Losing a rabbit gave Disney its mouse, and the mouse earned more on watches than films
In 1928 Walt Disney discovered that his hit cartoon star, Oswald the Lucky Rabbit, legally belonged to Universal. Stripped of his character, he sketched a replacement mouse his wife renamed Mickey. Within six years Walt admitted that Mickey's merchandise made him more money than Mickey's films, and a clock company owed its survival to him.
Failure came first. In 1921 Walt Disney and Ub Iwerks opened Laugh-O-Gram Studio in Kansas City, which went bankrupt in 1923 after a final short, Alice's Wonderland, mixing a live girl with cartoon figures. Walt moved to Los Angeles to join his brother Roy, who was recovering from tuberculosis. The New York distributor Margaret Winkler bought the Alice film, and on October 16, 1923, the brothers founded Disney Brothers Cartoon Studio to make more.
Oswald, created in 1927, was their first fully animated series, but when Walt asked producer Charles Mintz for a bigger fee, Mintz demanded a cut instead and threatened to carry on without him. With Universal holding the rights, Disney walked away. Mickey premiered in test screenings of Plane Crazy in May 1928, and Steamboat Willie later that year became the first cartoon with sound added in post-production, an instant hit.
Then the money machine started. A New York manufacturer paid 300 dollars to put Mickey on writing tablets, making him the first licensed character. From 1933 Kay Kamen ran the merchandising, signing 40 licenses in a year and reaching 35 million dollars in sales within two. The Waterbury Clock Company's Mickey watch rescued it from bankruptcy during the Depression; Macy's once sold 11,000 in a single day.
Colour and ambition followed. Flowers and Trees in 1932 was the first full-colour cartoon and won an Academy Award, and The Three Little Pigs repeated the feat. In 1934 Walt announced Snow White and the Seven Dwarfs, the first cel-animated feature, which critics nicknamed Disney's Folly and Roy feared would ruin them. To give it depth, the studio built the multiplane camera, stacking drawings on sheets of glass at different distances.
Source: The Walt Disney Company
