Acquired
03:01:19 · David Rosenthal, Ben Gilbert
[03:01:19] S1: Yes. So it quickly becomes the second most popular show on television after I love Lucy, and it's the first ABC program to crack the top 25 shows ever. Like, it was all NBC and CBS until Disneyland. Unbelievable. [03:01:38] S0: Also, ABC lets Disney run trailers inside each episode for their current theatrical release. Yes. So it both promotes Disneyland and the current movie slate. [03:01:48] S1: It it becomes a whole another no to the flywheel. [03:01:51] S0: Yes. And for the first time, they get repeat exposure. I mean, Disney only gets a touch point once every few years with a consumer with a movie, and maybe you watch their shorts. But with TV, it's this way to build a repeated relationship. [03:02:05] S1: They had this in a certain way with the comic strip before, but this is like that on steroids. Yes. So in that same fall and winter of nineteen fifty four into 1955, the show has its first big, like, viral moment even before the park opens. So in December 1954, Disney begins a three part live action miniseries on the show about the story of Davy Crockett. Davy Crockett. Oh, that's right. And America goes nuts for Davy Crockett. For listeners who don't know, Davy Crockett is like a historical American figure that fought and died in the battle of the Alamo in Texas over a century before this. [03:02:58] S0: Which Disney highly fictionalizes the character.
03:02:58 · Ben Gilbert, David Rosenthal
[03:02:58] S0: Which Disney highly fictionalizes the character. [03:03:00] S1: Yes. Totally. But this miniseries becomes a massive flywheel moment for Disney, totally unintentionally. Davy Crockett coonskin caps become the must have kids product of 1955. They sell 10,000,000 caps in 1955. Unreal. Even better, the theme song, the ballad of Davy Crockett, you know, king of the wild frontier, reaches number one on the billboard charts in America and sells 7,000,000 records. In total, Disney would go on to do around 300,000,000 of gross sales of Davy Crockett merchandise, which at this point, they fully in housed commercial products. Kate Kamen had tragically passed away in a airplane crash in 1949, after which they in house all of this within Disney. So if all that happened with the same splits we mentioned before at 5% royalties on that $300,000,000, assuming, again, a 100% retail markup from wholesale, That's 7 and a half million dollars to Disney, which, you know, I think is more in actual revenue to Disney than they had earned from any film at that point in history. [03:04:23] S0: And, David, this is really gonna blow your mind. That is actually more than the amount of income they had received ever cumulatively from first run animated features. If you add up all the pluses and all the minuses Yeah. By 1957, the money they had made ever in profit dollars from their first release films was a hair over $7,000,000. And they made, by your estimates, 7 and a half million.
03:04:23 · Ben Gilbert, David Rosenthal
[03:04:23] S0: And, David, this is really gonna blow your mind. That is actually more than the amount of income they had received ever cumulatively from first run animated features. If you add up all the pluses and all the minuses Yeah. By 1957, the money they had made ever in profit dollars from their first release films was a hair over $7,000,000. And they made, by your estimates, 7 and a half million. [03:04:53] S1: They made more from Coonskin caps and record sales than incredible. And what timing right before Disneyland opens? [03:05:01] S0: Insane. Amazing. Disney absolutely crushed the timing on switching their horse to TV or sort of embracing TV and embracing it in this huge way. And not just with programming, but directing all this attention at Disneyland. We gave that stat earlier all the way in the the twenties that the average American went to theaters over 40 times. By 1947, that number was down to about 32 times. And by 1956, the year after Disneyland opened, it was down to 14 times per year. [03:05:31] S1: Wow. [03:05:32] S0: Thanks to our friend Arvind at Worldly Partners for gathering all this data. [03:05:35] S1: So movie executives really had good cause to be concerned about TV.
03:05:35 · David Rosenthal, Ben Gilbert
[03:05:35] S1: So movie executives really had good cause to be concerned about TV. [03:05:40] S0: Absolutely. Attention was shifting to television, and right as it was shifting in droves, boom. That is right where Disney showed up in this, like, multiplicative way. You know? Yeah. Man, incredible timing. And Walt as ever had a quote on this. This is from the special that he did back in 1950 as an experiment. He said, I regard television as one of our most important channels for the development of a new motion picture audience. Millions of televiewers never go to a picture theater and countless others infrequently. In these highly competitive days, we must use the television screen along with every other promotional medium to increase our potential audience. [03:06:20] S1: Man, was he right. [03:06:21] S0: Man, was he right. [03:06:23] S1: And it's just so incredible that because he started playing with trains, Disney became a major force in television and, of course, opened the park. [03:06:33] S0: Yes. Okay. So how does this all come together? We've got this, like, joint venture called Disneyland Inc. It's got $500,000 from Walt Disney Productions. It's got $500,000 from ABC. It's got $200,000 from Western Publishing who distributed their books. Yep. And then Walt himself put in $250,000. [03:06:53] S1: That's right. I did see that. Yes. And then they've got the 4 and a half million of debt guaranteed by ABC.
03:06:53 · David Rosenthal, Ben Gilbert
[03:06:53] S1: That's right. I did see that. Yes. And then they've got the 4 and a half million of debt guaranteed by ABC. [03:07:01] S0: Exactly. So there's a total of million dollars that they have to spend to build the thing. Plus, there was actually another 2,000,000 of ten year bonds that ABC was committed to if they really, really needed an extra $2,000,000 to flex from a budget of six to a budget of eight. [03:07:16] S1: So, Ben, I've read a bunch of places this ended up costing $17,000,000. [03:07:22] S0: Yes. That is correct. So the cap table is, Walt Disney Productions and ABC each own 34%. Western Publishing owns 14%, and Walt himself personally owns 17%. And there's a contract between Disneyland Inc. And WED Enterprises, which Walt owns a 100% of to actually build it all. So all of this leads up to 07/17/1955, the opening of Disneyland that would change the company forever, that would change American vacations forever Yep. That would lay out a giant part of Disney's business model going forward, the opening of Disneyland. [03:08:02] S1: Yes. But before we do that, now is a great time to thank our friends at Statsig. [03:08:08] S0: Yes. So Walt Disney had this idea that he would often talk about, plussing. Most amusement parks would be effectively complete at opening, and then they'd call it finished, but not Disneyland. Walt treated the park as something that you have to keep improving forever, and he constantly looked at how guests move through it.
03:08:08 · Ben Gilbert, David Rosenthal
[03:08:08] S0: Yes. So Walt Disney had this idea that he would often talk about, plussing. Most amusement parks would be effectively complete at opening, and then they'd call it finished, but not Disneyland. Walt treated the park as something that you have to keep improving forever, and he constantly looked at how guests move through it. [03:08:26] S1: Yep. This idea, though, only works if you can see what's happening. You can't improve an experience on a hunch. What mattered was how guests really behaved, not what anyone assumed in a meeting, which is largely the same problem that product teams have today, just at speed and scale. You can ship faster than ever now, but the hard part becomes knowing which changes actually improve the product. [03:08:47] S0: And now coding with AI only raises those stakes because LLMs are nondeterministic, meaning that the same input doesn't always produce the same output. So a small change to a prompt or model can have surprisingly large downstream effects. Offline evals will really only get you so far, and you need to be getting signals from real users and making decisions on that. [03:09:08] S1: And that's where Statsig comes in. They offer product teams experimentation, feature flags, and product analytics all in one place. You can ship quickly, roll out changes safely, and measure how those changes impact users making your product actually better instead of just guessing.