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The 'Fantasia effect'
Show them magic and they will come.
By conventional measures of success, Fantasia was a total disaster.
Released in 1940, the film cost $2.28m to produce ($51m in 2024 dollars) and made a huge loss at the box office.
Production went fantastically over budget and over deadline. No expense was spared.
Walt Disney wanted to push the boundaries of what was possible in animation to an entirely new level.
To go radically beyond expectation and open up a new dimension of experience.
It was a high-conviction move, which was impossible to justify with precedent and established logic.
There was no proven mainstream 'market' for Fantasia. For 3 years, precious capital was sunk into a massive project that seemingly had no creative restrictions or validated commercial viability.
However, Walt was convinced it would capture the imagination and deepen the position his company was pioneering in animated entertainment.
He saw Fantasia not just as a film, but as an evolving concept that could continuously bring music and visuals together in new ways. Pure creation.
When it was finished, it ran in just a handful of theatres throughout the U.S. because the Walt Disney Company had to rent them out.
Why rent? To fit a special sound system -- Fantasound -- that had been developed specifically for it.
Fantasound was basically the first surround sound system.
Years ahead of its time, it cost 20% of the film's total budget to develop in R&D expenditure.
Walt was adamant it was needed, so viewers would get the 'full immersive experience' of the audio and visual spectacle his team was creating.
The expense didn’t stop there, though.
It cost up to $85,000 ($1.9m) to manufacture and kit out each venue with a Fantasound system. That meant every theatre had to sell a ton of tickets before it could break even.
The timing of Fantasia’s release was also terrible due to the outbreak of WW2.
The planned 88-theatre run was cut down to 13. Materials and equipment needed for the Fantasound system were diverted to the war effort.
Ticket sales from Europe, which usually accounted for 45% of film income, were shut off.
This financial hole was a big deal for The Walt Disney Company, which relative to today was still a startup.
It had financed much of its recent development up until that point by borrowing.
That year, it found itself in debt to the bank to the tune of $4.5m ($100m) with declining revenue to pay it down.
To dig themselves out of this mess, Walt and his brother Roy had to float the company to raise the capital needed to survive.
From a short-term purely economic perspective, Fantasia was a fantastic f**k up.
Except, it wasn't.
The film was a bold and contrarian idea that Walt Disney poured all of his creative energy into.
It's the idea of Fantasia that is important. Not the box office receipts.
It helped transform the perception of the Walt Disney Company, transcending itself onto a new level of imagination and 'Disney magic'.
The bold idea shone a light over everything else the company produced, enhancing their perception with an extra sprinkle of magic. It lifted them up, by benefiting from an association with a studio at the frontier of animated creativity.
This is what I call the ‘Fantasia effect’.
It works like the halo effect, except it is specific to a scenario where one shocking and bold initiative improves the perception of all propositions the company offers.
It instils buying behaviour, because it’s an exaggerated articulation of the core Positioning of the company.
What do I mean by that? You could think of Fantasia as the outcome of letting the Disney animation team run wild and pursue their wildest ambition, utilising every creative spark in their imagination.
In other words: it’s the idea of Disney, blown up.
It points towards the exciting and daring possible, whilst retaining the essence of what makes it Disney.
It also generates a lot of buzz for this reason — it’s captivating.
Although attendance severely restricted its initial screenings due to logistical reasons, the idea of Fantasia spread. Through PR, through word-of-mouth.
People didn't have to experience Fantasia to be effected by it. Or, for it to modify their perception of Disney in a favourable way. The appeal of the idea was enough.
This shareability is a key element that makes the ‘Fantasia effect’ so powerful.
Scaling it up via distribution channels compounds its impact further. After WW2, Fantasia was rereleased a bunch of times across the decades, dramatically growing its exposure.
In terms of building a perception that instilled buying behaviour for all Disney products, it was one of the best investments Walt made.
“Fantasia is an idea in itself. I can never build another.
I can improve. I can elaborate. That is all.”
How you can utilise the Fantasia effect
First, let’s ask the question: What are other examples of the Fantasia effect?
Let’s define it more, by calling out other examples.
Examples:
R8 for Audi
Watson for IBM
Daytona for Rolex
Red Bull F1 for Red Bull
Dreamforce for Salesforce
Underwater Suite for The Atlantis Palm Hotel
What are the ingredients?
It doesn’t have to be a product. It can be an initiative. An event. Anything.
Though Fantasia incurred heavy losses in the beginning, this is certainly not a prerequisite to utilising the Fantasia effect. It could be a low cost initiative or even generate a profit (which would be high-fives all round!).
And, as you can probably tell from the above examples, what it also isn’t is a core product offering. As in, it does not become a primary revenue driver in itself. Instead, it helps instil demand for the primary revenue driving products.
This gives much more scope to be creative and attract attention. So, the wrong way to think about it is ‘as the future’ of where your core proposition is shifting too.
Here’s what it should do:
Be shockingly interesting and captivating. If it’s boring, no one will notice or remember. The bar for this is higher than you think.
Continue the core idea of the company, in an exaggerated form. If you go off track, it will cause confusion and not pass on the desired perceptional equity to the other propositions your company offers.
Not half-arsed. For the Fantasia effect to work, it has to be convincing and inspiring. If you fall short of this measure, whatever you do will likely be perceived as a gimmick. That doesn’t have to mean expensive, but it does mean high-effort.
So, what does that look like?
Let’s run through a few hypothetical examples:
If you ran a coffee chain called 6am, launch an insanely strong coffee
If you ran a loan platform for small businesses, launch a service tier where you help your client invest the money they borrow
If you ran a CRM tool, launch a service tier where you organise and host exclusive customer events on behalf of your client
Whatever it is, the bar has to be fantastic.
That’s it for today. I’ll be back in your inbox soon. 🤘
Martin
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