Disney Consumer Products

Background

DCP's origins trace back to 1929, when Walt Disney licensed the image of Mickey Mouse for use on a children's writing tablet. On December 16 of that year, Walt Disney Productions formed the Walt Disney Enterprises (WDE) division to handle merchandising.

The Mickey Mouse doll production by Charlotte Clark started shortly after in January 1930. The WDE division also hired George Borgfeldt & Company of New York as a licensing agent to make Mickey and Minnie Mouse toys. Borgfeldt & Company in turn set to work developing other products, granting the first license to Walkburger, Tanner and Company of St. Gall, Switzerland, for Mickey and Minnie Mouse handkerchiefs. That summer of 1930 Disney expanded WDE to England, granting a general license to William Banks Levy for Mickey and Minnie Mouse character merchandise.

In 1932 Disney closed a merchandising contract with Herman "Kay" Kamen for sole representation. Early on WDE began to show results. The company's merchandising made the Silly Symphony film Three Little Pigs (1933) the company's first profit-making animated film.

In 1934, Disney licensing expanded to hand-crank toy projectors, diamond-studded Mickey Mouse pins, Mickey Mouse toffee in England and a Lionel wind-up train toy, while a patent is received for Ingersoll-Waterbury Clock Company's Mickey Mouse watch.

Yet more companies licensed the Mickey Mouse image. General Foods did so for one year and made $1.5 million on the Post Toasties cereal box. Mickey was the first licensed character on such a product. Clashes with other companies weren't unavoidable, though. Disney filed suit on July 31 against the United Biscuit Company of America, Sawyer Biscuit Company, and the Chicago Carton Company for unauthorized use of Disney characters for animal crackers which lasted for four months and ended in Disney's favor.

Disney signed on July 19, 1938 with Courvoisier Galleries, making Courvoisier Disney's original art marketing representative. In December, Walt Disney Enterprises was renamed Walt Disney Productions.

In October 1948, Disney and Kay Kamen extend the merchandising contract, but only for the Americas. In 1949, the Character Merchandising Division is formed with in Disney. Also that year on October 28, Kay Kamen, Disney's licensing representative, died in an Air France plane crash over the Azores.

With Roy Disney's split off the merchandising division from Disney Production, Jimmy Johnson became head of the merchandising division's publication department in 1950 and took on managing business affairs for the Walt Disney Music Company.

Disney had a food division with product from bread to soft drinks, which was mostly discontinued due to its contract with ABC to produce TV shows and the need to not be in competition with potential advertisers.

After Disney purchased the rights for Winnie the Pooh to make a 1966 animated short film, the company conceded to a broad licensing agreement with Sears, Roebuck & Co.. Stephen Slesinger Inc.'s Pati Slesinger found merchandise that Disney did not pay royalties on. The Slesinger then attempt to get the A.A. Milne Trust to abrogate its contract. In 1983, Disney paid Stephen Slesinger Inc. and the Milne estate to end the royalty issue and agreed to a new contract that lower Slesinger Inc.'s royalty percentage.

In 1979, the Intergovernmental Philatelic Corporation of New York was licensed by Walt Disney Productions to make Disney character stamps for several countries.

History

Disney Consumer Products was incorporated with the State of California in 1986.

The first Disney Store opened in Glendale, California on March 28, 1987. On October 12, Disney agreed to a licensing contract with Mattel for a Disney Character infant and preschool toy line. DCP purchased Childcraft Education Corp., maker of children's furniture and equipment, retail stores and catalog sales, from Grolier Inc. in April 1988.

In April 1990, the 50th store was opened in Montclair, California along with the first Mickey's Kitchen fast food restaurant. On November 11, 1991, Mattel and Disney extended the 1987 agreement, adding Pinocchio, Bambi, Dumbo, It's a Small World, and the Autopia to the toy line. In March 1992, Disney Stores closed the two Mickey's Kitchen as the restaurants were only breaking even while well received by the customers as the company wanted to focus on overseas expansions.

In 1994, DCP ended an exclusive licensing agreement with Sears for Winnie the Pooh. Three distinct product lines were created for Pooh: Disney Pooh, based on the Disney red-shirted tan bear cartoon version; 100 Acre Collection, a more upscale line for department stores and the Classic Pooh line based on the original A.A. Milne books' Ernest H. Shephard illustrations.

DCP licensing peak in 1997 with 749 Disney Stores worldwide, operating income of $893 million and 4,200 licensees for mostly Winnie the Pooh and Mickey Mouse product plus some top animated movies. Disney's and McDonald's ten-year cross-promotional agreement began on January 1, 1997. In May 1997, the Vermont Teddy Bear Co. filed a copyright infringement suit against Disney over "Pooh-Grams" being similar to its mail-order "Bear-Gram" trademark and logo. Also, Disney Enterprises, Inc. sold DCP operating subsidiary Childcraft Education Corp. to U.S. Office Products Co.

In March 1998, Walt Disney Records and Walt Disney Music Publishing were transferred out of DCP to Buena Vista Music Group in the Disney studio division. By 1998, Pooh outsold Mickey Mouse $316 million to $114 million through November of that year in just-licensed-toy sales. By replacing Sears with 100 licensees including Mattel, Hallmark, Timex, Tupperware and Royal Daulton, DCP has since increased Pooh product lines from $390 million to $3.3 billion.

Franchise focus

With Mickey Mouse and other characters on products everywhere and a general retail decline in 2000, DCP had registered operating income of only $386 million. In December 1999, Andrew P. Mooney became the head of DCP. He created the Disney Princess franchise in January 2000. He also developed the Disney Couture fashion line, Walt Disney Signature furniture, a princess-inspired bridal gowns line, and lines based on the Pixar films, Toy Story and Cars. Mooney had DCP try an Always Fresh labeled women's nightshirts and T-shirts line which attempt to be more mature but failed. He also reduced the number of licensees in half, sold low sale stores and had staff actively pursuing licensing partners than waiting for proposals. For example, Mooney, worked to have Fred Segal, a high-end retailers, sell specialty products and opened a sales office near Wal-Mart's headquarters in Bentonville, Arkansas. In 2001, Mooney lead a promotion of Mickey Mouse T-shirts by getting them into the hands of celebrities, which was a success. Also, Disney Publishing issued its first original comic book, W.I.T.C.H., which was successful enough to be adapted into an animated series.

Consumer Products also begin expanding licensing in the food category in the 2000s. DCP agreed to a licensing agreement with Kellogg Company for a Kellogg's Disney cereal line launched in February 2002; Kellogg's Disney Mickey's Magix, Kellogg's Disney Hunny Bs, and Kellogg's Disney/Pixar Buzz Blasts. In May 2003, DCP and Wells' Dairy launched a Disney-branded dairy line with a variety of new ice creams, frozen novelties and yogurt products. In May 2005, DCP licensed Krogers the Old Yeller name to sell dog food.

The Japanese stores were sold to Oriental Land Company in 2002, while most North American stores were sold and licensed in November 2004 to The Children's Place. Disney licensed Motorola for cordless phones and two way handset radios in August 2002.

For the first 3 quarters of 2004, Disney Consumer Products made $388 million in operating income placing the year ahead of 2000 and 2003. In May 2004, the Disney Cuties design (a more anime style) line was introduced with T-shirts. Mooney's major initiatives was to turn Disney into a lifestyle brand by relying on the Disney brand reputation instead of its characters to sell clothing and household goods with half the royalty percentage of the 10% for Disney characters. At Fred Segal in August, the retailer was test selling Snap watches, with swappable faces and wristbands, with Disney characters with hipper, urban designs. In Spring 2005, DCP planned to start sell pants and jean jackets under the Disney Denim brand with a cartoon whimsical elements. On August 5, 2004, the Disney Dream Desk PC, designed by Frog Design and manufactured by Medion, began being sold at CompUSA and Disney online. DCP planned to release a camcorder and digital camera later in the year.

Disney purchased the rights to The Muppets and the Bear in the Big Blue House franchises from The Jim Henson Company on February 17, 2004. The two brands were placed under control of the Muppets Holding Company, LLC, then as a unit of Disney Consumer Products.

In 2005, DCP has begun working with various Indian retail outlets to establish Disney Corners within the outlets to sell licensed merchandise. Also that year, Mooney formed the Disney Fairies franchise which launched in the fall with the Fairy Dust and the Quest for the Egg book. In the early 2000s, DisneyToon Studios (DTS) joined DCP as their internal Disney conglomerate video partner in developing the new Disney franchises. While DCP eyed other potential franchises, DTS looked to the Seven Dwarfs for a male centric franchise to counterbalance the female centric Fairies by 2005.

In 2006, the Muppets Holding Company was transferred from the Disney Consumer Products unit to The Walt Disney Studios with studio executives passing on oversight, the unit was placed in the special events group. With Disney Princesses a success and Disney Fairies just under way in 2006, Consumer Products started looking into the next possible franchises with Disney Bunnies selected already. DCP in May concluded a consumer products master licensing agreement for Indochina, including Vietnam, Cambodia and Laos, with East Media Holdings Inc.'s EMHI Licensing Inc. On September 26, the Disney Jeans brand was launched in India under license to Indus Clothing, who planned to open 30 Disney Jean stores by the end of 2007. In October, DCP India franchised to Ravi Jaipuria Corporation the rights for five years to set up 150 Disney Artist brand stores and wholesale under the Disney Artist brand Disney character branded greeting cards, stationary, arts, crafts and party product in India, Nepal, Sri Lanka, Bangladesh and Maldives.

In January 2007 two new DCP franchises were launched, Disney Bunnies and Disney Dragonkind.

In 2008, Disney purchased back its Disney Stores from The Children's Place. On June 5, 2008, Disney Interactive Studios is transferred out of DCP to the Disney Interactive Media Group.

John Lasseter of Pixar became a creative advisor to DCP in 2009 after already assisting on Cars products. Lasseter pushed for an end to "label slapping", which is using a popular move to sell unrelated generic toys. The Disney Princesses franchise has generated more than $4 billion in retail sales worldwide. In post-Christmas 2009, Disney Pook-A-Looz, a plush line of Disney caricatures, was launched with its first set at Toy'R'Us with Disney Stores receiving them in mid-March 2010 with the Cheshire Cat selling well. The Muppets were considered the best sellers of the second set of Pook-A-Looz over the expected “Nightmare Before Christmas” characters.

In 2009, Disney acquired Marvel Entertainment for $4.24 billion. Josh Silverman, a senior executive at Marvel, was appointed Executive Vice President of Global Licensing for Disney Consumer Products and helped facilitate the Disney-Marvel integration. In 2011, Disney fired Marvel Studios' marketing department taking over marketing of their films beginning with the 2012 film The Avengers.

The Cars sequel was approved for a 2011 debut despite the original being panned by the critics and one of the lowest grossing Pixar film as its licensed products have done well. Mooney stepped down as DCP chair in September 2011. With Robert Chapek being appointed president of DCP, DCP expanded its responsibility to include all retailing, distribution and licensing for Marvel, Pixar, video discs and video games.

Swampy the Alligator from Where's My Water? was the first Disney Interactive Media Group original character to get the merchandising treatment by 2012. In 2012, Disney was the world’s largest licensor and number 1 in the entertainment category according to International Licensing Industry Merchandisers’ Association for another year with an 80% market share and $39.5 billion.

In March 2013, Disney sent a letter to its suppliers to have them by April 2014 pull any Disney branded products out of the five "highest-risk countries": Bangladesh, Ecuador, Venezuela, Belarus and Pakistan, based on a World Bank-governed metric report. This was announced in May after a Bangladeshi factory building collapsed. Haiti and Cambodia, which are also low-ranking countries, were allowable per Disney's new policy so long as the factories worked with the Better Work health and safety program run by the International Labor Organization and the International Finance Corporation. Bangladesh factories were liable to get work if they also partnered with the Better Work program. Disney also stated that less than 1% of its products were sourced from Bangladesh and even less from the other four countries.

DCP began representing Lucasfilm brands in June 2013. With the addition of Star Wars, Disney has six of the top 10 franchises: Disney Princess (1st), Star Wars (2nd), Winnie the Pooh (3rd), Cars (4th), Mickey & Friends (6th), and Toy Story (8th), with two more in the top twenty; Disney Fairies (11th) and Spider-Man (16th). In October, DCP announced an arrangement with Wet Seal for an ABC Family character inspired Crush by ABC Family apparel and accessories line to reach the shelves in 2014.

In April 2014, DCP was the subject of online criticism from numerous parents (through the Disney Store's Facebook page and other forums) for severely underestimating consumer demand for merchandise related to Disney Animation's 2013 blockbuster hit, Frozen. DCP saw its profit increase by 22% for the 2014 year.

On 000000002015-02-23-0000February 23, 2015, Robert Chapek was named chairman of Walt Disney Parks and Resorts effective that day. Leslie Ferraro, formerly executive vice president of global marketing, sales and travel operations of Walt Disney Parks and Resorts, was named president of DCP. DCPI was formed in 000000002015-06-01-0000June 2015 as merger of Disney Consumer Products and Disney Interactive. The presidents of DCP were appointed co-chairs of the division while retaining the presidency of their subsidiary while Disney Publishing Worldwide would report to them as co-chairs. Ferraro left Disney eight months later in February 2016.

Franchises

Andrew P. Mooney of Disney Consumer Products (DCP) created the Disney Princess franchise in January 2000. In 2005, Mooney formed the Disney Fairies franchise which launched in the fall with the Fairy Dust and the Quest for the Egg book. In the early 2000s, DisneyToon Studios (DTS) joined DCP as their internal Disney conglomerate video partner in developing the new Disney franchises. While Consumer Products eyed other potential franchises, DTS looked to the Seven Dwarfs for a male-centric franchise to counterbalance the female-centric Fairies by 2005. The Muppet franchise held by DCP, in Muppet Holding Company, after being purchased in 2004 and transferred out in 2006 to Disney Studios.

With Disney Princesses a success and Disney Fairies just under way in 2006, Disney Consumer Products started looking into the next possible franchises (see table at right) with Disney Bunnies selected already. In January 2007, two new DCP franchises were launched, Disney Bunnies with three books and Disney Dragonkind with a set of statues.

Complications relating to the production of Tinker Bell, the debut film of the Disney Fairies franchise lead to discussion over the focus of DisneyToon Studios. Pixar leadership exerted control and affected Franchise projects at the production company. Tinker Bell's animation was scrapped and was restarted while two possible franchise projects were cancelled, "Disney's Dwarfs" and the "Disney Princess Enchanted Tales" line after the first DVD release.

The June 2013 release of the Disney Princess Palace Pets app from Disney Publishing lead DCP to turn Palace Pets into a Disney Princess franchise extension with the release of The Palace Pets toy line in August from licensee, Blip Toys. The line was also listed by TimetoPlayMag.com for its Most Wanted List Holiday 2013.

Disney Consumer Products and Interactive Media

Disney Consumer Products and Interactive Media (DCPI) is a division and business segment of the Walt Disney Company consisting of Licensing, Disney Retail, Games and Apps and Content divisions.

DCPI was formed in 000000002015-06-01-0000June 2015 as merger of Disney Consumer Products and Disney Interactive. The presidents of DCP were appointed co-chairs of the division while retaining the presidency of their subsidiary while Disney Publishing Worldwide would report to them as co-chairs. The units were brought together due to increase use of technology on the part of DCP with the announced Playmation toy system and digital publishing by DPW. In 2014, The Muppets Studio was transferred and reorganized into the division, as part of the newly formed DCPI Labs unit. In December 2015, Maker Studios was placed under the control of Disney Interactive concurrent with the appointment of Courtney Holt as Maker head with the title of executive vice president. Ferraro left Disney eight months later in February 2016 with James Pitaro becoming sole chairman. Disney Co/Op team was formed in 2015 to work with licensees and other partners for branded content like Disney Boxed (the reverse concept of Unboxing) with Hasbro about creating a toy.

In early 2016, DCPI formed its Content & Media department under executive vice president Andrew Sugerman. Content and Media consisted of Disney Publishing Worldwide - original short-form and micro-content production teams included Co/Op via social media and internal digital channels included Disney LOL and Oh My Disney. In December 2016, Holt was moved to the position of Walt Disney Company executive vice president of media and strategy and Maker was placed within the Content and Media department.

DCPI structure