This excerpt taken from the DIS 10-K filed Nov 21, 2007.
Character Merchandise Licensing
The Companys worldwide merchandise licensing operations are divided among several product categories, including toys, apparel, accessories, footwear, home furnishings, home décor, health, beauty, food, stationery and consumer electronics. The Company earns royalties, which are usually based on a fixed percentage of the wholesale or retail selling price of the products. The Company licenses characters from its film, television and other properties. Some of the major properties licensed by the Company include Mickey Mouse, Winnie the Pooh, Disney Princess, Cars and High School Musical. The Company has also expanded its ability to design individual products and create exclusive themed and seasonal promotional campaigns for retailers based on characters, movies and TV shows.