Our stage play business, Buena Vista Theatrical Productions, continues to be the gold standard of the Great White Way. I will now abandon all caution and predict that our winning ways in this business will continue in 2005 with the stage production of Mary Poppins. As I write this, the show has yet to actually premiere. However, by the time you read this letter, it will have opened in London. They’re still fine-tuning the play, but from what I've seen (several rehearsals, plus two pre-London shows in Bristol, England), it is everything you would hope a live stage production of Mary Poppins would be – charming, magical, surprising, i.e. "practically perfect in every way." In addition to the requisite tea parties on the ceiling, spoonfuls of sugar and steps in time, there are new songs and characters, as one of the great musical films of all time becomes one of the great musical plays. I estimate that I've seen the stage plays of Beauty and the Beast, The Lion King and Aida a total of at least 45 times. I eagerly look forward to extending my record with multiple viewings of this incredible new Disney production.

Over at Walt Disney Feature Animation, where so much of the entertainment magic is first conjured up, they have completed the transition to digital production. More than 20 remarkable projects are in various phases of development, including a second sequel to Toy Story. The next production will be Chicken Little. As you’ll see, we are bringing our own original Disney look and feel to the very exciting 3D animation medium.

The Walt Disney Studios has an array of great live-action films underway. In order to maximize shareholder value in the often volatile live-action business, we are aggressively managing our investment levels, developing some eagerly anticipated sequels and, most significantly, increasing the proportion of Disney-branded films. The advantage of the Disney brand in the film business is enormous. As I write this letter, Disney has the number one and two films in America during Thanksgiving. Studios often need to hire a major star to “open” a film, at a cost of as much as $20 million or even more. We get much the same advantage by simply releasing a film under the Disney banner. Millions of people will automatically consider seeing the film because they know it will offer the kind of quality, family-friendly entertainment they’re looking for. In this way, the Disney brand is our “star”...and we can use it anytime we want and free of charge. Of course, we have to make great films that maintain the standards of the Disney name. A brand is still only as strong as the excellence of its products. Next year, our “star” brand will be featured on a number of exciting motion pictures, including the adaptation of the modern classic, The Hitchhiker's Guide to the Galaxy, a sequel to the wonderful Love Bug series and an epic film, The Lion, the Witch and the Wardrobe, based on the immensely popular Chronicles of Narnia series.

Our cable group is creating a whole new brand, called Jetix. Disney Channel is phenomenally successful with families, 'tweens and children, and especially with girls. Jetix offers more boy-oriented entertainment and is being featured on Toon Disney and ABC Family. Plus, the entire Fox Kids international cable operation, which reaches more than 48 million subscribers in Europe and Latin America, is being renamed Jetix. The Jetix brand is anchored by Power Rangers, along with a number of original animated shows from our TV Animation group. Jetix should become a major new kids brand, with the potential to benefit the entire Company, from Consumer Products to Parks and Resorts.

continue to part VIII of Letter to Shareholders >>

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In London's West End on Dec. 15, 2004, Disney Theatrical Productions and Cameron Mackintosh presented the highly anticipated stage adaptation of Mary Poppins, starring Laura Michelle Kelly as the unforgettable – and practically perfect – nanny.