232 InManagersWeTrust
Through adversity and opportunity, Eisner recounts how the
challenges he faces are not all that different from those Walt Disney
faced 50 or 60 years ago. The challenges listed in Disney’s annual
report of 1940 were eerily similar to its list in 1990: external world
crises such as war, studio expansion, film production expansion, for-
eign currency fluctuations, and control over the cost of creative tal-
ent. All these things remain, including, the pundits notwithstanding,
the ris kof war, which is hardly expected far in advance by the in-
vesting public.
Disney’s recession resistance comes from a combination of a
strong brand, financial conservatism, and a disciplined emphasis on
growth that concentrates mainly on internal expansion supple-
mented with selective expansion through prudent acquisition. Ex-
ternal expansion is prudent when it is necessary to preserve access
to the means of entertainment delivery, especially to the home en-
tertainment environment. That often entails expansion through tech-
nological advances, but Eisner cautions that he will not let Disney
invest in technology for its own sake.
Disney’s commitment must be to the content of the entertain-
ment, Eisner says, not its delivery mechanisms. He regards Marshall
McLuhan’s claim that “the medium is the message” as anachronistic,
maybe true when written but no longer the case in a world of pro-
liferating delivery systems—numerous broadcast networks, indepen-
dent television stations, and the advent and multiplication of home
video, satellite, and the Internet. “What has counted from the time
of Homer, Chaucer and Shakespeare to the present is the story and
the skill with which it is told, whatever the medium,” he observes.
Even so, Eisner aggressively led Disney to embrace the Internet.
Among Disney’s major assets are some of the most visited Web sites:
Disney.com for entertainment, ESPN.com for sports, and ABC.com
for news. By partnering first with Starwave, a leading technology
company, and then with Infoseek, one of the most popular Web
search engines, Disney also created the Go Network, an Internet
space that collects and offers content from all Disney units.
Magic and Mice
Eisner explains that many people in the early 1980s thought ani-
mation was dead, a lost art. Roy Disney disagreed and proved that
when done properly, animation was magic. And as Eisner says,
“magic is the essence of Disney.” Disney’s success in renewing ani-