Disney's Park Strategy

[erc]

When taken in context with the statement I cited above, I personally think (and I'm sure some will disagree) it means that they see large cap-ex investments in additional park capacity taking a back seat to the "long life assets" that have a a long term affinity with customers.

In other words, leverage the nostalgic equity for as long as possible.

Well, as much as I would like for them to invest in theme-park expansion, if their planners could not predict an increase in attendance or increased revenue from this expansion, it would be a dumb thing to do. As long as we foolish folks keep shelling out thousands of dollars to jam elbow to elbow into the theme parks, they have no need to change. In fact they have shown that they can increase the park admission to over $100 per day and people still flood the parks.

 

[Laketravis]

I think it means they see the parks product as mature, no massive expansions. Not necessarily bad, but not exciting. Unlike Universal which is still in the building phase. I think thats what they are addressing.

Yes, I'm with you. . . I hope not, but your take is one possibility with parks pretty much as they stand now qualifying as the "long-term assets" and the new purchases of those movie franchises being the "new fad" or "business cycle" that they aren't chasing.

Well, as much as I would like for them to invest in theme-park expansion, if their planners could not predict an increase in attendance or increased revenue from this expansion, it would be a dumb thing to do. As long as we foolish folks keep shelling out thousands of dollars to jam elbow to elbow into the theme parks, they have no need to change. In fact they have shown that they can increase the park admission to over $100 per day and people still flood the parks.

Exactly.

It would be naive to think that a C-level executive of a multi-billion dollar corporation is going to publicly state that "As long as we can continue to increase prices and pack the parks with people who are content with what is already there, we don't need to waste money on new experiences". Instead, they will use carefully crafted talking points like "theme parks......are long-term assets that have a long life and we hope have long-term affinity with consumers."

Likewise, "Disney's strategy going forward is to do less not more, he explained, but to do the things they take on in a bigger way and all over the globe. "Narrowing our focus," Rasulo called it. "More investment in properties we think have legs." can translate into "It's smarter for us to do less by focusing on a smaller number of opportunities we believe will provide much larger and greater returns, than to do more things that provide little to no return at all"

Like I said, I hope I'm wrong and those statements really mean they've got big plans for WDW.

 

[prudence64]

That's how I take that statement on its face as well. I don't see at all how it jibes with the current "slap Frozen everywhere on everything" practice, however.

That's a good point, but frozen is their own creation they already own so the strategy is to keep it going so it becomes nostalgia. I'd say the more questionable example is avatar. Wildly successful at the box office but will it have lasting power to have made that a good investment?

 

[Laketravis]

....I'd say the more questionable example is avatar. Wildly successful at the box office but will it have lasting power to have made that a good investment?

Interesting that you brought that up, here's a recent article that asks the same question:

Five years after Avatar

"....It seemed like the future of cinema had arrived. And yet a half a decade after its release, it actually feels like the longer-term impact of the movie has been oddly negligible."

"Few could deny that Avatar captured the imaginations of millions back in 2009 and 2010, but interest seems to have waned over the years. Was the film’s success a one-off, a mix of Cameron’s old-school showmanship, curiosity in the much-hyped 3D format, and a lack of serious tentpole competition?"

 

[ziravan]

How would you interpret this statement?

"There is a long-held belief at Disney," said Rasulo, "that you don't invest around business cycles, because whatever we put out there, whether it's a film, a television show or the Disney Channel, or a show on ABC Family, theme parks or cruise lines, are long-term assets that have a long life and we hope have long-term affinity with consumers."

I think this perfectly explains the five hour waits to see the sisters this summer. Disney is saying their policy is to not get worked up by fads; they are looking for long term assets.

Once they realized the sisters were more than a fad, Frozen exploded in the parks. The five hour waits were in the middle of the catch up curve.

I guess that policy sucked if you waited five hours. But. It did ultimately translate to changes in the parks, something you are suggesting this article is suggesting won't happen.

I mean, aren't you glad Disney is taking your concerns to heart and investing in the parks by rebooting a Frozen ride at EPCOT....

 

[Laketravis]

I mean, aren't you glad Disney is taking your concerns to heart and investing in the parks by rebooting a Frozen ride at EPCOT....

I think that's a perfect example of doing less, not more.

 

[Tarheel girl 1975]

For the most part, I feel like this statement was taken out of context. I think that the article was mostly about Disney's tv/film division.

That said, There are a few ways I find Disney's risk management philosophy concerning:

1. That very few (if any) new attraction will be built that are not tied to an existing intellectual property. This would be a shame, since some of my favorite rides in the park (BTMRR, HM, POTC) were not tied to any IE when they built.

2. We'll see a lot more rides like Under the Sea, which are just copies of existing rides in other parks. Carsland may be the coolest thing ever, but I don't want DL and WDW to have identical rides.

 

[erc]

That's how I take that statement on its face as well. I don't see at all how it jibes with the current "slap Frozen everywhere on everything" practice, however.

I think they have actually waited quite a while before deciding Frozen was a long-term franchise worth investing in. Look at all the videos of Disneyland and WDW from the late 80's. Roger Rabbit was almost the leader of the Disney Parks. Now do any kids going there today even know who he is? That was when they were chasing every flash in the pan within their movie universe. I should say Lilo and Stitch were the same way, so it wasn't just a late 80's thing.

 

[larryz]

I apparently interpret completely differently than you do. I interpret it as they don't like short term fads for investments.

You mean like one of Cameron's movies?