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How do you revive a 72-year old icon? If you're Walt Disney Co., you spruce up the Mouse. With Disney's vaunted merchandising business in the doldrums, the media giant has decided to put its marketing muscle behind Mickey Mouse for the first time in nearly a decade. In a move not taken since the Mickey Mouse Club days, Disney plans to roll out a Saturday morning show on ABC by early next year called House of Mouse, featuring original cartoon shorts of the Great One himself.
The plans to promote Mickey have been talked about within Disney for months, but Disney Chairman Michael Eisner unveiled the breadth of the rollout at the company's annual shareholder meeting in Chicago on Feb. 22. Having actually started with ABC's January, 2000, broadcast of the Super Bowl, the Mouse blitz will soon spread all over the airwaves with TV ads featuring celebrities such as Millionaire game-show host Regis Philbin, Fraser sitcom star Kelsey Grammar, and pro basketball star Shaquille O'Neal paying homage to Mickey.
Disney's consumer-products division is also unveiling a new array of Mickey-themed merchandise, including a line of clothes. The company has already rolled out an interactive race-car game that features Mickey behind the wheel. Disney's record unit will also soon release a new La Vida Mickey album.
LOST APPEAL.
Disney's merchandising unit could sure use a pickup. In the fiscal year just ended, revenues there fell for the first time since Eisner took over in 1984, dropping 1%, to $3 billion from $3.2 billion in 1998. Operating earnings fell by more than 25%, to $607 million from $801 million. Moreover, analysts criticized Disney for allowing some of its brand-name characters to lose their appeal, especially among young teens.
The company has rarely missed an opportunity to put Mickey in front of the audience. It has recently released The Tigger Movie, which featured a 90-second Mickey-themed music video with singer Lou Bega. Mickey also appeared early in the newly released update of Fantasia 2000, as conductor James Levine introduced one of the film's segments.
But Disney is putting its biggest bets on the commercials for Mickey to pep up the audience. In one ad, Shaq muses that he has always wanted to follow in his footsteps -- "little itty bitty footsteps." In another, Grammar, who plays a psychiatrist in Fraser, says the star "needs to have his head examined" after professing to be more popular than Grammar. Still to come, a TV commercial on the CBS broadcast of the Grammy's on Feb. 23 -- a pure play for teenage eyeballs.
"A MAJOR ASSET."
Disney execs won't say how much they intend to spend on the ads or on any part of the Mickey Mouse campaign. Nor will they elaborate on how much revenue Mickey brings to the company, although it's considered to be a substantial part of the consumer-product revenues. "Quite frankly, we don't like talking about Mickey as an 'asset,'" says Eisner. "But, in fiscal terms, he does represent a major asset that was created in 1928. However, unlike just about anything else created back then -- whether cars, clothing, or kerosene stoves -- Mickey is infinitely more valuable today than when he first came on the scene."
Disney's orchestrated announcement of Mickey's rollout was largely overlooked by the crowd of nearly 3,000 at the Disney annual meeting. Like many previous Disney shareholder gatherings, this one was dominated by questions from the audience, many of them directed at either the size of Eisner's paycheck to Disney's oft-criticized board of directors.
Still, shareholders soundly rejected a pair of proposals -- one that would have required the company to offer two candidates for each open board seat in the future and another that would have had the company eliminate bonuses, stock options, and other additional compensation for management. Disney has been criticized in recent years for having a board that isn't significantly independent of Eisner, and last year it discontinued its practice of voting three-year terms for each board member.
At this year's meeting, Disney elected 10 of its 19 board members to one-year terms, a practice it says it intends to continue in the future. But you won't be seeing any commercials for that.
By Ronald Grover in Chicago EDITED BY DOUGLAS HARBRECHT
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