Michael Eisner
Now that the Disney and ESPN brands have been expanded so comprehensively, they are well poised to take advantage of another major strategic initiative -- namely, the digital transformation of our company. This is about how we apply technology to elevate the creative process in previously unimaginable ways, and to distribute that content ubiquitously over countless new distribution paths. . .
. Back in 1990, we declared, with a touch of hyperbole and strategic cheerleading, that our company was on the eve of the "Disney Decade," and we made good on that pledge with tremendous growth and expansion of the company's physical infrastructure.
Thirteen years later, we are once again at the beginning of a vast and exciting period of opportunity . . . what we expect will be a Digital Decade for us at Disney.
Our company has already taken a leadership position in this transformation. Disney content is appearing in innovative ways on advanced cell phone systems in Japan and Europe, ABC is the only network broadcasting in true High Definition including Dolby 5.1 digital surround sound, ABC News is the first network news organization to develop a full time interactive online news product and ESPN HD will almost certainly become the number one driver of the digital transition for the entire industry. I suggest you log on to ESPN.com and look at ESPN Motion to get a great view into the future. These initiatives represent the first bold steps down a path that will lead to new ways of experiencing entertainment.
We will continue to deliver high quality movies and television shows and games and news and sports; but increasingly we will be able to offer them with fantastic interactive features and creative materials designed expressly for these interactive capabilities. This wealth of appealing and innovative content, offered at consumer friendly prices will represent a strategy of offense that will help combat the problem of piracy as effectively as defensive legislative and encryption strategies.
One way to consider the significance of the digital phenomenon is to look at one aspect of our business -- home video. Today, videos and DVDs are distributed in two ways -- by renting or purchasing them at a store. In the near future, you will be able to do both of these things at home, either by renting a movie through video-on-demand or by buying the digital file online and having it permanently burned onto a DVD that you can then add to your library. Both of these techniques will be much more convenient for consumers and will be highly advantageous to our company, since they should increase the overall volume and margins.
We are working on a number of initiatives, including movies.com -- which will allow us to distribute films through all sorts of new high-speed connections -- and MovieBeam, which will make it possible to use a portion of the broadcast airwaves to view any of 100 current movies any time you want. We expect both of these initiatives to become reality by the end of next year.
The changes enabled by the digital revolution will go to the core of what entertainment -- especially Disney entertainment -- is all about . . . emotional connection with audiences. For example, fans of our animated characters will be able to relate to them in new ways as these characters take on a new dimension, both literally and figuratively . . . transformed into the hyper- reality of 3D animation. Where this takes our company going forward has no limits, whether talking about new and original content or redistributing or remaking of content from the phenomenal Disney library.
As a company, we are committed to aggressively pursuing the opportunities of the digital world The ones who benefit the most will be the ones who are first to embrace this new way to connect with audiences. It offers opportunities we can only begin to imagine as we are just at the beginning of this digital decade.