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Stalking the King of Animation

No one has been able to dethrone Disney so far. Nevertheless, studios are spending up to half a billion dollars to challenge its grip on the lucrative genre.


Back in 1937, a skeptical Hollywood snickered when Walt Disney was making a feature-length cartoon about a beautiful maiden stranded in a forest with a group of tiny mine workers. They dubbed it "Disney's Folly."

The laughing stopped when "Snow White and the Seven Dwarfs" became one of the most profitable films ever. And in the six decades since, the Walt Disney Co. rarely has had to glance over its shoulder at rivals when making such animated hits as "101 Dalmatians," "The Lion King," "Beauty and the Beast" and its latest effort, the $70-million "The Hunchback of Notre Dame."

At least until now. In one of the biggest bets Hollywood has made on a movie genre, studios collectively are spending as much as half a billion dollars on a risky premise: that moviegoers can develop an appetite for major, full-length animated movies beyond the one or two that Disney releases into theaters each year.

Given Disney's dominance in making animated movies and the relentless way it defends its franchise, diving into the business might seem foolish. But in a town where money shouts, the roar of Disney's animation profits has become deafening to its rivals.

Hollywood is enticed by the multitude of ways the studio mines its films to produce enormous profits, its success marketing them to both children and adults, and the soaring costs of making and marketing live-action movies.

About a dozen animated films are planned--with at least as many on the drawing boards. They range from basketball superstar Michael Jordan dropped into a cartoon to movies that are likely to look like high-tech "Toy Story" knockoffs.

To some observers, Hollywood's animation frenzy is akin to trying to field a team from scratch to beat the Chicago Bulls--probably with the same result. The Disney name is on 22 of the top 25 animated movies of all time in box office receipts. The take from a single Disney hit, "Aladdin," equals all non-Disney animated films combined. Hollywood's movie graveyard is filled with efforts that failed, from 1994's "Thumbelina" to last year's "Balto."

"Going head to head with Disney is like standing in front of a bullet train," said Don Barrett, senior vice president for Nest Entertainment, whose "Swan Princess" failed to catch fire at the box office in 1994. "You can create a wonderful product, but if it doesn't have the Disney brand, will the public buy it?"

Disney, a $42-billion colossus after swallowing the ABC television network this year, has mastered the art of producing top-quality animation as well as mobilizing the entire company to launch its films.

"The Hunchback of Notre Dame," which opens Friday, is being backed by a $40-million marketing effort. Much of the promotional tab is being picked up by Burger King and Nestle because Disney animated movies help sell millions of dollars in children's meals, dolls, chocolate bars and lunch boxes. Among the "Hunchback" promotions is an elaborate stunt estimated to cost $4 million in which New Orleans will shut down Wednesday for a parade and screening.

Disney also plays hardball to fend off challengers. Last month, it locked up McDonald's for an exclusive, 10-year promotional agreement on future movies. This prevents competitors from promoting their films through the fast-food giant.

In April, Metro-Goldwyn-Mayer discovered how hard it is to compete head to head with Disney. After it announced it would release "All Dogs Go to Heaven II," Disney re-released its 1988 "Oliver & Company" the same weekend. "All Dogs" quickly died.

"Once we decided on a release date, we saw how aggressively Disney could come after us," said John Symes, president of MGM's Worldwide Television Group, which oversees the studio's animation efforts. "I think Disney has every right to protect their domain. But I think every company in this business has to be aware of the machine they've created."

Beyond the marketing machine, fans of Disney movies believe they are not easily emulated.

"The real genius of Walt Disney himself and of his successors has not been drawing pretty pictures or making characters come to life. The real genius has been the solid grasp of story," said critic Michael Medved, who writes extensively about family movies.

Still, competitors all hope for even a small piece of the billions Disney has generated from animated movies. In addition to what audiences pay in the United States, Disney's animated movies can be smoothly dubbed for foreign markets, from which Hollywood gets most of its box office business.

Having a hit animated movie in the theaters virtually guarantees that a studio can make millions more selling videos. Some Disney animated videos have earned more than $200 million in profit, at least 10 times the amount most live-action videos generate.

Add in the sale of merchandise, video games and interactive products licensed to dozens of companies. Studios such as Disney and Warner Bros. stand to profit even further when those goods are sold in their company-owned stores.

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