The Magical-Market World of Disney

Monthly Review, April, 2001 by Janet Wasko

Discussions of the New Economy generally point to media and communication as the dynamic industries that are at the eye of the free market hurricane. The creation of ideas and images, we are told, has overtaken the production of things. The culture of consumer choice that commercial media offer, it is said, provides the basis for free societies and human happiness. Time-Warner CEO Gerald Levin proclaimed on CNN in January 2000 that "the global media is fast becoming the predominant business of the twenty-first century; and we're in a new economic age." In this article I would like to take a look at the Disney company, one of the three largest media firms in the world, and a firm often invoked as the type of company poised to dominate in the twenty-first century. From its evolution as a small Hollywood animation studio, Disney has expanded into a giant media conglomerate (see page 58). From a political-economic perspective we need to ask: How has Disney expanded beyond the commodification of children's cultur e to the commodification of culture more generally? How does it exemplify in the digital age what Harry Braverman in Labor and Monopoly Capital called "the logic of the universal market"?

To begin to understand the Disney phenomenon, it is crucial to investigate Disney, the corporation. In other words, to understand Disney's brand of fantasy one must understand how it is manufactured and marketed, by whom and why Despite the image of Disney as a fun-loving, lighthearted and creative company, like any other corporation it is primarily geared to accumulation. Michael Eisner, Disney's CEO, explained in no uncertain terms to Disney stockholders:

To better understand how Disney operates, this article will look at various "financial boxes" that explain how it integrates and promotes its diverse activities and global strategies.

I have always believed that the creative process must be contained in what we call "the financial box"--financial parameters that creative people can work in--but the box is tight, controlled and responsible. Finance has the key to the box.

Financial Box 1--Disney Synergy and Children's Culture

The major media and entertainment companies have long been diversified with business divisions spread across film, broadcasting, and print. Yet, these companies increasingly are realizing the benefits of promoting their activities across a growing number of outlets, creating a cross-promotional dynamic or "synergy" between individual units and producing immediately recognizable brands. An article in The Economist (May 23, 1998) detailed this process as follows:

The brand is a lump of content--such as News Corp's The X-Files, Time Warner's Batman or Viacom's Rugrats -- which can be exploited through film, broadcast and cable television publishing, theme parks, music, the Internet and merchandising.

Such a strategy is not so much vertical or horizontal integration, but a wheel, with the brand at the hub and each of the spokes a means of exploiting it. Exploitation produces both a stream of revenue and further strengthens the brand. Thus when Viacom licenses Rugrats toothpaste and Rugrats macaroni and cheese, it both makes money and promotes the direct-to-video movie launched last year and the full-blown animation feature due out later this year.

This certainly is not a new development for the Disney company. From its inception, Disney created strong brands or characters that were marketed in various forms (mostly through films and merchandise) throughout the world. The company's cross-promotional strategies accelerated dramatically in the 1950s when the company opened Disneyland, the theme park that used previously created stories, characters, and images as the basis for its attractions. In addition, the television program Disneyland was introduced on ABC, providing further opportunities to promote the theme park as well as Disney's other products. Over the past few decades, the possibilities for synergy have expanded even further with the addition of cable, home video and other new media outlets. Indeed, the Disney company has developed the strategy so well that "Disney synergy" has become the phrase typically used to describe the ultimate in cross-promotional activities.

While synergy is often a goal of other media corporations, the Disney company claims to be especially suited for such a strategy of seamless market expansion. As one executive explained:

It's a unique attribute of the Disney company, the ability to create synergy between divisions, whether it's interactive games, Buena Vista television, or the Disney Channel. We all work together and we do it on a year-round basis and we do it aggressively. The success of those ongoing roles makes everything in the company work better. We actually have people in every division that are responsible for the synergy relationships of the company and every division has that. We take it very seriouly. Disney CEO Michael Eisner takes it very seriously. (Zoltak 1996)