You've gotta love Disney (NYSE:DIS). Or, rather, you've gotta love the Disney brand. Especially if you're a shareholder.
The Little Mermaid recently made its debut on DVD in a special collector's edition. According to The Hollywood Reporter, the product moved 4 million discs in its initial seven days of release. By comparison, News Corp.'s (NYSE:NWS) and Marvel Entertainment's (NYSE:MVL) latest X-Men sequel sold 5 million units in its first seven days.
I don't know about you, but that says something to me. Consider that The Little Mermaid was released to theaters back in the late '80s and has had a previous run on video. Plus, there was a direct-to-video sequel of the film several years ago. The world has been amply exposed to the Mermaid mythology, yet Disney can pull off a successful release in 2006. As a shareholder, I'm thankful.
But before this turns into a cheerleading session for the Mouse, let me say that the company has its work cut out for it. After all, will a collector's release of Chicken Little and/or The Wild foster the same kind of excitement 20 years down the line? It's difficult to say. We all know that the big story in Disney animation has been, for a long time now, the Pixar brand. Now that Disney and Pixar have intermingled their respective corporate DNAs, the fact that Pixar has outshone Disney in the generation of animated classics-in-the-making is no longer such a shadow -- indeed, it arguably strengthens Bob Iger in his quest to outshine DreamWorks Animation (NYSE:DWA). Nevertheless, Iger has to ensure that the integration of his talent and the talent of John Lasseter finally catalyzes Disney's non-Pixar branded features in such a way that the conglomerate sees Lion King-like grosses once again.
Whether that happens or not remains to be seen. But with Disney selling 80% of the number of DVD discs that X-Men sold in a week's timeframe is encouraging in terms of the Disney library operation. Going forward, these classic releases will have a chance to sell millions more when the next format wave finally hits us; Sony's (NYSE:SNE) PlayStation 3 unit will juice things up in that regard since it will have Blu-ray capability. And with every opportunity to sell additional copies of a library member comes the opportunity to cross-promote a whole new marketing initiative -- Disney is taking full advantage of The Little Mermaid's success to entice parents to buy licensed items for their kids (especially the little princesses). This will aid the Disney consumer products segment, of course -- isn't synergy wonderful? If you doubt the potency of Disney's library, be sure to check out yet another example of a money-generating release -- Bambi sold a million copies during its first day on the street!
Disney's stock is doing well this year; the upcoming holiday season will be, at least in part, helped along by The Little Mermaid brand. That should please investors and encourage them to stick with Disney a little longer. The stock hasn't been a great investment over the past few years, but with so many positive developments lately -- from Pirates of the Caribbean to High School Musical -- shareholders should feel some encouragement.
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Fool contributor Steven Mallas owns shares of Disney and Marvel Entertainment. The Fool has a disclosure policy.
