DEBATE: Does Disney understand their market?

[larworth]

Looks like DSP is also having a rough start-up. article

If we look at the last 3 non-Japan parks they all seem to be falling short of THEIR own projections. For the guys who are supposed to be experts in understanding their customer base, it seems more like a random walk.

DAK opens with reasonable adherence to standards, but has potential “theme” and number of attractions issues. A problem they evidently don’t think can be addressed by lowering price points, nor by major additions.

DCA opens with more attractions than DAK, but they skimp on standards and attention to the “Wow” factor. They have to make massive price point adjustments and many unplanned additions.

DSP opens with an even shorter list of attractions, and light application of standards. They do open with lower price points, but still seem to be too high. Corrective action unknown at this time.

Launch and learn is an acceptable strategy, just seems they always over-estimate their value proposition (goes beyond their imperfect ability to forecast the economy). Just guilty of over-selling the street, or a fundamental flaw in their market understanding?

 

[raidermatt]

Just guilty of over-selling the street, or a fundamental flaw in their market understanding?

A little of the former, a lot of the latter, all guided by a mis-placed philosophy.

I know this sounds like a broken record, but really, it all goes back to philosophy. When your goal is to provide as little as possible to acheive certain financial results, you get things like DSP and DCA.

I suppose if they had a perfect understanding of their market, they would still manage to hit their financial/attendance targets. But when you are trying so desparately not to provide more than you absolutely have to, you're almost inevitably going to undershoot the mark.

And your chances of creating something that is capable of propping up a media conglomerate in troubled times (see DL and MK) is practically nil.

 

[DisneyKidds]

I know this sounds like a broken record

Welllll gooooollllleeey, ya think so . Actually, so much so that I thought of answering for the disenchanted majority as I knew this very answer was coming, but I decided to let them speak for themselves..............................

 

[raidermatt]

You mean there are people "enchanted" by DCA, DSP and their financial/attendance performance?

I know, its all the economy's fault...

(Except in Japan, where such economic law does not apply as it does in America and Europe)


People develop and follow philosophies for a reason. So do businesses.

If you work to develop a good one, and stick to it, it can be used in just about any situation. Hence, the "broken record".

 

[Bstanley]

Hmm, interesting.

The statistics from Orlando (WDW, Orlando airport stats and USF) show that international travelers are staying home.

But - European travelers are not going to DLP/DSP either...

So where are they going? Are they all just staying home? Or are other vacation spots seeing improved numbers?

 

[DisneyKidds]

Originally posted by raidermatt
You mean there are people "enchanted" by DCA, DSP and their financial/attendance performance?

I know, its all the economy's fault...

(Except in Japan, where such economic law does not apply as it does in America and Europe)


People develop and follow philosophies for a reason. So do businesses.

If you work to develop a good one, and stick to it, it can be used in just about any situation. Hence, the "broken record".

Ahh, Matt. I was just kiddin ya .

I really can't speak about DLP or DSP.

 

[Luv2Roam]

I have e-mailed back and forth with even die hard Disney fans about DLP Studios. No one has said WOW. They all have said *okay*.
Does seem like another DCA, with maybe even less to offer, from what little I have heard from attendees.

 

[Bob O]

If disney did understand their market they never would have built DAK/DCA in the manner that they did. They knew their market when they built Epcot but were off when they built MGM and show they havent learned their lessons yet. Now the OLC has shown they understand their marketplace and the attendance shows,

 

[larworth]

I was trying to separate intent from understanding for a moment. I too complain that they are intentionally making choices at the wrong end of the “better for the short vs longterm” spectrum. That knowingly cutting corners allows for higher returns in the shortterm, at the expense of what is really in the longterm best interest.

Let’s assume they are fully conscious of the trade-offs they are making. That while they have the wrong intent, that they do understand the market enough to design and price the path they pick accordingly.

Are these mis-readings (remember, they also mis-read the TDS situation) an indication that they have poor market intelligence or is this just fundamental to this market. One where it is difficult to predict customer behavior.

 

[PKS44]

I agree with Matt-it just does not matter what they understand as long as they are misguided by their underlying philosophy...they get data and they massage data to make it fit what they want it to fit so that it jibes with their philosophy...thus they scoff at TDS as a bloated overinvestment not because they don't realize what a hit is would be (which they did not) but because they don't really care if it is a success or not-that kind of success won from risk and investment is not part of their business philosophy...to them it is like playing the lottery (it is not-but that is how they see it...sure somebody wins big, but they are not interested in any gamble) Investment must be cautious, returns and margins must be maximized now -long term is meaningless...the thing their philosophy fails to account for is that such a cautious approach is not cautious it is a loser..innovation is mandatory, risk is inherent in any proposition that is likely to pay out big....Sure things are sure of one thing only- that there are no sure things......it is like the guy who keeps his money in the mattress or the low paying savings account because of the short term risks of the stock market...WISE investment and risk are the ONLY way to stay ahead and win...those who hesitate are lost...as current Disney management has amply demonstrated time and again.

 

[raidermatt]

Given your assumptions, larworth, yes, there is a certaion amount of uncertainty in this market, and that would certainly lead to some misses.

But I think the degree to which Disney has mis-read these situations is an indication that they are clearly lacking in this area and not doing as good a job as they could.

This seems to be part of a disturbing pattern of drawing poor conclusions from data and failed situations.

Euro Disney's original struggles appear not to be due to an "over-investment" in the park, but more due to the hotels. Yet the conclusion drawn was that "over-done" parks are too risky, and simply will not succeed. So, AK is scaled back, and falls short of expectations.

Apparently, the conclusion drawn was that even AK was too "over-done", so here comes DCA and DSP. Yet they fail expectations by an even greater margin.

Meanwhile, the one park that does get a higher level of investment is TDS, and its a smash.

Yet they still seem unwilling to accept the fact that their cautious strategy is really a major cause of the problem.

Its hard to leave philosophy out of the equation, because it is the guiding force behind all decisions. But even if we do leave it out, its clear that Disney has a fundamental mis-understanding of what makes its guests tick... Its a tough thing to do, especially when you are using the "provide as little as we have to" philosophy, but that's why people get paid the big bucks to figure it out. Nobody's perfect, but they've got to get better.

 

[PKS44]

IOA suffered two problems-1)it is primarily a park for teens and up with only a little bit for toddlers people with little ones did not realize this when they went and found themselves with little to do and little good to say about the park...the presence of the Dr Suess stuff led people to think the park might have more in general than just the one area...this led to bad word of mouth from the parents with little kids-(we sure heard it from our friends with little ones)and people stayed away 2) Problem #2--...the target audience was just beginning to grow when IOA opened-- that audience is reached differently than the classic theme park Orlando?disney group and that was not appreciated initially---now teens/twentysomethings have found it and the same audience is growing everyday as the echo boom grows...

Paul

 

[space42]

Originally posted by thedscoop
...this conversation is almost impossible to have without adding the initially very tepid response to IOA.

By all accounts, IOA was designed to directly compete with Disney parks in not just rides but in theming, immersiveness, depth and such.

Yet, when IOA opened, it remained way under projected attendance until Universal finally lowered their attendance projections.

So, what is one to think when they look at IOA, the type of park many seem to be clamoring for, and just see more poor results right out of the gate.

Because IOA is not even close to the Disney we all know and love? They may have spent big bucks on the park, but it still seems half baked to me. Large "un-themed" (but great) roller coasters that you can see from other areas. Ugly "un-themed" space shot. All of this goes a long way in destroying the great theming in other areas like Jurrasic Park and Lost Continent. If you go to IOA looking for a "Disney" type of experience, you will be dissapointed.

I think the park may have a perception problem also as what you see from the road are the big coasters and space shot. It's not really shouting out "come see me, I'm a great family vaction spot"

I know I cannot be the only one who was underwhelmed with IOA. Perhaps this could be part of the reason it underperforms? Or perhaps Universal mis-judged the Orlando market?

 

[Bstanley]

Islands of Adventure is an example of a Decorated, rather than a Themed park IMHO.

Some of the Islands do have a story, but others are just 'places with rides'.

 

[EUROPA]

Originally posted by space42
Because IOA is not even close to the Disney we all know and love? They may have spent big bucks on the park, but it still seems half baked to me. Large "un-themed" (but great) roller coasters that you can see from other areas. Ugly "un-themed" space shot. All of this goes a long way in destroying the great theming in other areas like Jurrasic Park and Lost Continent. If you go to IOA looking for a "Disney" type of experience, you will be dissapointed.

I guess if they had put a building around them and added Day-glow cardboard cutouts IOA would be beating guest away with sticks?? Isn't it much more likely that IOA attendance will increase as Universal becomes more and more of a destination and not just a 1 or 2 day visit? I mean after all we have an huge number of Disney snobs on the board that will not even admit that Universal has built two really great parks. I'm still not buying that IOA is a failure speech either. Universal will never have that Disney type of experience because Universal is not Disney. I wonder how many people 10-15 years from now will be saying, "I don't want to go to Disney because it does not have that Universal feel to it"? I think Universal is on the right track. They have won my family over. The more they add the less we go to Disney.

 

[raidermatt]

Scoop, IoA may have been intended to compete directly with Disney, but if so, it fails due to the same reasons Disney is slipping.

IoA may have themed its thrill rides better than others, but the thrill rides are still too high a percentage of their attractions to steal away a lot of families. (hmmm, maybe THAT'S a lesson Disney could learn...)

Also, IoA doesn't have the built in family appeal of Disney's characters and reputation. Yes, Disney is milking that and it will eventually run dry without new creations, but for now, its an advantage Universal does not have. Yeah, Woody Woodpecker is funny, but he is not beloved at the same level as Mickey and the gang.

The roller coasters maybe more exciting than Disney's, but are they really THEMED better than Big Thunder, Space Mountain, and even RnRC?

So, what is one to think when they look at IOA, the type of park many seem to be clamoring for, and just see more poor results right out of the gate.

Frankly, I would be very disappointed in this park had it been Disney. Yes, some of the attractions are strong enough, and its probably better than DCA, but it still falls short of what Disney should be doing. (Note- That does not mean it falls short of most of what Disney IS doing. But that is really pointless, since most of what Disney is doing is falling well short of expectations.)

Also, it relies too much on height-restricted attractions.


Yes, IoA has problems, but its not due to it being TOO good...

 

[raidermatt]

Would IOA be considered a "full" or "completed" park when built (or for that matter today since nothing much has been added since day one)?

Two caveats...

1- I've never been there because there are too many things my son can't ride, and my wife wouldn't want to.

2- No park should ever be considered "complete".

That said, from what I know, yes, IoA could be considered an essentially full park as it stands today. That's not to say it couldn't become more profitable with further expansion, but I count 24 attractions, and without regard to quality/target/etc, that would seem to qualify as a "full" park, at least at opening.

 

[Bob O]

IOA is a example of a excellant themed park that matches disney is the ability to create a themed park!! Of course people here on a disney site will never agree but polls by other sites like amusement today golden ticket awards/theme park insider that arent over-run with disney fans differ from the results of a disney site. On other polls that are not stacked IOA rates as good or better than any disney park.
IOA was built as a completed park from day one(unlike dca/ak) and have added a attraction since the park opended(storm force in the marvel comics section.When a park is complete from day one and is new you dont need to add much but im sure as the park grows with age rides will be removed and replaced with updated attractions.
Their is more than enough to keep kids occupied at IOA as compared to either AK/Ecpot/MGM but not as much as MK or US. The park has stolen away days from wdw when my family goes to FLA and my older kids perfer it over any disney theme park which is a negative for disney because when they have kids their allegiance will lie with USF rather than wdw.
Is it different than disney, yes but that is a major postive and not a negative and my family for one wasnt underwhelmed at all with IOA but was w/AK and soon i will be able to judge DCA.

 

[PKS44]

With a Six Flags near so much of the country, and similar thrill based parks near the rest, that a thrill based park will be a magnet for guests is unlikely. Themed lines leading to unthemed yet great coasters can attract a select niche, but for the WDW level of success (or nowadays Tokyo kind of success) it has to be really special and themed. I don't know about Universal lacking characters as Matt says. Woody Woodpecker may not be much, but the whole Nickelodeon stable is very popular with kids nowadays, more so than Disney characters.

Paul

 

[raidermatt]

Woody Woodpecker may not be much, but the whole Nickelodeon stable is very popular with kids nowadays, more so than Disney characters.

Yes, but I am referring to appeal to everyone, not just the kids.

30 years ago, Popeye and Woody Woodpecker were probably more popular among little kids than the Disney characters were. But the key is lasting appeal, and the Disney characters have accomplished that to a greater degree than anyone elses.

Plus, you have the Disney movie characters, which haven't been as great lately, but does include characters popular with kid's of the 80's and 90's. Ariel, Belle, Simba etc.

Again, not saying it automatically makes Disney's parks better, its just an element of appeal and reputation where they have an advantage.

BobO, as much as I agree that IoA is a more complete park than what Disney has been doing lately, it still remains true that its not all about putting in things that keep kids occupied. We do not take family vacations so I can go ride 5 or 6 thrill rides while my wife takes my son to the kiddie areas.

Sadly, however, Disney is also starting to move in this direction, which will eventually decrease their advantage in this area.

Europa/BobO, you can point to your family's personal preference all you want, but until the numbers start bearing out the "stealing" theory, its nothing more than anecdotal data. The fact is that Universal's attendance fell more than Disney's did last year. IoA fell short of expectations, period.

Comments like "Disney snobs will not admit that Universal built two great parks" are pointless. If the parks are great, attendance will bear that out, and so far it hasn't.

Maybe that will change, maybe it won't.

Call that snobbish if you want, but its really just the reality of the situation.