Continued Product Development (i.e., Being Disney)
The final -- and eternal -- element of our overall strategy is product development. Great entertainment product is, has always been and will always be the fundamental driver of our company's success. Many people now take our excellence in product for granted. They expect the Animal Kingdom to be great, the cruise ships to be great, new rides at our parks to be great, our animated movies to be great, our Internet initiatives to be great. But the magic doesn't happen by accident. Our creative cast is maniacal in the pursuit of perfection, about coaxing perfection, about always hoping for it. And we will not let up! To be sure, we also need to be smart about how we manage and optimize our product ... which is what the first three elements of our strategy are all about. But, ultimately, it is creative, innovative and engaging product that will fuel our future growth. This, in turn, will strengthen, reinforce and add value to our outstanding array of entertainment brands, such as ESPN, ABC and, of course, Disney.
As much as there were clearly problems in 1999, the good news is that product wasn't one of them. This is ultimately why I remain a firm optimist about our company. Underperforming businesses can be fixed. Shifting market patterns can be adjusted to. But bad product can't be made good. We may not hit a homerun every time at bat, but the quality of our entertainment achieves a consistency that remains unmatched.
Certainly, in 1999, our entertainment product was second to none. "The Sixth Sense" bewitched audiences around the world. "Tarzan" is on its way to becoming the second most successful animated film we've ever released. The Disney Cruise Line added a second ship, Disney Wonder, and posted some of the highest guest satisfaction rates in our history. The new attractions we added to our parks were not only cost-effective, but, even more important, they were instant guest favorites. DisneyQuest and ESPNZone have been well received in the cities in which they have been rolled out. "Der Glockner von Notre Dame" has creatively expanded our stage play business into Germany. Our new production of "Annie" was a huge ratings success on ABC's Wonderful World of Disney. ESPN continues to offer a blend of wit and comprehensive coverage that is embraced by sports fans everywhere. Zoog Disney is a landmark program on the Disney Channel that merges the worlds of television and the Internet. World News Tonight is once again the number one prime-time news program. "One Saturday Morning" continues to be a safe and exciting place for children to spend time with the Disney brand on ABC. Radio Disney is a fresh choice on the dial for kids and their parents. The History Channel and A&E are qualitatively two of the finest networks in the history of television. "Who Wants to Be a Millionaire" has transcended being a mere television show and has entered into the culture,
In other words, I could look Regis Philbin straight in the eye and say: Yes, that is my final answer. At The Walt Disney Company, we are poised for strong long-term growth even as we address near-term challenges.
And, as always, our success "to infinity and beyond" will be led by great product like "Toy Story 2," which made our Thanksgiving more thankful and our Christmas more merry! In January, there's "Fantasia 2000," which is a remarkable continuation of a completely distinct Disney legacy. For Memorial Day weekend, there's "Dinosaur," which is truly like nothing you've ever seen before. Further down the road, "Kingdom in the Sun" and "Atlantis" are looking to be wonderful additions to the Disney animation legacy. Then there are our new theme park projects, each of which is dazzling. On the Internet, GO.com is an exciting venture into an entirely new world of information and entertainment. I'd like to tell you which of our upcoming films and TV shows will be the next "Sixth Sense" or the next "Who Wants to Be a Millionaire," but that's impossible to predict. However, I believe that these kinds of mega-hits are in the pipeline, and when they break through their impact will reverberate throughout our company.
And so it is that, in the year ahead, we have our work cut out for us to return our company to the growth track. It will require a relentless focus on operations and on the implementation of new strategies to meet new market conditions. But, our fundamentals -- our collection of brands and our relationship with our guests and customers -- remain strong. We are committed to a core vision: to continue to pursue excellence in everything we do, to be the leader in quality entertainment and information in the surely complicated century ahead, and to serve our cast members and shareholders productively and ethically. Speaking personally, I feel very much as I did back in 1984, when I came to Disney and our management team was eager to show what we could do. This is the attitude that infuses our team today. And, it comes at a time of unusual excitement in the entertainment industry in particular and the business community at large. The emergence of the Internet, the expansion of cable, the growing international markets, the arrival of digital exhibition of films, the advent of DVD and the growth of interactive entertainment are all important trends that go to the heart of what we do best.
Ten years ago, when I promised a strong Disney Decade, I was really just stating the obvious. This is because, since the birth of our company in 1923, you could say that every decade has been a Disney decade, as our company's creative product has been embraced year after year, decade after decade, by people everywhere. This consistent popularity of our product has driven Disney's average 16% annual earnings growth since 1945. Of course, I cannot predict the company's growth rate over the next 55 years, but I am confident that in the years ahead, we will add to our company's legacy, and our customers and investors will be able to continue to celebrate Disney, decade after decade.
Sincerely, Michael D. Eisner Chairman and CEO December 10, 1999
-- Posted January 5,2000