Eisner: Then there's a newcomer who is literally out of this world. Although he's not here today as he's still being drawn, we expect him to be with us for light years -- the co-star of this summer's "Lilo and Stitch" ... the universe's most lovable alien ... Stitch.
Iger: In highlighting these key players at The Walt Disney Company, we are having a little fun. But, the fact is that characters like Mickey, Peter, Belle and Stitch -- and literally hundreds like them -- are extraordinary assets for our company. From Bambi to Sleeping Beauty to Buzz Lightyear ... all of them are timeless and each has their own distinctive personalities, appealing to people of all ages around the globe. They are among the reasons that the Disney brand is so incredibly strong by any measure.
Of course, even with all of these characters in our corner, our company is still subject to the challenges of business cycles and recessions. To position our company for growth when the economy rebounds, we have initiatives in place, which draw from and build on the strength of our remarkable family of entertainment brands -- ABC, ESPN, Miramax, Touchstone, Lifetime, A&E, the recent addition of ABC Family and, of course, Disney.
Eisner: This morning, we're going to give you some previews of the entertainment that is coming from our company. We want you to see this because at Disney, creation of new content is the key to the creation of shareholder value.
At Disney, content can take the form of an animated film, a children's toy, an educational book, a prime-time show, an interactive game, a news broadcast, a stage play, an ice show, a sports magazine, a theme park attraction or any of an enormous range of other offerings. We are determined that this entertainment, whatever it is, should be of the best possible quality. This is truly the Disney heritage, which we are honoring all this year at Walt Disney World, with our 100 Years of Magic celebration in honor of Walt Disney's 100th birthday.
Iger: This celebration is all about the Disney legacy, of which Michael and I are stewards. It was created by Walt and Roy -- and has been watched over by our own Roy E. Disney -- and it is why the strength of this brand is unmatched in the entertainment industry.
Consider the fact that last year there were more than 100 million visits to Disney theme parks, there were 250 million visits to Disney Stores, 217 million Disney videos and DVDs were purchased and 94 million cable and satellite subscribers received the Disney Channel. Every week, three million kids and their parents listen to Radio Disney, 13 million watch "The Wonderful World of Disney" and four million log on to Disney.com. In fact, a recent brand equity study concluded that, in the 14 primary world markets, 1.2 billion consumers had used at least one Disney product over the preceding 12 months.
Consumers everywhere seek out all things Disney. As long as we keep doing our job of providing quality, innovative family entertainment, this gives us an enormous advantage in the marketplace, providing us with a strong and positive daily connection with people around the world.
Eisner: When the economy improves, there can be little doubt that our family of brands will help propel resurgent growth. Growth in travel will likely bring our parks to new levels of performance and a rebound of the advertising market will have enormous significance for ABC, ESPN and our other strong cable outlets. But, in addition to the improvement that will come from a healthier economy, we believe that our company's performance will be getting an important added boost from technology.
Throughout its history, our company has benefited from technology. We produced the first cartoon with synchronized sound, the first color cartoon, invented the multi-plane camera, developed stereophonic sound, and made cutting-edge use of robotics and ride simulation technology in our theme parks.
And, our entertainment has also benefited from new technology. Mickey went from black and white to color to publishing to television to theme parks to video games to cell phones. Or, to cite a more recent example, "Beauty and the Beast" migrated successfully from film to video to theme parks to Broadway to audio cassettes to CDs and now to IMAX and soon to DVD and then broadband.
So, it should be easy to see how advances in technology are opening up a wonderful range of new possibilities for our company. We'd like to show you a few examples.
Iger: First, there's the adaptation of our content to wireless distribution. In this form of technology, the United States is a bit behind the curve. In Japan, they already have cell phones that are really mini-computers offering an array of services. In that country, we have entered into agreements with distributors to provide subscribers with Disney-branded services.
This represents a look into the wireless future. We now have similar agreements elsewhere in Asia and Europe. And, of course, once wireless technology in North America has the kind of capabilities that you see here, this will represent a considerable opportunity in the U.S.
Eisner: Or, consider the impact of broadband Internet delivery. We have already pioneered the convergence of the Internet and traditional television with the development of Enhanced TV broadcasts of such shows as "Monday Night Football," "Who Wants To Be a Millionaire," the Academy Awards and the Emmy Awards. With broadband delivery, the possibilities become incredibly vast. This has the potential to transform the Internet into a true entertainment medium. Thus, the implications for our company are substantial.
Iger: Another, and very different, utilization of technology is an initiative we call Customer Relations Management, or CRM for short.
As we've already mentioned, Disney enjoys an extraordinary affinity with its customers. Until now, this has been based on the appeal of our stream of products. But, thanks to technology, we will have the ability to have a deeper two-way relationship with our biggest fans.
Let us give you an example of how this can work. Imagine that Mr. and Mrs. Charming and their two children visit Walt Disney World. During their stay, preferred reservations are made at their favorite restaurants, advance FASTPASS tickets are provided for their favorite rides and one morning a cupcake with a candle is brought to their room in honor of their daughter's 8th birthday.
When the Charmings leave the resort, they indicate in their guest surveys that they particularly enjoyed the Peter Pan flight attraction. Shortly after arriving home, they receive a note thanking them for coming to Disney World and offering them discount coupons for the video of "Peter Pan" and for the film "Return to Neverland," playing at their local theater. Later in the year, they receive promotional materials offering them a family package for the Disney Cruise Line, mentioning that Captain Hook himself will be on board. And, at Halloween, they are sent discounts for Peter Pan and Tinker Bell costumes at the Disney Store. When they return to Disney World, they are notified of a Character Breakfast that features the Peter Pan cast.
This hypothetical example should give you an idea of how we can interact with our guests, making them aware of opportunities and providing them incentives to enhance their sense of connection with our company.