laughter] man. The things you could do back then. could do back then. could do back then. >> Yes. Right. I mean, uh, permitting was >> Yes. Right. I mean, uh, permitting was >> Yes. Right. I mean, uh, permitting was pretty light back then. So, we get to pretty light back then. So, we get to pretty light back then. So, we get to opening day. How's it go? Well, less opening day. How's it go? Well, less opening day. How's it go? Well, less than half of the planned rides were than half of the planned rides were than half of the planned rides were open. And, uh, just to give you a sense open. And, uh, just to give you a sense open. And, uh, just to give you a sense of how down to the wire it came, Walt of how down to the wire it came, Walt of how down to the wire it came, Walt personally put on a mask and was helping personally put on a mask and was helping personally put on a mask and was helping to paint the 20,000 Leagues Under the to paint the 20,000 Leagues Under the to paint the 20,000 Leagues Under the Sea exhibit the day before it opened. Sea exhibit the day before it opened. Sea exhibit the day before it opened. Opening day comes, it's nearly 100° in Opening day comes, it's nearly 100° in Opening day comes, it's nearly 100° in the middle of July in Southern the middle of July in Southern the middle of July in Southern California. that created issues with the California. that created issues with the California. that created issues with the newly poured asphalt and there are newly poured asphalt and there are newly poured asphalt and there are legends of women's high heels sinking legends of women's high heels sinking legends of women's high heels sinking into the asphalt because of [laughter] into the asphalt because of [laughter] into the asphalt because of [laughter] that. There are water fountains, that. There are water fountains, that. There are water fountains, but they don't yet have the plumbing but they don't yet have the plumbing but they don't yet have the plumbing finished to turn on. So, if you want finished to turn on. So, if you want finished to turn on. So, if you want something to drink in this 100° heat, something to drink in this 100° heat, something to drink in this 100° heat, you can go buy a Pepsi. you can go buy a Pepsi. you can go buy a Pepsi. >> Exactly. >> Exactly. >> Exactly. >> The restaurants ran out of food. Rides >> The restaurants ran out of food. Rides >> The restaurants ran out of food. Rides were breaking down. Mr. Toad's Wild Ride were breaking down. Mr. Toad's Wild Ride were breaking down. Mr. Toad's Wild Ride went down because it was too much for went down because it was too much for went down because it was too much for the power grid. and the Mark Twain the power grid. and the Mark Twain the power grid. and the Mark Twain riverboat began to sink since the riverboat began to sink since the riverboat began to sink since the operator let 500 people onto it, which operator let 500 people onto it, which operator let 500 people onto it, which was double the 250 that he was supposed was double the 250 that he was supposed was double the 250 that he was supposed to. But despite all of this, it is a to. But despite all of this, it is a to. But despite all of this, it is a giant giant hit. That first day that was giant giant hit. That first day that was giant giant hit. That first day that was technically a preview day for press and technically a preview day for press and technically a preview day for press and invited guests, 15,000 people were invited guests, 15,000 people were invited guests, 15,000 people were invited, but it is believed that 30,000 invited, but it is believed that 30,000 invited, but it is believed that 30,000 attended. attended. attended. >> And then that was in person. >> And then that was in person. >> And then that was in person. >> Yes. >> Yes. >> Yes. >> Then there's the TV show. So ABC rolls >> Then there's the TV show. So ABC rolls >> Then there's the TV show. So ABC rolls in with 22 live TV cameras and a giant in with 22 live TV cameras and a giant in with 22 live TV cameras and a giant crew to operate it all with 1955 crew to operate it all with 1955 crew to operate it all with 1955 technology. The viewership numbers are technology. The viewership numbers are technology. The viewership numbers are astonishing. It was the world's largest astonishing. It was the world's largest astonishing. It was the world's largest live telecast ever. 83 million people live telecast ever. 83 million people live telecast ever. 83 million people tuned in to watch from home, which means tuned in to watch from home, which means tuned in to watch from home, which means that nearly half of America watched this that nearly half of America watched this that nearly half of America watched this broadcast, broadcast, broadcast, >> watched this 90minute commercial, >> watched this 90minute commercial, >> watched this 90minute commercial, [laughter] [laughter] [laughter] >> right? Yes. >> right? Yes. >> right? Yes. >> And it's it's crazy, right? It's live >> And it's it's crazy, right? It's live >> And it's it's crazy, right? It's live coverage of this like Wackadoo amusement coverage of this like Wackadoo amusement coverage of this like Wackadoo amusement park opening. On the one hand, why would park opening. On the one hand, why would park opening. On the one hand, why would you want to watch that? On the other you want to watch that? On the other you want to watch that? On the other hand, you've been conditioned over the hand, you've been conditioned over the hand, you've been conditioned over the last year by one of the most popular last year by one of the most popular last year by one of the most popular televisions programs in America that televisions programs in America that televisions programs in America that this is going to be a giant deal, so you this is going to be a giant deal, so you this is going to be a giant deal, so you better be watching when it happens. better be watching when it happens. better be watching when it happens. >> Do you know I'm sure you do, but do you >> Do you know I'm sure you do, but do you >> Do you know I'm sure you do, but do you know who the three anchors were that ABC know who the three anchors were that ABC know who the three anchors were that ABC hired to do the opening? hired to do the opening? hired to do the opening? >> One was Ronald Reagan, right? >> One was Ronald Reagan, right? >> One was Ronald Reagan, right? >> Ronald Reagan is the big one. Art >> Ronald Reagan is the big one. Art >> Ronald Reagan is the big one. Art Linklator, Bob Cummings, and future Linklator, Bob Cummings, and future Linklator, Bob Cummings, and future president of the United States of president of the United States of president of the United States of America, Ronald Reagan. America, Ronald Reagan. America, Ronald Reagan. >> It's crazy that the TV strategy just >> It's crazy that the TV strategy just >> It's crazy that the TV strategy just absolutely knocked it out of the park. absolutely knocked it out of the park. absolutely knocked it out of the park. What does half of America tune into What does half of America tune into What does half of America tune into anymore? I mean, ever. anymore? I mean, ever. anymore? I mean, ever. >> Yeah. I mean, even the Super Bowl today, >> Yeah. I mean, even the Super Bowl today, >> Yeah. I mean, even the Super Bowl today, which is the biggest television event in which is the biggest television event in which is the biggest television event in America, only gets about 40% of US America, only gets about 40% of US America, only gets about 40% of US households tuning in. And this was just households tuning in. And this was just households tuning in. And this was just to watch guys talk about what's going on to watch guys talk about what's going on to watch guys talk about what's going on behind them in an amusement park. behind them in an amusement park. behind them in an amusement park. >> No, I think it was that America had been >> No, I think it was that America had been >> No, I think it was that America had been primed via the TV show for the whole primed via the TV show for the whole primed via the TV show for the whole past year that this was going to be the past year that this was going to be the past year that this was going to be the event of 1955. event of 1955. event of 1955. >> Yeah. So cool. By the end of the first >> Yeah. So cool. By the end of the first >> Yeah. So cool. By the end of the first week, there was 160,000 visitors. Two week, there was 160,000 visitors. Two week, there was 160,000 visitors. Two months after opening, the millionth months after opening, the millionth months after opening, the millionth visitor walked in. And in the first visitor walked in. And in the first visitor walked in. And in the first year, there had been 3.6 6 million year, there had been 3.6 6 million year, there had been 3.6 6 million visitors. visitors. visitors. >> You have in the second year of the >> You have in the second year of the >> You have in the second year of the park's operation, it does over 4 million park's operation, it does over 4 million park's operation, it does over 4 million visitors, which makes it more popular visitors, which makes it more popular visitors, which makes it more popular than both the Grand Canyon and than both the Grand Canyon and than both the Grand Canyon and Yellowstone National Park. It's like the Yellowstone National Park. It's like the Yellowstone National Park. It's like the most popular park in America is now most popular park in America is now most popular park in America is now Disneyland. Disneyland. Disneyland. >> And today, the park has over 900 million >> And today, the park has over 900 million >> And today, the park has over 900 million visitors since opening day. visitors since opening day. visitors since opening day. >> My favorite little bit of trivia about >> My favorite little bit of trivia about >> My favorite little bit of trivia about Disneyland was learning about the Disneyland was learning about the Disneyland was learning about the original business model. So, you used to original business model. So, you used to original business model. So, you used to have to pay to get on the rides. have to pay to get on the rides. have to pay to get on the rides. >> You would pay, I think it was a dollar >> You would pay, I think it was a dollar >> You would pay, I think it was a dollar for admission to the park, for admission to the park, for admission to the park, >> and then you could buy booklets of >> and then you could buy booklets of >> and then you could buy booklets of tickets that would get you admission to tickets that would get you admission to tickets that would get you admission to the various rides and attractions and the various rides and attractions and the various rides and attractions and different rides and attractions would different rides and attractions would different rides and attractions would have different ticket grades and would have different ticket grades and would have different ticket grades and would be priced differently. It was this whole be priced differently. It was this whole be priced differently. It was this whole complicated business model that they complicated business model that they complicated business model that they obviously have drastically simplified obviously have drastically simplified obviously have drastically simplified since and raised prices astronomically. since and raised prices astronomically. since and raised prices astronomically. Yes, absolutely. And I mean the the Yes, absolutely. And I mean the the Yes, absolutely. And I mean the the biggest sort of success of the whole biggest sort of success of the whole biggest sort of success of the whole thing is it just couldn't be farther thing is it just couldn't be farther thing is it just couldn't be farther from a carnival or fairground. And that from a carnival or fairground. And that from a carnival or fairground. And that turned out to be a great great business. turned out to be a great great business. turned out to be a great great business. Yes. Harrison Price, who led the Yes. Harrison Price, who led the Yes. Harrison Price, who led the research at SRRI for Disneyland, said research at SRRI for Disneyland, said research at SRRI for Disneyland, said Disney's rethinking of the American Disney's rethinking of the American Disney's rethinking of the American amusement park had striking and amusement park had striking and amusement park had striking and immediate business consequences. Because immediate business consequences. Because immediate business consequences. Because his park was such a pleasant place, his park was such a pleasant place, his park was such a pleasant place, people stayed there longer, and because people stayed there longer, and because people stayed there longer, and because they stayed longer, they spent more they stayed longer, they spent more they stayed longer, they spent more time. Basically, Price said he tripled time. Basically, Price said he tripled time. Basically, Price said he tripled per capita expenditures because he per capita expenditures because he per capita expenditures because he tripled time. tripled time. tripled time. >> And then, of course, you know, fast >> And then, of course, you know, fast >> And then, of course, you know, fast forward to today at Disneyland or Disney forward to today at Disneyland or Disney forward to today at Disneyland or Disney World. World. World. >> You go for like 14 hours. >> You go for like 14 hours. >> You go for like 14 hours. >> Yeah. Right. Per day. I mean, you you're >> Yeah. Right. Per day. I mean, you you're >> Yeah. Right. Per day. I mean, you you're not going there for just a day. You're not going there for just a day. You're not going there for just a day. You're going there for multiple days, right? going there for multiple days, right? going there for multiple days, right? >> You're making a whole trip out of it. >> You're making a whole trip out of it. >> You're making a whole trip out of it. >> And if you're going to Disney World, >> And if you're going to Disney World, >> And if you're going to Disney World, then you're there a whole week. then you're there a whole week. then you're there a whole week. >> Y >> Y >> Y >> So, I I promise we won't do too much >> So, I I promise we won't do too much >> So, I I promise we won't do too much part two foreshadowing on this episode, part two foreshadowing on this episode, part two foreshadowing on this episode, but this is just one point I got to but this is just one point I got to but this is just one point I got to drive home. Disney parks and cruises drive home. Disney parks and cruises drive home. Disney parks and cruises today does $ 36 billion in revenue and today does $ 36 billion in revenue and today does $ 36 billion in revenue and $10 billion in profit per year. That is $10 billion in profit per year. That is $10 billion in profit per year. That is twice the amount of profit that their twice the amount of profit that their twice the amount of profit that their entertainment division produces. entertainment division produces. entertainment division produces. >> Yeah. Also just wild to think about >> Yeah. Also just wild to think about >> Yeah. Also just wild to think about physical amusement parks having physical amusement parks having physical amusement parks having essentially a 30% net income margin. essentially a 30% net income margin. essentially a 30% net income margin. [laughter] [laughter] [laughter] >> What other physical park operator is >> What other physical park operator is >> What other physical park operator is going to operate with those kind of going to operate with those kind of going to operate with those kind of margins? And the fact that it's a bigger margins? And the fact that it's a bigger margins? And the fact that it's a bigger business for Disney than their movies. business for Disney than their movies. business for Disney than their movies. Yes. Like twice as big of a business. Yes. Like twice as big of a business. Yes. Like twice as big of a business. And this is, you know, there's 160 acres And this is, you know, there's 160 acres And this is, you know, there's 160 acres in California. There's a big swath of in California. There's a big swath of in California. There's a big swath of land in Florida. There's five or six of land in Florida. There's five or six of land in Florida. There's five or six of them around the world. There's some them around the world. There's some them around the world. There's some cruise ships. And that spits off more cruise ships. And that spits off more cruise ships. And that spits off more profit, twice as much profit than all of profit, twice as much profit than all of profit, twice as much profit than all of the other Disney things you can the other Disney things you can the other Disney things you can experience anywhere, anytime. experience anywhere, anytime. experience anywhere, anytime. >> Well, we're gonna get into this in a >> Well, we're gonna get into this in a >> Well, we're gonna get into this in a minute here. Really, the impressive minute here. Really, the impressive minute here. Really, the impressive thing is that Disney films are now great thing is that Disney films are now great thing is that Disney films are now great again, and still the parks do more again, and still the parks do more again, and still the parks do more revenue. We're about to hit a period revenue. We're about to hit a period revenue. We're about to hit a period where the parks do a lot more net income where the parks do a lot more net income where the parks do a lot more net income than the films because the films suck. than the films because the films suck. than the films because the films suck. Now, reflecting on all this, Disneyland Now, reflecting on all this, Disneyland Now, reflecting on all this, Disneyland actually was not a bet the company move actually was not a bet the company move actually was not a bet the company move for Walt Disney Productions financially. for Walt Disney Productions financially. for Walt Disney Productions financially. It was cleverly structured by Roy to not It was cleverly structured by Roy to not It was cleverly structured by Roy to not be, be, be, >> but reputationally it absolutely was. I >> but reputationally it absolutely was. I >> but reputationally it absolutely was. I mean, people were willing to take these mean, people were willing to take these mean, people were willing to take these giant leaps on Walt because of who he giant leaps on Walt because of who he giant leaps on Walt because of who he was and what he had accomplished the was and what he had accomplished the was and what he had accomplished the same way that they do with Elon or Steve same way that they do with Elon or Steve same way that they do with Elon or Steve Jobs or Warren Buffett getting deals Jobs or Warren Buffett getting deals Jobs or Warren Buffett getting deals that no one else could get. So Roy was that no one else could get. So Roy was that no one else could get. So Roy was like great at making sure it wouldn't like great at making sure it wouldn't like great at making sure it wouldn't financially bankrupt the company. But financially bankrupt the company. But financially bankrupt the company. But Walt was sort of betting that reputation Walt was sort of betting that reputation Walt was sort of betting that reputation extremely publicly to half the extremely publicly to half the extremely publicly to half the households in the US. So not only was he households in the US. So not only was he households in the US. So not only was he betting the company, he was betting his betting the company, he was betting his betting the company, he was betting his own personal fortune, too. Remember that own personal fortune, too. Remember that own personal fortune, too. Remember that $250,000 that he put in? He sold his $250,000 that he put in? He sold his $250,000 that he put in? He sold his vacation house in Palm Springs. He vacation house in Palm Springs. He vacation house in Palm Springs. He borrowed $100,000 against his life borrowed $100,000 against his life borrowed $100,000 against his life insurance and he took on a personal loan insurance and he took on a personal loan insurance and he took on a personal loan to fund that obligation. to fund that obligation. to fund that obligation. >> Yep. All true and all necessary because >> Yep. All true and all necessary because >> Yep. All true and all necessary because of how they had always operated the of how they had always operated the of how they had always operated the company. He wasn't taking lots of cash company. He wasn't taking lots of cash company. He wasn't taking lots of cash out of the company out of the company out of the company >> until the sort of renegotiation of his >> until the sort of renegotiation of his >> until the sort of renegotiation of his employment contract. employment contract. employment contract. >> Yep. >> Yep. >> Yep. >> So, there is a fascinating kod to all >> So, there is a fascinating kod to all >> So, there is a fascinating kod to all this crazy corporate stuff on how the this crazy corporate stuff on how the this crazy corporate stuff on how the park was formed. You might be wondering, park was formed. You might be wondering, park was formed. You might be wondering, well, wait, doesn't the Walt Disney well, wait, doesn't the Walt Disney well, wait, doesn't the Walt Disney Company own the park outright now? I Company own the park outright now? I Company own the park outright now? I mean, when you visit Disneyland, don't mean, when you visit Disneyland, don't mean, when you visit Disneyland, don't you assume, hey, wait, this is just part you assume, hey, wait, this is just part you assume, hey, wait, this is just part of Disney. What about that weird joint of Disney. What about that weird joint of Disney. What about that weird joint venture thing and ABC and Walt venture thing and ABC and Walt venture thing and ABC and Walt personally? So, here's how it all goes personally? So, here's how it all goes personally? So, here's how it all goes down. The headline is the Walt Disney down. The headline is the Walt Disney down. The headline is the Walt Disney Company would not actually own the park Company would not actually own the park Company would not actually own the park and everything within its borders for a and everything within its borders for a and everything within its borders for a full 27 years after opening in 1982. full 27 years after opening in 1982. full 27 years after opening in 1982. So here's the the full story of who sold So here's the the full story of who sold So here's the the full story of who sold what and when. Pretty quickly, Walt what and when. Pretty quickly, Walt what and when. Pretty quickly, Walt Disney Productions exercised their right Disney Productions exercised their right Disney Productions exercised their right to buy out Western Publishing and Walt to buy out Western Publishing and Walt to buy out Western Publishing and Walt personally. So by 1958, 3 years after personally. So by 1958, 3 years after personally. So by 1958, 3 years after opening, they owned 66%. opening, they owned 66%. opening, they owned 66%. But the buyout right to ABC stake, that But the buyout right to ABC stake, that But the buyout right to ABC stake, that wasn't pre-negotiated. M wasn't pre-negotiated. M wasn't pre-negotiated. M >> so in 1960 when the company actually had >> so in 1960 when the company actually had >> so in 1960 when the company actually had enough cash to do it that's when Roy enough cash to do it that's when Roy enough cash to do it that's when Roy negotiated hey we'll pay you $7.5 negotiated hey we'll pay you $7.5 negotiated hey we'll pay you $7.5 million to buy out your your stake so by million to buy out your your stake so by million to buy out your your stake so by 1960 the publicly traded company Walt 1960 the publicly traded company Walt 1960 the publicly traded company Walt Disney Productions did own all of Disney Productions did own all of Disney Productions did own all of Disneyland Inc. But that leaves Wed Disneyland Inc. But that leaves Wed Disneyland Inc. But that leaves Wed Enterprises which had been hired as a Enterprises which had been hired as a Enterprises which had been hired as a contractor to build all the stuff. contractor to build all the stuff. contractor to build all the stuff. >> Yes. And Wed Enterprises is Imagineering >> Yes. And Wed Enterprises is Imagineering >> Yes. And Wed Enterprises is Imagineering today. Disney Imagineering. today. Disney Imagineering. today. Disney Imagineering. >> Yes. But Wed Enterprises, the entity at >> Yes. But Wed Enterprises, the entity at >> Yes. But Wed Enterprises, the entity at this point in time, also owned rights to this point in time, also owned rights to this point in time, also owned rights to some elements in the park, some elements in the park, some elements in the park, >> right? And it wasn't consolidated into >> right? And it wasn't consolidated into >> right? And it wasn't consolidated into Disney, the company yet, right? It was Disney, the company yet, right? It was Disney, the company yet, right? It was still this separate thing owned by Walt, still this separate thing owned by Walt, still this separate thing owned by Walt, >> right? So Wed, which Walt is the 100% >> right? So Wed, which Walt is the 100% >> right? So Wed, which Walt is the 100% shareholder of, actually owned the shareholder of, actually owned the shareholder of, actually owned the railroad outright. It had been railroad outright. It had been railroad outright. It had been negotiated. negotiated. negotiated. >> Of course, he did [laughter] >> Of course, he did [laughter] >> Of course, he did [laughter] >> as a part of the personal services >> as a part of the personal services >> as a part of the personal services contract because it was like, hey, I was contract because it was like, hey, I was contract because it was like, hey, I was already doing this side project and now already doing this side project and now already doing this side project and now I'm just putting it on Disneyland. I'm just putting it on Disneyland. I'm just putting it on Disneyland. [laughter] [laughter] [laughter] >> It all comes back to trains. >> It all comes back to trains. >> It all comes back to trains. >> So, he got ticket revenue from it as an >> So, he got ticket revenue from it as an >> So, he got ticket revenue from it as an annuity basically. annuity basically. annuity basically. >> Right. Cuz all the rides cost money. So, >> Right. Cuz all the rides cost money. So, >> Right. Cuz all the rides cost money. So, the the railroad at Disneyland, the the railroad at Disneyland, the the railroad at Disneyland, >> yes, >> yes, >> yes, >> was Walts. >> was Walts. >> was Walts. >> Same thing with the Montreal. These were >> Same thing with the Montreal. These were >> Same thing with the Montreal. These were not owned by Disneyland Inc., they were not owned by Disneyland Inc., they were not owned by Disneyland Inc., they were owned by Wed. owned by Wed. owned by Wed. >> Amazing. We also mentioned since Wed was >> Amazing. We also mentioned since Wed was >> Amazing. We also mentioned since Wed was Walt's personal company, it owned Walt's Walt's personal company, it owned Walt's Walt's personal company, it owned Walt's name and likeness, which led to that 10% name and likeness, which led to that 10% name and likeness, which led to that 10% royalty on merchandise. royalty on merchandise. royalty on merchandise. >> In 1963, 8 years after the park opened, >> In 1963, 8 years after the park opened, >> In 1963, 8 years after the park opened, Roy was getting very nervous that the Roy was getting very nervous that the Roy was getting very nervous that the public shareholders would sue over this public shareholders would sue over this public shareholders would sue over this admittedly very tenuous structure. So, admittedly very tenuous structure. So, admittedly very tenuous structure. So, they reached a deal. Wed would get they reached a deal. Wed would get they reached a deal. Wed would get sliced into two pieces. Imagineering, sliced into two pieces. Imagineering, sliced into two pieces. Imagineering, the architectural engineering the architectural engineering the architectural engineering department, and everything else. Disney department, and everything else. Disney department, and everything else. Disney Productions would buy the half of Wed Productions would buy the half of Wed Productions would buy the half of Wed that was Imagineering. So they finally that was Imagineering. So they finally that was Imagineering. So they finally in-house Imagineering in 1965. The rest in-house Imagineering in 1965. The rest in-house Imagineering in 1965. The rest of the holdings would be renamed Rhett of the holdings would be renamed Rhett of the holdings would be renamed Rhett Law, which is Walter backwards. Law, which is Walter backwards. Law, which is Walter backwards. >> Right. Right. >> Right. Right. >> Right. Right. >> And inside of Rhettaw, Walt would get to >> And inside of Rhettaw, Walt would get to >> And inside of Rhettaw, Walt would get to keep the trains, the Montreal, and his keep the trains, the Montreal, and his keep the trains, the Montreal, and his 10% royalty. This is in 1965. 10% royalty. This is in 1965. 10% royalty. This is in 1965. that would actually last all the way that would actually last all the way that would actually last all the way until 1982, nearly three decades after until 1982, nearly three decades after until 1982, nearly three decades after the opening, where the company says the opening, where the company says the opening, where the company says enough is enough. Goes to Walt's family, enough is enough. Goes to Walt's family, enough is enough. Goes to Walt's family, cuz this was after he passed away, and cuz this was after he passed away, and cuz this was after he passed away, and they bought out the name rights, the they bought out the name rights, the they bought out the name rights, the Montreal, and the railroad in exchange Montreal, and the railroad in exchange Montreal, and the railroad in exchange for $43 million of Disney stock. for $43 million of Disney stock. for $43 million of Disney stock. Insanely Wed Enterprises, which would Insanely Wed Enterprises, which would Insanely Wed Enterprises, which would later be Rhett Law, got a total of $75 later be Rhett Law, got a total of $75 later be Rhett Law, got a total of $75 million in checks from Walt Disney million in checks from Walt Disney million in checks from Walt Disney Productions for the Disneyland Railroad Productions for the Disneyland Railroad Productions for the Disneyland Railroad and for the Montreal between 1953 and and for the Montreal between 1953 and and for the Montreal between 1953 and 1981 and another 46 million for name 1981 and another 46 million for name 1981 and another 46 million for name royalties. royalties. royalties. >> Wow. So, I guess the question as a >> Wow. So, I guess the question as a >> Wow. So, I guess the question as a Disney shareholder would have been, was Disney shareholder would have been, was Disney shareholder would have been, was it worth it, it worth it, it worth it, >> right? >> right? >> right? >> And the obvious answer is yes. I mean, >> And the obvious answer is yes. I mean, >> And the obvious answer is yes. I mean, there's all these conflicts of interest there's all these conflicts of interest there's all these conflicts of interest everywhere, and this would never fly everywhere, and this would never fly everywhere, and this would never fly today with sort of modern shareholder today with sort of modern shareholder today with sort of modern shareholder and SEC and securities laws, but in and SEC and securities laws, but in and SEC and securities laws, but in practice, if you were a Disneyland practice, if you were a Disneyland practice, if you were a Disneyland shareholder then and you held through shareholder then and you held through shareholder then and you held through all of this, that worked out great for all of this, that worked out great for all of this, that worked out great for you. you. you. >> Well, speaking of how great it would >> Well, speaking of how great it would >> Well, speaking of how great it would have worked out for you after the launch have worked out for you after the launch have worked out for you after the launch of the TV show, the park, the company is of the TV show, the park, the company is of the TV show, the park, the company is just firing on all cylinders again. and just firing on all cylinders again. and just firing on all cylinders again. and Disneyland. The combination of the Disneyland. The combination of the Disneyland. The combination of the television show and the park have really television show and the park have really television show and the park have really added a fifth element to the flywheel added a fifth element to the flywheel added a fifth element to the flywheel business model. That's right. You've got business model. That's right. You've got business model. That's right. You've got one, compelling great IP. Two, maximize one, compelling great IP. Two, maximize one, compelling great IP. Two, maximize distribution in the core vehicle. Three, distribution in the core vehicle. Three, distribution in the core vehicle. Three, feed the IP into as many ancillary feed the IP into as many ancillary feed the IP into as many ancillary vehicles as possible. Four, you've got vehicles as possible. Four, you've got vehicles as possible. Four, you've got the re-releases in the vault. And now the re-releases in the vault. And now the re-releases in the vault. And now five, parks and television. This is uh five, parks and television. This is uh five, parks and television. This is uh television to amplify interest in all of television to amplify interest in all of television to amplify interest in all of the characters. You've got parks to do the characters. You've got parks to do the characters. You've got parks to do almost like the extreme bottom of almost like the extreme bottom of almost like the extreme bottom of funnel. The way to experience the most funnel. The way to experience the most funnel. The way to experience the most Disney thing you possibly could Disney thing you possibly could Disney thing you possibly could experience every once in a while, but a experience every once in a while, but a experience every once in a while, but a huge monetization event. And of course, huge monetization event. And of course, huge monetization event. And of course, you do that. I I mean, I just got back you do that. I I mean, I just got back you do that. I I mean, I just got back from Disneyland. Guess what? We're from Disneyland. Guess what? We're from Disneyland. Guess what? We're watching a lot of Toy Story this week at watching a lot of Toy Story this week at watching a lot of Toy Story this week at my house. It's a refresher on your my house. It's a refresher on your my house. It's a refresher on your fandom. Thinking about it more now, fandom. Thinking about it more now, fandom. Thinking about it more now, television was adding another node to television was adding another node to television was adding another node to the flywheel for sure. The parks are the flywheel for sure. The parks are the flywheel for sure. The parks are almost this like hybrid flywheel plus IP almost this like hybrid flywheel plus IP almost this like hybrid flywheel plus IP because all the core Disney IP of course because all the core Disney IP of course because all the core Disney IP of course goes into the parks. I mean, you've got goes into the parks. I mean, you've got goes into the parks. I mean, you've got the Peter Pan ride, you've got the Star the Peter Pan ride, you've got the Star the Peter Pan ride, you've got the Star Wars rides today, but the parks are also Wars rides today, but the parks are also Wars rides today, but the parks are also not just a destination, not just a destination, not just a destination, >> right? They're a source of IP >> right? They're a source of IP >> right? They're a source of IP development, not just a a sync of IP development, not just a a sync of IP development, not just a a sync of IP development. development. development. >> And I mean, this would literally become >> And I mean, this would literally become >> And I mean, this would literally become true with Pirates of the Caribbean much true with Pirates of the Caribbean much true with Pirates of the Caribbean much later. later. later. >> I mean, that's got to have grossed >> I mean, that's got to have grossed >> I mean, that's got to have grossed billions after all these sequels. billions after all these sequels. billions after all these sequels. >> You actually have new IP generation >> You actually have new IP generation >> You actually have new IP generation coming out of Imagineering and the coming out of Imagineering and the coming out of Imagineering and the parks, parks, parks, >> right? A lot of stuff hasn't done as >> right? A lot of stuff hasn't done as >> right? A lot of stuff hasn't done as well. Like Haunted Mansion has never well. Like Haunted Mansion has never well. Like Haunted Mansion has never really worked as Jungle Cruise. But really worked as Jungle Cruise. But really worked as Jungle Cruise. But yeah, that that is a great point that yeah, that that is a great point that yeah, that that is a great point that the parks serve as a way to feed the the parks serve as a way to feed the the parks serve as a way to feed the rest of the flywheel, not just be a sink rest of the flywheel, not just be a sink rest of the flywheel, not just be a sink of it. So this year 1955 with the park of it. So this year 1955 with the park of it. So this year 1955 with the park with TB revenue from Davy Crockett, with TB revenue from Davy Crockett, with TB revenue from Davy Crockett, Mickey Mouse Club, this is basically the Mickey Mouse Club, this is basically the Mickey Mouse Club, this is basically the inflection point for the company. inflection point for the company. inflection point for the company. Revenue doubled from 54 to 55 and it Revenue doubled from 54 to 55 and it Revenue doubled from 54 to 55 and it would just keep on climbing for decades would just keep on climbing for decades would just keep on climbing for decades from this point forward. Disney from this point forward. Disney from this point forward. Disney effectively stops being a movie studio effectively stops being a movie studio effectively stops being a movie studio and it becomes this new form of and it becomes this new form of and it becomes this new form of diversified diversified diversified stable entertainment company. stable entertainment company. stable entertainment company. >> Yes. In November of 1957, Disney finally >> Yes. In November of 1957, Disney finally >> Yes. In November of 1957, Disney finally lists its stock on the New York Stock lists its stock on the New York Stock lists its stock on the New York Stock Exchange. Stock had obviously been held Exchange. Stock had obviously been held Exchange. Stock had obviously been held by the public ever since the 1940 stock by the public ever since the 1940 stock by the public ever since the 1940 stock offering, but it wasn't listed and offering, but it wasn't listed and offering, but it wasn't listed and traded on the New York Stock Exchange traded on the New York Stock Exchange traded on the New York Stock Exchange until 1957. Interestingly, post IPO, until 1957. Interestingly, post IPO, until 1957. Interestingly, post IPO, Walt and Roy do still effectively Walt and Roy do still effectively Walt and Roy do still effectively control the company. 47% of the voting control the company. 47% of the voting control the company. 47% of the voting power of the company is held by the power of the company is held by the power of the company is held by the Disney Voting Trust. Disney Voting Trust. Disney Voting Trust. >> And so, you just don't need that many >> And so, you just don't need that many >> And so, you just don't need that many other shareholders for your votes to other shareholders for your votes to other shareholders for your votes to carry the day. Y carry the day. Y carry the day. Y >> So, even as a public company, it was >> So, even as a public company, it was >> So, even as a public company, it was still their sort of family company. still their sort of family company. still their sort of family company. >> Y >> Y >> Y >> for a little bit, that would sort of >> for a little bit, that would sort of >> for a little bit, that would sort of wayne over the decades from here. wayne over the decades from here. wayne over the decades from here. >> Yep. Once the company's listed publicly >> Yep. Once the company's listed publicly >> Yep. Once the company's listed publicly and people start to realize the and people start to realize the and people start to realize the incredible power of the business behind incredible power of the business behind incredible power of the business behind Disney, in early 1958, the Wall Street Disney, in early 1958, the Wall Street Disney, in early 1958, the Wall Street Journal runs a front page story about Journal runs a front page story about Journal runs a front page story about Disney's unique business model. And this Disney's unique business model. And this Disney's unique business model. And this was one of the most fun things to was one of the most fun things to was one of the most fun things to discover in our research. So the discover in our research. So the discover in our research. So the article's title is Disney's land, Walt's article's title is Disney's land, Walt's article's title is Disney's land, Walt's profit formula, dream, diversify, and profit formula, dream, diversify, and profit formula, dream, diversify, and never miss an angle. And this article in never miss an angle. And this article in never miss an angle. And this article in the Wall Street Journal is where the the Wall Street Journal is where the the Wall Street Journal is where the famous Disney flywheel illustration famous Disney flywheel illustration famous Disney flywheel illustration comes from that Ben, you are holding up comes from that Ben, you are holding up comes from that Ben, you are holding up live that you have framed in your live that you have framed in your live that you have framed in your studio. studio. studio. >> This has been on the wall of my office >> This has been on the wall of my office >> This has been on the wall of my office for years. So, the legend that's out for years. So, the legend that's out for years. So, the legend that's out there that everybody believes is that there that everybody believes is that there that everybody believes is that this was a napkin sketch that Walt this was a napkin sketch that Walt this was a napkin sketch that Walt himself drew. No, it was actually himself drew. No, it was actually himself drew. No, it was actually created by a Disney studio artist as an created by a Disney studio artist as an created by a Disney studio artist as an illustration for this Wall Street illustration for this Wall Street illustration for this Wall Street Journal piece. Disney confirmed this for Journal piece. Disney confirmed this for Journal piece. Disney confirmed this for us when we were visiting them in the us when we were visiting them in the us when we were visiting them in the archives. And then we asked the Wall archives. And then we asked the Wall archives. And then we asked the Wall Street Journal to pull the original Street Journal to pull the original Street Journal to pull the original piece out of their archives. We'll link piece out of their archives. We'll link piece out of their archives. We'll link to it in the show notes. So cool that to it in the show notes. So cool that to it in the show notes. So cool that this is the origin of where it all came this is the origin of where it all came this is the origin of where it all came from. from. from. >> Yeah, it it serves as an illustration >> Yeah, it it serves as an illustration >> Yeah, it it serves as an illustration for something that at the time was for something that at the time was for something that at the time was actually a pretty difficult to actually a pretty difficult to actually a pretty difficult to articulate concept of a business articulate concept of a business articulate concept of a business flywheel. I will say the word flywheel flywheel. I will say the word flywheel flywheel. I will say the word flywheel never appears in the Wall Street Journal never appears in the Wall Street Journal never appears in the Wall Street Journal article. article. article. >> No, that nomenclature would get added >> No, that nomenclature would get added >> No, that nomenclature would get added later, later, later, >> but it was like the journal saying, "Hey >> but it was like the journal saying, "Hey >> but it was like the journal saying, "Hey Disney, help us with some kind of Disney, help us with some kind of Disney, help us with some kind of illustration that makes this point that illustration that makes this point that illustration that makes this point that you have a wholly unique new business you have a wholly unique new business you have a wholly unique new business model in the media landscape." model in the media landscape." model in the media landscape." >> And it's a beautiful, beautiful diagram. >> And it's a beautiful, beautiful diagram. >> And it's a beautiful, beautiful diagram. The whole article is great. Roy has The whole article is great. Roy has The whole article is great. Roy has these amazing quotes within it. He says, these amazing quotes within it. He says, these amazing quotes within it. He says, "Our diversified activities are related "Our diversified activities are related "Our diversified activities are related and tend to complement each other, and tend to complement each other, and tend to complement each other, helping us to do relatively fine helping us to do relatively fine helping us to do relatively fine business in the face of otherwise business in the face of otherwise business in the face of otherwise difficult times for the motion picture difficult times for the motion picture difficult times for the motion picture industry. Integration is the key word industry. Integration is the key word industry. Integration is the key word around here. We don't do anything in one around here. We don't do anything in one around here. We don't do anything in one line without giving a thought to its line without giving a thought to its line without giving a thought to its likely profitability in our other likely profitability in our other likely profitability in our other lines." lines." lines." so spot-on. And then they walk through so spot-on. And then they walk through so spot-on. And then they walk through the steps of the company's flywheel with the steps of the company's flywheel with the steps of the company's flywheel with their plans for their upcoming feature their plans for their upcoming feature their plans for their upcoming feature film release of Sleeping Beauty, which film release of Sleeping Beauty, which film release of Sleeping Beauty, which was still a year away from release at was still a year away from release at was still a year away from release at the time of the article. In 1958, how the time of the article. In 1958, how the time of the article. In 1958, how crazy is this? At Disneyland, which crazy is this? At Disneyland, which crazy is this? At Disneyland, which opens in 1955, there is the centerpiece opens in 1955, there is the centerpiece opens in 1955, there is the centerpiece of the whole thing is Sleeping Beauty of the whole thing is Sleeping Beauty of the whole thing is Sleeping Beauty Castle. That movie wouldn't come out for Castle. That movie wouldn't come out for Castle. That movie wouldn't come out for another four years, right? They were another four years, right? They were another four years, right? They were building hype for a movie that was building hype for a movie that was building hype for a movie that was basically in pre-production at this basically in pre-production at this basically in pre-production at this point. point. point. >> In fact, it was based on concept art >> In fact, it was based on concept art >> In fact, it was based on concept art that was effectively a German castle cuz that was effectively a German castle cuz that was effectively a German castle cuz it was so far from the film. it was so far from the film. it was so far from the film. >> Yes. Incredible. So, the article walks >> Yes. Incredible. So, the article walks >> Yes. Incredible. So, the article walks through at Disneyland, they've installed through at Disneyland, they've installed through at Disneyland, they've installed animated diaramas as an attraction that animated diaramas as an attraction that animated diaramas as an attraction that they're charging a 35 cent admission fee they're charging a 35 cent admission fee they're charging a 35 cent admission fee for. These are animated diaramas of for. These are animated diaramas of for. These are animated diaramas of Sleeping Beauty, the upcoming movie. Sleeping Beauty, the upcoming movie. Sleeping Beauty, the upcoming movie. Next, Disney is producing and selling Next, Disney is producing and selling Next, Disney is producing and selling Princess Aurora dolls and costumes. Princess Aurora dolls and costumes. Princess Aurora dolls and costumes. They're working on producing and They're working on producing and They're working on producing and publishing books of the Disney version publishing books of the Disney version publishing books of the Disney version of the fable that will be told in the of the fable that will be told in the of the fable that will be told in the movie. Of course, they are. And of movie. Of course, they are. And of movie. Of course, they are. And of course, there are segments in the course, there are segments in the course, there are segments in the Disneyland TV show about Sleeping Disneyland TV show about Sleeping Disneyland TV show about Sleeping Beauty. They're already preparing the Beauty. They're already preparing the Beauty. They're already preparing the soundtrack album to go on sale before soundtrack album to go on sale before soundtrack album to go on sale before the movie's released. And then finally, the movie's released. And then finally, the movie's released. And then finally, comics of Aurora and The Sleeping Beauty comics of Aurora and The Sleeping Beauty comics of Aurora and The Sleeping Beauty Story are already starting to come out Story are already starting to come out Story are already starting to come out as part of the Disney Treasury of as part of the Disney Treasury of as part of the Disney Treasury of Classic Tales syndicated comic strip. Classic Tales syndicated comic strip. Classic Tales syndicated comic strip. >> Fascinating. >> Fascinating. >> Fascinating. >> Just amazing. >> Just amazing. >> Just amazing. >> The other thing this article reveals is >> The other thing this article reveals is >> The other thing this article reveals is that Disney was intentionally making its that Disney was intentionally making its that Disney was intentionally making its TV shows in color even when TVs were TV shows in color even when TVs were TV shows in color even when TVs were still black and white because they still black and white because they still black and white because they thought it was likely TVs would go color thought it was likely TVs would go color thought it was likely TVs would go color soon and they knew that the IP they were soon and they knew that the IP they were soon and they knew that the IP they were making would stay valuable for decades. making would stay valuable for decades. making would stay valuable for decades. I mean the foresight they are so bought I mean the foresight they are so bought I mean the foresight they are so bought in on we just dumping valuable IP onto in on we just dumping valuable IP onto in on we just dumping valuable IP onto the pile and we want it to live forever. the pile and we want it to live forever. the pile and we want it to live forever. >> Yep. Now there is one other thing we >> Yep. Now there is one other thing we >> Yep. Now there is one other thing we haven't talked about which is that haven't talked about which is that haven't talked about which is that Disney in-housed their own film Disney in-housed their own film Disney in-housed their own film distribution right before the launch of distribution right before the launch of distribution right before the launch of Disneyland. Disneyland. Disneyland. >> Yes. Yeah. And this actually comes up in >> Yes. Yeah. And this actually comes up in >> Yes. Yeah. And this actually comes up in that journal article too. that journal article too. that journal article too. >> Yep. They create something called Buena >> Yep. They create something called Buena >> Yep. They create something called Buena Vista Distribution and they left RKO Vista Distribution and they left RKO Vista Distribution and they left RKO Radio Pictures who had been their Radio Pictures who had been their Radio Pictures who had been their distributor since I think 1936. distributor since I think 1936. distributor since I think 1936. Howard Hughes ended up owning it and it Howard Hughes ended up owning it and it Howard Hughes ended up owning it and it had been kind of a train wreck as he had been kind of a train wreck as he had been kind of a train wreck as he spiraled out of control toward the end spiraled out of control toward the end spiraled out of control toward the end of his life. Disney didn't really want of his life. Disney didn't really want of his life. Disney didn't really want to be a part of that chaos. And at the to be a part of that chaos. And at the to be a part of that chaos. And at the same time, Walt had really started same time, Walt had really started same time, Walt had really started thinking about Disney as vertically thinking about Disney as vertically thinking about Disney as vertically integrated entertainment, not just a integrated entertainment, not just a integrated entertainment, not just a film studio who would rely on others for film studio who would rely on others for film studio who would rely on others for distribution. So in 53, 2 years before distribution. So in 53, 2 years before distribution. So in 53, 2 years before Disneyland opened, they incorporated Disneyland opened, they incorporated Disneyland opened, they incorporated Buenav Vista, The Living Desert was Buenav Vista, The Living Desert was Buenav Vista, The Living Desert was their first films, one of these nature their first films, one of these nature their first films, one of these nature documentaries. documentaries. documentaries. >> Mhm. Then quickly thereafter, they did >> Mhm. Then quickly thereafter, they did >> Mhm. Then quickly thereafter, they did Lady in the and 20,000 Leagues Lady in the and 20,000 Leagues Lady in the and 20,000 Leagues Under the Seas distribution through Under the Seas distribution through Under the Seas distribution through Buenav Vista instead of through an Buenav Vista instead of through an Buenav Vista instead of through an outside distributor. It was kind of like outside distributor. It was kind of like outside distributor. It was kind of like a test like can we pull this off? a test like can we pull this off? a test like can we pull this off? >> They got pretty good at it pretty fast >> They got pretty good at it pretty fast >> They got pretty good at it pretty fast with the exception of international with the exception of international with the exception of international where they then had to rely on where they then had to rely on where they then had to rely on subdistributors for a long time. But subdistributors for a long time. But subdistributors for a long time. But Disney had become such a household name, Disney had become such a household name, Disney had become such a household name, especially because of that weekly ABC especially because of that weekly ABC especially because of that weekly ABC show and because of Disneyland, where show and because of Disneyland, where show and because of Disneyland, where they were pretty uniquely well suited to they were pretty uniquely well suited to they were pretty uniquely well suited to actually self-distribute without a actually self-distribute without a actually self-distribute without a middleman. I mean, this is like Walt's middleman. I mean, this is like Walt's middleman. I mean, this is like Walt's dream from the early cartooning days. dream from the early cartooning days. dream from the early cartooning days. >> It's kind of surprising that they didn't >> It's kind of surprising that they didn't >> It's kind of surprising that they didn't start doing it after Snow White. I mean, start doing it after Snow White. I mean, start doing it after Snow White. I mean, who's going to turn down a Disney who's going to turn down a Disney who's going to turn down a Disney picture? picture? picture? >> All right, you te me right up cuz I was >> All right, you te me right up cuz I was >> All right, you te me right up cuz I was wondering the same thing. Cash flow. wondering the same thing. Cash flow. wondering the same thing. Cash flow. >> M. You can't distribute them before you actually get paid by the them before you actually get paid by the theaters when tickets. theaters when tickets. theaters when tickets. >> So Disney didn't have the working >> So Disney didn't have the working >> So Disney didn't have the working capital to pull this off until their capital to pull this off until their capital to pull this off until their real strength in the mid-50s. real strength in the mid-50s. real strength in the mid-50s. >> That's such a good point. I always had >> That's such a good point. I always had >> That's such a good point. I always had wondered why more studios didn't wondered why more studios didn't wondered why more studios didn't vertically integrate and own their own vertically integrate and own their own vertically integrate and own their own distribution. And that makes sense. You distribution. And that makes sense. You distribution. And that makes sense. You need a lot of working capital to do so. need a lot of working capital to do so. need a lot of working capital to do so. It's exactly right. In the long run, It's exactly right. In the long run, It's exactly right. In the long run, it's a pretty amazing strategy since it's a pretty amazing strategy since it's a pretty amazing strategy since they'd been paying I don't know what is they'd been paying I don't know what is they'd been paying I don't know what is it about a third of the total rentals to it about a third of the total rentals to it about a third of the total rentals to another distributor. And especially with another distributor. And especially with another distributor. And especially with these re-releases. these re-releases. these re-releases. >> Yeah, it's an absolute no-brainer with >> Yeah, it's an absolute no-brainer with >> Yeah, it's an absolute no-brainer with the re-releases. At this point, the re-releases. At this point, the re-releases. At this point, Disneyland plus the merchant licensing Disneyland plus the merchant licensing Disneyland plus the merchant licensing provides this really stable foundation. provides this really stable foundation. provides this really stable foundation. They almost like replatformed the They almost like replatformed the They almost like replatformed the business is what one way you could put business is what one way you could put business is what one way you could put it where it's the same like spiritual it where it's the same like spiritual it where it's the same like spiritual entity, but instead of the business entity, but instead of the business entity, but instead of the business being in the films, they now have the being in the films, they now have the being in the films, they now have the business in this stable foundation and business in this stable foundation and business in this stable foundation and they do the films to like add new stuff they do the films to like add new stuff they do the films to like add new stuff to the pile, but the platform itself is to the pile, but the platform itself is to the pile, but the platform itself is Disneyland, TV, and merch and and Disneyland, TV, and merch and and Disneyland, TV, and merch and and licensing. So then a few years later in licensing. So then a few years later in licensing. So then a few years later in 1961, Walt Disney Productions after 22 1961, Walt Disney Productions after 22 1961, Walt Disney Productions after 22 years of being in debt to Bank of years of being in debt to Bank of years of being in debt to Bank of America finally paid off their last America finally paid off their last America finally paid off their last loan. loan. loan. >> Roy must have been so happy on that day >> Roy must have been so happy on that day >> Roy must have been so happy on that day [laughter] [laughter] [laughter] and Walt was already scheming how to and Walt was already scheming how to and Walt was already scheming how to blow some more money. [laughter] blow some more money. [laughter] blow some more money. [laughter] >> Yes. So one thing we foreshadowed is is >> Yes. So one thing we foreshadowed is is >> Yes. So one thing we foreshadowed is is Sleeping Beauty. We talked about Sleeping Beauty. We talked about Sleeping Beauty. We talked about Sleeping Beauty Castle. You might be Sleeping Beauty Castle. You might be Sleeping Beauty Castle. You might be wondering what ended up happening with wondering what ended up happening with wondering what ended up happening with the film. This, like many of the other the film. This, like many of the other the film. This, like many of the other films we talked about, did not recoup films we talked about, did not recoup films we talked about, did not recoup costs. I mean, since then, it's done costs. I mean, since then, it's done costs. I mean, since then, it's done phenomenally well and made probably phenomenally well and made probably phenomenally well and made probably hundreds of millions of dollars in hundreds of millions of dollars in hundreds of millions of dollars in cumulative profit for Disney, but did cumulative profit for Disney, but did cumulative profit for Disney, but did not pay back at the box office. not pay back at the box office. not pay back at the box office. >> Mhm. Part of that was it had a really >> Mhm. Part of that was it had a really >> Mhm. Part of that was it had a really high production cost, right? After all high production cost, right? After all high production cost, right? After all the success of Disneyland and all the the success of Disneyland and all the the success of Disneyland and all the bihooing about the flywheel and bihooing about the flywheel and bihooing about the flywheel and everything in the Wall Street Journal everything in the Wall Street Journal everything in the Wall Street Journal article, I mean, they're building around article, I mean, they're building around article, I mean, they're building around it. it. it. >> Whole hog on this one. >> Whole hog on this one. >> Whole hog on this one. >> Yeah. They spent $6 million making it. >> Yeah. They spent $6 million making it. >> Yeah. They spent $6 million making it. It was the most expensive to produce to It was the most expensive to produce to It was the most expensive to produce to date. date. date. >> Yep. >> Yep. >> Yep. >> But yeah, I mean, Walt was pretty >> But yeah, I mean, Walt was pretty >> But yeah, I mean, Walt was pretty distracted with Disneyland, so he wasn't distracted with Disneyland, so he wasn't distracted with Disneyland, so he wasn't that kind of authoritative voice to help that kind of authoritative voice to help that kind of authoritative voice to help the team find the great story in there. the team find the great story in there. the team find the great story in there. But yeah, if if it wasn't such an But yeah, if if it wasn't such an But yeah, if if it wasn't such an extravagantly detailed animation piece, extravagantly detailed animation piece, extravagantly detailed animation piece, then it probably would have been then it probably would have been then it probably would have been profitable. profitable. profitable. >> And hey, given the company's business >> And hey, given the company's business >> And hey, given the company's business model, they're happy to play the long model, they're happy to play the long model, they're happy to play the long game, game, game, >> right? So the weird thing is the >> right? So the weird thing is the >> right? So the weird thing is the financial blip that happens in this year financial blip that happens in this year financial blip that happens in this year 1959. Everything is true about this 1959. Everything is true about this 1959. Everything is true about this really stable platform. But if you look really stable platform. But if you look really stable platform. But if you look at that year, the financial year 1960, at that year, the financial year 1960, at that year, the financial year 1960, the company actually shows a loss. Like the company actually shows a loss. Like the company actually shows a loss. Like they flip briefly from looking they flip briefly from looking they flip briefly from looking increasingly profitable to suddenly net increasingly profitable to suddenly net increasingly profitable to suddenly net income negative because Sleeping Beauty income negative because Sleeping Beauty income negative because Sleeping Beauty had that hole. had that hole. had that hole. >> Mhm. >> Mhm. >> Mhm. >> ABC canceled Zoro and Mickey Mouse Club, >> ABC canceled Zoro and Mickey Mouse Club, >> ABC canceled Zoro and Mickey Mouse Club, which were both TV shows that Disney was which were both TV shows that Disney was which were both TV shows that Disney was making, which was related to Walt Disney making, which was related to Walt Disney making, which was related to Walt Disney Productions blowing up the Disneyland Productions blowing up the Disneyland Productions blowing up the Disneyland deal. and saying, "You guys are kind of deal. and saying, "You guys are kind of deal. and saying, "You guys are kind of difficult to work with now. We want to difficult to work with now. We want to difficult to work with now. We want to buy you out of Disneyland." And ABC's buy you out of Disneyland." And ABC's buy you out of Disneyland." And ABC's like, "All right, then we're gonna stop like, "All right, then we're gonna stop like, "All right, then we're gonna stop paying you huge sums for your TV shows paying you huge sums for your TV shows paying you huge sums for your TV shows and giving you all this free marketing." and giving you all this free marketing." and giving you all this free marketing." So that relationship ended there, at So that relationship ended there, at So that relationship ended there, at least for least for least for >> for the moment. ABC would come back in >> for the moment. ABC would come back in >> for the moment. ABC would come back in the beginning. the beginning. the beginning. >> Yes. But the takeaway is the company is >> Yes. But the takeaway is the company is >> Yes. But the takeaway is the company is actually financially stable now. That actually financially stable now. That actually financially stable now. That this is okay. this is okay. this is okay. >> Yeah. The last time that Walt and the >> Yeah. The last time that Walt and the >> Yeah. The last time that Walt and the company bet big on investing in company bet big on investing in company bet big on investing in production ahead of revenues was 1940 production ahead of revenues was 1940 production ahead of revenues was 1940 with the move to Burbank and having with the move to Burbank and having with the move to Burbank and having Pinocchio and Fantasia and Bambi in Pinocchio and Fantasia and Bambi in Pinocchio and Fantasia and Bambi in production all at once. production all at once. production all at once. >> Any one of those almost killed the >> Any one of those almost killed the >> Any one of those almost killed the company on their own. company on their own. company on their own. >> Yeah. Now though, post Disneyland, >> Yeah. Now though, post Disneyland, >> Yeah. Now though, post Disneyland, they've got this stable base that they they've got this stable base that they they've got this stable base that they can take these big swings. can take these big swings. can take these big swings. >> Yeah. Merchant licensing taught them to >> Yeah. Merchant licensing taught them to >> Yeah. Merchant licensing taught them to crawl and then they they walked and ran crawl and then they they walked and ran crawl and then they they walked and ran with Disneyland in terms of that that with Disneyland in terms of that that with Disneyland in terms of that that stable platform. Just to illustrate this stable platform. Just to illustrate this stable platform. Just to illustrate this bounceback point, here's the trend. bounceback point, here's the trend. bounceback point, here's the trend. 1957, they do $3.6 million in net 1957, they do $3.6 million in net 1957, they do $3.6 million in net income. Then the next year, 3.9. Then income. Then the next year, 3.9. Then income. Then the next year, 3.9. Then the next year, 3.4. Then, ah, 1960 the next year, 3.4. Then, ah, 1960 the next year, 3.4. Then, ah, 1960 happens. That perfect storm of badness, happens. That perfect storm of badness, happens. That perfect storm of badness, $1.3 million loss. Then they bop right $1.3 million loss. Then they bop right $1.3 million loss. Then they bop right back. 1961, 4.5, then 5.2, then 6.5, back. 1961, 4.5, then 5.2, then 6.5, back. 1961, 4.5, then 5.2, then 6.5, then 7, then 11, then 12. I mean, they then 7, then 11, then 12. I mean, they then 7, then 11, then 12. I mean, they just stability. just stability. just stability. >> Mhm. >> Mhm. >> Mhm. And then Walt decided that it was too And then Walt decided that it was too And then Walt decided that it was too stable [laughter] stable [laughter] stable [laughter] and he needed to blow it all up again or and he needed to blow it all up again or and he needed to blow it all up again or at least he wanted to. So he starts at least he wanted to. So he starts at least he wanted to. So he starts wondering how can I bet it all again and wondering how can I bet it all again and wondering how can I bet it all again and in a bigger way, right? Is Disney land in a bigger way, right? Is Disney land in a bigger way, right? Is Disney land like is a theme park going to really be like is a theme park going to really be like is a theme park going to really be my legacy? Are these animated films my legacy? Are these animated films my legacy? Are these animated films really going to be my legacy? I really going to be my legacy? I really going to be my legacy? I shouldn't I do something actually shouldn't I do something actually shouldn't I do something actually meaningful to the world? meaningful to the world? meaningful to the world? >> Yes. I mean, this this idea of a >> Yes. I mean, this this idea of a >> Yes. I mean, this this idea of a physical Disney location physical Disney location physical Disney location worked really well. But what if we don't worked really well. But what if we don't worked really well. But what if we don't stop at an amusement park, what if the stop at an amusement park, what if the stop at an amusement park, what if the next time we build an entire city? next time we build an entire city? next time we build an entire city? Maybe like an experimental Maybe like an experimental Maybe like an experimental prototype community of tomorrow, you prototype community of tomorrow, you prototype community of tomorrow, you know, Epcot. [laughter] know, Epcot. [laughter] know, Epcot. [laughter] And if you think you know what we're And if you think you know what we're And if you think you know what we're talking about because you've been to talking about because you've been to talking about because you've been to Epcot, that's not it. Epcot, that's not it. Epcot, that's not it. >> That's not what we're talking about. >> That's not what we're talking about. >> That's not what we're talking about. >> That's a theme park named Epcot. But >> That's a theme park named Epcot. But >> That's a theme park named Epcot. But Walt had this insane insane vision that Walt had this insane insane vision that Walt had this insane insane vision that never got built, but got pretty far never got built, but got pretty far never got built, but got pretty far along in the process for along in the process for along in the process for again a fever dream. Not just of a place again a fever dream. Not just of a place again a fever dream. Not just of a place that you go for a day, but a place where that you go for a day, but a place where that you go for a day, but a place where you live and you work and you are you live and you work and you are you live and you work and you are transported and futuristic transport transported and futuristic transport transported and futuristic transport mechanisms and all the most innovative mechanisms and all the most innovative mechanisms and all the most innovative companies locate their innovation companies locate their innovation companies locate their innovation centers all in in one place together and centers all in in one place together and centers all in in one place together and there's this beautiful tower in the there's this beautiful tower in the there's this beautiful tower in the center of it. I mean, this is the ideal center of it. I mean, this is the ideal center of it. I mean, this is the ideal future. So this was Walt's final future. So this was Walt's final future. So this was Walt's final project, the Florida project that never project, the Florida project that never project, the Florida project that never got built as you say. And I think got built as you say. And I think got built as you say. And I think it all kind of stems back to Burbank it all kind of stems back to Burbank it all kind of stems back to Burbank >> and that brief moment before the strike >> and that brief moment before the strike >> and that brief moment before the strike when the studio at Burbank really was when the studio at Burbank really was when the studio at Burbank really was this utopian physical place that was the this utopian physical place that was the this utopian physical place that was the perfect marriage of art and commerce. I perfect marriage of art and commerce. I perfect marriage of art and commerce. I really think that that's what Walt really think that that's what Walt really think that that's what Walt always wanted to realize in the world. always wanted to realize in the world. always wanted to realize in the world. And now after the success of Disneyland, And now after the success of Disneyland, And now after the success of Disneyland, his ambition is restored his ambition is restored his ambition is restored and he wants to build it in this city. and he wants to build it in this city. and he wants to build it in this city. >> To my mind, the most interesting part >> To my mind, the most interesting part >> To my mind, the most interesting part about this is how far it got. about this is how far it got. about this is how far it got. >> Yes. Yes. Yes. So the way that Walt >> Yes. Yes. Yes. So the way that Walt >> Yes. Yes. Yes. So the way that Walt starts working towards realizing this starts working towards realizing this starts working towards realizing this vision is the 1964 World's Fair in New vision is the 1964 World's Fair in New vision is the 1964 World's Fair in New York. So Walt gets this great idea York. So Walt gets this great idea York. So Walt gets this great idea leading up to the fair that Disney on leading up to the fair that Disney on leading up to the fair that Disney on the success that they have at Disneyland the success that they have at Disneyland the success that they have at Disneyland can partner with other big American can partner with other big American can partner with other big American companies and institutions companies and institutions companies and institutions to create Disney sponsored pavilions and to create Disney sponsored pavilions and to create Disney sponsored pavilions and exhibitions at the fair that they can exhibitions at the fair that they can exhibitions at the fair that they can then transfer into Disneyland. But even then transfer into Disneyland. But even then transfer into Disneyland. But even more than that, the New York World's more than that, the New York World's more than that, the New York World's Fair can serve as this sort of Fair can serve as this sort of Fair can serve as this sort of undercover test bed for this big idea of undercover test bed for this big idea of undercover test bed for this big idea of an East Coast city that will be a an East Coast city that will be a an East Coast city that will be a partnership between American industry, partnership between American industry, partnership between American industry, Disney, and the public. So, the four Disney, and the public. So, the four Disney, and the public. So, the four exhibitions that they create for the exhibitions that they create for the exhibitions that they create for the 1964 World's Fair, many of which should 1964 World's Fair, many of which should 1964 World's Fair, many of which should probably sound familiar to you, It's a probably sound familiar to you, It's a probably sound familiar to you, It's a Small World, sponsored by Pepsi and Small World, sponsored by Pepsi and Small World, sponsored by Pepsi and UNICEF, which is actually designed by UNICEF, which is actually designed by UNICEF, which is actually designed by Mary Blair, who's this famous designer. Mary Blair, who's this famous designer. Mary Blair, who's this famous designer. She brought modernism to Disney. She's She brought modernism to Disney. She's She brought modernism to Disney. She's the one that basically did all the the one that basically did all the the one that basically did all the concept art for Alice in Wonderland, concept art for Alice in Wonderland, concept art for Alice in Wonderland, which is why it looks the way that it which is why it looks the way that it which is why it looks the way that it does. She's kind of responsible for that does. She's kind of responsible for that does. She's kind of responsible for that aesthetic. And she was one of the aesthetic. And she was one of the aesthetic. And she was one of the original team members of Imagineers that original team members of Imagineers that original team members of Imagineers that came over from Wed and I believe the came over from Wed and I believe the came over from Wed and I believe the first female Imagineer. first female Imagineer. first female Imagineer. >> That's right. That's right. And then >> That's right. That's right. And then >> That's right. That's right. And then she's the one who does Small World. she's the one who does Small World. she's the one who does Small World. >> Yep. By far the most successful pavilion >> Yep. By far the most successful pavilion >> Yep. By far the most successful pavilion at the fair that makes its way to at the fair that makes its way to at the fair that makes its way to Disneyland. So that's one. Two, the Disneyland. So that's one. Two, the Disneyland. So that's one. Two, the Carousel of Progress sponsored by Carousel of Progress sponsored by Carousel of Progress sponsored by General Electric. Three, the Magic General Electric. Three, the Magic General Electric. Three, the Magic Skyway sponsored by Ford. And then four, Skyway sponsored by Ford. And then four, Skyway sponsored by Ford. And then four, Great Moments with Mr. Lincoln sponsored Great Moments with Mr. Lincoln sponsored Great Moments with Mr. Lincoln sponsored by the state of Illinois and that last by the state of Illinois and that last by the state of Illinois and that last one of which one of which one of which >> catch that >> catch that >> catch that >> is how Disney Imagineering develops >> is how Disney Imagineering develops >> is how Disney Imagineering develops audio animatronics audio animatronics audio animatronics >> for Abraham Lincoln. >> for Abraham Lincoln. >> for Abraham Lincoln. >> Yes. This whole thing is this amazing >> Yes. This whole thing is this amazing >> Yes. This whole thing is this amazing test bed for audio animatronics which test bed for audio animatronics which test bed for audio animatronics which Disney kind of invents and then Disney kind of invents and then Disney kind of invents and then popularizes in Disneyland and then in popularizes in Disneyland and then in popularizes in Disneyland and then in Disney World. Disney World. Disney World. >> Yeah. And because it's Disney and part >> Yeah. And because it's Disney and part >> Yeah. And because it's Disney and part of Disneyland, we think, oh yeah, audio of Disneyland, we think, oh yeah, audio of Disneyland, we think, oh yeah, audio animatronics like Disneyland like these animatronics like Disneyland like these animatronics like Disneyland like these are robots, [laughter] are robots, [laughter] are robots, [laughter] >> right? that Disney Imagineering is >> right? that Disney Imagineering is >> right? that Disney Imagineering is inventing in the late 50s, early 60s. inventing in the late 50s, early 60s. inventing in the late 50s, early 60s. >> Well, David, you you and I have had the >> Well, David, you you and I have had the >> Well, David, you you and I have had the privilege of being at some pretty cool privilege of being at some pretty cool privilege of being at some pretty cool robotics conferences and you meet these robotics conferences and you meet these robotics conferences and you meet these like PhD researchers who are sort of in like PhD researchers who are sort of in like PhD researchers who are sort of in and out of Disney. Like that is still and out of Disney. Like that is still and out of Disney. Like that is still where a lot of cutting edge robotics where a lot of cutting edge robotics where a lot of cutting edge robotics happens. happens. happens. >> Yes. So, all four of those rides after >> Yes. So, all four of those rides after >> Yes. So, all four of those rides after the fair get ported right over to the fair get ported right over to the fair get ported right over to Disneyland because of course Disneyland because of course Disneyland because of course >> three of the four >> three of the four >> three of the four >> the Ford one does not. The part of the >> the Ford one does not. The part of the >> the Ford one does not. The part of the deal is that Walt says, "You have to pay deal is that Walt says, "You have to pay deal is that Walt says, "You have to pay a million dollars to use my name as a a million dollars to use my name as a a million dollars to use my name as a part of your attraction." Of course, in part of your attraction." Of course, in part of your attraction." Of course, in addition to footing the bill for addition to footing the bill for addition to footing the bill for building it, but I'll forgive that building it, but I'll forgive that building it, but I'll forgive that million dollars if you let us put it in million dollars if you let us put it in million dollars if you let us put it in Disneyland afterwards because we want to Disneyland afterwards because we want to Disneyland afterwards because we want to get some value of it out after the fair. get some value of it out after the fair. get some value of it out after the fair. And Ford says, "We'll just pay the And Ford says, "We'll just pay the And Ford says, "We'll just pay the million." [laughter] >> Poor decision on Ford's part. >> Poor decision on Ford's part. >> I know. >> I know. >> I know. >> Okay. So, three of the four get ported >> Okay. So, three of the four get ported >> Okay. So, three of the four get ported over to Disneyland, but all of it leads over to Disneyland, but all of it leads over to Disneyland, but all of it leads right into planning for the Florida right into planning for the Florida right into planning for the Florida Project. Project. Project. >> And I think while the Florida Project >> And I think while the Florida Project >> And I think while the Florida Project initially is not a theme park, and Walt initially is not a theme park, and Walt initially is not a theme park, and Walt very much is uninterested in building an very much is uninterested in building an very much is uninterested in building an East Coast Disneyland, he says it East Coast Disneyland, he says it East Coast Disneyland, he says it explicitly over and over again. He does explicitly over and over again. He does explicitly over and over again. He does have a nagging concern that an east have a nagging concern that an east have a nagging concern that an east coast audience is more sophisticated coast audience is more sophisticated coast audience is more sophisticated than a west coast audience and there than a west coast audience and there than a west coast audience and there isn't demand for a theme park like isn't demand for a theme park like isn't demand for a theme park like Disneyland in Florida. And I always Disneyland in Florida. And I always Disneyland in Florida. And I always think he uses that as kind of his like think he uses that as kind of his like think he uses that as kind of his like emotional defense mechanism air cover emotional defense mechanism air cover emotional defense mechanism air cover for why he's like, "Oh, I don't want to for why he's like, "Oh, I don't want to for why he's like, "Oh, I don't want to just do the same thing again." I think just do the same thing again." I think just do the same thing again." I think it's like I'm afraid it'll fail. And one it's like I'm afraid it'll fail. And one it's like I'm afraid it'll fail. And one of the big takeaways from the World's of the big takeaways from the World's of the big takeaways from the World's Fair is no, people would absolutely love Fair is no, people would absolutely love Fair is no, people would absolutely love a Disneyland type thing, especially with a Disneyland type thing, especially with a Disneyland type thing, especially with audio animatronics and all this cool new audio animatronics and all this cool new audio animatronics and all this cool new technology you're developing for the technology you're developing for the technology you're developing for the World's Fair. World's Fair. World's Fair. >> Well, obviously if Disney is going to do >> Well, obviously if Disney is going to do >> Well, obviously if Disney is going to do anything on the East Coast, it should be anything on the East Coast, it should be anything on the East Coast, it should be in Florida. I mean, it has the warmest in Florida. I mean, it has the warmest in Florida. I mean, it has the warmest yearround weather and even more yearround weather and even more yearround weather and even more important, important, important, >> abundant cheap land. >> abundant cheap land. >> abundant cheap land. >> Abundant cheap land all throughout the >> Abundant cheap land all throughout the >> Abundant cheap land all throughout the state. state. state. >> Yep. So, Walt though, like you said, had >> Yep. So, Walt though, like you said, had >> Yep. So, Walt though, like you said, had no interest in just building another no interest in just building another no interest in just building another Disneyland. So, what is this Florida Disneyland. So, what is this Florida Disneyland. So, what is this Florida project? I had heard about this lore and project? I had heard about this lore and project? I had heard about this lore and legend over the years before doing the legend over the years before doing the legend over the years before doing the research, but diving in, it blew my research, but diving in, it blew my research, but diving in, it blew my mind, and it will blow yours, too, mind, and it will blow yours, too, mind, and it will blow yours, too, hearing about what Walt's vision for it hearing about what Walt's vision for it hearing about what Walt's vision for it was, was, was, >> the ambition. So, one, it starts with a >> the ambition. So, one, it starts with a >> the ambition. So, one, it starts with a brand new airport of the future paired brand new airport of the future paired brand new airport of the future paired together with a vast entrance complex together with a vast entrance complex together with a vast entrance complex and park. Two, there will of course be a and park. Two, there will of course be a and park. Two, there will of course be a theme park, a new Disney World Magic theme park, a new Disney World Magic theme park, a new Disney World Magic Kingdom theme park that was initially Kingdom theme park that was initially Kingdom theme park that was initially intended to be five times the size of intended to be five times the size of intended to be five times the size of Disneyland just for just for the theme Disneyland just for just for the theme Disneyland just for just for the theme park. Three, a 1,000 acre industrial park. Three, a 1,000 acre industrial park. Three, a 1,000 acre industrial park intended to house satellite R&D park intended to house satellite R&D park intended to house satellite R&D offices for America's greatest offices for America's greatest offices for America's greatest companies. Think everybody that Walt is companies. Think everybody that Walt is companies. Think everybody that Walt is partnering with at the World's Fair. partnering with at the World's Fair. partnering with at the World's Fair. Ford, GE, Pepsi, all the companies that Ford, GE, Pepsi, all the companies that Ford, GE, Pepsi, all the companies that are corporate sponsors back at are corporate sponsors back at are corporate sponsors back at Disneyland. He wants them Disneyland. He wants them Disneyland. He wants them >> Yeah, Monsanto m move their most >> Yeah, Monsanto m move their most >> Yeah, Monsanto m move their most advanced R&D teams to this new city in advanced R&D teams to this new city in advanced R&D teams to this new city in Florida. And then four, most important, Florida. And then four, most important, Florida. And then four, most important, the heart of the whole project is Epcot. the heart of the whole project is Epcot. the heart of the whole project is Epcot. But again, not the Epcot you know today. But again, not the Epcot you know today. But again, not the Epcot you know today. So Walt Epcot was going to be in his own So Walt Epcot was going to be in his own So Walt Epcot was going to be in his own words a living blueprint of the future words a living blueprint of the future words a living blueprint of the future where people actually live a life they where people actually live a life they where people actually live a life they can't find anywhere else in the world. A can't find anywhere else in the world. A can't find anywhere else in the world. A showcase to the world for the ingenuity showcase to the world for the ingenuity showcase to the world for the ingenuity and imagination of American free and imagination of American free and imagination of American free enterprise. And basically enterprise. And basically enterprise. And basically it is a sci-fi city. it is a sci-fi city. it is a sci-fi city. >> Meanwhile, I gotta say they couldn't >> Meanwhile, I gotta say they couldn't >> Meanwhile, I gotta say they couldn't open most of Tomorrowland for 1955 when open most of Tomorrowland for 1955 when open most of Tomorrowland for 1955 when they opened Disneyland and they're they opened Disneyland and they're they opened Disneyland and they're having a really hard time keeping up having a really hard time keeping up having a really hard time keeping up with the pace of technology. I walk with the pace of technology. I walk with the pace of technology. I walk through Tomorrowland even today and I'm through Tomorrowland even today and I'm through Tomorrowland even today and I'm like this all feels really dated and like this all feels really dated and like this all feels really dated and nothing like tomorrow. I think Walt nothing like tomorrow. I think Walt nothing like tomorrow. I think Walt himself has a famous quip on this which himself has a famous quip on this which himself has a famous quip on this which is tomorrow comes a lot faster into is tomorrow comes a lot faster into is tomorrow comes a lot faster into today than we can kind of keep up with. today than we can kind of keep up with. today than we can kind of keep up with. So you could imagine if they actually So you could imagine if they actually So you could imagine if they actually built this thing, it it very quickly built this thing, it it very quickly built this thing, it it very quickly would would not feel like the future. I would would not feel like the future. I would would not feel like the future. I mean, you plow a bunch of capex into mean, you plow a bunch of capex into mean, you plow a bunch of capex into concrete and futuristic concepts. New concrete and futuristic concepts. New concrete and futuristic concepts. New stuff gets invented real fast and then stuff gets invented real fast and then stuff gets invented real fast and then it's ugly and old. it's ugly and old. it's ugly and old. >> That's a good point. But perhaps you >> That's a good point. But perhaps you >> That's a good point. But perhaps you haven't heard the vision for what this haven't heard the vision for what this haven't heard the vision for what this city is yet. city is yet. city is yet. >> Please, please lay [laughter] it on me. >> Please, please lay [laughter] it on me. >> Please, please lay [laughter] it on me. >> Okay. It will have a radical radial >> Okay. It will have a radical radial >> Okay. It will have a radical radial design plan. So, the city itself is design plan. So, the city itself is design plan. So, the city itself is going to fan out like spokes on a wheel going to fan out like spokes on a wheel going to fan out like spokes on a wheel from a domed central downtown hub. Yes, from a domed central downtown hub. Yes, from a domed central downtown hub. Yes, you did hear that right. A 50 acre you did hear that right. A 50 acre you did hear that right. A 50 acre enclosed climate controlled enclosed climate controlled enclosed climate controlled fully domed central downtown city fully domed central downtown city fully domed central downtown city that will have no surface streets, fully that will have no surface streets, fully that will have no surface streets, fully pedestrian walkways, pedestrian walkways, pedestrian walkways, >> Montreals. Well, yeah. Yes. The the only >> Montreals. Well, yeah. Yes. The the only >> Montreals. Well, yeah. Yes. The the only motorized forms of transportation will motorized forms of transportation will motorized forms of transportation will be Montreals and this new concept of be Montreals and this new concept of be Montreals and this new concept of people movers. And then below ground, people movers. And then below ground, people movers. And then below ground, there will be a vast network of tunnels, there will be a vast network of tunnels, there will be a vast network of tunnels, a multi-layered tunnels underneath the a multi-layered tunnels underneath the a multi-layered tunnels underneath the ground for cars and industrial vehicles ground for cars and industrial vehicles ground for cars and industrial vehicles to circulate throughout the city. On the to circulate throughout the city. On the to circulate throughout the city. On the edge of this downtown dome, there'll be edge of this downtown dome, there'll be edge of this downtown dome, there'll be highdensity apartment buildings. highdensity apartment buildings. highdensity apartment buildings. Surrounding that, there is a vast green Surrounding that, there is a vast green Surrounding that, there is a vast green belt of parks and recreation facilities. belt of parks and recreation facilities. belt of parks and recreation facilities. And then finally, in the outer ring of And then finally, in the outer ring of And then finally, in the outer ring of the city is lowdensity single family the city is lowdensity single family the city is lowdensity single family home neighborhoods. And the plan is that home neighborhoods. And the plan is that home neighborhoods. And the plan is that 20,000 people will live here in this 20,000 people will live here in this 20,000 people will live here in this city with full self-governing city with full self-governing city with full self-governing infrastructure. So, schools, public infrastructure. So, schools, public infrastructure. So, schools, public services, everything. And it is all services, everything. And it is all services, everything. And it is all going to be founded as a new city in the going to be founded as a new city in the going to be founded as a new city in the state of Florida. This is unreal. state of Florida. This is unreal. state of Florida. This is unreal. [laughter] [laughter] [laughter] >> Self-governing, >> Self-governing, >> Self-governing, but in a special district carved out and but in a special district carved out and but in a special district carved out and controlled controlled controlled lawfully by the Walt Disney Company. lawfully by the Walt Disney Company. lawfully by the Walt Disney Company. >> I mean, it sort of sounds like a I don't >> I mean, it sort of sounds like a I don't >> I mean, it sort of sounds like a I don't know if it's a utopian or a dystopian know if it's a utopian or a dystopian know if it's a utopian or a dystopian film or both. [laughter] film or both. [laughter] film or both. [laughter] Yeah, it's definitely ambitious. So on Yeah, it's definitely ambitious. So on Yeah, it's definitely ambitious. So on November 15th, 1965, November 15th, 1965, November 15th, 1965, Walt along with Roy and the then Walt along with Roy and the then Walt along with Roy and the then governor of Florida, Hayden Burns, hold governor of Florida, Hayden Burns, hold governor of Florida, Hayden Burns, hold a press conference where they announced a press conference where they announced a press conference where they announced that Disney has been buying land in that Disney has been buying land in that Disney has been buying land in Central Florida Central Florida Central Florida >> under various uh subsidiaries and >> under various uh subsidiaries and >> under various uh subsidiaries and obscured names so no one would catch on obscured names so no one would catch on obscured names so no one would catch on to what they're doing. to what they're doing. to what they're doing. >> Yep. and that a very large new Disney >> Yep. and that a very large new Disney >> Yep. and that a very large new Disney project will be coming to the state. project will be coming to the state. project will be coming to the state. That planning has already begun and they That planning has already begun and they That planning has already begun and they will be seeking public approvals. will be seeking public approvals. will be seeking public approvals. >> They bought 27,000 acres. That is the >> They bought 27,000 acres. That is the >> They bought 27,000 acres. That is the size of San Francisco. size of San Francisco. size of San Francisco. >> Yes. Yes. Twice the size of Manhattan. >> Yes. Yes. Twice the size of Manhattan. >> Yes. Yes. Twice the size of Manhattan. Uh it's almost 40 square miles that they Uh it's almost 40 square miles that they Uh it's almost 40 square miles that they have purchased in the middle of Florida. have purchased in the middle of Florida. have purchased in the middle of Florida. and it's all swamp land right now. It's and it's all swamp land right now. It's and it's all swamp land right now. It's uninhabitable. And so in May of 1966, so uninhabitable. And so in May of 1966, so uninhabitable. And so in May of 1966, so a few months later, they get government a few months later, they get government a few months later, they get government approval to drain the swamp and prepare approval to drain the swamp and prepare approval to drain the swamp and prepare to build Walt's vision. Let's go. to build Walt's vision. Let's go. to build Walt's vision. Let's go. [laughter] [laughter] [laughter] [gasps] [gasps] [gasps] [sighs] If only. So, in late October of 1966, If only. So, in late October of 1966, Walt records a film of a pitch, the full Walt records a film of a pitch, the full Walt records a film of a pitch, the full reveal for the Epcot Vision. We'll link reveal for the Epcot Vision. We'll link reveal for the Epcot Vision. We'll link to it in the show notes. You should to it in the show notes. You should to it in the show notes. You should absolutely go watch this movie. It is absolutely go watch this movie. It is absolutely go watch this movie. It is the second to last recorded appearance the second to last recorded appearance the second to last recorded appearance that Walt makes in his life, and he has that Walt makes in his life, and he has that Walt makes in his life, and he has no idea. The last one, I think, is a day no idea. The last one, I think, is a day no idea. The last one, I think, is a day or two later. and he ends the video or two later. and he ends the video or two later. and he ends the video with, "Speaking for myself and for the with, "Speaking for myself and for the with, "Speaking for myself and for the entire Disney organization, we're ready entire Disney organization, we're ready entire Disney organization, we're ready to go right now." Unfortunately, [sighs] to go right now." Unfortunately, [sighs] to go right now." Unfortunately, [sighs] he dies he dies he dies about 2 months later. His death is both about 2 months later. His death is both about 2 months later. His death is both incredibly fast, incredibly unexpected, incredibly fast, incredibly unexpected, incredibly fast, incredibly unexpected, and of course kind of a slow motion and of course kind of a slow motion and of course kind of a slow motion disaster that's been brewing his whole disaster that's been brewing his whole disaster that's been brewing his whole life ever since he started chain smoking life ever since he started chain smoking life ever since he started chain smoking in France when he was 17 years old. in France when he was 17 years old. in France when he was 17 years old. >> I mean, he was notorious for his hacking >> I mean, he was notorious for his hacking >> I mean, he was notorious for his hacking cough. That is how people knew that he cough. That is how people knew that he cough. That is how people knew that he was approaching if you were in a was approaching if you were in a was approaching if you were in a building on the Burbank campus. building on the Burbank campus. building on the Burbank campus. >> Yeah. You'd hear him hacking. So that >> Yeah. You'd hear him hacking. So that >> Yeah. You'd hear him hacking. So that summer in 1966, Walt had started summer in 1966, Walt had started summer in 1966, Walt had started experiencing pains in his body. He experiencing pains in his body. He experiencing pains in his body. He assumes that it's all the stress from, assumes that it's all the stress from, assumes that it's all the stress from, you know, all these new projects that you know, all these new projects that you know, all these new projects that he's working on, or maybe it's old polo he's working on, or maybe it's old polo he's working on, or maybe it's old polo injuries that he has, or maybe it's this injuries that he has, or maybe it's this injuries that he has, or maybe it's this nagging cough, but obviously it's cancer nagging cough, but obviously it's cancer nagging cough, but obviously it's cancer eating away at him. Finally, in November eating away at him. Finally, in November eating away at him. Finally, in November of 1966, so right after recording the of 1966, so right after recording the of 1966, so right after recording the Epcot pitch video, he checks himself Epcot pitch video, he checks himself Epcot pitch video, he checks himself into the hospital where doctors find a into the hospital where doctors find a into the hospital where doctors find a pretty massive tumor in his lungs. They pretty massive tumor in his lungs. They pretty massive tumor in his lungs. They do emergency surgery to remove it. He do emergency surgery to remove it. He do emergency surgery to remove it. He comes back to the studio afterwards and comes back to the studio afterwards and comes back to the studio afterwards and the company announces publicly that Walt the company announces publicly that Walt the company announces publicly that Walt is back. They say he's going to recover, is back. They say he's going to recover, is back. They say he's going to recover, but the cancer is metastasized and the but the cancer is metastasized and the but the cancer is metastasized and the doctors tell him, "Hey, you probably doctors tell him, "Hey, you probably doctors tell him, "Hey, you probably only have a couple weeks or months to only have a couple weeks or months to only have a couple weeks or months to live." His health goes downhill quickly. live." His health goes downhill quickly. live." His health goes downhill quickly. And on December 15th, 1966, And on December 15th, 1966, And on December 15th, 1966, just 10 days after his 65th birthday, just 10 days after his 65th birthday, just 10 days after his 65th birthday, Walt Disney passes away right in the Walt Disney passes away right in the Walt Disney passes away right in the middle of this Epcot thing. I mean, what middle of this Epcot thing. I mean, what middle of this Epcot thing. I mean, what a sliding door moment. a sliding door moment. a sliding door moment. He was always escalating bigger and He was always escalating bigger and He was always escalating bigger and bigger and bigger. It would have always bigger and bigger. It would have always bigger and bigger. It would have always been right in the middle of the biggest been right in the middle of the biggest been right in the middle of the biggest thing he's ever done. That's such a good thing he's ever done. That's such a good thing he's ever done. That's such a good point. point. point. >> Mickey with Synchronized Sound, Snow >> Mickey with Synchronized Sound, Snow >> Mickey with Synchronized Sound, Snow White with the first animated feature White with the first animated feature White with the first animated feature film, the Burbank Campus, plowing cash film, the Burbank Campus, plowing cash film, the Burbank Campus, plowing cash into all the expensive failures after into all the expensive failures after into all the expensive failures after Snow White, Disneyland. Every point in Snow White, Disneyland. Every point in Snow White, Disneyland. Every point in his life, he was betting the farm over his life, he was betting the farm over his life, he was betting the farm over and over and over again, and he always and over and over again, and he always and over and over again, and he always pushed all his chips in. It would have pushed all his chips in. It would have pushed all his chips in. It would have always felt like this. always felt like this. always felt like this. >> That's such a good point. If they had >> That's such a good point. If they had >> That's such a good point. If they had pulled off the Florida project, what pulled off the Florida project, what pulled off the Florida project, what would he have done next? would he have done next? would he have done next? >> Right. Like a colony on the moon. Like >> Right. Like a colony on the moon. Like >> Right. Like a colony on the moon. Like [laughter] [laughter] [laughter] >> Yeah. I gotta be honest though. I will >> Yeah. I gotta be honest though. I will >> Yeah. I gotta be honest though. I will say I don't have the faith after say I don't have the faith after say I don't have the faith after watching a lot of videos and watching a lot of videos and watching a lot of videos and documentaries and reading about the documentaries and reading about the documentaries and reading about the Florida project. It just doesn't make Florida project. It just doesn't make Florida project. It just doesn't make sense to me. sense to me. sense to me. >> And it may have protected his legacy >> And it may have protected his legacy >> And it may have protected his legacy that he didn't live another 10 or 20 that he didn't live another 10 or 20 that he didn't live another 10 or 20 years to see this through. years to see this through. years to see this through. >> Yep. I mean, even just building a domed >> Yep. I mean, even just building a domed >> Yep. I mean, even just building a domed city, like, how would you actually do city, like, how would you actually do city, like, how would you actually do that? that? that? >> And look, I could be completely wrong. >> And look, I could be completely wrong. >> And look, I could be completely wrong. They invented, you know, amazing thing They invented, you know, amazing thing They invented, you know, amazing thing after amazing thing, but this one felt after amazing thing, but this one felt after amazing thing, but this one felt nuts. nuts. nuts. [laughter] [laughter] [laughter] >> I mean, it was I think it's a totally >> I mean, it was I think it's a totally >> I mean, it was I think it's a totally fair point. So, immediately after Walt's fair point. So, immediately after Walt's fair point. So, immediately after Walt's death, Roy renames the whole Florida death, Roy renames the whole Florida death, Roy renames the whole Florida project Walt Disney World in his honor. project Walt Disney World in his honor. project Walt Disney World in his honor. And Roy postpones his own retirement to And Roy postpones his own retirement to And Roy postpones his own retirement to dedicate himself to finishing this dedicate himself to finishing this dedicate himself to finishing this project. And in fact, just a couple project. And in fact, just a couple project. And in fact, just a couple months later, in May of 1967, Roy gets months later, in May of 1967, Roy gets months later, in May of 1967, Roy gets full approval from the Florida State full approval from the Florida State full approval from the Florida State Legislature to build Epcot, to build Legislature to build Epcot, to build Legislature to build Epcot, to build Walt Disney World, and importantly to Walt Disney World, and importantly to Walt Disney World, and importantly to carve out the Reedy Creek Development carve out the Reedy Creek Development carve out the Reedy Creek Development District, which gave the company a lot District, which gave the company a lot District, which gave the company a lot more autonomy over the area containing more autonomy over the area containing more autonomy over the area containing the land that they purchased than they the land that they purchased than they the land that they purchased than they ever had in Anaheim. And famously, Walt ever had in Anaheim. And famously, Walt ever had in Anaheim. And famously, Walt was very regretful that they didn't buy was very regretful that they didn't buy was very regretful that they didn't buy up all the land around Disneyland, too, up all the land around Disneyland, too, up all the land around Disneyland, too, because he just hated all of the, you because he just hated all of the, you because he just hated all of the, you know, hotels and restaurants and crummy know, hotels and restaurants and crummy know, hotels and restaurants and crummy stuff around there. And, uh, they run stuff around there. And, uh, they run stuff around there. And, uh, they run the show there in Florida the show there in Florida the show there in Florida >> that they do. But Roy is not Walt and >> that they do. But Roy is not Walt and >> that they do. But Roy is not Walt and he's not willing to bet the company like he's not willing to bet the company like he's not willing to bet the company like Walt was. So he does see Walt Disney Walt was. So he does see Walt Disney Walt was. So he does see Walt Disney World through, but he dramatically World through, but he dramatically World through, but he dramatically scales it back mostly because he doesn't scales it back mostly because he doesn't scales it back mostly because he doesn't want to take on any additional debt for want to take on any additional debt for want to take on any additional debt for the company. So he sets a goal that he's the company. So he sets a goal that he's the company. So he sets a goal that he's going to get this thing constructed going to get this thing constructed going to get this thing constructed without raising debt for the company, without raising debt for the company, without raising debt for the company, >> which is unbelievable. They built the >> which is unbelievable. They built the >> which is unbelievable. They built the Magic Kingdom, the Walt Disney World, Magic Kingdom, the Walt Disney World, Magic Kingdom, the Walt Disney World, >> the theme park, >> the theme park, >> the theme park, >> copy paste of Disneyland in Florida for >> copy paste of Disneyland in Florida for >> copy paste of Disneyland in Florida for $400 million with two hotels and no $400 million with two hotels and no $400 million with two hotels and no debt. debt. debt. >> Yes. That is an incredible achievement. >> Yes. That is an incredible achievement. >> Yes. That is an incredible achievement. Yes. And it is absolutely not what Walt Yes. And it is absolutely not what Walt Yes. And it is absolutely not what Walt would have done. would have done. would have done. >> Nope. >> Nope. >> Nope. >> So, it's just the Magic Kingdom. There's >> So, it's just the Magic Kingdom. There's >> So, it's just the Magic Kingdom. There's no city. There's no Epcot. There's no no city. There's no Epcot. There's no no city. There's no Epcot. There's no airport. There's no industrial park. airport. There's no industrial park. airport. There's no industrial park. It's more or less like, hey, we've got It's more or less like, hey, we've got It's more or less like, hey, we've got all this land and we're extremely all this land and we're extremely all this land and we're extremely confident that Disneyland is going to confident that Disneyland is going to confident that Disneyland is going to work here, so we'll build it. work here, so we'll build it. work here, so we'll build it. >> And it was extremely successful. >> And it was extremely successful. >> And it was extremely successful. >> Yep. >> Yep. >> Yep. >> But it's not betting the company. And >> But it's not betting the company. And >> But it's not betting the company. And it's not blazing a new trail. I mean, it's not blazing a new trail. I mean, it's not blazing a new trail. I mean, look, like, how could you say Disney look, like, how could you say Disney look, like, how could you say Disney World isn't a success? Like, it's an World isn't a success? Like, it's an World isn't a success? Like, it's an incredible success. incredible success. incredible success. >> And there's like so much cool innovation >> And there's like so much cool innovation >> And there's like so much cool innovation there. The underground tunnels, they there. The underground tunnels, they there. The underground tunnels, they took everything about Disneyland and and took everything about Disneyland and and took everything about Disneyland and and made it better. Okay, now we don't have made it better. Okay, now we don't have made it better. Okay, now we don't have to have people wandering around carrying to have people wandering around carrying to have people wandering around carrying trash bags. Okay, we don't have to have trash bags. Okay, we don't have to have trash bags. Okay, we don't have to have characters appearing in the wrong land characters appearing in the wrong land characters appearing in the wrong land because the only way for them to, you because the only way for them to, you because the only way for them to, you know, come quote unquote on stage is know, come quote unquote on stage is know, come quote unquote on stage is through a door that's inconveniently through a door that's inconveniently through a door that's inconveniently placed. We've got this network of placed. We've got this network of placed. We've got this network of underground tunnels where we can all do underground tunnels where we can all do underground tunnels where we can all do it exactly the way that we would have it exactly the way that we would have it exactly the way that we would have wanted to. I'm pretty sure the wanted to. I'm pretty sure the wanted to. I'm pretty sure the underground tunnels are actually street underground tunnels are actually street underground tunnels are actually street level and all of Disney World is up one level and all of Disney World is up one level and all of Disney World is up one story. It's this like whole insane story. It's this like whole insane story. It's this like whole insane concept of what if we could do concept of what if we could do concept of what if we could do Disneyland over again, but not as Disneyland over again, but not as Disneyland over again, but not as cowboys, as as real planners and cowboys, as as real planners and cowboys, as as real planners and builders and engineers and a much bigger builders and engineers and a much bigger builders and engineers and a much bigger budget. budget. budget. >> Which may actually be, to your point, >> Which may actually be, to your point, >> Which may actually be, to your point, it's probably just as likely, if not it's probably just as likely, if not it's probably just as likely, if not more likely, that Walt Disney's death more likely, that Walt Disney's death more likely, that Walt Disney's death when it came preserved his reputation when it came preserved his reputation when it came preserved his reputation [laughter] and that this this might have [laughter] and that this this might have [laughter] and that this this might have actually been the better path for the actually been the better path for the actually been the better path for the Florida project. Florida project. Florida project. >> May have been. Regardless though, what >> May have been. Regardless though, what >> May have been. Regardless though, what it is not is shooting for the stars. And it is not is shooting for the stars. And it is not is shooting for the stars. And after Walt's death, the company after Walt's death, the company after Walt's death, the company basically stops doing that and every basically stops doing that and every basically stops doing that and every dimension. Roy himself tragically dies 2 dimension. Roy himself tragically dies 2 dimension. Roy himself tragically dies 2 and a half months after opening Disney and a half months after opening Disney and a half months after opening Disney World at the end of 1971. World at the end of 1971. World at the end of 1971. >> It's kind of poetic. It seems like he he >> It's kind of poetic. It seems like he he >> It's kind of poetic. It seems like he he said he was going to see this thing said he was going to see this thing said he was going to see this thing through and he did. through and he did. through and he did. >> And he did for his brother. Yeah. >> And he did for his brother. Yeah. >> And he did for his brother. Yeah. And then what follows is basically kind And then what follows is basically kind And then what follows is basically kind of 13 years of Disney [snorts] of 13 years of Disney [snorts] of 13 years of Disney [snorts] becoming a parks company. becoming a parks company. becoming a parks company. >> Yeah. I mean, if you look over at the >> Yeah. I mean, if you look over at the >> Yeah. I mean, if you look over at the film side of things, the last film that film side of things, the last film that film side of things, the last film that Walt worked on was Jungle Book, which Walt worked on was Jungle Book, which Walt worked on was Jungle Book, which ended up coming out after his death in ended up coming out after his death in ended up coming out after his death in 1967. He was deeply involved in this 1967. He was deeply involved in this 1967. He was deeply involved in this one. It was a smash hit, grossing $23 one. It was a smash hit, grossing $23 one. It was a smash hit, grossing $23 million. 23 million in its first box million. 23 million in its first box million. 23 million in its first box office run, which implies a cut of about office run, which implies a cut of about office run, which implies a cut of about $11 million for Disney and Buen a Vista $11 million for Disney and Buen a Vista $11 million for Disney and Buen a Vista on a budget of just $4 million. This on a budget of just $4 million. This on a budget of just $4 million. This though would be Disney's most successful though would be Disney's most successful though would be Disney's most successful film for the next two decades. film for the next two decades. film for the next two decades. >> Yeah. Yeah. That's bigger than >> Yeah. Yeah. That's bigger than >> Yeah. Yeah. That's bigger than Cinderella, certainly bigger than Cinderella, certainly bigger than Cinderella, certainly bigger than Sleeping Beauty, 101 Dalmatians, Sleeping Beauty, 101 Dalmatians, Sleeping Beauty, 101 Dalmatians, any of the other movies around that era. any of the other movies around that era. any of the other movies around that era. >> Yep. So the financials of the company >> Yep. So the financials of the company >> Yep. So the financials of the company keep growing, but really it's all keep growing, but really it's all keep growing, but really it's all because of the parks. And you can see it because of the parks. And you can see it because of the parks. And you can see it when you look at the numbers. So in when you look at the numbers. So in when you look at the numbers. So in 1972, the first year of Disney World, 1972, the first year of Disney World, 1972, the first year of Disney World, films do 78 million in revenue and 44 films do 78 million in revenue and 44 films do 78 million in revenue and 44 million in profit. Parks do a whopping million in profit. Parks do a whopping million in profit. Parks do a whopping 223 223 223 million in revenue and 38 million in million in revenue and 38 million in million in revenue and 38 million in profit. And then all the rest of the profit. And then all the rest of the profit. And then all the rest of the flywheel, consumer merchandising, etc. flywheel, consumer merchandising, etc. flywheel, consumer merchandising, etc. does 27 million in revenue and 13 does 27 million in revenue and 13 does 27 million in revenue and 13 million in profit. million in profit. million in profit. >> This is before the corporate expenses. >> This is before the corporate expenses. >> This is before the corporate expenses. >> Yes, before the corporate expenses. >> Yes, before the corporate expenses. >> Yes, before the corporate expenses. >> Okay. So, what are the three profit >> Okay. So, what are the three profit >> Okay. So, what are the three profit numbers for each of those again? numbers for each of those again? numbers for each of those again? >> So, you've got in 1972 >> So, you've got in 1972 >> So, you've got in 1972 44 million in profit from films. 44 million in profit from films. 44 million in profit from films. >> Yep. >> Yep. >> Yep. >> Biggest profit engine. >> Biggest profit engine. >> Biggest profit engine. >> It's actually a lot. >> It's actually a lot. >> It's actually a lot. >> The IP of the company is still in good >> The IP of the company is still in good >> The IP of the company is still in good shape here in 1972. Parks do 38 million shape here in 1972. Parks do 38 million shape here in 1972. Parks do 38 million in profit and other flywheel businesses in profit and other flywheel businesses in profit and other flywheel businesses do 13 million in profit. do 13 million in profit. do 13 million in profit. >> Okay. So parks and movies are pretty >> Okay. So parks and movies are pretty >> Okay. So parks and movies are pretty comparable then. comparable then. comparable then. >> Yes. Pretty comparable right after >> Yes. Pretty comparable right after >> Yes. Pretty comparable right after Disney World opens. Disney World opens. Disney World opens. >> Yep. >> Yep. >> Yep. >> But then 12 years later, by the end of >> But then 12 years later, by the end of >> But then 12 years later, by the end of this period in 1984, this period in 1984, this period in 1984, parks and consumer products generate parks and consumer products generate parks and consumer products generate $250 million of operating income on over $250 million of operating income on over $250 million of operating income on over a billion dollars in revenue, while film a billion dollars in revenue, while film a billion dollars in revenue, while film and TV and TV and TV barely breaks even with only $2.2 $2 barely breaks even with only $2.2 $2 barely breaks even with only $2.2 $2 million in operating million in operating million in operating >> income. So yeah, by the end of this >> income. So yeah, by the end of this >> income. So yeah, by the end of this period here, period here, period here, >> basically IPwise, the company is >> basically IPwise, the company is >> basically IPwise, the company is creatively bankrupt and they're running creatively bankrupt and they're running creatively bankrupt and they're running a parks and merch business. a parks and merch business. a parks and merch business. >> No way. Okay, give me the profit numbers >> No way. Okay, give me the profit numbers >> No way. Okay, give me the profit numbers from 1984 again. from 1984 again. from 1984 again. >> So together, parks and consumer products >> So together, parks and consumer products >> So together, parks and consumer products >> generate 250 million in operating >> generate 250 million in operating >> generate 250 million in operating income. So4 billion dollars from the income. So4 billion dollars from the income. So4 billion dollars from the parks and consumer products. and film parks and consumer products. and film parks and consumer products. and film and TV is 2.2 million. [laughter] and TV is 2.2 million. [laughter] and TV is 2.2 million. [laughter] >> Unbelievable. >> Unbelievable. >> Unbelievable. >> It really illustrates what happens to >> It really illustrates what happens to >> It really illustrates what happens to the company during this period. the company during this period. the company during this period. >> It's funny because I only have the >> It's funny because I only have the >> It's funny because I only have the topline numbers from all the annual topline numbers from all the annual topline numbers from all the annual reports that we took photographs of when reports that we took photographs of when reports that we took photographs of when we were in the archives. Revenue goes we were in the archives. Revenue goes we were in the archives. Revenue goes from 100 million in 1965 from 100 million in 1965 from 100 million in 1965 to to to 1.4 billion in 1984. And then over on 1.4 billion in 1984. And then over on 1.4 billion in 1984. And then over on the net income after all the corporate the net income after all the corporate the net income after all the corporate expenses in 1965 goes from 11 million expenses in 1965 goes from 11 million expenses in 1965 goes from 11 million all the way up to 97 million in 1984. So all the way up to 97 million in 1984. So all the way up to 97 million in 1984. So if you just look at the whole business if you just look at the whole business if you just look at the whole business >> yeah the consolidated financials >> yeah the consolidated financials >> yeah the consolidated financials >> looks great but what you're sort of >> looks great but what you're sort of >> looks great but what you're sort of illustrating is the core is rotting. illustrating is the core is rotting. illustrating is the core is rotting. Yes. That they're not contributing new Yes. That they're not contributing new Yes. That they're not contributing new IP onto the pile that consumers love. IP onto the pile that consumers love. IP onto the pile that consumers love. Otherwise we'd be seeing that in the the Otherwise we'd be seeing that in the the Otherwise we'd be seeing that in the the films division. Name a Disney film from films division. Name a Disney film from films division. Name a Disney film from the 70s that you can even think of the 70s that you can even think of the 70s that you can even think of today. today. today. >> They're just harvesting over in the >> They're just harvesting over in the >> They're just harvesting over in the parks. parks. parks. >> Yes. So really the the biggest problem >> Yes. So really the the biggest problem >> Yes. So really the the biggest problem what this comes down to is that American what this comes down to is that American what this comes down to is that American mythmaking mythmaking mythmaking moved on. It moved elsewhere. So this is moved on. It moved elsewhere. So this is moved on. It moved elsewhere. So this is the era when George Lucas makes Star the era when George Lucas makes Star the era when George Lucas makes Star Wars and Stephen Spielberg makes Indiana Wars and Stephen Spielberg makes Indiana Wars and Stephen Spielberg makes Indiana Jones and ET and these guys become the Jones and ET and these guys become the Jones and ET and these guys become the new American storytellers, not Disney new American storytellers, not Disney new American storytellers, not Disney and not Disney animation. Disney and not Disney animation. Disney and not Disney animation. Disney animation during this decade goes from a animation during this decade goes from a animation during this decade goes from a staff of roughly 500 at the time of staff of roughly 500 at the time of staff of roughly 500 at the time of Walt's death all the way down to just Walt's death all the way down to just Walt's death all the way down to just 125 by the early8s. There's all sorts of 125 by the early8s. There's all sorts of 125 by the early8s. There's all sorts of problems. The films they do make are problems. The films they do make are problems. The films they do make are disasters. The worst example of this is disasters. The worst example of this is disasters. The worst example of this is The Black Cauldron. Did you read about The Black Cauldron. Did you read about The Black Cauldron. Did you read about this? this? this? >> Yeah. Wasn't it like 10 years in >> Yeah. Wasn't it like 10 years in >> Yeah. Wasn't it like 10 years in development? development? development? >> 10 years in development and production. >> 10 years in development and production. >> 10 years in development and production. Ties up the studio forever. And then Ties up the studio forever. And then Ties up the studio forever. And then when they eventually do release it in when they eventually do release it in when they eventually do release it in 1985, it's a total flop. 1985, it's a total flop. 1985, it's a total flop. >> And it's super dark, right? It's like a >> And it's super dark, right? It's like a >> And it's super dark, right? It's like a scary kids movie. scary kids movie. scary kids movie. >> Yeah. It's a PG rated Disney, >> Yeah. It's a PG rated Disney, >> Yeah. It's a PG rated Disney, >> right? It was the first one ever rated >> right? It was the first one ever rated >> right? It was the first one ever rated PG. PG. PG. >> Yeah. Yeah. Yeah. >> Yeah. Yeah. Yeah. >> Yeah. Yeah. Yeah. >> They do have some success with live >> They do have some success with live >> They do have some success with live action since 1964 with the massive action since 1964 with the massive action since 1964 with the massive success of Mary Poppins, which won five success of Mary Poppins, which won five success of Mary Poppins, which won five Oscars. They kind of leaned into that Oscars. They kind of leaned into that Oscars. They kind of leaned into that side of the house. side of the house. side of the house. >> Yep. They start Touchstone Pictures and >> Yep. They start Touchstone Pictures and >> Yep. They start Touchstone Pictures and that has a couple, you know, big hits that has a couple, you know, big hits that has a couple, you know, big hits like Splash is a big hit for them. But like Splash is a big hit for them. But like Splash is a big hit for them. But animation, the core of the company is animation, the core of the company is animation, the core of the company is dying. And of course, Mary Poppins was dying. And of course, Mary Poppins was dying. And of course, Mary Poppins was made made made >> during Walt's life >> during Walt's life >> during Walt's life >> with Walt's involvement before his >> with Walt's involvement before his >> with Walt's involvement before his death. death. death. >> But to your point all episode, you know, >> But to your point all episode, you know, >> But to your point all episode, you know, great, they started Touchtone Pictures. great, they started Touchtone Pictures. great, they started Touchtone Pictures. Great. They made 20,000 Leagues Under Great. They made 20,000 Leagues Under Great. They made 20,000 Leagues Under the Sea and Old Yeller and The the Sea and Old Yeller and The the Sea and Old Yeller and The Absent-minded Professor and Absent-minded Professor and Absent-minded Professor and >> they made a bunch of Herby the Love Bug >> they made a bunch of Herby the Love Bug >> they made a bunch of Herby the Love Bug liveaction movies in liveaction movies in liveaction movies in >> right >> right >> right >> the 60s and 70s. >> the 60s and 70s. >> the 60s and 70s. >> And that's not to hate on any of these >> And that's not to hate on any of these >> And that's not to hate on any of these things on their own. Like my parents things on their own. Like my parents things on their own. Like my parents loved Herby. I I remember them talking loved Herby. I I remember them talking loved Herby. I I remember them talking about it. They showed it to me when I about it. They showed it to me when I about it. They showed it to me when I was a kid. Is that durable IP that feeds was a kid. Is that durable IP that feeds was a kid. Is that durable IP that feeds >> the future of Disney? No. >> the future of Disney? No. >> the future of Disney? No. >> No. No. >> No. No. >> No. No. >> So then in 1984, >> So then in 1984, >> So then in 1984, basically the inevitable happens. Wall basically the inevitable happens. Wall basically the inevitable happens. Wall Street corporate raiders come gunning Street corporate raiders come gunning Street corporate raiders come gunning for Disney. I mean, it's an easy target, for Disney. I mean, it's an easy target, for Disney. I mean, it's an easy target, right? The financials look great. right? The financials look great. right? The financials look great. There's a lot of net income here. And There's a lot of net income here. And There's a lot of net income here. And there's also a lot of hard assets there's also a lot of hard assets there's also a lot of hard assets between the parks, the real estate, the between the parks, the real estate, the between the parks, the real estate, the old films in the vault. This is like old films in the vault. This is like old films in the vault. This is like easy pickings to come in, take over the easy pickings to come in, take over the easy pickings to come in, take over the >> super undervalued, right? >> super undervalued, right? >> super undervalued, right? >> Yeah. I mean, the market cap of this >> Yeah. I mean, the market cap of this >> Yeah. I mean, the market cap of this company is only like $2 billion despite company is only like $2 billion despite company is only like $2 billion despite 1.5 billion in topline revenue and call 1.5 billion in topline revenue and call 1.5 billion in topline revenue and call it a hundred million in net income. But it a hundred million in net income. But it a hundred million in net income. But this would be super easy to break up this would be super easy to break up this would be super easy to break up Disney, sell off the theme parks, sell Disney, sell off the theme parks, sell Disney, sell off the theme parks, sell off the IP to other movie studios. You off the IP to other movie studios. You off the IP to other movie studios. You could come in and make a killing doing could come in and make a killing doing could come in and make a killing doing this. this. this. >> And that's what Saul Steinberg tries to >> And that's what Saul Steinberg tries to >> And that's what Saul Steinberg tries to do. Come in, raid the company, break it do. Come in, raid the company, break it do. Come in, raid the company, break it up for parts. But, uh, David, I I think up for parts. But, uh, David, I I think up for parts. But, uh, David, I I think you're getting ahead of yourself. you're getting ahead of yourself. you're getting ahead of yourself. >> I'm pretty sure this should be how we >> I'm pretty sure this should be how we >> I'm pretty sure this should be how we start part two. start part two. start part two. Yes, this is the story for next time, Yes, this is the story for next time, Yes, this is the story for next time, but just know for now as a little teaser but just know for now as a little teaser but just know for now as a little teaser that this period of the company ends that this period of the company ends that this period of the company ends improbably improbably improbably not with Disney being broken up, but not with Disney being broken up, but not with Disney being broken up, but with three complete outsiders with three complete outsiders with three complete outsiders coming in to run the company, none of coming in to run the company, none of coming in to run the company, none of whom have any history in animation, any whom have any history in animation, any whom have any history in animation, any familiarity with the flywheel business familiarity with the flywheel business familiarity with the flywheel business model, or any experience or demonstrated model, or any experience or demonstrated model, or any experience or demonstrated ability ility to operate anything ability ility to operate anything ability ility to operate anything outside film and television. So like outside film and television. So like outside film and television. So like running parks, nope. Doing merch? Nope. running parks, nope. Doing merch? Nope. running parks, nope. Doing merch? Nope. Nothing. None of that. Nothing. None of that. Nothing. None of that. And those three men, Michael Eisner, And those three men, Michael Eisner, And those three men, Michael Eisner, Frank Wells, and Jeffrey Katzenberg, Frank Wells, and Jeffrey Katzenberg, Frank Wells, and Jeffrey Katzenberg, would pull off probably the greatest would pull off probably the greatest would pull off probably the greatest media company comeback in history. So media company comeback in history. So media company comeback in history. So that's what two Paramount executives and that's what two Paramount executives and that's what two Paramount executives and a lawyer turned Warner Brothers exec. a lawyer turned Warner Brothers exec. a lawyer turned Warner Brothers exec. >> Yep, that's right. >> Yep, that's right. >> Yep, that's right. >> It's like the other Hollywood Studios >> It's like the other Hollywood Studios >> It's like the other Hollywood Studios executives are going to team up and come executives are going to team up and come executives are going to team up and come in and save Disney. in and save Disney. in and save Disney. >> Doesn't sound like it's going to work, >> Doesn't sound like it's going to work, >> Doesn't sound like it's going to work, but we'll have to story on part two but we'll have to story on part two but we'll have to story on part two because [laughter] boy did it ever. because [laughter] boy did it ever. because [laughter] boy did it ever. >> All right. Well, should we do some >> All right. Well, should we do some >> All right. Well, should we do some analysis? analysis? analysis? >> Yes, absolutely. Do you still like the >> Yes, absolutely. Do you still like the >> Yes, absolutely. Do you still like the thing that we did on Vanguard which is thing that we did on Vanguard which is thing that we did on Vanguard which is have one big question that we we try to have one big question that we we try to have one big question that we we try to answer? answer? answer? >> And I think the question should be why >> And I think the question should be why >> And I think the question should be why has nobody else built an IP flywheel has nobody else built an IP flywheel has nobody else built an IP flywheel like Disney? like Disney? like Disney? >> Is it as simple as Disney was the first >> Is it as simple as Disney was the first >> Is it as simple as Disney was the first IP flywheel company and so they've been IP flywheel company and so they've been IP flywheel company and so they've been the biggest? I mean that no that's not the biggest? I mean that no that's not the biggest? I mean that no that's not it. But it is interesting they are the it. But it is interesting they are the it. But it is interesting they are the first and they're like the biggest best first and they're like the biggest best first and they're like the biggest best IP flywheel company at that point in IP flywheel company at that point in IP flywheel company at that point in history. 1984. history. 1984. history. 1984. >> Yeah. And I mean really like even to >> Yeah. And I mean really like even to >> Yeah. And I mean really like even to today, I don't think any of the other today, I don't think any of the other today, I don't think any of the other movie studios out there, any of the movie studios out there, any of the movie studios out there, any of the other major studios are anywhere near as other major studios are anywhere near as other major studios are anywhere near as good a business. good a business. good a business. >> No, they're all terrible businesses. >> No, they're all terrible businesses. >> No, they're all terrible businesses. >> Yeah. Despite having at this point going >> Yeah. Despite having at this point going >> Yeah. Despite having at this point going on a hundred years of watching Disney on a hundred years of watching Disney on a hundred years of watching Disney operate and seeing exactly how the operate and seeing exactly how the operate and seeing exactly how the flywheel business model works. I mean, flywheel business model works. I mean, flywheel business model works. I mean, the Wall Street Journal wrote that the Wall Street Journal wrote that the Wall Street Journal wrote that article in 1958. Why has nobody else article in 1958. Why has nobody else article in 1958. Why has nobody else copied them successfully? copied them successfully? copied them successfully? >> To be fair, okay, the terrible business >> To be fair, okay, the terrible business >> To be fair, okay, the terrible business thing is not fair. The business of movie thing is not fair. The business of movie thing is not fair. The business of movie production on its own is a terrible production on its own is a terrible production on its own is a terrible business, but the other studios, like, business, but the other studios, like, business, but the other studios, like, you got to give Universal a ton of you got to give Universal a ton of you got to give Universal a ton of credit. credit. credit. >> And I guess that's my point. Universal >> And I guess that's my point. Universal >> And I guess that's my point. Universal is probably the closest, but even then, is probably the closest, but even then, is probably the closest, but even then, it's not Disney. I mean, isn't Universal it's not Disney. I mean, isn't Universal it's not Disney. I mean, isn't Universal running effectively the the same running effectively the the same running effectively the the same playbook but with less valuable IP or IP playbook but with less valuable IP or IP playbook but with less valuable IP or IP that they don't own? So, they have to that they don't own? So, they have to that they don't own? So, they have to sort of share it. Think like Harry sort of share it. Think like Harry sort of share it. Think like Harry Potter. Potter. Potter. >> Yep. >> Yep. >> Yep. >> Or just at smaller scale. >> Or just at smaller scale. >> Or just at smaller scale. >> Yeah. Still, nobody else is Disney. And >> Yeah. Still, nobody else is Disney. And >> Yeah. Still, nobody else is Disney. And and to me, I think it all comes back to and to me, I think it all comes back to and to me, I think it all comes back to when we first talked about the flywheel when we first talked about the flywheel when we first talked about the flywheel all the way in the beginning of the all the way in the beginning of the all the way in the beginning of the episode. I think animation is super episode. I think animation is super episode. I think animation is super super key. I mean Bob Iger when he took super key. I mean Bob Iger when he took super key. I mean Bob Iger when he took over the company in 2005 had that famous over the company in 2005 had that famous over the company in 2005 had that famous quote of as animation goes so goes the quote of as animation goes so goes the quote of as animation goes so goes the company. Yep. company. Yep. company. Yep. >> There really is something unique about >> There really is something unique about >> There really is something unique about animated IP in its timelessness, in the animated IP in its timelessness, in the animated IP in its timelessness, in the ever availability of its stars, in the ever availability of its stars, in the ever availability of its stars, in the better economics of not having to share better economics of not having to share better economics of not having to share too much on the back end or in too much on the back end or in too much on the back end or in merchandising fees, etc. with stars. And merchandising fees, etc. with stars. And merchandising fees, etc. with stars. And then I think really just like the then I think really just like the then I think really just like the ability of people to form deep lasting ability of people to form deep lasting ability of people to form deep lasting relationships with the characters versus relationships with the characters versus relationships with the characters versus live action. And because Disney's always live action. And because Disney's always live action. And because Disney's always had animation at its core, that's what had animation at its core, that's what had animation at its core, that's what creates all this special IP. creates all this special IP. creates all this special IP. >> And it's all created in house. You know, >> And it's all created in house. You know, >> And it's all created in house. You know, it's funny. I threw out Harry Potter. it's funny. I threw out Harry Potter. it's funny. I threw out Harry Potter. Universal doesn't own all of the rights Universal doesn't own all of the rights Universal doesn't own all of the rights to everything Harry Potter, but Disney to everything Harry Potter, but Disney to everything Harry Potter, but Disney for sure does own all the rights to for sure does own all the rights to for sure does own all the rights to everything Buzz Lightyear now that they everything Buzz Lightyear now that they everything Buzz Lightyear now that they own Pixar or Aladdin or Mickey Mouse. own Pixar or Aladdin or Mickey Mouse. own Pixar or Aladdin or Mickey Mouse. Like, this is true vertical integration. Like, this is true vertical integration. Like, this is true vertical integration. >> Yes. Yes. There's also Disney, for all >> Yes. Yes. There's also Disney, for all >> Yes. Yes. There's also Disney, for all its ups and downs, made the decision to its ups and downs, made the decision to its ups and downs, made the decision to never sell its catalog, so they could never sell its catalog, so they could never sell its catalog, so they could compound longer than everyone else. A compound longer than everyone else. A compound longer than everyone else. A lot of these other studios have sold lot of these other studios have sold lot of these other studios have sold their back catalogs, and some of them their back catalogs, and some of them their back catalogs, and some of them are are worthless since it's live action are are worthless since it's live action are are worthless since it's live action films and black and white that no one's films and black and white that no one's films and black and white that no one's ever going to watch, but Disney hasn't. ever going to watch, but Disney hasn't. ever going to watch, but Disney hasn't. They own everything they've ever made, They own everything they've ever made, They own everything they've ever made, and that ties to Walt's Oswald and that ties to Walt's Oswald and that ties to Walt's Oswald experience. experience. experience. >> Yep. And I think there's something else >> Yep. And I think there's something else >> Yep. And I think there's something else too that only comes when you really too that only comes when you really too that only comes when you really fully embrace the flywheel business fully embrace the flywheel business fully embrace the flywheel business model and the trade-offs that it model and the trade-offs that it model and the trade-offs that it involves. And it's the vault and the involves. And it's the vault and the involves. And it's the vault and the reissue strategy. reissue strategy. reissue strategy. >> Yeah. >> Yeah. >> Yeah. >> Disney. Let's put Marvel aside for a >> Disney. Let's put Marvel aside for a >> Disney. Let's put Marvel aside for a minute. [laughter] Uh with the exception minute. [laughter] Uh with the exception minute. [laughter] Uh with the exception of Marvel, of Marvel, of Marvel, >> you got to put Star Wars in that pile, >> you got to put Star Wars in that pile, >> you got to put Star Wars in that pile, too, because I know where you're going too, because I know where you're going too, because I know where you're going with this. And I the way you feel about with this. And I the way you feel about with this. And I the way you feel about Marvel, I feel about the um Marvel, I feel about the um Marvel, I feel about the um overexloitation of Star Wars. overexloitation of Star Wars. overexloitation of Star Wars. >> Yeah. Yeah. Okay. Great. Okay. All >> Yeah. Yeah. Okay. Great. Okay. All >> Yeah. Yeah. Okay. Great. Okay. All right. Let's [laughter] right. Let's [laughter] right. Let's [laughter] Let's put Star Wars aside of the pile, Let's put Star Wars aside of the pile, Let's put Star Wars aside of the pile, too. Core Disney and Disney animation too. Core Disney and Disney animation too. Core Disney and Disney animation and Pixar have been so disciplined over and Pixar have been so disciplined over and Pixar have been so disciplined over the years about metering out their the years about metering out their the years about metering out their content and the core delivery of that content and the core delivery of that content and the core delivery of that content on an infrequent enough basis content on an infrequent enough basis content on an infrequent enough basis that it doesn't dilute it. And Marvel, that it doesn't dilute it. And Marvel, that it doesn't dilute it. And Marvel, ironically, I think really is the ironically, I think really is the ironically, I think really is the counter example here. Yeah, it was on a counter example here. Yeah, it was on a counter example here. Yeah, it was on a great great run, but honestly, it feels great great run, but honestly, it feels great great run, but honestly, it feels like the Disney plusification of Marvel. like the Disney plusification of Marvel. like the Disney plusification of Marvel. We'll get to this in the next episode, We'll get to this in the next episode, We'll get to this in the next episode, but that my gripe would be that the but that my gripe would be that the but that my gripe would be that the developing a lot of content to always developing a lot of content to always developing a lot of content to always have something fresh there. have something fresh there. have something fresh there. >> Maybe what the issue that we're both >> Maybe what the issue that we're both >> Maybe what the issue that we're both describing is actually a blurring of describing is actually a blurring of describing is actually a blurring of flywheel point. 2 and Flywheel 3. Point flywheel point. 2 and Flywheel 3. Point flywheel point. 2 and Flywheel 3. Point 2 was maximized distribution of each 2 was maximized distribution of each 2 was maximized distribution of each core IP's core IP's core IP's primary initial delivery vehicle. And primary initial delivery vehicle. And primary initial delivery vehicle. And your point three was feed IP into as your point three was feed IP into as your point three was feed IP into as many ancillary profitable flywheel nodes many ancillary profitable flywheel nodes many ancillary profitable flywheel nodes as possible. Kind of feels like with as possible. Kind of feels like with as possible. Kind of feels like with direct consumer Disney Plus, those two direct consumer Disney Plus, those two direct consumer Disney Plus, those two things got confused. Yeah. things got confused. Yeah. things got confused. Yeah. >> And like ah what's the difference >> And like ah what's the difference >> And like ah what's the difference between ancillary content and primary between ancillary content and primary between ancillary content and primary content it all ends up in the same content it all ends up in the same content it all ends up in the same place. And that's kind of how I feel place. And that's kind of how I feel place. And that's kind of how I feel when I watch some of the overexploited when I watch some of the overexploited when I watch some of the overexploited IP now. M mhm. Mhm. IP now. M mhm. Mhm. IP now. M mhm. Mhm. >> It goes back all the way back to the >> It goes back all the way back to the >> It goes back all the way back to the point you made, I don't know, 6 hours point you made, I don't know, 6 hours point you made, I don't know, 6 hours ago or whatever, that you you have to be ago or whatever, that you you have to be ago or whatever, that you you have to be really clear about giving a nice lane really clear about giving a nice lane really clear about giving a nice lane around your primary medium and delivery around your primary medium and delivery around your primary medium and delivery vehicle. So that stuff still feels vehicle. So that stuff still feels vehicle. So that stuff still feels scarce, special, and canonical. scarce, special, and canonical. scarce, special, and canonical. >> Yep. Yep. Yep. But I think for every >> Yep. Yep. Yep. But I think for every >> Yep. Yep. Yep. But I think for every other studio out there, their incentives other studio out there, their incentives other studio out there, their incentives have always been and are always going to have always been and are always going to have always been and are always going to be release as much content as quickly as be release as much content as quickly as be release as much content as quickly as possible. Yeah. especially once they possible. Yeah. especially once they possible. Yeah. especially once they have a franchise that's working, get the have a franchise that's working, get the have a franchise that's working, get the sequels out as fast as possible and get sequels out as fast as possible and get sequels out as fast as possible and get the sure profits from them. the sure profits from them. the sure profits from them. >> And Disney is playing a many decade >> And Disney is playing a many decade >> And Disney is playing a many decade compounding game which can take three compounding game which can take three compounding game which can take three decades to really kick in. And all these decades to really kick in. And all these decades to really kick in. And all these other studios change ownership every other studios change ownership every other studios change ownership every decade. And so there's really not the decade. And so there's really not the decade. And so there's really not the right like ownership incentive structure right like ownership incentive structure right like ownership incentive structure to play a three decade game. to play a three decade game. to play a three decade game. >> Yep. And I think this impacts the >> Yep. And I think this impacts the >> Yep. And I think this impacts the creative decisions too because when you creative decisions too because when you creative decisions too because when you don't need to release content, don't need to release content, don't need to release content, you can keep working on the content and you can keep working on the content and you can keep working on the content and make sure that you only release it once make sure that you only release it once make sure that you only release it once it's truly great. it's truly great. it's truly great. >> Yeah. There's one other point on this >> Yeah. There's one other point on this >> Yeah. There's one other point on this though that we haven't really touched though that we haven't really touched though that we haven't really touched on, which is universe cohesion. on, which is universe cohesion. on, which is universe cohesion. >> Here's my favorite way to make the >> Here's my favorite way to make the >> Here's my favorite way to make the point. What's your favorite Paramount point. What's your favorite Paramount point. What's your favorite Paramount song? song? song? >> Right. Yeah. No idea. The Top Gun theme >> Right. Yeah. No idea. The Top Gun theme >> Right. Yeah. No idea. The Top Gun theme song. What's your favorite Universal song. What's your favorite Universal song. What's your favorite Universal song? song? song? >> Right. Yeah. >> Right. Yeah. >> Right. Yeah. >> But like everyone's got a litany of >> But like everyone's got a litany of >> But like everyone's got a litany of answers to what's your favorite Disney answers to what's your favorite Disney answers to what's your favorite Disney song. Yes. song. Yes. song. Yes. >> They actually managed to associate all >> They actually managed to associate all >> They actually managed to associate all of this love and heritage and fandom and of this love and heritage and fandom and of this love and heritage and fandom and universe interaction with the studio universe interaction with the studio universe interaction with the studio itself. itself. itself. >> It's back to becoming the lifesavers of >> It's back to becoming the lifesavers of >> It's back to becoming the lifesavers of animation. animation. animation. >> Yep. >> Yep. >> Yep. >> So, okay, as I was thinking about this, >> So, okay, as I was thinking about this, >> So, okay, as I was thinking about this, I was trying to ask myself, are there I was trying to ask myself, are there I was trying to ask myself, are there any other companies in the broader any other companies in the broader any other companies in the broader >> entertainment landscape? Ah, you got it. >> entertainment landscape? Ah, you got it. >> entertainment landscape? Ah, you got it. [laughter] That do this. I thought I was [laughter] That do this. I thought I was [laughter] That do this. I thought I was going to get you. going to get you. going to get you. Which is so great because Nintendo and Which is so great because Nintendo and Which is so great because Nintendo and Disney, you know, Nintendo started on Disney, you know, Nintendo started on Disney, you know, Nintendo started on the back of Disney, right? As we talked the back of Disney, right? As we talked the back of Disney, right? As we talked about on our Nintendo episodes, right? about on our Nintendo episodes, right? about on our Nintendo episodes, right? It was the Disney license for the It was the Disney license for the It was the Disney license for the playing cards in Japan that kicked off playing cards in Japan that kicked off playing cards in Japan that kicked off modern Nintendo. modern Nintendo. modern Nintendo. >> Yep. >> Yep. >> Yep. >> Yes. But yes, they have the exact same >> Yes. But yes, they have the exact same >> Yes. But yes, they have the exact same ethos ethos ethos >> and flywheel. >> and flywheel. >> and flywheel. >> But interestingly, they sort of don't >> But interestingly, they sort of don't >> But interestingly, they sort of don't play together now. I mean, that's the play together now. I mean, that's the play together now. I mean, that's the thing about vertically integrated thing about vertically integrated thing about vertically integrated companies is they don't really work companies is they don't really work companies is they don't really work together, together, together, >> right? And Nintendo has partnered with >> right? And Nintendo has partnered with >> right? And Nintendo has partnered with Universal now for their perks. I kind of Universal now for their perks. I kind of Universal now for their perks. I kind of suspect the way that a relationship suspect the way that a relationship suspect the way that a relationship between Disney and Nintendo, between Disney and Nintendo, between Disney and Nintendo, the only way it could work would be if the only way it could work would be if the only way it could work would be if one of them buys the other, one of them buys the other, one of them buys the other, >> right? >> right? >> right? >> Yep. >> Yep. >> Yep. >> Yep. >> Yep. >> Yep. >> Great. Seven powers. >> Great. Seven powers. >> Great. Seven powers. >> Great. So listeners, this is the part of >> Great. So listeners, this is the part of >> Great. So listeners, this is the part of the show where we walk through Hamilton the show where we walk through Hamilton the show where we walk through Hamilton Helmer's seven powers framework that Helmer's seven powers framework that Helmer's seven powers framework that effectively helps analyze why does a effectively helps analyze why does a effectively helps analyze why does a business get to be more profitable than business get to be more profitable than business get to be more profitable than its nearest competitor and do so its nearest competitor and do so its nearest competitor and do so sustainably. And those seven are scale sustainably. And those seven are scale sustainably. And those seven are scale economies, network economies, economies, network economies, economies, network economies, counterpositioning, switching costs, counterpositioning, switching costs, counterpositioning, switching costs, branding, cornered resource, and process branding, cornered resource, and process branding, cornered resource, and process power. And I think we're just analyzing power. And I think we're just analyzing power. And I think we're just analyzing this for pre984 Disney. this for pre984 Disney. this for pre984 Disney. >> Yep. Well, easy one to start with. >> Yep. Well, easy one to start with. >> Yep. Well, easy one to start with. Counterpositioning for days. Being Counterpositioning for days. Being Counterpositioning for days. Being willing to invest in a featurelength willing to invest in a featurelength willing to invest in a featurelength animated picture. I mean, that was the animated picture. I mean, that was the animated picture. I mean, that was the peak of this relative to anybody else peak of this relative to anybody else peak of this relative to anybody else doing animation leading up to Snow doing animation leading up to Snow doing animation leading up to Snow White, White, White, >> right? Cuz their competitive set would >> right? Cuz their competitive set would >> right? Cuz their competitive set would have needed to be people who have the have needed to be people who have the have needed to be people who have the talent of their animation staff, which talent of their animation staff, which talent of their animation staff, which is not zero people, but few people, and is not zero people, but few people, and is not zero people, but few people, and who had all the cash from Mickey and the who had all the cash from Mickey and the who had all the cash from Mickey and the Mickey merch, which would have been Mickey merch, which would have been Mickey merch, which would have been almost no one. I don't know, actually. almost no one. I don't know, actually. almost no one. I don't know, actually. That's almost like capital as a moat to That's almost like capital as a moat to That's almost like capital as a moat to go pursue Snow White cuz they weren't go pursue Snow White cuz they weren't go pursue Snow White cuz they weren't there was no one else who really could there was no one else who really could there was no one else who really could have done it. have done it. have done it. >> Mhm. You know what? You're right. Versus >> Mhm. You know what? You're right. Versus >> Mhm. You know what? You're right. Versus the other animation studios, but Disney the other animation studios, but Disney the other animation studios, but Disney was counterpositioned, I think, versus was counterpositioned, I think, versus was counterpositioned, I think, versus the big liveaction studios because they the big liveaction studios because they the big liveaction studios because they never would have made a three-year $1.5 never would have made a three-year $1.5 never would have made a three-year $1.5 million investment in a film when it was million investment in a film when it was million investment in a film when it was >> nor they have the capability though. >> nor they have the capability though. >> nor they have the capability though. >> Yep. >> Yep. >> Yep. >> So, let's see. early on. I mean, >> So, let's see. early on. I mean, >> So, let's see. early on. I mean, branding pretty quickly played a role as branding pretty quickly played a role as branding pretty quickly played a role as soon as Mickey Mouse was established. soon as Mickey Mouse was established. soon as Mickey Mouse was established. >> Walt Disney production. Absolutely. >> Walt Disney production. Absolutely. >> Walt Disney production. Absolutely. >> Yeah. Yeah. You'd pay more for a Walt >> Yeah. Yeah. You'd pay more for a Walt >> Yeah. Yeah. You'd pay more for a Walt Disney production than than others. Disney production than than others. Disney production than than others. >> It was brand for Disney itself. >> It was brand for Disney itself. >> It was brand for Disney itself. >> I wonder if there was process power. >> I wonder if there was process power. >> I wonder if there was process power. Reading in some of the old recollections Reading in some of the old recollections Reading in some of the old recollections of animators, it seems like there were of animators, it seems like there were of animators, it seems like there were people that kind of traded between people that kind of traded between people that kind of traded between studios and left and started rival studios and left and started rival studios and left and started rival studios and they were able to produce studios and they were able to produce studios and they were able to produce great work. So, maybe there's not great work. So, maybe there's not great work. So, maybe there's not process power. M process power. M process power. M >> I mean the the big two once it started >> I mean the the big two once it started >> I mean the the big two once it started to really kick in are scale economies to really kick in are scale economies to really kick in are scale economies and network economies. The flywheel is and network economies. The flywheel is and network economies. The flywheel is sort of all about that. The these films sort of all about that. The these films sort of all about that. The these films are all scale economies. It's can I go are all scale economies. It's can I go are all scale economies. It's can I go plop down $6 million and then get the plop down $6 million and then get the plop down $6 million and then get the entire world to care about my movie for entire world to care about my movie for entire world to care about my movie for a year and make as much as possible on a year and make as much as possible on a year and make as much as possible on that and then expand it out into the that and then expand it out into the that and then expand it out into the flywheel and take advantage of all those flywheel and take advantage of all those flywheel and take advantage of all those ancillary streams. And then of course ancillary streams. And then of course ancillary streams. And then of course the network economies of if you have a the network economies of if you have a the network economies of if you have a big enough release, it is a cultural big enough release, it is a cultural big enough release, it is a cultural moment. Yeah. It matters to the world, moment. Yeah. It matters to the world, moment. Yeah. It matters to the world, >> right? Gosh, I see it with my girls now >> right? Gosh, I see it with my girls now >> right? Gosh, I see it with my girls now today buying, you know, the Aurora today buying, you know, the Aurora today buying, you know, the Aurora costume that their friends also have so costume that their friends also have so costume that their friends also have so that they can dress up and play that they can dress up and play that they can dress up and play together. Yeah. The flywheel is built on together. Yeah. The flywheel is built on together. Yeah. The flywheel is built on network economies. It's like a network economies. It's like a network economies. It's like a combination of scale economies and combination of scale economies and combination of scale economies and network economies. Scale economies to network economies. Scale economies to network economies. Scale economies to enable the investment in the IP and then enable the investment in the IP and then enable the investment in the IP and then network economies across all of the network economies across all of the network economies across all of the nodes. But the whole thing, if you were nodes. But the whole thing, if you were nodes. But the whole thing, if you were to go ask that question of why isn't to go ask that question of why isn't to go ask that question of why isn't another company able to replicate the another company able to replicate the another company able to replicate the success of Disney to any of the very success of Disney to any of the very success of Disney to any of the very smart executives and their great teams smart executives and their great teams smart executives and their great teams that work at competitive companies, they that work at competitive companies, they that work at competitive companies, they would say, "Oh, cuz Disney has the would say, "Oh, cuz Disney has the would say, "Oh, cuz Disney has the cornered resource of all that IP." And cornered resource of all that IP." And cornered resource of all that IP." And like, what do you want me to do? I can't like, what do you want me to do? I can't like, what do you want me to do? I can't devise a strategy that's going to work devise a strategy that's going to work devise a strategy that's going to work in the next 5 to 10 years to suddenly in the next 5 to 10 years to suddenly in the next 5 to 10 years to suddenly beat Disney when they have a hundred beat Disney when they have a hundred beat Disney when they have a hundred years of heritage and the world caring years of heritage and the world caring years of heritage and the world caring about their IP. The entire thing is about their IP. The entire thing is about their IP. The entire thing is predicated on that. predicated on that. predicated on that. >> Yep. Yep. Which really comes down to >> Yep. Yep. Which really comes down to >> Yep. Yep. Which really comes down to Walt always playing the long game and Walt always playing the long game and Walt always playing the long game and always being willing always being willing always being willing >> to bet the whole farm. >> to bet the whole farm. >> to bet the whole farm. >> Yep. >> Yep. >> Yep. >> And being right enough times and >> And being right enough times and >> And being right enough times and managing to survive through the times managing to survive through the times managing to survive through the times where he was wrong that it worked. where he was wrong that it worked. where he was wrong that it worked. >> Yep. All right, Quintessence. >> Yep. All right, Quintessence. >> Yep. All right, Quintessence. >> Yes. So mine is Disney managed to take >> Yes. So mine is Disney managed to take >> Yes. So mine is Disney managed to take not only a set of IP and build their not only a set of IP and build their not only a set of IP and build their flywheel, but a cohesive set of IP, an flywheel, but a cohesive set of IP, an flywheel, but a cohesive set of IP, an opinionated universe of timeless stories opinionated universe of timeless stories opinionated universe of timeless stories about durable, emotional story arcs that about durable, emotional story arcs that about durable, emotional story arcs that are universally applicable that work are universally applicable that work are universally applicable that work together as one. And that is something together as one. And that is something together as one. And that is something that can stay relevant and of course that can stay relevant and of course that can stay relevant and of course monetize for a very long time across monetize for a very long time across monetize for a very long time across generations. They can't fully avoid generations. They can't fully avoid generations. They can't fully avoid being a hitbased business. They are a being a hitbased business. They are a being a hitbased business. They are a movie studio, but they've gotten about movie studio, but they've gotten about movie studio, but they've gotten about as far away from it as they possibly as far away from it as they possibly as far away from it as they possibly can. can. can. >> It's funny listening to you say that. I >> It's funny listening to you say that. I >> It's funny listening to you say that. I think that entire passage could equally think that entire passage could equally think that entire passage could equally apply to Nintendo. apply to Nintendo. apply to Nintendo. >> Yeah. >> Yeah. >> Yeah. >> Which really just shows how the >> Which really just shows how the >> Which really just shows how the companies, they are the two flywheel companies, they are the two flywheel companies, they are the two flywheel companies. They are the two intellectual companies. They are the two intellectual companies. They are the two intellectual property flywheel companies out there. property flywheel companies out there. property flywheel companies out there. >> Yeah. >> Yeah. >> Yeah. >> Okay. Okay, so my quintessence goes all >> Okay. Okay, so my quintessence goes all >> Okay. Okay, so my quintessence goes all the way back to the beginning of the the way back to the beginning of the the way back to the beginning of the episode and Marceline. episode and Marceline. episode and Marceline. >> Of course it does. >> Of course it does. >> Of course it does. >> Art and commerce. Those two things got >> Art and commerce. Those two things got >> Art and commerce. Those two things got married in Walt's head when he was a married in Walt's head when he was a married in Walt's head when he was a little kid. And that is Disney. It little kid. And that is Disney. It little kid. And that is Disney. It really is art. When Disney is at its really is art. When Disney is at its really is art. When Disney is at its best, what they make is not just a best, what they make is not just a best, what they make is not just a commercial product. It exists at a commercial product. It exists at a commercial product. It exists at a higher level than that. higher level than that. higher level than that. And it is married to this incredible And it is married to this incredible And it is married to this incredible commerce engine that is in of itself commerce engine that is in of itself commerce engine that is in of itself beautiful and like Disneyland and Disney beautiful and like Disneyland and Disney beautiful and like Disneyland and Disney World and all the parks are the most World and all the parks are the most World and all the parks are the most perfect expression of that perfect expression of that perfect expression of that >> in it sounds exactly right. The >> in it sounds exactly right. The >> in it sounds exactly right. The sightelines man the the I I like going sightelines man the the I I like going sightelines man the the I I like going to Disneyland just to walk around. It's to Disneyland just to walk around. It's to Disneyland just to walk around. It's the craziest thing. I the rides are free the craziest thing. I the rides are free the craziest thing. I the rides are free and I have just as much fun not going on and I have just as much fun not going on and I have just as much fun not going on them even though I've already paid for them even though I've already paid for them even though I've already paid for them. Any parent who's been to Disney them. Any parent who's been to Disney them. Any parent who's been to Disney with their kids knows exactly what I'm with their kids knows exactly what I'm with their kids knows exactly what I'm talking about. And it is like talking about. And it is like talking about. And it is like irreplicable at any other company or irreplicable at any other company or irreplicable at any other company or place in the world. All right, before we place in the world. All right, before we place in the world. All right, before we do carveouts, I've got one fun little do carveouts, I've got one fun little do carveouts, I've got one fun little thing that didn't make the narrative. thing that didn't make the narrative. thing that didn't make the narrative. So, when Disney launched Donald Duck in So, when Disney launched Donald Duck in So, when Disney launched Donald Duck in 1934, they hired radio actor Clarence 1934, they hired radio actor Clarence 1934, they hired radio actor Clarence Nash to do his voice. Do you know how Nash to do his voice. Do you know how Nash to do his voice. Do you know how Clarence Nash got his start doing Animal Clarence Nash got his start doing Animal Clarence Nash got his start doing Animal Voices on the radio? Voices on the radio? Voices on the radio? You won't guess it, but it's an awesome You won't guess it, but it's an awesome You won't guess it, but it's an awesome acquired crossover. acquired crossover. acquired crossover. >> He was the radio spokesperson for Ador >> He was the radio spokesperson for Ador >> He was the radio spokesperson for Ador Dairy Farms. Whoa. Dairy Farms. Whoa. Dairy Farms. Whoa. >> In Southern California. >> In Southern California. >> In Southern California. >> Trader Joe's. >> Trader Joe's. >> Trader Joe's. >> Trader Joe's. [laughter] >> Trader Joe's. [laughter] >> Trader Joe's. [laughter] >> That's awesome. >> That's awesome. >> That's awesome. >> Crossover. Trader Joe's. Donald Duck. >> Crossover. Trader Joe's. Donald Duck. >> Crossover. Trader Joe's. Donald Duck. There you go. Trader Joe's original milk There you go. Trader Joe's original milk There you go. Trader Joe's original milk supplier before they got bought by supplier before they got bought by supplier before they got bought by Trader Joe's competitor 7-Eleven. Trader Joe's competitor 7-Eleven. Trader Joe's competitor 7-Eleven. >> Yep, that's right. And of course, Trader >> Yep, that's right. And of course, Trader >> Yep, that's right. And of course, Trader Joe's itself was in part inspired by the Joe's itself was in part inspired by the Joe's itself was in part inspired by the Enchanted Tiki Room at Disneyland. Enchanted Tiki Room at Disneyland. Enchanted Tiki Room at Disneyland. >> That's right. Which we didn't talk >> That's right. Which we didn't talk >> That's right. Which we didn't talk about, but Walt also owned that about, but Walt also owned that about, but Walt also owned that personally. It opened in ' 63. He put up personally. It opened in ' 63. He put up personally. It opened in ' 63. He put up the capital for it. I think Wed owned the capital for it. I think Wed owned the capital for it. I think Wed owned it. And it was ticketed separately. I it. And it was ticketed separately. I it. And it was ticketed separately. I think it was like an extra 75 cents or think it was like an extra 75 cents or think it was like an extra 75 cents or something to go to Walt Disney's something to go to Walt Disney's something to go to Walt Disney's personal tiki room, which is why it's personal tiki room, which is why it's personal tiki room, which is why it's named named named >> the Tiki Room. That's right. All right. >> the Tiki Room. That's right. All right. >> the Tiki Room. That's right. All right. Carveouts, what you got? Carveouts, what you got? Carveouts, what you got? >> All right. Followup to yours from the >> All right. Followup to yours from the >> All right. Followup to yours from the Vanguard episode. The shoes, Brooks Vanguard episode. The shoes, Brooks Vanguard episode. The shoes, Brooks Vanguards are indeed great. I ordered a Vanguards are indeed great. I ordered a Vanguards are indeed great. I ordered a pair. They're excellent. Uh I'm not pair. They're excellent. Uh I'm not pair. They're excellent. Uh I'm not wearing them today because they're not wearing them today because they're not wearing them today because they're not squishy enough to stand for whatever squishy enough to stand for whatever squishy enough to stand for whatever we're at 9 hours. we're at 9 hours. we're at 9 hours. >> Yes. But they are great shoes. I got two >> Yes. But they are great shoes. I got two >> Yes. But they are great shoes. I got two pairs. pairs. pairs. >> I wear them around the neighborhood. >> I wear them around the neighborhood. >> I wear them around the neighborhood. They're awesome. I have two YouTube They're awesome. I have two YouTube They're awesome. I have two YouTube channels. channels. channels. >> Oo, nice. >> Oo, nice. >> Oo, nice. >> One is Defunct Land. >> One is Defunct Land. >> One is Defunct Land. >> I used to watch this channel all the >> I used to watch this channel all the >> I used to watch this channel all the time. I forgot about it for a while and time. I forgot about it for a while and time. I forgot about it for a while and then I rediscovered it while we were then I rediscovered it while we were then I rediscovered it while we were doing research. It is the stories of doing research. It is the stories of doing research. It is the stories of either defunct or neverbuilt theme parks either defunct or neverbuilt theme parks either defunct or neverbuilt theme parks and it walks you through the insanity of and it walks you through the insanity of and it walks you through the insanity of action park in where is that? New action park in where is that? New action park in where is that? New Jersey. Jersey. Jersey. >> Yep, I think that's right. >> Yep, I think that's right. >> Yep, I think that's right. >> Tons of great Disney ones, Disney parks >> Tons of great Disney ones, Disney parks >> Tons of great Disney ones, Disney parks that were never built. There's a great that were never built. There's a great that were never built. There's a great one on the the Florida project. So, I one on the the Florida project. So, I one on the the Florida project. So, I highly recommend defunct Land. My second highly recommend defunct Land. My second highly recommend defunct Land. My second one is Animagraphs. one is Animagraphs. one is Animagraphs. >> There's not a lot of videos on this >> There's not a lot of videos on this >> There's not a lot of videos on this channel, but they're all so cool. It is channel, but they're all so cool. It is channel, but they're all so cool. It is 3D models explained by a narrator of how 3D models explained by a narrator of how 3D models explained by a narrator of how really interesting pieces of machinery really interesting pieces of machinery really interesting pieces of machinery work. I've used it for at least two work. I've used it for at least two work. I've used it for at least two episodes that I can think of off the top episodes that I can think of off the top episodes that I can think of off the top of my head. One, how a mechanical watch of my head. One, how a mechanical watch of my head. One, how a mechanical watch works and two, how a Formula 1 car works and two, how a Formula 1 car works and two, how a Formula 1 car works. I highly recommend the channel, works. I highly recommend the channel, works. I highly recommend the channel, Animagraphs. It is awesome. Animagraphs. It is awesome. Animagraphs. It is awesome. >> I also have two carveouts. My first one >> I also have two carveouts. My first one >> I also have two carveouts. My first one is we got a new car, is we got a new car, is we got a new car, >> a Volvo EX30. >> a Volvo EX30. >> a Volvo EX30. >> The little guy. >> The little guy. >> The little guy. >> The little guy. A, it is awesome. It's >> The little guy. A, it is awesome. It's >> The little guy. A, it is awesome. It's like the perfect car for San Francisco. like the perfect car for San Francisco. like the perfect car for San Francisco. It fits in tight parking spaces, but it It fits in tight parking spaces, but it It fits in tight parking spaces, but it can hold my whole family, hold a bunch can hold my whole family, hold a bunch can hold my whole family, hold a bunch of gear. B, oh my god, Chinese EVs are of gear. B, oh my god, Chinese EVs are of gear. B, oh my god, Chinese EVs are incredible. So Volvo is owned by Giley, incredible. So Volvo is owned by Giley, incredible. So Volvo is owned by Giley, which is a Chinese company, and the EX30 which is a Chinese company, and the EX30 which is a Chinese company, and the EX30 is a Gily is a Gily is a Gily platform EV with Volvo branding, unlike platform EV with Volvo branding, unlike platform EV with Volvo branding, unlike the other Volvo cars. I the other Volvo cars. I the other Volvo cars. I >> mean, this thing is crazy. It only costs >> mean, this thing is crazy. It only costs >> mean, this thing is crazy. It only costs like $35,000. And it's awesome. like $35,000. And it's awesome. like $35,000. And it's awesome. Unfortunately, that leads to C, which is Unfortunately, that leads to C, which is Unfortunately, that leads to C, which is Volvo just canceled it in the US right Volvo just canceled it in the US right Volvo just canceled it in the US right after I got it. Yeah, I think because of after I got it. Yeah, I think because of after I got it. Yeah, I think because of tariffs. Yeah. tariffs. Yeah. tariffs. Yeah. >> Oh, >> Oh, >> Oh, >> it is an amazing car. You can no longer >> it is an amazing car. You can no longer >> it is an amazing car. You can no longer buy it in the US, but you can buy it in the US, but you can buy it in the US, but you can internationally. internationally. internationally. >> It was a short window. >> It was a short window. >> It was a short window. >> And like, man, I get Chinese EVs now. >> And like, man, I get Chinese EVs now. >> And like, man, I get Chinese EVs now. This is a really, really good car for This is a really, really good car for This is a really, really good car for not a lot of money. Okay, my second not a lot of money. Okay, my second not a lot of money. Okay, my second carve out is the San Francisco Symphony. carve out is the San Francisco Symphony. carve out is the San Francisco Symphony. Jenny and I went the other night. They Jenny and I went the other night. They Jenny and I went the other night. They have a new music director coming in, have a new music director coming in, have a new music director coming in, Ellen Chan, and this was her first Ellen Chan, and this was her first Ellen Chan, and this was her first performance since being named music performance since being named music performance since being named music director. She's awesome. She's 39 years director. She's awesome. She's 39 years director. She's awesome. She's 39 years old. She's so much fun and so much old. She's so much fun and so much old. She's so much fun and so much energy. And going to the symphony, which energy. And going to the symphony, which energy. And going to the symphony, which I hadn't been in forever, made me I hadn't been in forever, made me I hadn't been in forever, made me realize that actually through classical realize that actually through classical realize that actually through classical animation, I got a ton of exposure to animation, I got a ton of exposure to animation, I got a ton of exposure to classical music growing up. I think more classical music growing up. I think more classical music growing up. I think more than anything else, like through Disney than anything else, like through Disney than anything else, like through Disney films and Looney Tunes and Warner films and Looney Tunes and Warner films and Looney Tunes and Warner Brothers, I was just sitting there like, Brothers, I was just sitting there like, Brothers, I was just sitting there like, man, I feel like I should be watching man, I feel like I should be watching man, I feel like I should be watching some animation right now. [laughter] some animation right now. [laughter] some animation right now. [laughter] >> Awesome. All right. Well, we have got >> Awesome. All right. Well, we have got >> Awesome. All right. Well, we have got some thank yous to people who helped us some thank yous to people who helped us some thank yous to people who helped us with our research. But first, to our with our research. But first, to our with our research. But first, to our partners this season. JP Morgan, partners this season. JP Morgan, partners this season. JP Morgan, trusted, reliable payments trusted, reliable payments trusted, reliable payments infrastructure for your business, no infrastructure for your business, no infrastructure for your business, no matter the scale. JPorggan.com/acquired matter the scale. JPorggan.com/acquired matter the scale. JPorggan.com/acquired to Verscell, the developer tools and to Verscell, the developer tools and to Verscell, the developer tools and cloud infrastructure to build and scale cloud infrastructure to build and scale cloud infrastructure to build and scale fast, secure applications on the web. fast, secure applications on the web. fast, secure applications on the web. Verscell.com/acquired Verscell.com/acquired Verscell.com/acquired to Service Now, the platform that puts to Service Now, the platform that puts to Service Now, the platform that puts AI to work for people. Service AI to work for people. Service AI to work for people. Service Now.com/acquired. and Statsig, bringing Now.com/acquired. and Statsig, bringing Now.com/acquired. and Statsig, bringing experimentation, feature flags, and experimentation, feature flags, and experimentation, feature flags, and product analytics into one unified product analytics into one unified product analytics into one unified system for product teams. system for product teams. system for product teams. statsig.com/acquired. statsig.com/acquired. statsig.com/acquired. Thanks to all four of these companies Thanks to all four of these companies Thanks to all four of these companies for being awesome partners with us this for being awesome partners with us this for being awesome partners with us this season as we wrap here with this finale season as we wrap here with this finale season as we wrap here with this finale and leave you with a cliffhanger here and leave you with a cliffhanger here and leave you with a cliffhanger here over the summer when we'll be back for over the summer when we'll be back for over the summer when we'll be back for our fall season in August. our fall season in August. our fall season in August. >> Disney part two. >> Disney part two. >> Disney part two. >> Yes, >> Yes, >> Yes, >> the Renaissance. >> the Renaissance. >> the Renaissance. >> Ben and David will return. >> Ben and David will return. >> Ben and David will return. >> Yes. As always, thank you to all of our >> Yes. As always, thank you to all of our >> Yes. As always, thank you to all of our sources, the books that we read for this sources, the books that we read for this sources, the books that we read for this episode. They're all linked in the show episode. They're all linked in the show episode. They're all linked in the show notes, and a special thank you to Arvin notes, and a special thank you to Arvin notes, and a special thank you to Arvin Navaratnam at Worldly Partners for his Navaratnam at Worldly Partners for his Navaratnam at Worldly Partners for his great write up on Disney, linked in the great write up on Disney, linked in the great write up on Disney, linked in the show notes. Arvin, for folks that don't show notes. Arvin, for folks that don't show notes. Arvin, for folks that don't know, is at Worldly Partners, which is a know, is at Worldly Partners, which is a know, is at Worldly Partners, which is a long-term investment firm focused on long-term investment firm focused on long-term investment firm focused on multi-deade compounding businesses. Very multi-deade compounding businesses. Very multi-deade compounding businesses. Very sympatico here with Acquired. Learn more sympatico here with Acquired. Learn more sympatico here with Acquired. Learn more at worldlypartners.com. at worldlypartners.com. at worldlypartners.com. He provided us with the data on the rise He provided us with the data on the rise He provided us with the data on the rise of televisions. Actually, some annual of televisions. Actually, some annual of televisions. Actually, some annual reports that we were missing even from reports that we were missing even from reports that we were missing even from our time in the Disney archives for the our time in the Disney archives for the our time in the Disney archives for the original offering document for Disney original offering document for Disney original offering document for Disney selling shares to the public. All sorts selling shares to the public. All sorts selling shares to the public. All sorts of awesome stuff. Personally, thank you of awesome stuff. Personally, thank you of awesome stuff. Personally, thank you to Jeffrey Katzenberg. We had a great to Jeffrey Katzenberg. We had a great to Jeffrey Katzenberg. We had a great breakfast when I was down in Burbank and breakfast when I was down in Burbank and breakfast when I was down in Burbank and helped us out a lot with research and helped us out a lot with research and helped us out a lot with research and you'll hear a lot more about him on part you'll hear a lot more about him on part you'll hear a lot more about him on part two. to Josh Dearo, the new CEO of the two. to Josh Dearo, the new CEO of the two. to Josh Dearo, the new CEO of the Walt Disney Company, for his time Walt Disney Company, for his time Walt Disney Company, for his time chatting through some stuff that we were chatting through some stuff that we were chatting through some stuff that we were wrestling with and helping us with wrestling with and helping us with wrestling with and helping us with research. Also to Nancy Lee and all the research. Also to Nancy Lee and all the research. Also to Nancy Lee and all the Disney folks in the archives, animation Disney folks in the archives, animation Disney folks in the archives, animation research library and all the other great research library and all the other great research library and all the other great folks in Burbank we met with on our folks in Burbank we met with on our folks in Burbank we met with on our research trip. research trip. research trip. >> That really was incredible. Thank you to >> That really was incredible. Thank you to >> That really was incredible. Thank you to all of you. all of you. all of you. >> To Mike Miller, former Wall Street >> To Mike Miller, former Wall Street >> To Mike Miller, former Wall Street Journal editor and now frequently Journal editor and now frequently Journal editor and now frequently helping us with acquired episodes. Mike, helping us with acquired episodes. Mike, helping us with acquired episodes. Mike, you are awesome. to Graden who you are awesome. to Graden who you are awesome. to Graden who emailed us last year with the emailed us last year with the emailed us last year with the observation that the entire business observation that the entire business observation that the entire business community misuses the phrase flywheel. community misuses the phrase flywheel. community misuses the phrase flywheel. >> Yes. >> Yes. >> Yes. >> Appreciate your your help, Graden. >> Appreciate your your help, Graden. >> Appreciate your your help, Graden. >> Glad we finally found the perfect >> Glad we finally found the perfect >> Glad we finally found the perfect episode to bring this up. episode to bring this up. episode to bring this up. >> Yes. Well, speaking of the Wall Street >> Yes. Well, speaking of the Wall Street >> Yes. Well, speaking of the Wall Street Journal, thank you to Ben Cohen and Journal, thank you to Ben Cohen and Journal, thank you to Ben Cohen and Emily Nelson over there who helped us Emily Nelson over there who helped us Emily Nelson over there who helped us track down the original Flywheel track down the original Flywheel track down the original Flywheel article. We will link to that in the article. We will link to that in the article. We will link to that in the show notes. Can't wait to share it with show notes. Can't wait to share it with show notes. Can't wait to share it with all of you. to Mitch Laskkey, our friend all of you. to Mitch Laskkey, our friend all of you. to Mitch Laskkey, our friend Mitch Laskkey, former partner at Mitch Laskkey, former partner at Mitch Laskkey, former partner at Benchmark, who helped me think through a Benchmark, who helped me think through a Benchmark, who helped me think through a whole bunch of the flywheel dynamics. To whole bunch of the flywheel dynamics. To whole bunch of the flywheel dynamics. To Ryan Shear, who is Walt's greatgrandson Ryan Shear, who is Walt's greatgrandson Ryan Shear, who is Walt's greatgrandson and is on the board of the Walt Disney and is on the board of the Walt Disney and is on the board of the Walt Disney Family Museum here in San Francisco, Family Museum here in San Francisco, Family Museum here in San Francisco, which really is a excellent museum, and which really is a excellent museum, and which really is a excellent museum, and it's done by the family. It's about it's done by the family. It's about it's done by the family. It's about Walt, the person. Highly recommend going Walt, the person. Highly recommend going Walt, the person. Highly recommend going to see it next time you are in San to see it next time you are in San to see it next time you are in San Francisco. If you like this episode, go Francisco. If you like this episode, go Francisco. If you like this episode, go check out our recent episodes on check out our recent episodes on check out our recent episodes on Vanguard, Ferrari, and Coca-Cola. And Vanguard, Ferrari, and Coca-Cola. And Vanguard, Ferrari, and Coca-Cola. And back in the archives, our two-part back in the archives, our two-part back in the archives, our two-part series on Nintendo. I think a lot of series on Nintendo. I think a lot of series on Nintendo. I think a lot of that is going to rhyme with Disney. that is going to rhyme with Disney. that is going to rhyme with Disney. >> Indeed. >> Indeed. >> Indeed. >> You can click the show notes to get >> You can click the show notes to get >> You can click the show notes to get access to the PDF companion with access to the PDF companion with access to the PDF companion with visuals, charts, tables, and visuals, charts, tables, and visuals, charts, tables, and illustrations of key concepts. You can illustrations of key concepts. You can illustrations of key concepts. You can also get it by joining our email list, also get it by joining our email list, also get it by joining our email list, acquired.fm/e. acquired.fm/e. acquired.fm/e. It's where we send out our takeaways It's where we send out our takeaways It's where we send out our takeaways from each episode, past episode from each episode, past episode from each episode, past episode corrections, behind the scenes photos, corrections, behind the scenes photos, corrections, behind the scenes photos, and it's where you can vote on future and it's where you can vote on future and it's where you can vote on future episode topics. Plus, we give away a episode topics. Plus, we give away a episode topics. Plus, we give away a little hint each time. acquire.fm/e. And we are writing in the Wall Street And we are writing in the Wall Street Journal. You can get access to read the Journal. You can get access to read the Journal. 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Who got Is it you? Is it you? Is it you? Who got Is it you? Is it you? Is it you? Who got the truth [music] now? Huh?