Disney Does DVD

Disney Does DVD

The Magic Kingdom is hoping that a new video trick will make its two-year slump disappear.

Walt Disney Co. has unveiled a revamped home video strategy that will make most of its classic cartoons available on DVD
and VHS all the time, beginning next year.

The Mouse House used to keep its 'toons on moratorium for up to 10 years, taking them out of circulation to build demand
for the next release. But with an underperforming home video division, Disney has

Over the next two years, the company will put the bulk of its animated library--films like Dumbo, Sleeping Beauty, The
Hunchback of Notre Dame--out simultaneously on DVD and video and keep them on store shelves for good. Twenty-six
films in all will be permanently available.

But Disney will set aside 10 other films--the company's crown jewels--as the so-called "Platinum Collection," which will
rotate in and out of stores. Only one Platinum title will be released a year, beginning with Snow White in the fall of 2001.
Other Platinum titles include Beauty and the Beast, Aladdin, The Lion King, Bambi, The Jungle Book, Cinderella, The
Little Mermaid, Lady and the Tramp and 101 Dalmatians.

"This new cycle will allow us to maximize each film's performance," studio boss Joe Roth says in a statement."We will treat
each Platinum Collection release as [an] event each fall. In addition, by creating a predictable, once-a-year, high-profile
release, we will maximize consumer and retail excitement for each title. And as we've seen in the past, major campaigns such
as this have a 'halo effect' that stimulates demand for all Disney products."

Disney needs all the halo effect it can get. Profits have flatlined for two years and counting and the once high-flying stock has
remained mired in the mid-$20 range.

The new strategy, announced Wednesday, also shows that Disney is serious about the DVD format it once ignored--the
studio was one of the last to embrace the new digitial video discs. And its first batch of animated releases (available for a
limited time this fall) are strictly bare-bones, with none of the bonus goodies DVD-philes have come to expect. While it is not
immediately clear if the next slate of DVD releases will have more extras (à la New Line's Platinum Series), the company
seems to have finally realized the format's sales potential. Especially considering there will be an estimated 4 million
households with DVD set-tops and 10 million DVD-equipped personal computers by Christmas.

"We believe that DVD represents a huge opportunity for our company," says Roth. "Just as with the VHS format, which saw
incredible growth of video unit sales as VCR penetration rose, DVD demand will surge as penetration levels hit critical mass.
As people change over to DVD, they will augment their existing video libraries with discs in the new format."

The company's brief flirtation with DVD has had mixed results so far. While the just-released, no-frills Pinocchio has
recorded lackluster sales, three other Disney titles with lots of bonuses, Armageddon, Enemy of the State and A Bug's Life,
rank among the Top 10 all-time DVD bestsellers.

Some Disney animated features weren't covered by the announcement, including Tarzan (still playing in some movie houses),
the computer-animated Toy Story and the classic Fantasia (soon to be rereleased theatrically in a revamped, IMAX-sized
millennial edition).