Specific Business Issues

[Another Voice]

In another thread, someone asked (or challenged?) me to provide specific recommendations to Disney. Since the debate and rumors boards have been merged, I guess this is appropriate, but I’m making this a separate thread so that innocent bystanders can run for cover. Warnings fairly posted – let the shrapnel fly…

No more bloated live action mega-movies. Feature animation is the tent pole product for Walt Disney Studios and I would much rather spend $140 million to entice Linda Wolverton back to the studio than to keep Michael Bay from jumping ship – her ‘Beauty and The Beast’ did more for the company than his ‘Pearl Harbor’ ever could have hoped to accomplish. Adopt a version of the Miramax model; find good filmmakers and give them a modest amount of money. It worked for ‘The Sixth Sense’, and really worked when Katzenberg was running the Studio.

Bring back the story department. Disney scripts have been atrocious recently. No movie is worth making unless there’s a good story to be told. And dump the factory mentality in Animation. A movie is ready when it’s ready, rushing a film to hit a release date guarantees its failure. And anyone that pitches a remake of a seventies “classic” like ‘Escape From Witch Mountain’ or ‘The Apple Dumpling Gang’ should be physically thrown onto Riverside Drive. No more retreads or TV-animation “sequels”: think of something new or go work for Sony.

Dump the traditional broadcast media outlets. The world is moving to a direct distribution model (downloaded movies and series). Being a little ahead of the curve is better than being behind it. ‘Snow White’ on DVD or pay-per-view is going to generate more revenue than a screening on ABC. Start with something from the core of Disney – like a series of animated shorts available only through download. Develop the technology and the business model to make this all work – I’m sure Apple or Microsoft would just love to help. Any synergy you need from broadcast TV can be gotten through The Disney Channel; besides, filming a special episode of ‘Boy Meets World’ in Florida has never done anything for attendance.

Close all but 50 of The Disney Stores. These places should be destination retail, not a neighborhood Gap outlet. Give people a reason to go to the stores, make the experience special (e.g., people should be excited to see a Disney Store). Keep them in high volume, upscale malls. Products should be exclusive, but available on-line at Disney.com. Focus on selling one really good, high margin item, rather on trying to sell ten cheap, low margin items. One exquisite figurine of Cinderella on a shelf makes Disney unique; ten cheap Disney Beanie Babies on the same shelf makes Disney common.

Re-introduce ride tickets to California Adventure and eliminate general admission. Admit this place was built as a shopping mall and tell Wall Street that stupid mistakes aren’t cheap to fix. Let it limp along until the retrofit is ready for a “one year and a day” build out – turn DCA into a movie studio, urban World Showcase, or sometime else that will be of interest to visitors. While the development and construction of the redo is happening, move ahead with a second themed hotel, Downtown Disney expansion and maybe the water park. Have something open every three months during this period to give the resort a sense of momentum towards the re-launch the second gate.

Finish Animal Kingdom and make that the last theme park at WDW. Spend the next couple of years and create the total immersion park to revolutionize the entire industry. The future is ‘Westworld’, not off-the-shelf spinner attractions. People should look to Disney for imagination and inspiration and not for motion induced nausea (that’s Six Flag’s market niche). For the parks, plan on one attraction every 18 months. It’s part of the cost of doing business. Better yet, develop one of the feature length attractions and see how it works.

Sell off non-core assets: the sports teams, the cruise line, the publishing houses, Hollywood Records and all the other distractions. Disney doesn’t take any of these businesses seriously so stop wasting resources and get out. Unless you see it on a screen or it can glide down Main Street, nuke it. These are not the days to play big swinging, er , media mogul.

Re-create the ultimate poison pill defense that Walt Disney had created when he set-up RETLAW. The rights to the name ‘Walt Disney’ and his creations should be held by a seperate company. Should someone buy out ‘The Walt Disney Company’ – the license gets pulled.

But most importantly – FOCUS. There is no direction to the company these days. The purpose of Disney is to make fantasy into reality. If you can make people’s dreams come true, the economics will follow.

[YoHo]

Oooo, I love these topics.
Plus I've been thinking about it all weekend.


Okay,

Animation
I'm kinda stealing this from AV, because I'm not enough in the know to know these specifics, but I had indepentdly thought of this.

Bring back the story team. this alone could save Disney animation even with all the other cuts.
Terminate all sequels.
I would not have a problem with Movies like recess, schools out.

Live Action

Again, no remakes
Focus on family entertainment.
non-touchstone divions will be given complete freedom.


Television

Here's where I depart from AV.

ABC and all cable properties besides disney channel and toon disney will be spun into a wholly owned subsidiary of TWDC. With fully independent executive staff, the ability to work with outside production houses.

since I work on the infastructure side of the pothole filled internet superhighway, I know that this statement

The world is moving to a direct distribution model (downloaded movies and series).

is 100% incorrect and the most foolish buisness decision ever.

the internet has yet to be anything close to profitable for any traditional media company. Heck, its not really profitable for anyone besides Cisco. Go.com wasn't unique.

Trust me, moving to internet Distribution would destroy the company.

The reason you move away from ABC, is because it doesn't have the same profit margin as your other buisnesses. Let the Television group work 100% independently so they can tailor their buisness to the realities of their buisness.

All Disney needs from them is a 3 hour block on Sunday for movies (time to open the Vaults)

Disney would keep the production side of the Television buisness and be able to sell both two its Network division and other networks.


On the parks side

the parks are easily the most complex side of the equation.


1: Much as the Animation group has a story Department, Imagineering would too. I would Take a long hard look at DCA and ask for a cohesive story for the park. Once a story was developed, everything in that park would be required to fit that story or it goes.

2: All Disney parks would be wrung through the Story Ringer

3: Assuming the story group doesn't dictate otherwise, Beastly Kingdom would be built I can't give a completeion date, or a ride count since I don't know the financials, but it would be high on my list.

4: Epcot's futureworld would get the pavilion makeover I discussed a month or two ago that Landbaron so enjoyed.

5. Pop century construction would stop with Phase one. no new resorts will be built for the next say 4 years.

6.
In general, Imagineering for each park will be given a set budget to work with for improvments. Park managment and Imagineering would work together to determine what gets done. I wouldn't care if it all got spent on a really impressive flowerbed as long as that bed was done well.

7. Capital funding would be doled out on a schedule. It will be assumed in every budget that money would be saved for that expense. There would be a theoretical cap on Capital spending, if the project is good enough to deserve more however (think adding a pavilion to Testtrack, or space) then new funding could be gotten, or parts of the project deffered for later opening.


The key is always something new, never stagnent. there is an imposed budget. its better to create a D-ticket that is within the budget, then lop off part of an E-ticket to meet it.



Of course the above is generalized as I could write all day about each buisness venture and park.

[Sarangel]

This looks like the makings of a great thread, but I do need to point out one tiny error on Another Voice's part:Since the debate and rumors boards have been merged.

The merged boards are Rumors and Business. The debate board is alive and well & will miss you if you don't go play there once in a while. :smooth:

Sarangel

[DisDuck]

It was my request AV. And you have answered them quite well. However, I do disagree with a few.

For one the broadcast rights thing: There are still areas that do not have cable or disney channel or download capability OR WANT IT. So you suggest cutting off a segment of your market (large or small, I don't have the numbers). Even a huge item like the Yankees that makes lots of money off of cable leaves around 50 games a year on regular broadcast so that non-cable (non-msg) can still see games, besides ad-revenue it generates is not bad either.

It seems that while typing 'thedscoop' chimed in. While I don't have a list of non-core businesses and their impact, I would not suggest dumping Cruise Line. It is a money maker and draws additional fans to the name.

The rest seems to have been covered. But AV, at least some ideas unlike those who just mutter all the time. A question who should take the CEO spot?

[All Aboard]

(Mega-movies) agreed

(Story dept) agreed

(Broadcast media) can Disney dump ABC and keep ESPN, Lifetime, A&E? If so, agreed.

(Disney Stores) We go to the one at Dadeland in Miami. Dadeland is one of the most successful regional malls in the country. The Disney Store there is always packed with shoppers. I guess it would be one of the 50. I think the Disney Store is diluted and selling the wrong kind of merchandise (agreed)

(DCA) Tickets? That was tongue in cheek, right? I still think DL/DCA/DDT can become an encompassing tourist destination. Haven't been there, don't know how much land is available or what it would cost. But, I don't agree that throwing in the towel on DCA, tearing it down and building something else is the financial answer.

(WDW) Don't completely agree. Yes, add to AK make it a complete park. No, don't stop there. I would like to see 6 or 7 gates. WDW should be complete in about 30 years. Haven't decided about the feature length attraction yet, need to read more about it.

(Non-core) keep the cruise line, the DVC properties and anything else vacation related. Hyperion, Hollywood, etc. they can go.

(poison pill) only if it were that simple.

(focus) couldn't agree more

All this with one caveat, let me sell before it all happens and buy it back after it does. I just can't see this level of capitalization reduction not having negative stock price implications. Perhaps I am wrong, though.

AV, I appreciate you well thought out discussion. I have read too many "Eisner just sucks, Disney is going to heck" posts lately. It's about time we had some of the good ol' discussion around here again.

[Peter Pirate]

There is a problem in the world and there is a problem in world economics and Disney must deal with it. The United States and the worlds business environment in general are now so un-arguably linked that there is about as much breathing room between overlapping, multi-business, multi-conglomerate companies as there is space between Pamela Anderson's assets and underwear. This creates a huge problem for a unique, quality based business as {we like to think} Disney is. Growth in today's environment is a given. The days of cream automatically rising to the top are gone and it is more like eat or be eaten. This survival of the fittest dogma was fine during Eisner's heydey when he transformed Disney from prey to predetor for survivals sake, but the current business environment demands even more.

Disney needs growth and despite the howl's of disagreement, the current theme parks have already given the lions share of what they have to offer. To be sure, Disney has to keep them at the top (and I understand this is the crux of many complaints), but they no longer NEED or can justify expansion for qualities sake alone (I'm not saying I like this, mind you). It has to be profit driven or it won't (can't) be a major undertaking. For anyone to think that Disney can just divest and run the core business is themself living in an animated world.

ROI is the key term. DCA is currently the key worry. It is an underperforming cog in a bigger plan to utilize DL's profit centers to the hilt. Disney obviously feels there is more to be made in California but was tentative in their creation (maybe even mindless, eh AV?). The movies & animation appear to be problematic but are not, IMO. PH won't make much and Disney looked foolish in their promotion but I think Atlantis will do fine in the long run (it is critically acclaimed, isn't it?). The problem with the PH promotional maelstrom was simply that it didn't work (as AV says, maybe the script wasn't good enough, maybe the acting wasn't good enough, maybe it was just too commercial) but WHAT IF it had been a great movie? Disney struck out this time, but WHAT IF they hit a Titanic size homerun next time or the time after? The profits will make the failures or "break-evens" justifiable. Survival of the fittest in this environment unfortunately means the proliferance of mega-mediocrity. It's a home run hitters world with glittering lights all around. It must shimmer and shine and promise the big swing even if it's a whiff because the survivor right now is the home run hitter who connects...(greusome analogy, I know). That's why Tiger was a good business move (and you know I dislike anyone other than Mickey as a spokesman).

I know I'm not playing the game on this thread (as you intended) but it's because I don't believe it is possible for Disney to be the Disney {we think} we knew and a successful 21st century player at the same time...I think the best thing that could happen to the Disney Parks (which is what we're most interested in) is for a couple of the movies to actually be huge, for ABC to actually have another (or two) Millionaire size shows and show real profitibility in these areas of perifery and for the Angels to win the Series. If these things don't happen, like it or not, Disney will just keep milking the Theme Park Cow looking for the next "big winner" and there will never be any chance for real innovation at WDW, remember, in their profit driven world, the Parks, particularily WDW, is not broken. This is why I see the tie-ins (the dreaded synergy) as an actual (or potential) saving grace for the Parks. New rides & attractions can be great multi-level income producers and since they do have to make certain concessions to the Parks to keep the masses coming back, this does seem like our best chance for new & entertaining attractions...Now everyone go out and see Atlantis again!!![;)
:cool: :cool: :bounce: :cool: :cool:

[YoHo]

I don't know if I can agree with Peter, Right now, we are in an economy that is going through self examination I wouldn't make any kind of proclimation about what a buisness needs to be to survive.

A few more topics I haven't covered yet.



Sports teams can be a perfectly viable thing to own. With little corporate intervention. The problem is the angels wwere not a good investment.

In fact, I wouldn't buy any baseball team unless Tribune Corp. or Steinbrenner are selling. At best the angels winning the series would make them the next Marlins.

the combined average attendence of a Marlins and Devil Ray's game wouldn't fill a minor league park.

Get out while the gettings good.

DCL Are you out of your mind? of course you keep the Cruise line. this is viable core product and it makes money.


Publishing houses, record labels. I don't know all the financials here. some of this you may move into ABC, some you may drop. I don't have the facts.

WDI. I am all in favor of the return of Retlaw and WED Corp. Because I have the urban planning bug just as Walt did.

this weekend, I was enjoying the John G. Shedd Aquarium on Chicago's lakefront along with a walk from the museum campus to Navy Pier and then to the loop El lines for the trip back out. Two things struck me.

1: Chicago lacks a few Unifing City improvments that would make it a major Vacation Destination

2: disney has the tools and could profit from helping out.


Examples (for my fellow chicagoans)

Immagine if you will a Sleek Monorail Emerging from O'hare Airport. It makes a quick stop at Desplaines River Road and then heads non-stop for the loop. a bit north of the loop it stops at Ohio and Rush, approximatly right outside DisneyQuest/ESPN Zone then heqads for the loop proper where it stops at Michigan and ?
It then heads further south and stops at the museum Campus and finally McCormack Place. Then it heads West non-stop to Midway Airport.


Now, Add in a modest Trolley system that connects River North with the Mag Mile, Navy Pier, Division and Clark, Lincoln Park, the museum Campus and museum of Science and industry.

now here's where Disney really pulls out the stops. Build a hotel attached to DisneyQuest. A themed hotel Think Vegas, but Disney Quality. Maybe, they have a Dark Ride built in the hotel. Sell Packages that include a City Pass and free use of all transportation.
(My Fiancee have always wanted to turn the Old Sock Yards into some sort of tourist Destination to enhance the South side, but as Disney Exec, I can't justify it.)

I, Like Walt would use the Imagineering arm as more then just park builders.

[Another Voice]

Wow. This is more of a response than I expected. First, thank you Ms. Sarangel for the clarification; I may have spent too much time in the California sun.

General comments – the overall themes in my post where that 1) Disney must focus to get its core businesses working again and 2) it must adept itself to the 21st century. For the first time in its history, all of the three central pillars of Disney are faltering and those have to be fixed NOW or discussions about sports team, cruise ships and regional hotels are mute. Nor do I believe that the “growth is good” strategy of buying anything within arms reach will work either. This was TimeWarner’s strategy – become BIG and the major player in all facets of media: movies, television, cable, publishing, music. And they still ended up as second billing to a second rate ISP. Even with all of Disney’s toys, they can very, very, very close to a similar fate. Disney can never make itself to big to shallow. And the more that unprofitable business drag down the profitable ones, the more tempting it is to buy Disney and split it apart.

Everyone always talks about how Disneyland made the company. They’re actually wrong – television made Disney. Walt was the first major Hollywood studio to understand, embrace and use television. Everyone else “knew” TV was a failure and must be fought because it kept people from going to the theaters. And Walt got a tremendous amount of flak from the industry for disagreeing. But in the end ‘Davy Crocket’ has probably the highest return of anything ever created by Disney, and the exposure on TV made Disneyland a success from the beginning. Walt appreciated that media was changing in the 1950’s and changed to company to thrive in the new world. That’s why his company is still around while larger studios like MGM, United Artists and Fox all went belly up.

Another major change is happening now. It’s not going the happen overnight, in fact it’s been going on for about ten years already, but that’s the nature of change. Traditional movie distribution is dying (more than half the movie theaters in the country are in bankruptcy right now) and people now accept buying movies in the same way they buy music. (Side note: the direct video ‘Lady and The Tramp 2’ will make much more money than ‘Atlantis’ will). The market for traditional theme parks is mature – but there is an eagerness for a new kind of experience. People no longer what to be just the audience anymore. And Sea World’s Discovery Cove is just the first step. Disney needs to adapt to these changes and exploit them. Or Disney will be buried by them.

A couple quick clarifications: The cruise line – it’s not a major money maker and was supposed to be a way to get people to WDW anyway. Sell it to Carnival, license the Disney name, and let someone else worry about scrapping barnacles. DCA – the place is a shopping mall. Let people in for free to spend money in shops and restaurants. Sell ticket books for the rides (just like a real seaside amusement park). Attendance will triple instantly. The place will never make it as a theme park, period. The poison pill – yea Roy kinda screwed this one up out of spite, but there are still several lurking in there. Besides, Disney lawyers, cash and the Delaware State Legislature can accomplish wonderful things together (the only area where I have confidence in Disney’s current management team).

Lastly, welcome back Mr. Pirate. I think our overall opinions may be closer than you think (or fear). I don’t want the Disney of old. That company is long gone and its era has passed. But to me Disney was never a particular style or a particular business model. In my view to be “Disney” is to tell a compelling, emotional story and to use all of the tools available to tell it. Whether animation or figure animation or television or computers, The Story is the product and Imagination is the raw material. But if Disney is supposed to be like everyone else and exists just for the sake of survival alone – what’s the point?

[Coronado Williams]

Another Voice is simply a genius. I especially love the part about shedding non-core businesses. They've never done anything for Disney, even in the old days. Anyone remember Celebrity Sports Center, the Independence Lake disaster, or that mysterious Disney Beach on the Atlantic? I thought not...

[YoHo]

Coronado, do you mean the DVC property on the beach in florida? or the one at Hilton Head Island?

Some of us are aware.


Thanks for Clarifying your new media concept. I was worried I'd have to brand you a sucker with that talk of "download".

ATTENTION EVERYONE. THE ONLY PEOPLE THAT WILL MAKE MONEY ON THE INTERNET IS CISCO AND SMALL BUISNESSES WITH LOYAL FANS LIKE PETE WITH THE DIS.

Sorry to shout, but I have yet to see proof that there is a viable moneymaking plan for the Internet and I wouldn''t want Disney to Disappear trying.

[hopemax]

I have a story of the way one company has started using the internet as a valuble resource and selling tool and it is paying off. And I think Disney could learn a few things from this company's successes in this area.

First, let me introduce everyone to a website

LUGNET (http://www.lugnet.com)

If you go there, you will find that it is something very similar to the DIS/wdwinfo, but it's about LEGO. There are multiple message boards, there is a link to a site that has every instruction book for every LEGO set with the exception of the last 2-3 years, a database of every LEGO set produced, a CAD program for designing your own LEGO models, etc.

The people who build LUGNET and post on those Message Boards are the same types of people who post on the various Disney boards. They are primarily adult fans who enjoy LEGO not only because it's fun for kids, but because it's fun for them. Some have kids, a lot of them don't. They have the same ideas that LEGO has strayed too far from the things that have made them a success, and lament for the "good old days" just like we do about Disney. The things that upset the LEGO fans are things like they discontinued the really good lines like Pirates and Castle (similar to the Disney fan's lament that rides like Pirates and HM aren't built anymore) and that current models use 1 brick where 20 years ago it would have taken 4 bricks; the term they use is "juniorization"; but the given reason is that today's kids don't have the patience to build complex models (similar to the Disney fan's lament that attractions are shorter and too dependent on thrill). This group has dubbed themselves AFOL's (Adult Fans of LEGO.

There would be discussions on whether LEGO should even listen to the AFOL's because they aren't the primary market, kids are. The other side would respond that they should be listened to because although there weren't a lot of AFOL's compared to kids, an AFOL was willing to spend 100, 500 or thousands of dollars on LEGO in one purchase and make several of those types of purchases a year. Back and forth it would go (does any of this sound familiar?)

Anyway, about a year and a half ago an official LEGO representative showed up on the LUGNET boards and told the group about a new division which would be called LEGO direct. One of the top "wish list" items for AFOL's was for the ability to purchase bricks directly from LEGO so they could build there incredible sculputures. Here's an example (http://www.end.com/~jynx/castle/) of what AFOL's build. LEGO direct allowed this to happen with bulk brick ordering. This was followed by the selling of more complex models, such as a Statue of Liberty, or Dragon. You may have seen these sculptures for sale at the LEGO Imagination Center at WDW. Other "wish list" items, re-releasing models from "the good old days" - last month LEGO direct announced that some popular older sets were going back into production. A few of them would be available in retail locations, but some would only be available through their website or phone/mail order service. They also started doing customizable models. You can get a mosaic made from a picture, or a train in a variety of colors and styles.

These things bulk ordering, complex sculptures, re-release sets, customizable models are, with only a handful of exceptions are only available through their mail order, phone or website; they aren't available by going into your chain retail stores. They are all a direct result of the desires of the small but rabid AFOL fanbase. The only marketing they do is a page in their mail order catalog, a web page, and by going over to LUGNET and announcing that this model or brick is now available for sale. They don't have to spend money on packaging design. Everytime a new product has been released it has sold out and surpassed LEGO's expectations.

LEGO and Disney are similar in that there are two very different markets who love their product; kids and adults who never outgrew it. One is large, but the other is willing to spend big bucks, frequently. LEGO tried to revamp it's product to appeal to the new millennium's child, but found out it was costing them the adult market and they decided to find another way to get that back. They did that by developing a two-tier approach; one for the kids and mass retail, one for AFOL's which is driven by word of mouth through the internet.

And I feel Disney needs to do that too; number one, have an official presence on fan message boards like the DIS and LaughingPlace. Not to crack down on anything but to listen to what we want. And two develop a two tier approach. One merchandiser that develops a plan to reach kids, one for AFOD's (Adult fans of Disney :) ), Zoog Disney on one channel, Vault Disney on another, one section of Disney.com for kids with games and activities, one for AFOD which can be a repositority of history and information. I'm sure Dave Smith and the archives would love something like that (more than what is there now). Music and films that are sold in retail, and certain items that are sold and distributed through an internet store where the only marketing is Randy Thorton getting on the Magical Music Discussion Board and saying it's available, no fancy packaging needed. Just a computer holding the tracks, and the security system for sales. Stuff like Song of the South or ride soundtracks or the old Disneyland TV shows.

I could go on for awhile, but I think I've written enough, I hope you all get the idea.

[Peter Pirate]

Thanks hopemax, I'm sure we all get the idea, and I found a lot of useful correlation that can be mulled over.

But much of the correlation ends at relatively superficial ends. First of all, the business climate is much more competetive at the high end of the entertainment industry than it is in the toy industry. Lego can afford to take its time and hone its market, but make no mistake, should Lego somehow become so wildly popular, and more importantly profitable, all of the rules change. Why? Because they are now ripe for a takeover by a mega Company who needs to diversify to please stockholders (sound familiar?), and all of the problems start all over again.

Thanks for the welcome back, AV. This is an interesting topic. But in your reply you state

If Disney is supposed to be just like everyone else and exist for survival alone, then what is the point?

Good point! Unfortunately, the point is there is no point. Disney does have to survive for survival's sake as simple job security to all involved. I don't like it and I'm willing to be swayed if someone can show me why Disney HAS to do something else, but so far thats what I believe...

Yoho, my point has little to do with current economic conditions (although I may have painted that picture) as current business climate. What happens when a big, efficient & generic Home Depot, Wal-Mart or Office Depot moves into town or the neighborhood? Lots and lots of small, independent, often very service & quality oriented businesses bite the dust. Why? Well, you know why and that bigger is better mentality is pervasive and again, I don't see an end. Disney is smack dab in the middle of the biggest battle grounds and lucky for us (so far) Eisner has been better than his opposing numbers...
:cool: :cool: :bounce: :cool: :cool:

[Another Voice]

If Disney was in a business as simple as Home Depot or WalMart…

An entertainment company sells emotion.

It is a much harder product to create than Home Dept hammers and is more difficult to sell than simply housing acres of shelves filled with low-priced goods like WalMart. Consumers don’t comparison shop movies like they shop for paper at Staples Office Supplies, they simply “know” when they like a movie or they don’t. The market needs for hammers is easy to figure out; the public’s tastes and desires are fickle and can change seemingly overnight.

But one thing is certain, for an audience to receive a satisfying emotional experience – the emotion needs to be in the product in the first place. The reason why Disney films are still viewed are moments like Dumbo visiting his mother in the cage, Snow White running terrified through the forest, The Beast realizing that this girl might actually like him while they dance. None of these moments were created to sell Happy Meals, none of them were created as a cheaper alternative scene so the movie come in on budget, none of them were created by people in market research. They were created by talented people trying to tell the best story they could.

And that is Disney’s “point” – to tell the best story in the best way possible. This is the core of the business and everything comes back to this purpose. In various media – film, television, live entertainment, theme parks – this is how Disney sells emotion. And it’s been a hugely profitable business for the better part of a century.

But when Disney ignores its storytelling core, or is run by people without a gift for story, this is when the company gets into trouble. The public knows when an entertainment company is producing shoddy, emotionless goods. Brand loyalty doesn’t exist for entertainment companies like it does for razor blades and the differing fates of ‘Atlantis’ and ‘Shrek’ proves that point. An army of MBA’s and scores of strategic acquisitions can not save a company that does not offer the public something they want to buy.

[YoHo]

Peter, I also think your missing why Wal Mart and home Depot have such appeal. It has little to do with being big and everything to do with being cheap. These places have low prices, because they make bigger orders. Also, there is some backlash to these stores going on right now. Not enough to reverse the trend, but it may come.

Further, lets take Disney's two primary products, theme parks and Movies. no mater if I want to go to a Hollywood blockbuster, or an independent Art film, the local googleplex is gonna soak me for $8.50. Given an average studio take of 50% its obvious to see that Disney is in full control of there margins and profits. Also, While Wal-mart sells you a thing, a plunger for instance. Disney is selling the right to view intellectual property I don't know how it all works out, but I'm sure the actual celluloid prints are cheap.

So, I get to pay the same amount whether its a good product or a bad one. Whereas, I can buy a $3 Hammer at Home Depot, or a $9 hammer at the local place.

The Theme Park buisness is much the same, Disney may be on the pricey end, but all major theme/amusment parks are around the same price. So disney has to control their margins and get more people.

If there's no cost difference, you buy the better product. Thus, Disney needs to focus on quality of their products. Size means nothing in this industry. If I made a film that was the greatest thing since Citizen Kane, I would make more money then Disney does with a mediochre product, no matter how big they are.
Well, Okay, I'm ignoring Advertising, but numerous sleeper hits have proven that advertising only goes so far.




The short of it is, Disney's Buisness has 0 in common with Wal Mart's and Home Depot's.

[Peter Pirate]

Wal-Mart & Home Depot are cheap because they are huge. It doesn't matter if the product is art or plumbing fixtures, it's the outlet for selling the items that we're discussing and nowhere in any business is simple quality outperforming size. Aside from Wal-Mart & HD, all Real estate companies are affiliated, all fast food outlets are franchised, even quality restaurants eventually expand to maximize profits for the big buy-out that will happen when profiotability is high and before the fact that the same old quality has been sacrificed is noticed by the consumers (witness Shula's).

AV, I agree that we probably see many things in closer terms than it appears, but I don't believe a conglomerate entertainment company cares if it sells emotion or not. If emotion is the most sellable item, then it's emotion it will sell, but the highest bidder walks away with the goods. Disney is certainly suffering from this crass commercialism & following of business school models right now (I agree with you). Dreamworks is not yet suffering simply because they are still new & have not yet hit the wall, but they will. Further, I want you to show me how Disney can operate out of the norm and still maximize its profits for the stockholders...To be sure, there are ways, you know that & I know that & even Eisner knows that, but will they do it?... Will they take the less traveled road of the leader (as they have done in the past) or will they follow the tried & true business models for corporate America? I hope you guys are right & Eisner or someone else will recognize the additional fortunes that can be made the Disney way, but I don't see it happening...It isn't as simple as divesting in Go.com because it comes back to ROI and until they can see that a loss of quality is affecting the potential for ROI we are where we are. Are they blinking? Is Eisner's job on the line? Are they acting like a company that needs a new direction? I think no best answers these questions and is proof that at this time a stagnant Disney is ok with them...
:cool: :cool: :bounce: :cool: :cool:

[DVC-Landbaron]

Why - Another Voice, of course!!! He is truly - THE MAN!!!!! :bounce:

I've avoided this thread for a while, until I could see what direction it took. I didn't want to rain on anyone's parade of brainstorming ideas and because I'm pretty much in lock-step with AV, I wanted to say a little more than "ditto'! Which, in retrospect is what the following really is. Let me say that I wholeheartedly agree with his entire post and his two follow ups. He's right about the stores, sports teams and everything else. Therefore, much of that stuff I've left out. The really important issues, to me of course, centers around the parks. SO…
Dump the traditional broadcast media outlets.

And

Any synergy you need from broadcast TV can be gotten through The Disney Channel; besides, filming a special episode of 'Boy Meets World' in Florida has never done anything for attendance. I'd go farther than that. I think it looks cheap!! Disney has GOT TO focus and get rid of all but their core!!! Absolutely!! Been saying that for months now. But I do admit, AV says it better!!!
Re-introduce ride tickets to California Adventure and eliminate general admission. I only quoted one sentence, but the whole paragraph is sheer genius!! At first read I thought my good buddy, Another Voice, had lost his marbles. I love the old days, and most things associated with them, but ticket books ain't on of those. I like the one price for everything. But in a subsequent post AV explained it a bit more and like, a bolt from above, I understood!!! True genius!!!
Finish Animal Kingdom and make that the last theme park at WDW.
Now I know that gcurling is in direct opposition to this, and we have been agreeing more and more lately. So it is with the most tender kid gloves I can find to say - Mr. Gcurling, YOU ARE WRONG!!!

This is something I've thought about for quite a while. EPCOT could have and should have been able to cover almost all the bases. MGM as we all know started life as a pavilion within EPCOT. The ONLY reason it is a stand alone gate is because of Universal's entry into central Florida and Ei$ner blowing up a pavilion to MINOR theme park status. I would have preferred that the monies spent on MGM and AK would have been spent on EPCOT, making it a MEGA park (something that would allow YoHo to do what he thinks should be done to Future World (and he's right). But even bigger than he thought possible!!!! Imagine a movie/film pavilion that takes a better part of a day to complete!!!) As it is now, we have 2 full parks, a ¾ park and a half park (very subjective, I know, but my take nonetheless). We should consider adding a gate ONLY if no other home can be found for a history park. But they've got to do it right!!!!

Again I quoted only the first sentence, but the entire paragraph is perfect. AK finished, no more Six Flags type rides, only exclusive immersive experiences, etc.

Sell off non-core assets: the sports teams, the cruise line, the publishing houses, Hollywood Records and all the other distractions. I absolutely agree!!! But, again, at first read I thought I might have to take issue with my good AV. The Cruise line sounded right to me. I don't know if it's profitable, it just sounded like something Disney could and should do. But once again he provided more later and said: The cruise line - it's not a major money maker and was supposed to be a way to get people to WDW anyway. Sell it to Carnival, license the Disney name, and let someone else worry about scrapping barnacles. PERFECT!!!!
Re-create the ultimate poison pill defense that Walt Disney had created when he set-up RETLAW. A great idea, IF it could be done.
But most importantly - FOCUS. There is no direction to the company these days. The purpose of Disney is to make fantasy into reality. If you can make people's dreams come true, the economics will follow.Can anyone possibly come up with a better paragraph? I doubt it. Thanks AV!!!

One last thought. About TV. AV is right once again. It was TV that kept the company solvent and Walt was the first to admit that without TV, Disneyland would have NEVER happened. Not only did TV (ABC in particular) invest in the project, but the company never had to advertise on a national level. I'm always quick to point that out, however, I leave out the fact that Walt's very first TV show was even named Disneyland. And his specials about the parks were marketing masterpieces. THAT, my friends, IS SYNERGY!!! ;)

[YoHo]

Landbaron, I'mm surprised you would agree with AV on the DCL issue. After all, Walt tried outsourcing with bad results. I thought Disney owned things like that so they could have full control over the guest expireance.


Peter, I still don't see how you can equate buissness that sell phisical product with Variable Margins with ones that sell intellectual property Selling an expireance has a completely different Cost and profit structure and requires different managment.
Quality still is paramount in this industry, because you can't offer your consumers a deal.

[DVC-Landbaron]

Landbaron, I'm surprised you would agree with AV on the DCL issue. After all, Walt tried outsourcing with bad results. I thought Disney owned things like that so they could have full control over the guest experience. Yeah. That was my first thought. But I don't think you need to run the ship (scrapping barnacles) in order to perform the magic. I saw that first hand in the summer of 1971. We visited the preview center for WDW. Nothing more than a building really. A couple of maps, pictures and dioramas in it, but certainly nothing MAGICAL.

YET IT WAS!! Why? Because of the CMs. They had the perkiest, cutest, smilingest CMs, just falling all over themselves, answering question, interacting with the families who were there!! It was a true WOW experience all by itself.

And that would be the caveat I would have to toss into the mix. CMs aboard ship on a "Disney Cruise" even if the ship isn't owned by them. Almost like a franchise. With very strict "MAGICAL" controls. Yeah. I think it could work.

[Peter Pirate]

To prove I am fallable and am, as I have always said, here to learn & have fun, I will announce now that my opinion on running a quality business versus "just big" in the world today is changing...I would like to thank those of you have posted here for showing me the path...I would like to, but I can't. ;) I will instead thank Tannerman for starting another thread with a link to a column written by the Motley Fools, who speak in a language I understand. Lets hope Mike reads it and understands as well...
:cool: :cool: :bounce: :cool: :cool:

[YoHo]

I'm glad someone opened your eyes. I know I'm bad at economics, Being an engineer, I tend to focus on quality out of habit.


(I think that's why I'm also so keen on the speculative posts, because I want to engineer the whole darn thing)

I figure Walt was an Engineer, well, an Imagineer at heart.

[YoHo]

DVC, Would that then, be a large scale Resturantasourus, A McDonalds staffed by Disney CMs?


(It may be hard to tell the difference, at least around chicago with the corporate bigwigs close, McDonalds employees are generally pleasent)


Disney will always own support industries, certainly they perform the proverbial Barnicle Scrapping on WDW. If the suggestion is that they outsource the whole shebang, that's one thing. If its used exclusivly for the cruise line which has operating principles close enough to the resort system to make managment of both reasonable, then it doesn't make so much sense. Disney is after all, good at running the whole resort system, why let someone else do it when you do it better (read, their is no real profit advantage.


If your going to Divest, then you have to do it logically, Divest of like industries and focus on those that operate along similar profit positions.
Then once you've done that, you can take a long hard look at what's left and see what can be made profitable, and what can't.

Remember we're talking about real employees here and right now, most of them won't be hired on elsewhere. I know.

[Another Voice]

In the crassest terms – entertainment in nothing more than emotional experience wrapped up and sold in the market. Emotion IS the product, that’s what entertainment companies sell and that’s what consumers are looking to buy. It’s not an optional ingredient. The public has a very strong ability to spot products where it’s lacking (‘Tomb Raider’) or where it was poorly created (‘Pearl Harbor’). You may be able to trick people for a short time, but they figure it very quickly (‘The Mummy Returns’). Hollywood is carpeted with the ruins of companies that failed to understand this, or tried to cheat (and cheapen) their product around the public’s desires.

Making good product is difficult, and to create a successful company creating successful product is a challenge beyond measure. There is no formula, there is no method, there is no model. Despite Mr. Eisner’s famous quote about ‘Pearl Harbor’, there isn’t anything even close to a sure thing here in Tinsel Town. To produce good entertainment, it takes the full attention and effort of a company.

Because of this, the “norm” for successful entertainment business has always been different than the norm for other businesses. Even corporate America realizes the difference. The two most “corporately” owned entertainment companies – NBC (General Electric) and Columbia/Tri-Star (Sony) are run at an arm & half length from their parents. Those corporations that didn’t understand the message – Coke, Seagrams, Matshustia, Transamerica – have left the industry. If companies with the business skills as Coca-Cola and Sony both couldn’t handle Columbia Studios – how will an industrial/conglomerate mentality work any better at Disney?

Wall Street backs take-over attempts of entertainment companies when it feels that someone else could run the company better than the current management can. No one is making a play for Dreamworks or MGM right because Wall Street knows that no other management team could run the companies better (although MGM has hit a rough spot). Disney got into trouble in the eighties because Wall Street felt someone could run the company better than Ron Miller and Card Walker. Disney is in trouble today because some on Wall Street feel someone else can do a better job than Michael Eisner.

Few other companies have the resources, and I mean creative resources, that Disney has. As long as Wall Street feels they are being properly used, the company will be safe with or without a cruise line. But, if Wall Street feels that assets are being underutilized, Disney could own General Electric and still not be safe. As the cliché goes, around here you’re only as good as your last movie – it doesn’t matter how big your name is on the marquee.


P.S. Thanks for the kind words Landbaron. It can get cold and lonely way out here in the black depths of The Dark Side. As for taking over for Mr. Eisner, I think I got as close on the org chart as I wanted to be.

[DVC-Landbaron]

First off to my good friend Peter Pirate!!! Well, we go back a long way. If I were finding my way back home to Kansas, you’d be my scarecrow though this wonderful land. So, I really have to ask - What the #%*@^$#(*^!!
I would like to thank those of you have posted here for showing me the path...I would like to, but I can't. I will instead thank Tannerman … Tannerman!!! Tannerman !!! Well I like that!!! Thanks a lot pal!!! After all we’ve been through!! Well!! Hurmph!! I never!! ;) ;) ;)

YoHo, my friend!!DVC, Would that then, be a large scale Resturantasourus, A McDonalds staffed by Disney CMs? YoHo. First off the Cruise line isn’t important enough to me to waste a whole bunch of time or thought on. I would have a sharp pencil guy (yeah they have their uses) look to see if we should own or franchise or just get out all together. If the best course would be the franchise thing, then the difference comes into play. It is a simple concept. Kind of like the “berm”. You know. The “berm” that Disneyland has and the “berm” that DCA doesn’t. When you’re talking about a McDonalds IN WDW you’re purposely breaking the berm. And you’re doing it consciously. Deliberately. And you didn’t have to!! But, when you take your SHOW on the road (i.e. a cruise ship) you can’t reasonably expect to control the “berm”. I know it’s subtle difference, but to me it makes all the difference in the world. (BTW, is berm spelled right? I could swear I’ve seen it this way, but Microsoft Word doesn’t recognize it. Ah heck! Maybe it’s only a word that Disney People use!!)

AV, sage of the Rumors Board In the crassest terms – entertainment in nothing more than emotional experience wrapped up and sold in the market. Emotion IS the product, that’s what entertainment companies sell and that’s what consumers are looking to buy. It’s not an optional ingredient.WOW!! I could have used you in a bicker thread I had not too long ago. I search for the very words you put together so well. And there is nothing at all crass about it!!
we were doing so well with specifics and then--whamo-the thread turned into "quality" generals.That is the specific!! NOTHING else matters. The other things come and go. Selling emotion (GOD!! I love that) and quality is their core business. See what people want to talk about!!
I mean licensing Walt's name to Carnival Cruise line. Did I really hear (or see) that? And a second to that motion by DVCLB? The same person who dreads corporate sponsors and alliances so much.Ahhhh! But have you ever really read and understood my posts? If you had, you wouldn’t be surprised at all. As I said to HoYo, first off it’s small potatoes in the grand scheme of things. Do away with or keep it. I really don’t care. Or franchise it. Let Carnival own the ship. The SHOW would be Disney’s. No worse than leasing the corner building in Chicago for it’s DisneyQuest. How is that contrary to my usual stance?

As for DVC ownership. Again. Small potatoes. I do have vested interest to see it remain in Disney, but I’m pragmatic enough to say, “what the hell!!” I kind of think that “resort’ functions can and should be Disney run. I suppose this goes for the cruise line too, but as I said, it’s not important enough to worry about. So, the sharp pencil guys can figure that out. They wouldn’t have much else to do, as they would be forbidden to value engineer attractions any longer!!!! ;)

[DisDuck]

Just a tidbit from the Duck. Anyone remember The Big Red Boat. Disney tried the license the name bit once before and it FAILED. Outsourcing sounds great but try it once and you do not come back for seconds. The nuts/bolts of the operation are still controlled by the owner not the licensor so customer service can still go down hill.

I have been on DCL and just about all the reports coming from other cruisers, including one who is approaching 20 trips with DCL, is that the ships are a little bit of Magic on the high seas. Just like being at a floating Contemporary or Polynesian.

AV had some good specific ideas and some not so good. I would get rid of sport teams as they tend to eat more more than make money (unless you are the Yankees or Dodgers) but keep TV (including Cable) as it gives the company an outlet for hooking people by keeping their name even more visible.

DCVLB.. do you really want someone else running the villas or any of the resorts for that matter. I think they are a great tie in to the parks. In fact, if I hadn't purchased the current timeshare I own (prior to Disney offering DVC) I would have purchased there. It is a good draw to bring back repeat customers even if no expansion to parks.

While I feel that MGM and AK are full day parks (DVC you claim viewpoint on parks is subjective so my take is full for both, who is right and who is wrong, cannot tell) add new attractions to them to increase the 'buzz'. Also, do same for EpCot.

Maybe the way to accomplish this is to not split up Disney into core/non-core but reorganize the company, making the different units more independent. This way less drain on going portions to subsidize others. Set ROI guidelines for each profit-center and R&D budget for each profit-center independent of each other. In this scheme ABC/TV ventures would have to stand more on its own merits rather than take money from parks.

I find this kind of debate much better than good-Walt/bad-Eisner debating.

[DVC-Landbaron]

One thing I do understand is that whoever created that dang "Quote" button should buy stock in you!
It is currently selling for $57.63 a share (undervalued!!). Which is much better than Disney.
Now quit quoting and offer some specific ideas. I've tried to solicit some more because you can leave burn Rome or rebuild it. Just don't stand there and look at it. Now come on and leave the amens in the keyboard and propose solutions. And, please, QUIT SHOUTING SO MUCHIs there anything else you don't care for in my posts? I mean are there other rules I should observe? Sentence structure, dangling participles, fragments, spelling? Would it be alright if I still spell Ei$ner with the "$" (it's kind of a trademark you know)? Please let me know! THANKS!! ;)
But this caveman like "Walt Good", "Mike Bad" general debate seems to have been tweaked, twisted, and tweened (a word?) from every angle.
But it's quite evident that you still don't get it! And let me further clarify. Mike isn't "bad". He just doesn't get it either. So, while he may not be a 'bad' guy, or even a 'bad' CEO for almost any other corporation in the world, because he doesn't 'get it', he is very, very 'bad' for Disney.

Conversely, Walt is not inherently good. He was supposed to be a real SOB at times. He dipped his donuts in bourbon, for God's sake, first thing in the morning!! No, I am not out to make him a saint. And I realize that times change, peoples perspectives change and stagnation is the surest way to bankruptcy, both financially and creatively. What I ALWAYS point to is his philosophy. And specifically his philosophy regarding the SHOW. And the SHOW should be sanctified. Whether dealing with the SHOW of the theme parks or the SHOW of a film, it must be sacrosanct! It is pure. And if you put your Walt head on, and be just a little practical and maybe a bit pragmatic dealing with time differentials, you can answer all these questions for yourselves. And I'm thinking that there would be little debate. Oh, a couple gray areas, the cruise line and DVC come to mind immediately. But other things are really no brainers. Let's try one, OK? Theme parks - Central to the core or not? Well… hmmm… Let me see…

See how easy it is? And it's even fun! Theme parks, of course, are part of the core!! As is animation. And we can stretch those two just a little to include some live action motion pictures and resorts (which makes the cruise line, DVC and some television venues gray areas).

Let's try another. And this is tricky. At first glance it seems to fit, but… Well… Give it a try. ABC: a keeper or do we dump it? Not from a business perspective (you keep on about sharks, so functionally we may need to keep it until we can get out gracefully. I'm talking philosophically.) We dump it of course!!! (And as an aside, it doesn't matter if it's a money maker or not. While it may generate unbelievable profits, it is not centered to the 'core'. And if it's margins are in fact marginal or a loser, it only makes dumping it imperative instead of just desirable.)

Want to do another one? OK! Let's try: sports teams. Well? What do you think? Keep or dump? Don't think as Walt would, but instead use his philosophy. Not in 1950's style, but extrapolating his 'philosophy' to the 21st Century. You will find that not much has really changed. You will find that the only criteria is, "can it work with what we do best?" (keeping it close to the core) and "If we do it, can we, do it right? Can we make it a Disney experience? Or will it be just like any other ball club in the world, the only difference being a Disney logo on the uniform somewhere?"

The point is you keep forgetting the philosophy. Maybe what you need is a mission statement. Lets try this one from AV: The purpose of Disney is to make fantasy into reality.Wonderful. That is a pretty good start to a Disney mission statement!! Can they do that with a sports team? Well, I suppose a very skilled attorney could make a case that it could be so. But I get the feeling that there would be several raised eyebrows within the jury as they retired. I suppose what I'm saying is if you need to hire a lawyer to make it fit within the mission statement, then it doesn't belong there in the first place. And in this case, being just another ball club really only dilutes their brand name in the long run.

How about this one?

entertainment in nothing more than emotional experience wrapped up and sold in the market. Emotion IS the product, that's what entertainment companies sell and that's what consumers are looking to buy. It's not an optional ingredient.
That is the essence of Disney. The only thing that AV left out is that Disney does it right, or they don't do it at all. In other words they are THE best at providing this emotional commodity. Whether it is the passionate response they elicit by providing a resort that blows you away (emotionally) or an hour and a half of (laughing, crying and everything else in-between) animation.

But alas, it is a little long for a mission statement. So, if you agree with the premise, let's whittle it down a bit. And while were whittling, let's make it Disney's. Why don't you have a stab at it. I mean, after all, any good business has a short, simple and clear mission statement, on which ALL other decisions are based. It is there we have to start. Otherwise we are all coming at it from different angles.

Your turn.

[YoHo]

DisDuck, I see you subscribe to the YoHo (read 3Com) school of corporate Org.

Give it a try. ABC: a keeper or do we dump it? Not from a business perspective

Landbaron you make it even more simple then it is.

Think of it this way, what is the difference between network television which Disney has not done well and Filmed Entetainment which Disney has had successes in? The difference is the structure needed to realize profits. The way you structure it so is to give them a seperate corporate structure with its own support staff. They run the buisness the way it needs to be run and you watch profits and stock price go up. They need to be kept at arms length.


There's such a thing as non-core buisness that it is highly desirable to keep.

As I said before, unless Tribune or Steinbrenner (I don't know how the dodgers do for profits) are selling, sports teams are bad mojo.

nd we can stretch those two just a little to include some live action motion pictures

Do you say these things for the express purpose of pushing my buttons, or do you really believe this?
Live action is core, there is no strech there. Its as core as animation. Need I remind you of Mary Poppins? True Life adventures? The Love bug? Song of the south? 20,000 Leagues under the sea? Three men and a baby?
Is this forgetfulness? or do you not think that these good films count as core?

Of course all of that is irrelevent. I would defer to AV's superior knowledge, but I believe Miramax/Dimension with their hands off Disney structure do pretty well. So why divest? They sell emotion pretty good.


One good point that I think AV makes, which you landbaron seem to have missed is that

entertainment in nothing more than emotional experience wrapped up and sold in the market.


That's entertainment, not Animation, or theme parks. It encompasses a large variety of products.


I would suggest that Disney is failing with ABC and other Entertainment arms, for the same reason that they are failing in animation. They are trying to be GE instead of trying to be an Entertainment corp.

If they figure that out, we won't be talking of Divesting a lot of this.
The sad part is that Eisner knew how to be a successful entertainment CEO and lost it.


If anything, the biggest division that should be spun is the Disney Stores, UNLESS, you plan on drastically reducing what they sell and how they sell it. Sears would be better at doing the selling.

[DVC-Landbaron]

Think of it this way, what is the difference between network television which Disney has not done well and Filmed Entetainment which Disney has had successes in?Simple. Making 'MAGIC'! You can do wonderful things with a fair amount of consistency through films. You can elicit a whole bunch of emotions through films. Does this mean that every film you make will do it? No, of course not. But the potential is there every time out of the box. Conversely, you CANNOT do it consistently, 24 by 7, on a TV network. Period! You cannot live up to the mission statement of emotions. It is NOT possible. And by not living up to the mission statement, the brand suffers. It becomes ordinary. Everyday. And some of the 'magic' wears away.
The difference is the structure needed to realize profits.Sorry, YoHo. But profits don't enter into the equation at this point at all. First you need to hold it up to the mission statement. Does it fit? Can it work, within the confines of it? Then second, can we "Do it right"? Only after these two questions are answered can we then ask if it can be set up profitably. If it fails ANY of these three, we don't do it. Period. But to talk about profits before the other two… well.. I think you're way ahead here.
There's such a thing as non-core buisness that it is highly desirable to keep.I strongly disagree!
As I said before, unless Tribune or Steinbrenner (I don't know how the dodgers do for profits) are selling, sports teams are bad mojo.Again I disagree. They are BAD MOJO - Period!!!!
Do you say these things for the express purpose of pushing my buttons, or do you really believe this? Live action is core, there is no strech there.Well, I suppose I agree, again to a point. Mary Poppins (and the like) I consider animation anyway, but technically you are right. I'm talking about the MANY film divisions they have. I'm talking about restructure so that these divisions fit nicely within the mission statement. And when I said stretch, I did indeed misspeak somewhat. What I meant was:

THE CORE:
1- Animation/Disney type (G) films
2- Theme Parks

Complimentary to the CORE (but every bit as important):
1- Major motion pictures (but very selective!!)
2- Resorts (vacation venues!!)

Is that a better way to look at it? And if you don't like that call it inner core and outer core. Whatever. I think you get the point.
One good point that I think AV makes, which you Landbaron seem to have missed is that:
"entertainment in nothing more than emotional experience wrapped up and sold in the market."WHAT!! How can you say I missed it when I QUOTED IT!!!! It is the very heart of the mission statement! Or is your point about entertainment vs. animation (which I never postulated)? If that is it, I agree!! Just not with a mundane, archaic and unwieldy device such as a TV network! A TV nework is NOT an art house/business (which a film studio could be). A TV network is a business. Plain and simple. Period! No 'art' about it. And therefore, no emotion. Some of the shows within the network fit the mission statement of creativity and emotional response. But not the entire network!! It is no different than the paint company. In fact it's even worse, for the press it gets and the HUGE potential it has for tarnishing the brand name.
The sad part is that Eisner knew how to be a successful entertainment CEO and lost it.We will have to agree to disagree!! ;)

[YoHo]

thedscoop


I agree with Landbaron to a degree that with what a full blown Television Network (CBS, NBC, ABC, FOX) it is highly difficult to run magic 24/7.
similarly, with a Cable channel, it is so much more like a movie house, you have far more creative control with much more manageable goals.


The reason I'm breaking from Landbaron is something AV said. He indicates that one of the reasons that GE succeeded with NBC, is that it let it run at arms length. This suggest to me that in fact, a Television network is like a filmed entertainment company.


I myself have no knowledge about what it takes to run such a company, neither does DVC, therefore, neither of us can truely claim to have a debatable position on the subject. My gut says you keep it, his says you don't So it goes.


DVC has taken a far more hardline approach to what needs to go, I'm not so Hack & Slash.

What I do believe, is that the mission statement should read something like this....

To produce products people enjoy, to enjoy every product we produce. To exceed our expectations, to exceed our customers expectations. We are passionate in all we do. The short hand for this is Disney MAgic.
Our product is Entertainment (emotion, what ever, all entertainment)

This mission Statement doesn't eliminate buisness based on how similar they are to filmed entertainment.

It does require you to do things with passion. To do things with quality. If you don't have the talents to do them right, and/or aren't willing to do what's needed to do it right, then it isn't done.

[Peter Pirate]

Landbaron proposed "inner core" & "outer core" and this sounds good but he dismisses television. I suggest a third category, perhaps "supportive". While I too agree that television is not going to be "magic" 24/7, what happend to the Disney quality commitment? Are you guys saying that if Disney had the balls to commit to quality entertainment (on network tv) that they couldn't blow the competetion out of the water? Or at least severly raise the bar? Televison is such a fit with the Disney model that I'd hate to see it given up on. They have done a great job with the Disney Channel (it is on almost all of the time in my house) and I can't help but believe that with quality programming, at the stated arms length (I agree with Yoho - wow) network TV is simply a huge advbantage to the Disney core business...
:cool: :cool: :bounce: :cool: :cool:

[JeffJewell]

...to quit the boards, but when I read things like "To produce products people enjoy, to enjoy every product we produce. To exceed our expectations, to exceed our customers expectations. We are passionate in all we do. The short hand for this is Disney MAgic" coming from historical adversaries like YoHo, I've got to chime in.

Well said.

Jeff

PS - As long as I've blown my cover anyway, I'll toss in a quick (well, quick for me, anyway) bit pertaining to the conversation in general. DVC doesn't go for the sports teams, YoHo thinks that certain sports teams might be acceptable. I'm gonna go a different direction, entirely.

I hate baseball, and I played it from the time I was six until I was eighteen. Playing the game was tedious, watching it is excruciating. Baseball is three minutes of action packed into three hours of game.

That said, I must admit that one of my fond memories is attending a baseball game a few years ago at Camden Yards. I watched maybe an inning and a half of actual baseball, and the rest of my time I spent roaming the incredibly well-built park, sampling the varied, atypical, and consistently high quality snack stands and paraphernalia shops scattered throughout.

I hate baseball, but I'd pay to go back to Camden Yards.

Creating that kind of feeling is where I feel Disney has fallen down on the job. If Disney is going to have a ball club, so be it, but please, make the games a legitimate Disney quality experience. To me, that does not mean anyone has to guarantee a pennant or a certain number of wins. It means to put everything you've got into it. It means, well, it means what YoHo said, up there. He said it really well.

If ABC affected us to a small fraction of the degree that Pinocchio affected us, none of us would be suggesting it be jettisoned.

[Another Voice]

A television network and a studio are two vastly different business. A studio creates product, a network simply distributes it. ABC, from a business sense, is much more like The Disney Stores than it’s like Filmed Entertainment. ABC makes it’s money by selling programs to the audience, and then selling those customers to advertisers. The network's chief concern is to gather only those eyeballs that someone else is willing to pay for. The network itself has no stake in the quality of the programs or of its audience so long as some soap company somewhere is willing to mail in checks. GE is successful with NBC because while GE knows zilch about making quality entertainment, it sure knows how to sell things.

From Disney’s point of view, it doesn’t matter what network carries a Disney program – in the same way it really doesn’t matter if GE Light Bulbs are sold through Kmart or through WalMart. It’s just a path to the consumer. Did everyone hear where the daytime version of ‘Millionaire’ has been sold to CBS? Did everyone see how much ABC is paying Warner Brothers for two more seasons of ‘Drew Carey’? A single studio can’t supply the variety of product that a network needs nor can it make money if it only sells it’s product in house.

The broadcast networks themselves are dying anyway. The days when 90% of the country plopping down on the couch and watching one of The Big Three are long gone – killed by cable, the VCR and the remote control. A show with huge ratings today would have lost its time slot to ‘I Dream of Jeannie’ during the heydays of Network TV. Of course the networks won’t disappear overnight, but the days of them as a profitable growing business are done.

My suggestion that Disney get out of broadcast television is based on it being a dying industry and the fact that there’s more money to be made in product creation than in product distribution (ask anyone who works for a trucking company). For long term survival, Disney and all of the other studios need to think ahead and, in thedscoop’s words, evolve into the next means of distribution.

The smartest thing I have ever heard anyone at Disney ever say was from a head of Network Television. He said that “No one wants a television set with 500 channels. What they want is a television set with only one channel, but a channel that only shows what they want to see, when they want to see it.”

Next note, in my view “entertainment” can cover a vast range of businesses. It does not need to be confined to the traditional forms of films, music and books. In fact, on of the most popular form of entertainment is shopping. It’s fair to say that entertainment is more of a function of presentation than anything else – think of the difference between a Target store and Downtown Disney. Definitions of “core” and “non-core” are never going to be precisely made. (Welcome back Mr. Jewell – I completely agree about Camden Yards).

[DVC-Landbaron]

... but first a couple thoughts for thedscoopNow doesn't that feel better… you talked specifics DVCLB and you did so quite well
I don’t know where you’ve been for the past year, but I’ve done little but talk specifics. I’m the one that gets bogged down in the minutia. You know, the famous ‘Mickey faced butter’ thread and ‘Workmen in broad Daylight” thread, to name just two. I’ve always talked specifics. And I always talk about how those specifics affect and reflect the show and Walt’s ‘philosophy’. In this I am consistent. It’s really easy. Just think of it in terms of a stage production and all the seemingly complex issues go away. It’s either right for the SHOW or it isn’t!! Even business related stuff. It is this basic premise that sets Disney apart from all other companies. You see, GE has complex problems and issues. General Motors has a whole bunch of business problems. Any other company on the world has multifaceted opportunities and business directions that simply boggle my little brain. But not Disney. Disney is different. Disney has a simple mission. Make magic. And ANYTHING that interferes with that, or detracts from it even slightly, MUST GO!!!!! And on the other hand, ANYTHING that furthers that cause, should be embraced or at least seriously considered. So, sometimes I do speak generally, but it is only because I have ranted so much on the specifics that I think everyone should know the ONLY specific that really counts. The SHOW!!!!
Now about this magical mission statement assignment from Professor DVCLB (adjunct of course ). I look back to some of my old postsWell, let’s take a look at them all together. (BTW, I’m glad to see you’re using the quote thing. It’s fun, ain’t it?) :bounce:
1- WDW evolves. It has to. Because after we go, its still here.
2- increase the scope and options of my vacation
3- a unique adventure
Hmmm. Doesn’t quite make up a mission statement, does it? You know, I’m in management. A couple of years ago a new Director was hired to head our Department. He went to all of the section heads and wanted a brief, on sentence, few words, mission statement from us all that would be the “WORD OF GOD” for our respective divisions. Now, you all know me. It takes me several sentences just to say hello!! How in the heck was I supposed to write a well-honed sentence describing my entire division and my life’s work!!! It was, by far, the hardest piece of writing I ever did. It started life as a page and a half of full-blown paragraphs and bullet statements. And the editing and condensing started. OH GOD!!! The agony!!! But I finally did it (with a lot of help, from anyone who would listen). And it really did set a focus for my Division. I had a sense of priority before the mission statement just because I lived it. But afterwards, EVERYTHING became crystal clear. There was no question whatsoever concerning prime goals, priorities and accomplishments. A very enlightening exercise.

And when I was pressed here, to put my feelings about Disney, into clear terms, I thought up the Walt Philosophy thing. Which to a certain extent is the mission statement. Exceed expectations and take care of the SHOW at all costs. And I have NEVER strayed from that one simple concept.
And that's why I preach specifics. Fix the fumbles. Protect the ball. And try to win the game.I agree. But you can’t win the game if you don’t know where the goal line is!! You need to focus. You need to know where you’re trying to go, otherwise you won’t know when (or if) you get there. You need a mission statement!!!! A general principle to guide you through the nonsense. To keep you away from ABC and paint companies. To steer you into automatically exceeding expectations and taking care of the SHOW at all costs.
Whew, that was long-winded, now back to details. Maybe, Disney should sell the sports teams, place live action and animation all under one wing, keep ABC, ESPN, and modify the Disney Channel to a fox family type channel. Then, put DCL and DVC into a division together. And then really put some meat into Celebration as an immersive attraction.Under what criteria did you make those decisions? To me they are all over the map.

YoHo
It does require you to do things with passion. To do things with quality. If you don't have the talents to do them right, and/or aren't willing to do what's needed to do it right, then it isn't done.NO!!!! It does not go far enough. Quality in what? We can have the best quality paint in the market and that still doesn’t make it fit with what the mission statement should say. You have to narrow the focus a bit otherwise, like thedscoop, you’ll be all over the map.

[Peter Pirate]

Well, I tried to be concise, to the point and specific, but apparantly I was wrong again! You guys are brutal:(

Jeff saysIf ABC affected us to a small fraction of a degree that Pinocchio affected us, none of us would be suggesting it be jettisoned. So, because the current ABC philosophy is wrong , that's it? I thought we were discussing the specific possiblities for running Disney the "Disney way"? Certainly you devout Disney fans don't doubt that Disney could install absolute quality to its programming do you? To dump ABC would be a huge mistake especially since so many extremely useful & profitable synergies still exist to aid the core mission statement...By the way, Pinnochio affected me very little...

AV, you mention that network tv is "dying" as a reason for it not being worth the effort. But as I recall the development of home video at one time led many to see the demise of movie distribution as we knew it and didn't the advent of the internet cause many to see the immediate downfall of numerous established business models? Have these things come to pass? No. Will they? Probably yes, but not in a blink. Therefore it seems totally incumbant on Disney to bring ABC into the quality fold of a Disney product even while keeping its operation at arms length (I do belive that would be sound). There is just too much potential with ABC to give up. Heck, one show alone allowed them to be number one for awhile. I say make it work Disney style then sell it when it is profitable and when AV's prediction for the decline of network influence seems more concrete.
:cool: :cool: :bounce: :cool: :cool:

[JeffJewell]

So, because the current ABC philosophy is wrong , that's it? Actually, I ducked a certain aspect of the "specifics' discussion, and wasn't suggesting anything in particular be done with ABC. I suggested that if ABC was doing some higher quality programming, that viewers and advertisers would follow and it wouldn't even come up to be searching for specific things to do better.

I don't have all the answers, I don't think I ever implied that I did. Suggesting specifics, in a lot of cases, has a lot more to do with personal preferences than does dealing with certain generalizations (not that folks shouldn't do it, I personally simply don't care to go in that direction).

For instance, I've never been much of a fan of Disney's live action, particularly the television live action. Even so, I can recognize the quality and care put into the old Mickey Mouse Club, or the Davy Crockett show. And I can appreciate the value those shows added to the company. If we were talking "specifics" at the time, I'd probably have said to cancel both of them, to label them "non-core," largely because I simply didn't care for them, didn't think they "fit." I don't think my thoughts on specifics would have been valuable to anyone, even me, in the long run.

So I'm not intentionally mucking about the question, nor even disagreeing, necessarily, with anything anyone has said. I just don't think my version of "specifics" should carry any particular weight, so why go into it?

If forced concerning the ABC topic, I'd squirm a bit and say that they should broadcast shows where talented creators were given the freedom to make something they loved, like, for instance, the pre Sci-Fi channel Mystery Science Theatre 3000. Happening to light on ABC briefly this evening, I instead saw PeeWee Herman wearing Austin Powers' clothes and hosting the short-bus version of Win Ben Stein's Money.

I don't have anything personal against Paul Reubens or anyone else involved with the show, I just didn't feel the love, if you see what I mean (also, I happen to think my expressions of disdain are far more entertaining than my gushing. You be the judge).

I didn't mean to try to divert anyone from specifics, and I think everyone's specifics are perfectly valid if we look at things from a particular point of view.

There have been times that Disney has done something I _never_ would have specifically suggested, but that has grabbed my imagination, once I saw it. I don't want Disney to do the things I specify, I want them to grab me some more. Do it so good I have to like it.

I certainly didn't mean to be brutal, nor imply that I thought you were wrong about anything in particular.

Jeff

[YoHo]

NO!!!! It does not go far enough. Quality in what? We can have the best quality paint in the market and that still doesn’t make it fit with what the mission statement should say. You have to narrow the focus a bit otherwise, like thedscoop, you’ll be all over the map.


I'm tempted to quote the CEO of my company who said that mission statements are for companies that don't know what they do......for companies that will fail.


Having said that, Landbaron I'm so dissappointed, you didn't even read my mission statement. Here I'll retype it.

To produce products people enjoy, to enjoy every product we produce. To exceed our expectations, to exceed our customers expectations. We are passionate in all we do. The short hand for this is Disney MAgic.
Our product is Entertainment (emotion, what ever, all entertainment)


That is plenty specific and NO, Paint could NOT fall under that mission statement.

(Did you know that Disney actually DOES make paint? Actually, I assume its some sort of License deal with a company. Head on Down to Menards and check it out, it comes premixed.)




As to ABC. I agree with Another Voice that Network T.V. is a Dying medium, but my problem is I can't figure out how you sell off JUST ABC and keep all the cable properties.(well, They can get rid of E! its offensive, but you understand) Cable properties as AV has alluded to and oothers have agreed with offer many oppertunities. Ideally, I'd turn ABC into a PAX/UPN/WB. the Broadcast version of TNN. That way you reach a bigger segment of the country, the problem is that you still need to generate ad revenue and court affiliates and the like. So, if they could sell ABC alone, I could deal with it. I would like to keep it, but I understand the nay-sayers.


P.S. I actually met the man who invented the Remote control. Crankey old Zenith Employee that was on Jay Leno when Jay did his show from Chicago a couple years back. I think He's still alive.
The guy doesn't watch T.V. :)

[doombuggy]

Whoa - cut down to 50 Disney Stores? You'll put me out of a job! while I agree that we have two many stores - I live just outside Philly and there are 6 - count 'em - 6 right off of consecutive Turnpike exits. That doesn't count the ones nearby in South Jersey. I haven't been to the new one in Cherry Hill, but I do not hear anything exciting about the decor. We do need to close stores, not a majority of them though. they are already closing some, anyway. I used to work 15 hours per week, now I am down to 4 - 7, if I am lucky. Yes, the merch needs to be improved. The economy is slowing down, which doesn't help. We have to be competitive in the market; unfortunately, the wheels turn slowly in a large corp.

We don't get a lot of guests in our store who have been to DCA, so I have heard nothing about it.

[DVC-Landbaron]

YoHo's Mission statement:
To produce products people enjoy, to enjoy every product we produce. To exceed our expectations, to exceed our customers expectations. We are passionate in all we do. The short hand for this is Disney Magic. Our product is Entertainment (emotion, what ever, all entertainment)
OK!! Great start. And I did get a little confused when I first read it (sorry). For many this would work. But for me, I think, it still needs to be more succinct. Or maybe just fine tuned a bit.

Did you know that Disney actually DOES make paint?
Yes!!! That's why I said it!!!

Thedscoop writes:
You have to narrow the focus a bit otherwise, like thedscoop, you'll be all over the [map].

"Or maybe thinking outside the box."
You know, you could be right. All the ideas we've talked about, with a few exceptions (ABC and Paint companies come to mind quickly) could be a Disney product. I really thought that ball teams were out of the question. Until YoHo and JeffJewell described a less mundane experience. And with a little Imagineering I can see it turning into part of the "SHOW". But the simple acquisition of a Baseball Team just doesn't cut it. They don't have to win. They don't have to be good (although it would help). But it is imperative that they make it special. CMs in the stands hawking hotdogs! A "Disney" seventh inning stretch. Special scorecards and probably hundreds of other little unique touches that make the team a Disney team. And some of that uniqueness must be translatable to TV!!! If they were to commit to that, then, and only then, can it be a "core" Disney product.

So you're right. We may need to do a little "outside the box" thinking (one of my favorite terms at work. My employees have come to hate it!! ;) )

I applaud your enthusiasm for specifics and your hope that it may cause a change, but I really think it's rather pointless with the current regime. It doesn't matter how many grand ideas we postulate on these boards. Ei$ner ain't listening!!!

(Now I'm really hoping AV steps in and tells the old LandBaron that he's very, very WRONG!!)