Nearly a year ago, Walt Disney Studios signed an unprecedented three-year marketing agreement with the Hawaii Visitors & Convention Bureau.
But in April, after just one year of what most agree has been a big success, the deal is expected to end -- a move that has stunned Disney officials.
Centered on last June's release of Disney's animated motion picture "Lilo & Stitch," the agreement, in part, allowed for initiatives worldwide -- consumer media, trade support, sweepstakes prizes, online support, premiere sponsorship and in-kind services -- as well as Hawaii history, culture and visitor promotion on the film's DVD, its "Lilo & Stitch" television series and a direct-to-video film sequel.
The agreement was crafted by Disney and HVCB executives to allow Hawaii and Disney to capitalize on their global marketing efforts.
The cost to Hawaii would have been $3.9 million for the three years, with year one costing an estimated $1.7 million.
The Hawaii Tourism Authority agreed last year to fund the first year through HVCB, but not subsequent years because it has other marketing plans for the state, HTA officials said.
The agreement between Disney and HVCB is contingent on the annual funding. Disney would not have entered the agreement for just one year, a Disney executive said.
"Disney's alliance with HVCB (was) a first for (Disney), as it spanned all areas of promotions and marketing, across all divisions and in all territories, and included the first-ever global sponsorship of a motion picture premiere," said Cherise McVicar, senior vice president of national promotions for the Walt Disney Studios.
Mike McCartney, HTA chairman, said that while the organization was "happy" with the first-year results of the agreement, "we never planned to continue beyond one year" because the agency's marketing strategies are changing.
McCartney; Rex Johnson, HTA's president and chief executive officer; and Frank Haas, director of tourism marketing, believe the state got its money's worth in the one year but that it is time to refocus Hawaii's marketing efforts.
Disney executives said Hawaii ended up getting a much better marketing deal than the corporation ever imagined and that Disney is unlikely to offer a similar agreement again to anyone.
HTA's Haas understands the popularity of "Lilo & Stitch" but emphasized that "there's a difference in what the ... film does in gross ticket sales and the marketing aspects of this."
In other words, the film's success does not necessarily translate into higher visitor counts.
"Now we're shifting our marketing to attract higher-spending visitors ... like golfers, active vacationers," Haas said. "We need to move on to promote some of those."
"Remember, Disney was going to do the movie anyway," whether or not there was an agreement between the studio and Hawaii, he said.
The agreement's possible termination has stunned executives at Disney Studios, which has had a long relationship with Hawaii and produced several films here, including "Pearl Harbor." In 2001 the state presented Walt Disney Studios with the Film in Hawaii Award for its "significant contribution to promoting Hawaii's film industry."
Last September, Ken Goldstein, executive vice president and managing director of Disney Online, met with HTA members to discuss Hawaii marketing plans. Goldstein returned to Honolulu earlier this month to meet again with HTA.
"The (agreement) between HVCB and Disney ... is absolutely a spectacular deal for Hawaii," Goldstein told the Star-Bulletin.
"The amount of value that Disney is providing to Hawaii compared to the amount of capital Hawaii has (paid Disney) is unprecedented for this company.
"Disney has so overdelivered," Goldstein said.
Hawaii is out of the risk period because "Lilo & Stitch" is a bona fide worldwide hit, Goldstein said.
"We'll be selling the film in video and DVD for another 50 years," he said.
Goldstein emphasized that Disney's goals are never to just have a successful movie, but "to extend the reach of the brand, always thinking long term."
For example, the 1994 animated film "Lion King" -- Disney's most successful animated feature -- was just released in IMAX.
"It's the gift that keeps on giving," Goldstein said, "and we believe 'Lilo & Stitch' will do the same and always be linked with Hawaii."
Under a continued Disney-Hawaii agreement, "everything that comes out of this phenomenal success, Hawaii has a contractual right to be part of," he said.
Whether the Hawaii travelogue and narration remains on subsequent "Lilo & Stitch" DVD printings or Hawaii marketing is included in other products " depends on whether we're in business together," Goldstein said.
HTA will not change its decision unless "someone in the highest level of state government leans on them," a source said. "And time is running out."
Spreadsheet Warriors - how have you calculated the all in real cost?
Vegetarians! Favorite QS foods that are not Impossible “meat”?
