car pools..........I don't get it

[DisneyKidds]

Its not that the present does not factor into the equation...its just that the present alone does not provide the answer to whether or not there is a problem.

I very much agree. I agree that Disney has problems. It is how one views the severity of the problems that seems to differentiate our positions. You see Disney as having terminal cancer where I see it as having a bad case of warts.

 

[YoHo]

In the theme park industry there are very few producers and the Disney differential is not "impossible" to see at all.

That is the problem. It used to be that Disneywas unique even 10 years ago when you had Universal Orlando, Disney was completely Unique.

The fact that it is moving toward a commodity scenario only proves that Disney is failing.

It isn't inevitable that a DIsney Theme park become a commodity. It is a failure.


I know quite a bit about how something becomes a commodity. I used to work in the Cable modem Buisness. When we started out, Cable modems were unique and individul and garnered fairly reasonable profit margins, because there were maybe 4 reputable companies making them. Then within a year, it jumped to 20 or 30 companies making them. The buyers didn't care about attention to detail or high quality, they wanted cheap and reasonably reliable. It became impossible to make a profit in that market. THe company I worked for dropped out of the field. Other companies use cable modems as a loss leader. They became a commodity.


To suggest that anything bought or sold is a commodity shows a fundimental lack of understanding of the concept. (as it relates to themeparks)

 

[All Aboard]

In the theme park industry there are very few producers and the Disney differential is not "impossible" to see at all.

Therefore it's not a commodity. It's a product with unique and differentiable qualities. One that can be set apart by more than just marketing. Rather by creativity and thought that comes through in the manufacturing and delivery process and thus in the final execution.

I know what websters.com says, but "commodity" is used in the finance world to refer to products that are not differentiable (or barely so.) "Product" and "Commodity" are not interchangable synonyms. A commodity is a product, but not all products are commodities. A dog is an animal but not all animals are dogs.

Follow this linkI can't find "theme park experience" being sold anywhere in this market.

 

[DisneyKidds]

Its tough to reconcile your logic on this. On many occasions you point to the fact that the "complainers" on this board still go, so whatever WDW is doing wrong can't be that bad.

Let it be known that I complain too , but yeah, I do believe this.

Yet when its pointed out that some are NOT going, or going less, you dismiss it as too small a sample.

Hey, I have no proof, but I don't believe there are theat many car 4 people out there who have been Disney regulars in the past and find the level of decline a reason to not go back.

If those who don't go are too small a sample to matter, aren't those who do also too small a sample?

Not really. While attendance may be down as of late, we know there are tens of millions of people who go to Disney every year. Again, I have no proof, but my opinion is that the number of people who are aware of Disney's decline, or don't know a lick about Disney's past but have been recently, and find that the current offerings don't provide substantial value for the buck are a drop in the bucket.

I suppose we can break the state of Disney into two categories. The first would be the state of Disney compared to what it used to be. If you look at the business of Disney compared to the past and discuss the direction of Disney relative to it being what it was in the past and whether it will ever be the same again, I would agree that Disney has a much more serious problem than warts. That is sad because Disney can be so much more than it is today. The second category would be the state of Disney today as a unique, Magical vacation destination that provides it's guests with quality entertainment that their family enjoys, regardless of Disney's past. No matter how you look at Disney compared to its' past, Disney provides this now and will continue to do so in the future. Maybe in the future it won't do it as well as it did in the past, but in the big picture, the realistic business picture, it will, whether we like it or not.

 

[crusader]

The present serves as a point-in-time measurement, a way to judge what has been happening. Its not that the present does not factor into the equation...its just that the present alone does not provide the answer to whether or not there is a problem.

Past and present are the main predicators used subjectively time and time again to prophesize direction and future. Your viewpoint is segmented to differentiate a position based on speculatives - but you share a common ground with just about everyone here - your attraction to this place.

It isn't inevitable that a DIsney Theme park become a commodity. It is a failure

not at all - it is where the realist and idealist collide.

I would add, that we have too many people with inside sources pointing to how bad upper managment is, in fact how bad DIsney is run in general.

And again I say this is one of the main contributors to the cynicism thwarting every project in the works. If this information was exposed when the parks first emerged what would be the result of your initial experience? If you were privy to what was initially slated vs what you wound up with how magical would your past recollections really be?

 

[YoHo]

Maybe in the future it won't do it as well as it did in the past, but in the big picture, the realistic business picture, it will, whether we like it or not.

How can you know that it won't simply get worse and worse to the point where it can't even support itself?

for that matter your statement doesn't make any sense.

If in the future it doesn't do as well as it did in the past, then in the big realistic business picture, it is also doing worse. It can't both be doing worse, and doing fine. It is either moving up, moving down or staying the same.


Here, let me try some ascii art.

Magical Not Magical
_____________|____________
|-----------|
1984 2003


This is a description of what we are talking about. in 1984, we were firmly in the magical camp. no doubts. in 2003, its still magical, but we're a lot closer to Not Magical. Dangerously close in fact. BUT, ir is still magical, there is no doubt that in general, people vacationing to WDW are having a magical time. But it becomes more precarious. Now, lets say in 2008 we have nudged over to the not magical side. There will be people that still find it magical then too, that doesn't mean that things haven't gotten worse.

 

[DisneyKidds]

How can you know that it won't simply get worse and worse to the point where it can't even support itself?

I don't, any more than you know that it will.

If in the future it doesn't do as well as it did in the past, then in the big realistic business picture, it is also doing worse. It can't both be doing worse, and doing fine. It is either moving up, moving down or staying the same.

Again, 'worse' is a relative term. Case in point your ascii art. I don't find WDW nearly as far down the Magical continuum as you do. In all honesty, there will be periods in the future when Disney is up, down, and flat. Furthermore, one can be doing 'worse' and still be fine. For instance, due to a recent MTA fare hike my commuting costs will be going up. Financially I will be doing 'worse', but I will still be fine.

On the whole Disney may be worse in the future than it was in 1972 or 2002. Who knows, maybe it won't. However, that 'worse' will still be Magical and Disney will continue to be a going concern, and a unique one at that. You and I may not like what it looks like compared to 1972 or even 2002, but I bet we'll still be going. Where's the proof? Neither of us has any either way. I guess we'll just have to wait and see what our discussions look like in 10 or 20 years, assuming we still have the time and inclination to chat the way we do today .

 

[YoHo]

The proof available is in the trends. The Walt DIsney studios in France, DCA in California, Dinorama in AK. These are all leading to a conclusion. Name one thing, one positive magical thing that the company has provided that is in scale with these failures and I might grant your supposition that things aren't trending down. There is plenty of evidence that things are going south, what we lack is evedince that anyone intends to do anything about it.

 

[DisneyKidds]

The proof available is in the trends. The Walt DIsney studios in France, DCA in California, Dinorama in AK. These are all leading to a conclusion.

I'll give you that we are currently on a downward trend. I've agreed to that many times. However, I'd hardly say we can use this current trend to draw any definitive conclusions about the future. All the things you mentioned are from the last two years. I'm not going to bet the farm on that trend. I suppose we'll have to agree to disagree, and one of us will have the opportunity to say 'I told you so' at some point in the future .

Here's where I default back to the present. Your perception based on the trend you see, and the conclusion you think it has led to, has you viewing the Magic of WDW as having almost completely disappeared. I don't agree with that assessment. Of course that puts us squarely in 'SubjectiveLand' . In the end, I recognize the problems, keep an eye to the future, evaluate whether Disney is worthy of my vacation dollars, and I go. I go twice a year. My last trip was not one iota less Magical than one I took 12 years ago. Was it different in some respects? Sure. But less Magical? No way. I'm sorry that you can no longer see that Magic.

 

[raidermatt]

DK, when you are talking about us zealots, and pointing out WE still go, that does not include the 43 million...wait...40 million....wait...37 million other folks who go. Again, you have referred to us as a minor subset....a grain of sand on the beach if you will. If so, then the fact that WE still go as just as inconsequential as the fact that some of us do not go.

Maybe in the future it won't do it as well as it did in the past, but in the big picture, the realistic business picture, it will, whether we like it or not.

The realisitc business picture requires growth. Not stagnation, and certainly not retraction. If the parks do not do as well as they once did, Disney the company has a huge problem because they must find other businesses that not only grow, but whose growth more than makes up for the parks decline.

If the parks really do become a zero or negative growth business, especially if its due to mismanagement, its hard to fathom seeing the problems as anything other than significant.

Your viewpoint is segmented to differentiate a position based on speculatives - but you share a common ground with just about everyone here - your attraction to this place.

Anything associated with the future is based on speculation. The variables are the judgements/opinions we make based on our speculation, and our level of confidence in those judgements.

In the case of the cars, you're right, the common ground is the attraction to WDW (current and/or past) and this board. But the differentiating factor is our speculation with regard to the future. Most of us arrive at that judgement based on comparisons of trips to past trips, and following news/rumors with regard to the company.

not at all - it is where the realist and idealist collide.

Define commodity however you wish. You were looking for an understanding, and to gain that understanding, you must look at the way commodity is being defined in this discussion. Assign a different word to it if you wish, but the key is that entertainment is a product that relies on differentiation. Unlike the orange market, or even something like the pencil industry, where there just isn't going to be much differentiation on product.

Its a fundamental difference in industries that must be recognized in order to successfully run a company such as Disney.

 

[YoHo]

I'll admit, I haven't been able to be in the world since 2000. (that big stupid Wand in Epcot certainly affected my magic.) However, as an Annual Passholder to DCA, I get to see Disney's failures up close and personal a couple times a year. DIsney has made it very clear that DCA is the way they intend to build things now, bragged about it. There is no magic in DCA. The only small hints of magic are from rides cloned from WDW like its Tough to Be a Bug and Muppetvision 4D.

I could actually sense the change in my gut when I entered the park. NO MAGIC. I'm not in car 4 yet, but I'll tell you If they keep on the DCA path, I will be far too soon.

 

[YoHo]

not at all - it is where the realist and idealist collide.

So your suggesting all products and services MUST become commodities?


Never mind that fact that services generally are never commodities and that Themeparks are service oriented?


We need to agree on a definition before we can have a discussion.

 

[raidermatt]

I'll give you that we are currently on a downward trend. I've agreed to that many times. However, I'd hardly say we can use this current trend to draw any definitive conclusions about the future.

Of course we cannot draw any real definitive conclusions about the future, particulaly more than a few months down the road. If any of us could, we likely wouldn't be taking the time to waste time here.

But let me ask you this...

If Disney were on an upward trend right now, would you likely find more reason to be optimisic about the future, or pessimistic?

In other words, when the majority of the evidence points in one direction, what logical reason is there to believe the future will be contrary to that direction.

To make the application more practical... Is Eisner going to change his ways? Why? Why hasn't he yet?

Who is the replacement you see coming in and changing things for the better, keeping in mind it is Eisner himself being asked to name a replacement?

Its not about a definitive answer, but rather about where the indicators are pointing.

 

[DisneyKidds]

DK, when you are talking about us zealots, and pointing out WE still go

Come on Matt, stop being devisive. I don't see you any more as a zealot than you see me as an apologist . Really, it isn't about ME vs. YOU, US vs. THEM, WE vs. THEY. Don't turn it into that.

the 43 million...wait...40 million....wait...37 million other folks who go.

Sorry Matt, I'm not going to play the attendance game as I don't think any of us know what it really means and where it will be longer term.

The realisitc business picture requires growth. Not stagnation, and certainly not retraction.

Agreed. Last I checked I did get a dividend check this year and I'll check the annual report again but I think Disney was in the black, despite all the non theme park and theme park failures. Disney has been thru down times before. Disney is in one now. However, I hardly feel that Disney's long term viability, and that of the theme parks, is in danger. Have you sold your stock yet? After all, $17 a share is better than nothing if things are that bad.

If Disney were on an upward trend right now, would you likely find more reason to be optimisic about the future, or pessimistic?

Of course I'd be a bit more optimistic. However, I wouldn't fool myself and discount the possibility that there would be rough times ahead. Just as rough times now don't make me believe that there are not brighter times ahead. The current Disney management boneheads may not be making things any easier, but history shows us that business is cyclical.

In other words, when the majority of the evidence points in one direction, what logical reason is there to believe the future will be contrary to that direction.

Boy, you'd have condemned an awful lot of successful companies during many times in their history using this logic.

Let me ask you this.......................

If Disney stock were to drop to $10 and you had some extra cash to invest, would you be more inclined to sell what you currently own before the bottm drops out, or increase your holdings?

 

[crusader]

I know what websters.com says, but "commodity" is used in the finance world to refer to products that are not differentiable (or barely so.)

Which "world" are we in? (sorry - couldn't resist!) I respect your point but I stand by my context - again!

Anything associated with the future is based on speculation. The variables are the judgements/opinions we make based on our speculation, and our level of confidence in those judgements

How can we be so confident about the future when we have no idea what it holds?

but the key is that entertainment is a product that relies on differentiation.

And the success of that product is preference oriented and subjective.

The zealots on these boards as WFH defined are well informed consumers. They approach this market with unsurpassed clarity and a wealth of opinions. That level of knowledge provides sound reasoning when making an informed decision about the worthiness of your time and money.

As Mr. Kidds clearly points out -

In the end, I recognize the problems, keep an eye to the future, evaluate whether Disney is worthy of my vacation dollars, and I go.

Which I suspect is the uniform approach being applied by many on these boards.

 

[All Aboard]

I respect your point

It's not really my point, rather just a basic business term that you are improperly using.

but I stand by my context - again

Then I guess I'm done with this discussion. You think Disney is peddling a commodity, I don't.

 

[raidermatt]

Come on Matt, stop being devisive. I don't see you any more as a zealot than you see me as an apologist . Really, it isn't about ME vs. YOU, US vs. THEM, WE vs. THEY. Don't turn it into that.

I'm not. I only used zealot because one of my car poolers used it. Its not about me vs. you. The point was, and continues to be, that you have used the fact that many of us car 3'ers still go to WDW as evidence that things can't be that bad. After all, if we still go, even with all of our criticsim...

In this case, you discounted the fact that some don't go, or don't go as much.

Its not about anyone vs. anyone. I happen to agree that we are far too small a group be a representative sample with regard to our vacationing habits. That goes for those of us who go as well as those of us who don't go.

Sorry Matt, I'm not going to play the attendance game as I don't think any of us know what it really means and where it will be longer term.

Of course we don't "know". Doesn't mean they have no relevance.

. Last I checked I did get a dividend check this year and I'll check the annual report again but I think Disney was in the black, despite all the non theme park and theme park failures.

Being in the black is not growth. Earnings, and more importantly, revenues, must grow.

However, I hardly feel that Disney's long term viability, and that of the theme parks, is in danger.

Fair enough, but remaining viable isn't the goal Disney should have in mind.

Of course I'd be a bit more optimistic. However, I wouldn't fool myself and discount the possibility that there would be rough times ahead. Just as rough times now don't make me believe that there are not brighter times ahead.

So downward trend = optimisitc, upward trend = more optimistic.

The current Disney management boneheads may not be making things any easier, but history shows us that business is cyclical.

History shows us that economies are cyclical. Industries are also to a certain extent, though they do come and go. However, history does not prove that the performance of any individual company is cyclical. An individual company's performance CAN rise and fall with the cycles, but its performance is much more subject to its own actions.

Further, as a public company, you are rated as an investment compared to other companies. A company cannot rely on an improved economy to make them a preferred investment, because an improved economy makes their competition stronger as well. Disney is using the economy as a cop-out for its own poor decision-making.

Boy, you'd have condemned an awful lot of successful companies during many times in their history using this logic

I haven't condemned anything. I'm talking about probabilities. When negative evidence outweighs the positive, the result will be negative more often than not. That doesn't mean a company CAN'T overcome a negative situation, but it does mean there must be a reason to believe they will buck the downward trend they have created.

Where is the evidence that is strong enough to make one believe that Disney's trend is more likely to be reversed than not, at least anytime in the near future? Not CAN it be reversed, but what makes it LIKELY to be reversed?

 

[raidermatt]

How can we be so confident about the future when we have no idea what it holds?

The fact that we do not have absolute confidence about the future does not preclude us from forming opinions about what we think the future is likely to hold, or how a certain course of action will impact the future.

To use a timely analogy, many people believe invading Iraq was the right thing to do for the future, others do not. Nobody KNOWS for sure whether the impact of the war will have a net positive or net negative affect on the future. However, in order to decide which course of action should be taken, one must use the information available to them and form and opinion.

Of course if one is not in a decision making position, one has the option to simply not form an opinion.

Same thing here. Everyone is free to simply not try to make a judgement about where Disney's course of action is taking them, and what is likely to change or not change. However, some of us have made such judgements, and most of them vary to certain degrees. Such is the case with any topic. We just happen to be discussing Disney.

 

[crusader]

It's not really my point, rather just a basic business term that you are improperly using.

Wasn't used as a "business term" - was used in its literary form. If that is difficult to reconcile than leave it.

Let's rephrase - Do I think Disney is peddling something? Yes I do. What seller isn't.

 

[DisneyKidds]

Doesn't mean they have no relevance.

No, it's just that I don't know what the relevance is .

So downward trend = optimisitc, upward trend = more optimistic.

Depending on the company, sure. Actually, depending on what your motivation is you might be more optimistic about a company's potential when they are on the downward trend. I only wish I had the financial means to act on my optimism for IBM when the stock was wallowing around $40 back in 1993. Today it stands at over $80 after splitting numerous times. Now I'm not as optimistic about Disney now as I was about IBM back then, but I believe that Disney is one of those bellwether companies that will make a comeback. No, I have no proof. However, Disney has the assets and balance sheet that will allow it to rebound. Girstner did wonders for IBM once. Eisner did it for Disney. Someone will do it for Disney again.

History shows us that economies are cyclical. Industries are also to a certain extent, though they do come and go. However, history does not prove that the performance of any individual company is cyclical. An individual company's performance CAN rise and fall with the cycles, but its performance is much more subject to its own actions.

I attribute much of Disney's recent poor performance to bad management. I also believe that economic and industry factors are in play. As you say, economy and industry will change, that is their cyclical nature. So, too, will Disney management. Eisner can't live forever. No, I don't know who we will get, but it is hard to imagine it getting worse. Combine all that with good fundementals on the financial side and I think there is reason to have optimism for Disney in the long term. Short term is another story. However, I'm a big picture, long term kind of guy. Combine that with my personal, subjective enjoyment of Disney's current offerings and what's not to be optimistic about?

Let me ask you this, Matt...................

Back in 1997 when the Silver and Black went 4 and 12, did you throw in the towel on them or was there some optimism there that eventually they'd have another AFC championship in them .