Acquired
00:53:46 · Ben Gilbert, David Rosenthal
[00:53:46] S0: Yes. An engineer. I think he's, he loves picking things apart and learning the way they work. I think he's motivated to make the best art he can in addition to making the best business he can. So if someone's gonna offer him A lesson. A way to learn something. [00:53:58] S1: Yeah. Yeah. He'll take it. He'll take it even if he might be mad at the person. So he writes about this moment later. From now on, the audience was gonna know if they like the picture, they were gonna know Walt Disney's name. Ultimately, what Walt does is he turns to Pat Powers, his partner in the sound technology, who had been one of the, you know, original Universal executives. And they cut a deal where Powers will be Disney's direct distribution agent in return for just 10% of the gross revenue on the Mickey's, which seems like a pretty good deal. Yeah. And indeed, it was kind of a too good to be true deal because Powers, like all these New York guys, was basically plotting to do the exact same thing as Mintz to Disney. He wanted to start working with Walt, give him a sweetheart deal, and then lure away the animation talent. Because Powers, remember, has the sound technology that he's given to Walt. So he's thinking, if I get the animators Right. What do we need Walt for? [00:55:08] S0: So this explains the sweetheart deal on distribution because that wasn't the real prize he was after.
00:55:08 · Ben Gilbert, David Rosenthal
[00:55:08] S0: So this explains the sweetheart deal on distribution because that wasn't the real prize he was after. [00:55:13] S1: And just a year later, in 1930, Powers does the unthinkable. He convinces Ub Iwerks to quit and leave Disney. He says, Ub, we're gonna get you set up with your own studio. You're gonna work with me. We're gonna create new characters. It's the exact same thing that Mintz did to Disney last time. Absolutely brutal. Except it plays out the exact opposite way. [00:55:44] S0: Because Walt's learned his lesson. [00:55:45] S1: Walt has learned his lesson. By the time this happens, over a dozen Mickey shorts with sound have come out. Every single one of them branded prominently upfront and at the end, a Walt Disney comic, and they had become huge hits. So even though Power steals Iwerks away, nobody cares. Everybody still wants the Mickeys. Everybody still wants Walt Disney comics. Disney has made himself the lifesavers of animation. Disney first switches to Columbia for distribution and then to United Artists, and audiences just keep loving Mickey. In fact, they love him so much that it leads to the discovery of a whole new business model for Disney and the company, the intellectual property flywheel. And it starts with the Mickey Mouse Club. This is wild. I had no idea about the origins of the Mickey Mouse Club. [00:56:44] S0: Basically discovered by Disney by accident. Accident. Right? Totally by accident.
00:56:44 · Ben Gilbert, David Rosenthal
[00:56:44] S0: Basically discovered by Disney by accident. Accident. Right? Totally by accident. [00:56:48] S1: So in the summer of nineteen twenty nine, just a few months after Steamboat Willie and the first sort of nationally distributed Mickey's, the manager of the Fox Dome Theater in Ocean Park, California contacts Walt with an idea. Why don't we partner to start a Mickey Mouse club for kids? I've got, like, a thousand kids who keep showing up here at the theater every weekend, and all they wanna do is watch the Mickey's again and again and again. I think we should capitalize on this. We can create a club like a kid's club, and we can charge parents a membership fee. The kids will love it. The parents will get them out of the house every weekend. It'll be great. And we can pilot it here at the Fox Dome Theater. And then if it works, I think we can franchise this nationally. And so this is exactly what Walt and this theater manager do. The way it works when they take it national is that theaters would buy a, quote, Mickey Mouse Club charter from the company, from the Walt Disney studio. [00:58:01] S0: It's like a franchise Yeah. [00:58:02] S1: Like a franchise right for $25. And then as part of the club, the kids and their parents would gain the right to buy exclusive Mickey merchandise. [00:58:15] S0: I mean, it's kind of amazing. Right? Pay to become a member of a club to dedicate yourself to fandom so you have the right to buy more things.
00:58:15 · Ben Gilbert, David Rosenthal
[00:58:15] S0: I mean, it's kind of amazing. Right? Pay to become a member of a club to dedicate yourself to fandom so you have the right to buy more things. [00:58:23] S1: The right to buy more things. Yes. So, like, hats, buttons, banners, etcetera. And all of this revenue is getting split back with Disney, the $25 club charter and then all the merchandise revenue. Pretty quickly, there are 800 Mickey Mouse clubs across the country with more than 1,000,000 total members. That is more members than the Boy and Girl Scouts of America combined at this point in time. [00:58:56] S0: That's insane scale and insane speed of adoption pre Internet. [00:59:01] S1: Right? Right. [00:59:02] S0: Pre Internet, pre cable, pre broadcast TV. The ability to get a million Americans doing something within a few years is, like, how how did that even work? I mean, I'm trying to think how word could even spread that quickly. I guess through Just through the theaters. Distributors Yeah. To the theaters.
00:59:02 · Ben Gilbert, David Rosenthal
[00:59:02] S0: Pre Internet, pre cable, pre broadcast TV. The ability to get a million Americans doing something within a few years is, like, how how did that even work? I mean, I'm trying to think how word could even spread that quickly. I guess through Just through the theaters. Distributors Yeah. To the theaters. [00:59:19] S1: Well, this is like a no brainer proposition for a movie theater operator. You're gonna take your Saturday or Sunday afternoons, which are probably reserved mostly for kids anyway, all your matinee showings. Right. You're gonna convert it into a Mickey Mouse Club. Kids are gonna love it. They're gonna buy a bunch of stuff that you otherwise wouldn't have the opportunity to sell to them. Parents are gonna love it because they get rid of the kids. And then for Disney, they're just getting this turbocharged distribution and brand recognition of Disney the company and Mickey Mouse, the character. [00:59:55] S0: Yeah. It's amazing. Okay. So they take the learnings from the Mickey Mouse Club. Right? And they kinda lean into Mickey in a in a big way at the corporate level.
00:59:55 · Ben Gilbert, David Rosenthal
[00:59:55] S0: Yeah. It's amazing. Okay. So they take the learnings from the Mickey Mouse Club. Right? And they kinda lean into Mickey in a in a big way at the corporate level. [01:00:03] S1: Totally. So just a few months after the Mickey Mouse Club kicks off, in January 1930, they launch a daily Mickey comic strip with King Features Syndicate in newspapers around the country. It gets published daily in 60 US newspapers and then also internationally in 20 more countries around the world. So Disney is getting paid to produce a Mickey comic strip, which only cost them the salary of the one animator that they have making it every day, a 24 year old named Floyd Gottfredson, who would do it every day for forty five years. Wow. Wild. So not only are they getting revenue for this, they're getting free daily advertising and IP exposure to probably a 100,000,000 plus people through this newspaper comic distribution every single day. [01:01:06] S0: And even if they weren't getting paid for it, the marketing on that so that people go see Mickey films. [01:01:11] S1: Exactly. Yeah. It never becomes a huge revenue or profit driver for them. But, like, that free daily marketing in most major newspapers around the country