Proof of Concept

The first ever full length animated feature movie was released in 1938.

Snow White and the Seven Dwarfs quickly became the highest grossing sound movie of all-time.

Even more impressive than the enduring quality of this movie (my 4-year-old loves it) is the new business it spawned for Disney.

At the time, Disney wasn’t necessarily the powerhouse brand it is today. The company made little in the way of profits in the early-1930s because of the combination of the aftermath of the Great Depression and the fact that Walt Disney spent heavily on new projects.

Snow White completely changed the trajectory of the company’s fortunes. Within two months of the movie’s release, they made more money from the sale of toys than the movie made in its entire first year.

Merchandising seems like a no-brainer these days but it was a novel concept at the time. The New York Times predicted Disney had come up with an entirely new business which they termed “industrialized fantasy.”

The innovator behind this idea wasn’t Walt Disney himself but a marketing executive named Kay Kamen. Kamen approached Walt and his brother Roy in the early 1930s with promises of bringing Disney’s characters, “out of the 10-cent store and into the department store because that’s where consumers are moving.”

He quickly became responsible for the merchandising of Disney characters. This was likely one of the best decisions Disney ever made in terms of branding and recurring revenue. Derek Thompson discussed Kamen’s insights in his book Hit Makers: The Science of Popularity:

Kamen’s winning insight was simple and somewhat Cassandran: Hollywood thought that toys were advertisements for movies. Hollywood was wrong; the opposite was true. The films were proofs of concept. The future of the movie business was everything outside the movie theater.

Kamen’s enduring lesson to Disney was this:

The art of film is film, but the business of movies is everywhere.

This week I talked about Kamen and Disney in a presentation to the Financial Planning Association of Illinois. I think service professionals in today’s digital age can learn a lot from these ideas:

  • Suppliers and sellers used to have all of the power through an informational advantage. The Internet has leveled the playing field in terms of information. Buyers now have more options than ever through the web to find alternative products, services, and pricing structure. Going forward, personal brands will matter more than ever, especially in service-based businesses.
  • Trust is one of the most valuable currencies in a world awash with information. To steal a line from Kamen, the art of financial services is financial services, but the business of financial services is everywhere.
  • “Brands” of the past were considered to be advertisements and logos. In the future, branding will be more about what people can reasonably expect from you in terms of messaging, services provided, client service, and execution. This will require a combination of implementation and merchandising outside of the business to build that brand to get to the point where you can show the proof of concept.

Here are my slides from this presentation:

Surviving & Thriving in the New World of Financial Advice by Ben Carlson on Scribd

Get in touch if you’d like me to speak at your event.

 

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