Leading the way for international growth is our Disney Channel
business. As I mentioned, earlier in 2004 we inaugurated our 22nd Disney Channel in Japan. On December 17, 2004, our next Disney Channel is launching in India. These businesses are strong in themselves, with all but one of the channels that were launched prior to 2003 already profitable. However, beyond their profitability, these channels add inestimable brand value for our Company by building familiarity with and affection for Disney in these new international markets.

But, the most innovative distribution platforms and the most brilliant international strategies are worth little without great content. On this subject, I'm afraid I've been something of a broken record these past 20 years. Content has always been the fundamental driver of success at this Company, whether it has been in the form of a certain good natured mouse or a princess with a snow white complexion or a theme park in an unknown place called Anaheim or a TV show hosted by a fellow named Walt or a resort carved out of swampland in Florida or a mighty lion king or an elegant cruise ship or a sports center or plane crash victims lost on an island or some really desperate housewives.

At Disney, we now have a superb team at all levels that knows how to develop content, market it, distribute it and explore new methods to deliver it. Of course, every piece of content cannot be a home run. Creativity requires risk and risk can be, well, risky. But, by managing our costs and making sure we have some of the best creative minds in the industry, we find we can minimize risk and maximize returns.

continue to part VI of Letter to Shareholders >>

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Michael Eisner and Postmaster General Jack Potter were at Disneyland for the June 2004 debut of a new set of U.S. postage stamps featuring Mickey Mouse and his friends.