View Full Version : Eisner on CNN tonight @ 6pm et

10-21-2002, 10:46 AM

Eisner will be on Lou Dobbs Moneyline tonight at 6pm et.
Should be interersting.

10-21-2002, 02:40 PM
Monday, October 21, 2002
Lou Dobbs Moneyline

Michael Eisner, chief executive of Disney, talks to Lou about the future of the company and recent reports that ABC News and CNN might join forces. We'll also discuss how the business of Hollywood plays out on Wall Street.

(5 pm Central on CNN)

10-21-2002, 06:32 PM
I'm watching Mr. Eisner on Dobbs..... He's most certainly had a facelift.. Geez, he doesn't look 60, 61...

10-21-2002, 06:55 PM
And darn it! I missed it! So what was said?

10-21-2002, 07:22 PM
Replay at 11:30 PM ET and 8:30 PM PT

10-21-2002, 07:31 PM
check out the 11:30 rebroadcast

10-21-2002, 07:35 PM
Any mention about him leaving or selling ABC ???:jester:

Just wishing upon a star!!!

10-21-2002, 08:06 PM
Then again at 2am.
Then a few days later the transcripts.

10-21-2002, 10:36 PM
No news at all about them selling ABC. In fact, he brought up the fact that they are consistently #1 or #2 in the coveted 18-49 bracket for 5 nights a week this season (which is true...sure the Thursday and Friday nights are dismal, but it's gotta be given a little time to grow in my opinion). He commented that they were #2 at the summer box office with the hits "Signs" and "Lilo and Stitch." ("Everyone counted us out, but we came in second," he said). He admitted that theme parks were lagging. And then they talked for an extended period of time about the possibility of Disney's acquisition of CNN. Eisner really wants to, he said. I personally think that Disney doesn't need another loser on its roster (CNN is second and falling compared to FoxNews' first place and rising position).

Anyway, that's a rough idea of what he said.


10-21-2002, 11:40 PM
CNN certainly isn't a loser and you have to factor in the International weight that CNN has, as it has broad International viewership with CNNi. The truth be told, Fox News will continue to grow, as it accompanies conservative radio, and the hardcore conservative audience now has a growing home to the conservative viewpoint. CNN's ratings continue to climb, but no one will now catch Fox News unless the public tires of conservative ramblings.

My concern is yet another media merger and even more control. It also is another shortsighted corporate move on behalf of Parsons and Eisner (if it happens) to shore-up their bottom lines and to continue their hold on power.

CNN brings in $200 million in PROFIT, ABC News $50 million in PROFIT. It's so sad to see these numbers. So sad that nothing is ever enough for these business titans.

Another Voice
10-22-2002, 01:37 AM
It’s getting increasing more and more difficult to be concerned about a company that so obviously lacks the ideas or the will to succeed.

Saying one has a great brand does nothing to sustain the public’s perception of the brand. Reaping the returns on past investments does nothing to create the future. Blaming woes on outside factors evades the responsibility to solve problems. Pleading that one is successful in spite of the evidence is either delusional or self-serving, and often both when money is concerned.

Eisner’s lackluster and defensive performance on CNN is exactly the state that he has put Disney in these days. The Company simply no longer dreams. Every move is a risk-free calculation to produce the highest return for the least amount of effort.

There is no joy in what the company does anymore. ‘Santa Claus 2’ is soulless, just another product churned out by uncaring and indifferent people passing time until something else happens. It’s only purpose for existing is simply to make money.

Yea, that’s business. That’s the soap business, that’s the aluminum siding business, that’s the cigarette business. But it’s not Disney’s business.

There was not a single child that sat in a movie theater in the 1930’s because of a Happy Meal deal. There was not a single child in the 1950’s that rushed to finish her homework on a Sunday night because ‘The Wonderful World of Disney’ was a way of repurposing old films. There was not a single child that excitedly tugged his parents down Main Street in the 1970’s because of the margins on soft drink sales.

Spark the imagination and the financial results will follow. But perfecting a return on investment calculation does not cause a child to dream.

I see the people clicking on the reply button now. “Walt had it easy”, “Wall Street demands”, “short term profits”, and “today’s economics makes it impossible”. What garbage. Nothing but the bayings of the unimaginative and the lazy. Things have always been tough. And they will always be tough. Wall Street or banks; bubble economy or Great Depression – it’s all the same.

An idea starts with nothing more than someone sitting down in front of a blank piece of paper. From there it’s hard work and creativity that brings it life. A novel, a film, a theme park – the same beginning and the same process that hasn’t changed in a hundred years. The exact same resources that were wasted to make ‘Inspector Gadget 2’ could have gone into making a movie that could be shown for generations. All it takes is the will to try.

And it’s a will that Michael Eisner does not have.

10-22-2002, 05:29 AM
Another voice, that was so very well said.

Once eisner crushed all the dissenting voices out of upper management, he found he was only capable of producing pathetic retreads of their former genius. Disney should be shedding their wasted investments and focus on producing specifically family oriented entertainment per Walt's original vision. Perhaps then they'll start seeing the money flow.

Who wants to bet this is the last thing on eisner's twisted mind?

10-22-2002, 08:22 AM
Very well said AV. It's sad but I have to agrre with much of what you said.

Eisner’s lackluster and defensive performance on CNN is exactly the state that he has put Disney in these days.

This is exactly the reason why I stopped watching his interviews a couple of years ago. It's always about the "Brand". They have the "Brand". Blah, blah blah. His apperances are always the same. He'll dance around the questions and constantly harp about how he's sure things will turn around. How the company is in an excellent position to reap the rewards once the economy improves. It's nonsense. He's been saying this for over two years while the company has been deteriorating all around him. These old rah rah speeches, which have lacked results, have become old and meaningless and will ultimately serve to bolster the argument for his dismissal.

10-22-2002, 09:02 AM
Clap............clap...................clap....... .........clap.............. (get that slow, pronounced clapping as I stand after AV's eloquent speech? ;))

Sadly, some of what you say is true, but anything taken to the extreme (in either direction) won't get you far.

Shades of...............ah, to heck with it. Abandon ship :rolleyes:.

I'll lazily crawl back in my unimaginitive hole now..............................

Captain Crook
10-22-2002, 09:14 AM
Black, white, grey...Are there really other colors?:rolleyes:

Great rebuttal Scoop & Kidds.

Certainly all things Mr. Voice gives us is littered with the truth but as Scoop points out where's the new Walt? Who's showing that spunk? All I see are Disney-clones or wanna-be's.

If the demand or ability to produce the 'next generation' were out there, wouldn't somebody be doing it?

:smooth: :smooth: :bounce: :smooth: :smooth:

10-22-2002, 02:27 PM
Why not?


But, as AV says, IT NEVER WAS.

Why is that so hard to grasp?

Yes, Disney can plod along and probably survive just fine with management just trying to milk the brand for everything they can get.

And eventually, the public's perception of Disney will have completely changed to the point that they are viewed no differently than any other company.

But Disney IS in a different situation than just about any other company on the face of the planet. They have the reputation for doing all of the things you are questioning. They have a loyal following that isn't even remotely challenged by any other company that ever existed. They have fan sites, such as this one, where people discuss and debate every decision the company makes.

Why? Because Disney was always DIFFERENT.

That difference gives Disney a built in advantage over everyone else. They can afford to be creative and focus on servicing their guests because its been proven that their guests WANT this and are willing to pay large sums of money for it.

Disney doesn't have to have another Walt. They don't have to start from scratch. They just have to build on an incredible foundation of public fondness and trust, the likes of which does not exist anywhere else in corporate America.

Is that easy? Heck no. It requires an understanding that Disney is different than everyone else in many ways, and needs to be handled as such.

But impossible? Please.

It all depends on what you want Disney to be. Do you want them to be just like everybody else, or do you want them to remain the unquestioned leader in providing Magical forms of family entertainment?

10-22-2002, 02:39 PM
There will never be another Walt, just like there will never be another Elvis or The Babe. They are unreplaceable icons that we will always try to measure others by. I don't know enough about ME to like or dislike him.Apperantly he's gone from hero to heel in the eyes of people on this board. But I feel it is unrealistic to try and compare him to Walt-it just can't be done. Someone mentioned how kids flocked to see "The WWoD". Well, what other tv choices did they have. What were there-three channels. What about theme parks ? There was nothing like DL to Walt built it. Today there are numerous choices. Look at all the great old movies, back then writers told the story with words,not special effects. People today are bombardied with so many more choices then back in the good ol' days of Walt. Has talent really dried up,or is it almost impossible to come up with something new in this day and age when everything has been done to death. I think Walt would be hard pressed to "WOW" us today. And if he could,I think he'd need a printing press that was pumping out real $$$ and not just the stuff with Mickeys face on it.

10-22-2002, 03:16 PM
You know, Viking, you are pretty much saying the same thing many people have been saying pretty much forever. "It can't be done."

I think Walt would be hard pressed to "WOW" us today.
Of course he would be. Its always difficult to "WOW" people. Do you think that when Walt came out West with something like $50 and two pair of underwear that he wasn't "hard pressed" to "WOW" anyone?

Something tells me he would find a way today, just as he did then.

But putting this focus on what Walt would or would not have done is really irrelevant to Disney today. The formula and philosophy is there. Somebody just needs to embrace it.

Another Voice
10-22-2002, 03:33 PM
“I have to believe if this was truly possible today somebody, somewhere would have tried this if not only because this level of quality could make them a ton of money in theory”


They really haven’t done too poorly for themselves have they? Go back and listen the commentary track on ‘Monsters, Inc.’ You’ll hear lots of talk about story and overcoming budget and time restrictions. And it ALWAYS comes back to what’s best for the movie. That’s caring about quality. And it works*.

Who decreed that entertainment is anything but a niche market. Movies are not industrial products that get stamped out on an assembly. You can’t manufacture joy and excitement on the same assembly line that turns out refrigerators. Anyone who tries the industrial approach is doomed to failure (like all the Mega Media Giants). As Mr. Scoop points out, all the people making $100 million mass-marketed movies these days are struggling because economics of mass production do not work when applied to entertainment. EVERY attempt to do so has failed miserably.

And that’s what I find most interesting about the whole argument. Those people who say “it can’t be done these days” and constantly screech that economics demand certain behaviors…Well my friends – where are your economic results?

Where are the flocks of eager patrons tossing down their credit cards for small generic theme parks? Where are the armored cars returning with the box office receipts from the latest focus group created movie sequel? Where are crowds around the water cooler re-laughing over the jokes from last night’s bland family sitcom?

If Walt’s “quality” philosophy is not profitable, then Eisner’s “money” approach sure isn’t working any better.

Creating entertainment is nothing but a gamble. There are no laws, no objective criteria that determine “good” or “bad”, “success” or “failure”. Anyone in the business is betting on capturing the public’s interest. It’s been shown time and time again that the public prefers quality. It’s not a sure thing and often dreck can be financially successful too. But in the long term quality and good products win out and poorly made get-rich-quick schemes fail.

P.S. – “Why not simply move on to another company and encourage change there?” That’s exactly what a lot of people have done. And it’s another reason why Disney is in the toilet. It’s takes people to create quality products. Without those people, all the boasts about “brand image” mean absolutely nothing.

* - and before we get the “they wouldn’t be anywhere without Disney’s marketing line”, how come the Pixar movies are all smash hits, yet the very same marketing effort couldn’t prevent Disney films like ‘Dinosaur’ and ‘Atlantis’ from producing big fat craters in the bottom line? And both ‘Shrek’ and ‘Ice Age’ did very well without Disney’s involvement at all. Objectively looking at the situation, what does Disney marketing do after all?

10-22-2002, 03:33 PM
Scoop - I'm not sure I'm getting the point you are trying to make.

Let me make a proposal and you clarify it, ok?

Proposed statement:

A film, TV and Theme park entertainment company today cannot be operated with the same focus on quality - at the expense of quantity - that was present 50 years ago. Market forces today require that a company produce more 'things' of lesser expense per 'thing', and generate a higher return per invested dollar than in the past.

Ok, your turn.

10-22-2002, 03:41 PM
Until, someone can move this idea from theory to implementation, well, it just remains a theory...

Scoop, what part of implementation is still fuzzy to you?

Make guest satisfaction the number one priority?

Before cutting hours and entertainment, analyze the impact on guest satsfaction THOROUGHLY, not a year later when attendance is in the toilet?

Use movie making talent to assist in the design of new attractions to ensure that the "SHOW" is maintained and enhanced?

Don't skimp on maintenance and upkeep? (Besides the show, it costs more in the long run).

Let the marketing folks take advantage of the creations, but keep 'em out of the room during the creative process..

Seriously, what isn't getting through?

Scoop, your "nobody else does it" logic is extremely flawed. If it were true that if the old Disney philosophy worked somebody would copy it, why didn't everyone copy it when it was absolutely PROVEN to be working at that time? Why weren't others building Disneylands, and making animated films to match Disney?

Oh, a few implemented pieces of it, like theme parks, but NOBODY embraced the entire philosophy. They didn't set out to exceed expectations. They thought it too risky and left it to Walt. Just like they are doing today.

It is a risky philosophy, because it will cost a lot to get it going, and to make the public believe in you. It took Walt nearly his entire life to build it for his company. That's why nobody else does it. Because you can make money without doing it.

But you'll never become what Disney has become. You'll never achieve what Disney has achieved. Why do you think Eisner can continue talking about the "Brand"? Where did that valuable "Brand" come from?

The current Disney doesn't have to build that loyalty and recognition. They HAVE it. But they won't have it forever unless they maintain the philosophies and principles that built it.

10-22-2002, 03:55 PM
AV has touched on something else that we have kicked around before.

Does the old Disney way work with EVERYTHING? We know it worked for theme parks and a movie studio. But does it work for a network and retail stores?

Clearly, emphasizing the "SHOW" isn't going to work in everything. If you run a shoelace company, "SHOW" probably isn't that important. Quality certainly would play a part, but even then, most shoelace users probably don't have much of a discerning eye when it comes to shoelaces.

So when I say the Disney way works with theme parks and films, its because its been proven to work.

Will it work with a network and retail stores? To me, that's a different debate (not necessarily with a different answer).

But when it comes to parks and films, which is the bulk of what we discuss around here, the answer is as clear as day.

10-22-2002, 04:19 PM
Matt and AV have outlined the issue very well...it is about risk and return...to follow the philosophy that quality will work you have to INVEST in making quality...this is expensive, requires harder work and risky IF it does not work...people are always reluctant to take risks and work harder ...in addition there is the issue of diminishing returns....in the past Disney could work hard and create a magical vacation destination and WOW people and it would really WOW them so they could reap HUGE profits because it was so much beyond the average that people were willing to pay for it...now even if they put in the same effort -with the rest of the world copying them to some extent- museums have tried to Disney-fy themselves, Vegas, etc...their effort can still be above average BUT the difference above average is less, the average has moved up...(Read Stephen Jay Gould's Full House for a more thorough discussion of this phenomenon-in it he explains why there are no more 0.400 hitters in baseball as the quality of players in baseball have actually improved)...with improving averages it becomes harder to WOW people to the level needed to generate the demand/profit to make the effort worthwhile...BUT--this is the kicker---the alternative- if you do not try to exceed the average you do not get even average results...it gets you less than average and you will fail. This is Disney's current problem-I understand the fear and reluctance to embrace risk and hard work when the rewards are less than they used to be..BUT less profit is better than no profit-and by destroying brand identity with garbge-no profit is the direction they are heading with their current approach.


10-22-2002, 04:25 PM
In the end, for Disney to fully implement Walt's original philosophy, it will need to become stricly a niche company rather than a widespread, diverse media company.
Probably true Scoop. However, this just gives all the more reason to lament the bad decisions by Disney management over the years (ABC, go.com, etc. etc., etc., etc.) Without some of these things would we not have that niche company - only movies and theme parks?

So, Disney today can't follow the Walt philosophy because they are too large, but they are too large because they didn't follow the Walt philosohy.................:eek:. Where does it end :crazy:? Calgon, take me away....................:jester:.

Captain Crook
10-22-2002, 05:28 PM
Don't forget too, that the lions share of the growth took place during that period of time when Disney either consumed or would have been consumed. Those times aren't with us any longer but one forgets management's (including the boards) preference to keep independent. Had Eisner not followed this track (which is certainly the cause of the current status) we most likely would've seen AOL buy Disney instead of Time-Warner or perhaps Yahoo at their height. Does anyone think we're worse off now than the possibility that could have been during the dot.com craziness?

It's easy to speak of downsizing in theory but the ramifications of not being the big dog is a whole 'nother story...

:smooth: :smooth: :bounce: :smooth: :smooth:

10-22-2002, 05:41 PM
Matt, nothing if flawed on this issue besides the fact that you cannot point to one single implemented example of a non-niche company which has successfully adopted Walt's philsophy.
Yes, Scoop it is, and you still haven't even responded to those flaws.

AGAIN, if your logic is sound, companies would have copied the philosophy as long as it was PROVEN to work, i.e., when Disney was still doing it 100%.

But they didn't.

The only stitch of proof you offer that the philosophy doesn't work is that nobody else is doing it on a Disney scale. You maybe right when it comes to a broadcast network and retail chain, and I'll grant that is a possibility. But we are talking parks and film studios here.

Your "proof" is non-existent. Even if you were right, the fact would remain that nobody did it before Disney, along with Disney, or after Disney. So that means it shouldn't have worked for Disney.

But it did.

Disney theme parks are a niche in the industry of resorts and vacation destinations. Focusing only on Disney's position in the narrow theme park industry is a huge mistake. Disney competes with Hawaii and New York just as much (if not more), than it competes with Six Flags. When you consider that, Disney IS operating in a niche of the vacation/resort industry.

A film, TV and Theme park entertainment company today cannot be operated with the same focus on quality - at the expense of quantity - that was present 50 years ago. Market forces today require that a company produce more 'things' of lesser expense per 'thing', and generate a higher return per invested dollar than in the past.
There are only three or four companies who come close to fitting this profile. What is it that has led you to believe that the fact that they do not use the old Disney philosophy means it won't work?

But lets look at the parks, since that is really what most of us care about.

What happened to make you believe that Disney's new philosophy will result in greater returns over the long haul than the old philosophy?

Really, I want to know what happened to make Disney believe that the Six Flags/Universal (of 5 years ago)/Paramount way of running parks was better a better long term decision for Disney?

Its not that nobody else was doing it, as Scoop says. That had always been the case. Is it the stellar performance of the parks of those other companies? Six Flags is finding itself in more trouble with its parks than Disney. Universal liked the non-Disney way so much, they decided to take a more "old-Disney" philosophy.

So, again, with respect to the parks, WHY?

10-22-2002, 06:00 PM
Had Eisner not followed this track (which is certainly the cause of the current status) we most likely would've seen AOL buy Disney instead of Time-Warner or perhaps Yahoo at their height.

Nobody is arguing that Eisner should have allowed Disney's under-utilized assets to remain under-utilized (at least I'm not).

Somebody was going to utilize them.

But how does that translate into decisions to scale back service, entertainment and hours?

Sure, do those things and tomorrow's profit will be greater. But what about next year's? In 5 years?

Disney has a loyal following like no other company. To make a decision to run them like other less succesful companies is ludicrous. You will eventually lose that advantage that took so long to build.

It is possible to take advantage of that loyalty, and still build on it.

Now, if the Disney philosophy does not fit certain acquisitions, there's a problem. But just because it might not completely work with ABC, how does that mean that it no longer works at Disneyland?

Companies have a choice when it comes to philosophy. Either only make acquisitions that allow you to successfully implement their philosophy, or apply different philosophies to different divisions.

You say that the old-Disney philosophy doesn't work for a multi-media company like Disney. But what about the individual businesses? Should Disney be looking at them individually, or should they simply abandon the old philosophy because they don't believe it works with the new businesses?

Another Voice
10-22-2002, 06:31 PM
Well, Pixar is a public company.

The simple fact is that giant media companies don’t work. The inherent risks involved in entertainment aren’t compatible with corporate thinking. Make-or-break projects do not produce steady cash flows. Brands are only marketing tools and not a guarantor of quality. There is no set of standards to create measurable “value”. Attempts to minimize risks through tactics such as choosing “pre-sold” concepts like sequels and remaking TV shows, packing the movie with “proven” box office stars and spending more millions on carpet-bombing marketing only guarantees they you have just produced an expensive flop rather than just a flop.

The Big Media business model is just as flawed (and just as stupid) as the “New Economy” Internet model was. You can not dupe investors into continually pour money into bad businesses, you can not dupe the public into buying overpriced dog food through their computers, and you can not dupe the audience to pay money to see talent-free movies.

Eisner’s continued insistence that things will simply get better on their own and the laughable notion that weakness today “proves” there will strong demand tomorrow shows how much his greed has overcome the limited business skills he had in the beginning. He and his associates created these problems to begin with, they either need to admit to their mistakes or step aside and allow others to do it for them.

P.S. - All this talk without a bit of walk...”. Perhaps, Mr. Scoop, when your livelihood depends on making movies we can talk.

P.S.S. - Eisner didn't buy ANYTHING in the early years. All he did was return the existing business and (for the most part) implement plans that we're in the works to begin with. Eisner's only real expansion was GO.com and ABC (and we've seen how well THOSE have turned out). There is absolutely no reason to beleive that Disney would have been a target during the media consolidations since that was drvien by the grab for cable systems. Since Disney had none, AOL or Viacom or the others simply were not interested.

Besides, it was Eisner that tried to sell Disney off to Yahoo! and not the other way around.

10-22-2002, 06:55 PM
Originally posted by Another Voice
“ As Mr. Scoop points out, all the people making $100 million mass-marketed movies these days are struggling because economics of mass production do not work when applied to entertainment. EVERY attempt to do so has failed miserably.

This is wrong. $100 million mass-marketed (I don't believe there is a $100 million film that is not) are prelivent and do indeed work.

The year is 2002 and I give you:

Men in Black II
Star Wars

All are $100 million plus films, and each have grossed over $150 million domestic. Of course, there are failures in this bracket but you said all.

10-22-2002, 06:58 PM
Sitting on the sidelines for a change! And loving it!!!Besides, it was Eisner that tried to sell Disney off to Yahoo! and not the other way around.I believe it's your turn Scoop!!

:) :p :bounce: :cool: :) :sunny: :crazy: :teeth:

10-22-2002, 07:18 PM
Since AV, brought up Internet economies...but first, Scoop, I think the primary reason that no one throws out example of successful businesses run under the Walt philosophy, is that we don't know enough about other companies to know enough to make those judgements. If I devoted as much time to researching other companies as I have Disney, I'm sure I'd find them. And I'm not going to start spending hours researching companies I don't care about just so Scoop can have "precedence." So since I don't have the knowledge, I don't say anything. Doesn't mean they don't exist.

Anyway, internet, Amazon.com, stock market darling, followed by a spectacular fall, is the #1 performer on the NASDAQ this year. Bill Miller, scooped up 18% of the stock because, "it is well on its way toward creating an entirely new and better business model for retailers--the customer service of a Nordstrom with the pricing power of Wal-Mart." That's a Walt-esq business strategy. And Jeff Bezos has shown some Walt-type saavy in talking people into giving him large influxes of cash when logic deems otherwise.

In Time's 1999 Person of the Year, Bezos talked about his heros.

If you ask him today who his heroes were, he names two: Thomas Edison and Walt Disney. The former was a brilliant innovator and a horrid businessman, the latter a good innovator and a great businessman. It wasn't Disney's movies that impressed Bezos but his theme parks. He went to Disney World six times. "The thing that always amazed me was how powerful his vision was," Bezos says. "He knew exactly what he wanted to build and teamed up with a bunch of really smart people and built it. Everyone thought it wouldn't work, and he had to persuade the banks to lend him $400 million. But he did it."

Now, I'm not going to say that Amazon is a success, but I think it is a company that needs to be watched. But by the time Amazon proves or disproves itself, it will be far too late for Disney.

Another Voice
10-22-2002, 07:49 PM
Actually 'Scooby-Doo', 'XXX', 'Men in Black II' and 'Star Wars' are all considered box office disappointments. When a movie costs close to $100 million to make it has to gross over $250 million to be considered profitable enough to help the studio that put out the movie. By the time everyone takes their cut of the moive and all the other costs are paid off, Big Time Blockbusters are very very expensive gambles.

And the moive with the highest rate of return this year is 'My Big Fat Greek Wedding'. That movie will bring in 35 times what it cost to produce and has already taken in more than 'Scooby', 'X' and 'MiB2' - and it's still going strong. It was released last April and was #4 last weekend.

It's all how you gamble. In order to make "safe" movie, the Media Companies have been forced in placing just a few huge bets at big odds in hopes of getting a big payback (Sony won with 'Spider-man' and has lost on all the others). The studios have traditionally played the other way, placing lots of smaller bets with much better odds.

10-22-2002, 10:13 PM

If Pixar suddenly went private...I just wasted a lot of money on some crappy paper that has Pixar and stock certificate all over it.

If I could reel off a dozen names (like Pixar) that all eschew the model of create it, market it, sell it and don't care about quality:

a. I wouldn't be here on this board, I'd be on "Moneyline"

b. I just don't feel that would convince anybody anyway. The fact that another company is successful will not stop Ei$ners Army from saying that the present shape of the parks, Disney Stores, and Media Entertainment isn't Ei$ner's fault.

Seriously. If Pixar isn't enough for you, what company example would? Here's a company, staffed with ex-Disney fanatics, who shout STORY IS KING from the rafters, and have had four HUGE hits in animation. Ask John Lassiter. He'll tell you.

Ask his employees. They'll tell you. You don't need to look for a Walt. You have a John Lassiter amongst you.

Let me edit this post.
What I mean is that the argument that Pixar is JUST a niche company using Walt's philosophy, and can't be applied to the real world doesn't hold it with me.

If Pixar is just a niche, then think of Disney in the same way. Each division of Disney is like a little bigger Pixar. Movies. Theme Parks. Cruise Lines. ABC. Cable channels. Disney Stores. Whatever else I forget. Each of these can and should be run with care and with the goal of 'story' or 'quality' or 'value' for the consumer. To get them to come back...because they trust the brand. The vicious little circle/cycle.

Each of these aren't steel-producers or widget makers. Each of these are entertainment producers. AV's right...The Scooby Doos of the world may make some money here and there, but the real money is made in the long run with quality. If not now, maybe later. Snow White (made in the 30s) makes a fortune for this company every time it is re-issued. Anybody care to bet whether or not Scooby Doo will be re-issued in 2070?

10-22-2002, 10:24 PM
He knew exactly what he wanted to build and teamed up with a bunch of really smart people and built it.

Interesting quote Hopemax. It kind of reminds me of Eisner's tenure, but with a bit of a twist. Here's how I would rephrase it to sum up his current situation:

"He knew exactly what he wanted to build and teamed up with a bunch of really smart people and built it. He then lost his right hand man and proceeded to alienate just about everyone else who helped him execute his plan in the first place."

Now that's gratitude for you.

10-23-2002, 05:01 PM
Scoop, as Larry and I have pointed out, Disney can only use a single strategy with each division if each division is suited for that strategy.

Other than saying there isn't another multi-media entertainment congolmerate operating with a quality first strategy, you haven't provided a SHRED of evidence that it no longer works in the individual divisions where it has been proven to work.

This notion that the parks, or the studios, or whatever, can't be run with a quality, long-term guest satisfaction strategy is baseless.

There is nothing to back it up. Nil, nada, zero, zilch.

When did Disney's old strategy fail?

Answer: It didn't. All it did was build a following loyal to company not seen anywhere else. And profits rolled in. Yes, they under-utilized assets, but in utilizing them, there was no need to alter strategies.

Ahhh, but somebody with a spreadsheet started to realize that short-term profits could be boosted by cutting costs. So they started making little changes, and have continued making those changes, each with the goal of increasing that quarter's profits.

And it works in the short term. But no regard is given to whether it works in the long term. They extract more profit from guests while on property, without regard to whether that will result in that guest returning less often, or not at all. Not until it smacks them in the face, like with EE.

Somewhere along the line, Disney deviated from its core philosophy, and has convinced you that because they no longer do it, it doesn't work.

Its like having a car, but not driving it, then saying the car doesn't work because its not going anywhere. Of course its not going anywhere, because you stopped driving it.

Likewise Disney's philosophies of a few years back are not producing results, but only because they are sitting un-used in the driveway. They're ready to go, keys in the ignition, engine ready to hum. They just need somebody to turn the key and hit the gas...

10-23-2002, 05:47 PM

Just so we can talk about the same companies here: Please name the companies that you feel are run consistently and successfully without attention to quality and customer and employee satisfaction. is there such a company?

Or just list those successful companies which you feel are NOT niche market companies.

Do you contend that only small companies can succeed? Is that your point...because as Matt pointed out, there is no reason a large company cannot run its subsidiaries like small companies. The key with Disney and it's strategy is that if they think that it is a big deal to have a brand identity- yet they have not been careful about what they put out with that brand slapped on it. Identity can change for the better or worse. Made in Japan used to be synonymous with poorly made...but that identity is long gone...Made in the USA used to be synonymous with well made. Which car makers now enjoy a better brand identity, USA or Japan?

I don't know if any of these companies would meet your criteria for non-niche success stories but they all are examples of successes dedicated to happy employees and customers satisfied by attention to quality:

Harley Davidson

10-23-2002, 05:59 PM
Scoop: A one-act play for you!

Caveman #1: Ugh! Hey!! I’ve got it!! Ugh! Loan me a chisel and a hammer, I’ve got an idea! Ugh!

Caveman #2: Ugh! Why? Ugh! What idea? Ugh!

Caveman #1: Ugh! I’m going to round off the corners of this stone and make a wheel! Ugh!

Caveman #2: Ugh! Now that’s stupid!! If that idea was any good at all, someone else would have already tried it!!! Ugh!


OK! Class discussion time.

1- What lesson can be learned from this?

2- What parallels can be drawn from the story?

3- If we were to cast this play with 20th Century people which caveman would Walt play and which caveman would Ei$ner (or Scoop) play?

EXTRA CREDIT: Which caveman was right?

10-23-2002, 06:06 PM
Not enough information,

Is caveman #2 the CEO of a multi-market, multi-segment quantative conglomerate?

10-23-2002, 06:14 PM
Originally posted by hopemax
Not enough information,

Is caveman #2 the CEO of a multi-market, multi-segment quantative conglomerate? Yes! Or a lawyer!

10-23-2002, 06:21 PM
If I may, Baron, I think we need to extend your story by an act or two, in order to complete the parallel...

Caveman #1 ignores Caveman #2 and creates his wheel, using it, making new and improved wheels, and profiting by letting others use it (for a fee of course).

Some years later, Caveman #1 is felled by inhaling too much Volcano smoke. Eventually Caveman #3 takes over. Caveman #3 finds that he can produce his wheels faster and cheaper by not rounding off the corners and leaving them square, leaving him with more money that month to buy the new "Sabre-toothed-Tiger-skin seat covers" for his son's Corvette.

Alas, some months later, the following conversation is overheard:

Caveman #3: Ugh! Wheel don't work so good anymore. Ugh! People starting to not buy my, ugh, wheels anymore. Ugh!

Caveman #4: Ugh! You know, ugh, you used to round the corners off. Ugh. It cost more, but cavemen bought them. Made more money. Ugh!

Caveman #3: Ugh! That no work anymore, ugh. I know, ugh, because nobody else does it! Ugh!


10-23-2002, 06:25 PM
Matt!! Perfect!! We'll make stage history! Just need to find a producer and an empty stage! .............







Hey! I know! I think there are a few empty stages in WDW right now! Now we just need a producer!! (didn't AV say someone would be out of work soon? Hmmmmm.....)

Hey Scoop! If I promise (cross my heart) to stay out of this will you come back?

Captain Crook
10-23-2002, 06:30 PM
Just as in the AKL & Poly evaluation thread you guys just aren't paying attention.;)

First Paul. Where the heck did you ever see Scoop say that a Company can be successful without attention to quality...?

Landbaron. Where the heck did you see Scoop state that it wasn't possible for huge innovaton to ever take place again?

Matt, I think you're close. I can see that it's nice to believe that a conglomerate could decentralize enough to allow each unit large degrees of autonomy. An idealistic scenerio where the 'big cheese' is operating with a good enough strategic plan and efficient enough management structure to run their divisions unfettered & profitably. The question Scoop keeps asking is where is the successful model for this utopian company? Do you guys suggest Michael Eisner is the guy that should have been leading such a ground breaking experiment? (I'm kiddding, I know the answer to that :rolleyes: ). But the point is it hasn't been done on this scale before and there must be a reason for it (I suggest that reason is probably the greed, ego & lack of teamwork is the corporate environment). Surely these are all traits attributed to ME but at least he's only one guy. Think of a conglomerate with 8 or 10 leaders running on different philosophies...I just don't think it could work.
:smooth: :smooth: :bounce: :smooth: :smooth:

10-23-2002, 06:44 PM
And that has revealed the clear fact that the idea that one certain division can follow a total different philosophy than other divisions just ends up in spin-off companies like Lexus.

Scoop, it really sounds like you agree that at least some divisions would be best run the "old" way, but feel the only way to accomplish this is to spin them off?

Not that I necessarily agree, but if that's the case, shouldn't they be spun off? Otherwise, you are intentionally causing them to under-perform.

Instead, I was asked to prove a negative.
Hey Scoop, Mr. Orwell called... He wants his double-speak back! (obscure late night TV reference)

"Nobody else does it" is not concrete proof.

In fact, the best concrete piece of proof offered is that it worked for Disney itself.

Now, when its all said and done, it maybe true that ABC can't be run the same way as the parks. If that's the case, and if you're right that a company cannot run them with different philosophies, the only possible option is a break-up.

BTW, I may not be up on all of my automakers, but isn't Lexus still owned by Toyota?

10-23-2002, 06:51 PM
Landbaron. Where the heck did you see Scoop state that it wasn't possible for huge innovation to ever take place again?No where! That’s why I didn’t address that issue at all!

Look who’s not paying attention, now!! I said and meant nothing about innovation!! My post was about the concept that because something hasn’t been done before, it can’t be or even worse shouldn’t be tried!! Matt followed that with an even better version (or a second act if you will) mirroring EXACTLY what Disney has gone through.

I know. I know. Pretty highbrow! But, good grieve!! Capt.!! I thought even you would have understood that!!! Tell me. Do you like made for TV movies too, or do you find them hard to follow? ;)

10-23-2002, 07:01 PM
I asked for proof to the contrary and wasn't given any.

And you were also told that perhaps the residents of this board don't feel comfortable with other businesses enough to "prove" anything. But if your just going to take a lack of knowlege as lack of proof...

So fine, Berkshire Hathaway. #39 on the Fortune 500 list (is that big enough for you), 4th most globably admired. Now, how much of Walt's philosophies do Buffett & Munger use, I don't feel qualified to say, but I do know that one very important criteria to Buffett is the moral integrity of his managers.

And whether Buffett is Walt like in his business philosophies or not, Buffett certainly espouses business philosophies that are unconventional. But with all of the successes Buffett has enjoyed, how come more businesses haven't adopted his philosophies?

Peter Pirate
10-23-2002, 07:08 PM
Can he sing like Jimmy?
:cool: :cool: :bounce: :cool: :cool:

10-23-2002, 07:16 PM
But the point is it hasn't been done on this scale before and there must be a reason for it

But even if that's true, the answer is not to abandon the philosophy. Think about it. We know its the best approach, but we aren't going to use it because we don't think it will work over at ABC?

If different divisions need to be run with different philosophies to be successful, the company MUST find a way to make it happen. There is no other option. If its not possible (I disagree, but for the sake of argument), the ONLY option is to break it up. If you keep it together, it will surely die a slow death, and then be broken up. Better to do it on your own terms.

But again, we only have a few of these multi-media entertainment conglomerates around. Saying that because those few don't use the old Disney way it doesn't work is drawing conclusions on an inadequate sample.

We KNOW it works in the biggest revenue producing arm of the company, and we KNOW it works in the studios as well. Why on earth would you let the philosophies that you suggest should guide ABC and retail dictate the philosophy in the more critical divisions of the company?

10-23-2002, 07:26 PM
Can he sing like Jimmy?

Don't know if he can sing like Jimmy, but he talks like James.

Mr. Buffett provides the voice for James Madison in PBS' new animated show "Liberty's Kids." My husband and I watch it and we have no kids. We think its a great show, don't know what kids think of it though.

10-24-2002, 01:55 AM
Oh, Ooohh, Oh, Ohhh, Oh, Ohhhhh *

1- What lesson can be learned from this?
Your two act play clearly shows that Disney should cut corners!!!!! ;) :p :crazy:

*No, this isn't a caveman trying to be heard, it is how a certain student in a certain classroom might try to get Mr. C's attention (old sitcom reference).

PS, Cap'n..........
Just as in the AKL & Poly evaluation thread you guys just aren't paying attention.
.......they just can't help it, it isn't in them ;).

10-24-2002, 02:10 AM
A little after one in the morning, the TV is very, very low. I am the only one still awake in the house and I read this:Your two act play clearly shows that Disney should cut corners!!!!! I litterally laughed out loud, before I realized that I was quite loud about it!!



10-24-2002, 07:31 AM
Boy how times change! A few years ago Eisner 'walked on water', now the lynch mobs are circling! Which proves the point, that the general public is after short term gains. ANY bad news, immediately results in finger pointing vs. taking responsibility. A lot of people made a lot of $$$$ during Eisners first years at Disney. Is that to be forgotten?? There seems to be a lot of short term memory loss here. You bet the company has stiff challenges ahead-as most companies do these days. As far as CNN vs. Fox, I find CNN increasingly difficult to watch. Weather in the corner, sports scores on the bottom, scrolling news items, and then some poor commentator trying to report the news. I am pretty adept at doing/watching 2 things at a time - but 4 or 5???? Seems to be an attempt to be all things to all people all the time - and the result is to lose audience attention. I agree that the creativity of Disney IS fading. The effort to produce frequent animated features, for example, vs. producing a high quality one with no timetable to meet, would better serve the public appetite-and long term gains for the company. Then of course, the naysayers would demand more, more, quicker, quicker, which of course dilutes the product.

10-24-2002, 12:03 PM
The answer to Chad's question is several pages back--the reason more companies are not doing things the old Walt way is that it remains HIGH RISK..like most high return investments...To inivest in WOW is expensive and not guaranteed to produce results but the potential return is enormous so a few brave pioneers like Walt who are driven not by the reward of money but by something else that makes them not worry about the money end up with the money anyway....On another thread I have referenced an excellent business analysis of Disney done on mouseplanet.com which explains the different ways a company can do business...Disney used to be a SPECIALTY company- offering an expensive to produce vacation product at an expensive price (a Saks Fifth Avenue vacation)---they changed somewhere along the line and are now trying to pass of JC Penney's at Saks Fifth prices...for a while they gotten away with it as they relied on the Brand to pull in the customers...but in lowering their standards they are destroying their brand and now have to compete with a lot more companies that can offer similar quality -so you get competition and price goes down-narrowing margins....in such n environment they must either lower quality more to keep fighting in this commodity market or die....their best hope is to get back to being a SPECIALTY company where the market is smaller, but the margins are bigger and the competition is less intense...they are trying to generate SPECIALTY margins by selling COMMODITY goods...any success they enjoy doing this invites others to do the same and thus competition will heat up to levels that drive down the margins...

Chad-- although I know you are not responding to me---you mention companies that are all struggling..please tell us if you feel there are any examples of NON struggling companies that are operating under this "new" philosophy that -whatever the Captain says- implies that quality is not so important...
..and I believe Lexus is owned by Toyota...and Infiniti by Honda- so they are companies that can provide high quality with success and serve different markets at the same time...


10-24-2002, 02:00 PM
What Scoop, no comments on Warren Buffett's unconventional business style and why no other large company tries to do the things he does even though it seems to be pretty successful?

I was reading the 2000 Letter to Shareholders, and came across the following:

Our managers are a very special breed. At most large companies, the truly talented divisional managers seldom have the job they really want. Instead they yearn to become CEOs, either at their present employer or elsewhere. Indeed, if they stay put, they and their colleagues are likely to feel they have failed.

At Berkshire, our all-stars have exactly the jobs they want, ones that they hope and expect to keep throughout their business lifetimes. They therefore concentrate solely on maximizing the long-term value of the businesses that they "own" and love. If the businesses succeed, they have succeeded. And they stick with us: In our last 36 years, Berkshire has never had a manager of a significant subsidiary voluntarily leave to join another business.

Perhaps, AV can share what things were like in Disney prior to Eisner, and even during Eisner/Wells years. I've certainly seen the revolving door since then. The answer to fears about the high turnover are supposed to be placated with "no company could hold onto it's people." But whoops, there is one.

Why hasn't Redstone or Case or Vivendi or the Dreamworks crew or any other diverse entertainment company at least tried to adopt Walt's philosophy as their own business philosophy?

Why have they forsoke such massive potential guest satisfaction and the resulting profits?

Are you actually open to an answer other than "Walt's way doesn't work?"

10-24-2002, 04:29 PM
If I think about some of the common strategic dimensions we associate with Walt’s philosophy it is a focus on quality, the customer, and innovation. These are common levers preached in most management tests today for creating competitive advantage and certainly practiced in many industries. Some companies use higher quality to their advantage, some companies are lauded for their history of innovation, and others for their success in understanding and servicing customer needs. Are we doubting that these can be successful sources of competitive advantage?

Now, it does seem fair to question whether the traditional levers (of excelling in quality, intimacy, and innovation) are still relevant for today’s Theme Park / Alternative Entertainment market? Will they continue to create competitive advantage in the eyes of the customer and generate those higher than average returns they have been?

Is the conglomerate test important? A conglomerate by design is made up of different strategic units. As Matt has said repeatedly, each division will have it’s own distinct business strategy and business model. Some conglomerates promote a common set of core values, processes, and training. I think GE is well noted for this. However, there is still diversity in the unit strategies employed.

Is Disney closer to being a holding company or a amalgamated enterprise. Look at the management structure and how isolated the different divisions are. They really are run independently and seem to be silo’s (*). Why even something as similar as TV programming has totally separate cable and network management. Eisner just recently hinted they might experiment with combining these into one group (gasp). When ABC needed exposure for its’ new fall season Eisner had to force this to happen across the divisions. It would not have happened naturally, because they are run as separate entities.

* p.s. Sadly the only time I’ve ever heard Eisner talk about cultural synergy across the divisions is when he talked about how much they had learned from ABC about managing costs. Yes, this was to a bunch of analysts, but it still would have been nice if the example had been how much the other divisions were learning about being customer centric from the theme parks.

10-24-2002, 04:37 PM
If anyone can explain why none, nada, zilch, zip, diverse entertainment companies like Disney have adopted Walt's original philosophy, then I'm All Ears...

C'mon, Scoop. How many times do you have to hear it?


Its why Disney went through many periods of financial distress.

But they stuck to their guns and were successful in building an unparalleld brand. Yes, we get tired of Eisner going on and on about the brand, but it does exist.

And because of that brand, Disney's level of risk in staying with at least some form of the original philosophy is much lower than Vivendi's, or Dreamworks, or anybody else. Yet the rewards are enormous.

Would the public buy into Dreamworks trying to do what Disney did? Who knows? It would be extremely risky for them to find out. But we know the public buys into with Disney.

I don't think its surprising at all that very few large companies want to take the risk of making that switch. If they are doing well, why change? If they aren't, such a risky change would be an even tougher sell to the public and board.

Of course, the advantage that Disney built up over the years is not guarnateed for the future. Only if they uphold the public's trust will that advantage and success remain.

Many people already realize that the Disney name does not mean what it once did. Eventually, if Disney does not get back on course, the Disney name WILL mean nothing more or less than Universal or Dreamworks.

How sad to have given up such an advantage out of short term greed and ego.

10-24-2002, 05:35 PM
Chad (and anyone else interested)

here is the link to the business analysis I had referenced...


By the way I was wrong in my label for Disney..they used to be what Dan Steinberg says is Augmented, not Specialty..they have drifted down to Specialty and are in danger of falling into Commodity..anyway- this Steinberg guy is sharp...he wrote way back in the summer of 2000 about why DCA would fail and if you read his columns it has unfolded and failed EXACTLY the way he said it would...



10-24-2002, 07:35 PM
The short term 'greed' for quick profits and quick fixes can hardly be layed at the doorstep of the CEO. It is the investor(shareholder) and the Wall Street types that DEMAND 25% annual earnings improvement. And when it isn't achieved, how quick it is to blame the CEO - the visible head of the company. Perhaps if these earnings improvements weren't EXPECTED every year, there would be less pressure to achieve them, hence quality would be sustained over quantity. Classic example is the Disney Stores - a premium product from a premium brand when they opened, now LOADED with quicky junk to pass off on the public - a dilution of the product name. Another example is the regurgitated 'junk' coming from animation. The Disney vaults don't have 500 'classics,' because classics aren't produced on an annual basis - they occur only intermittently over time. This brings us back to every product - whether film, theme park, ride, store, etc. MUST not just produce a profit (to satisfy the investor), NO, it must be a BLOCKBUSTER or is perceived as 'unsuccessful.' Perhaps if we lay off expectations and demands, both will be obtained.