Intellectual property built around animated characters works far better for a flywheel business model than live-action IP, because cartoon characters don't age and aren't bound up in actors who must be paid and who eventually die.
David argues that Disney's flywheel model depends on IP being animated rather than live-action, since characters like Mickey Mouse never age and don't require paying (or eventually losing) human stars, unlike franchises such as Star Wars or James Bond. ✦ AI generated
David Rosenthal · Acquired · 2026-06-23 · original ↗
starts at this moment · 72:25
Now, critically for Disney, and again, I think completely accidentally discovered by Walt, the IP that works best for Flywheel Dynamics almost has to be animated, i.e. not live action. Because with live action characters, the characters are too bound up in the actors that play them. And that creates all sorts of problems.
verbatim transcript · starts at 72:25
72:25actors that play them. And that creates all sorts of problems. Like one, especially today, it makes your economics as a studio just like way worse because you got to pay the stars so much, >> right? There's wholesale transfer pricing. A huge amount of the margin you could get ends up getting paid out to effectively your partner in creating the character, the actual actor. >> Whereas Mickey works for free. No, like
72:50you you got to like pay the animators and they get paid very well to animate them. It's >> that's on the value capture side, but on the value creation side, which I think is the more important thing, Mickey is always available to work. >> Yes. Yes. >> And Mickey doesn't age. >> Yes. Exactly. You can create a eternal character through animation in a way that you just can't when you're using
73:11real people. I mean, Star Wars, as great as Star Wars is, and we'll talk about it later in the episode, is going to have a problem when Mark Hamill and Harrison Ford die. I mean, I guess unless AI gets really good. >> And live action is sort of dated to a time and place in a way that cartoons can sort of transcend. Like Mickey can always exist in the present
73:35>> in a way that we're going to talk about Davy Crockett later, but at some point it became completely uninteresting to watch Davy Crockett. Even though he was like a complete heartthrob obsession that was great IP for the moment, it just wasn't as durable. >> Yeah. Live action IP with very few exceptions tends not to have the staying power over decades and generations that animation does. >> Yeah. few exceptions being like James
74:00Bond, but god have they tried to do all sorts of crazy stuff in order to let that IP keep living. I mean, like there's been six, seven James Bonds, you know, and they have to keep rebooting the story over and over. >> Exactly. Okay, so that's step one. Genuinely great IP that audiences fall in love with has to be at the core. Then step two, you need to maximize the
74:23distribution for that IP as wide and as far as possible in its primary delivery vehicle. So like Mickey in those films, get those films into as many theaters as possible to just completely saturate the world. It's sort of a scale economies thing. If you're going to invest a whole bunch in making it the very best you can, then you need to distribute it everywhere in order to maximize the
- ·Walt accidentally discovered this dynamic
- ·Animated characters, not live-action, power the flywheel best
- ·Live-action characters are too tied to their actors
- ·Actors age and eventually die
- ·Actors must be paid, cutting into recurring value
- ·Animation avoids both constraints entirely