In Defense of Bob Chapek

[starlite_]

I agree with everything @Liquidice said.

I've said it before and I will say it again, Disney is missing it's creative and ppl lead. Chapek is good at quick profits but it is coming at the expense of what I see as the "Disney Experience/Magic" and it is specially obvious at WDW. All the little things that made the parks valuable to many ppl are either being dismantled or are paid for now. I can't believe for example that it's taken 4 years to build a roller coaster when it took them 3 to build Galaxy's Edge. There needs to be a balance to trying to maximize all profits vs maintaining a high quality Disney Experience.

 

[wabbott]

At the risk of getting flamed, I'll put this out there - hire John Lasseter back. He IS Pixar.

 

[NYDisGuy]

There has been a war going on at Disney with "diehard" Disney park goers who come to the parks time and time again and Disney itself. Maybe this would have happened under Iger as well - but it started under Chapek's leadership.

You made good points but I disagree with this. You can trace this war back to when Roy E. Disney stepped down and pushed Eisner out around 2005 because as in his own words called Disney a soulless company. He supported Iger but at that point the cutting began to happen and also ticket increases. There was a 20% increase for base tickets within Iger's first 2 years and AP went up $100. From 1980-1995 AP's went up $100 total, from 2005-2020 it went up $800.

At that point Diehards started to question why there wasn't a loyalty program for repeating customers. Then discounts started to get reduced, perks were cut, online dining reservations were introduced and the rest is history. Now I get everyone saying supply and demand, capacity etc. but Disney resorts used to be something where you could spend the day at your hotel because there was so much going on in terms of activities such as random character meet and greets, live bands, special parties etc. that they got rid of but that eased some of the pressure off of the parks. I remember Caribbean Beach being packed in the early 2000's because they had an exotic bird show, a steel drum band, sailing lessons and a beach volleyball competition all going on at the same time and it was no additional cost.

Iger gets alot of credit as Disney CEO because of his Marvel, Star Wars and Pixar acquisitions among other things but parks were completely squeezed during his tenure. And you can look back at the history of these boards, even going back to 2008. Plenty of people were jumping ship because of the cost hikes in the middle of a recession while simultaneously laying off 2000 people that supported WDW. Chapek is taking it to new heights but this has been going on for years. And like always some die hards will leave, some will stay, and new die hards will hop on board.

 

[wabbott]

The parks have always been the cash cow for DIS, and what do you do with cows?

https://www.investopedia.com/terms/c/cashcow.asp

A cash cow is also a reference to a business, product, or asset that, once acquired and paid off, will produce consistent cash flows over its lifespan.

 

[lugnut33]

I disliked Iger and I disliked Bob Chapek before he became CEO. Heck, I disliked Chapek before he was head of parks.

 

[Liquidice]

You made good points but I disagree with this. You can trace this war back to when Roy E. Disney stepped down and pushed Eisner out around 2005 because as in his own words called Disney a soulless company. He supported Iger but at that point the cutting began to happen and also ticket increases. There was a 20% increase for base tickets within Iger's first 2 years and AP went up $100. From 1980-1995 AP's went up $100 total, from 2005-2020 it went up $800.

At that point Diehards started to question why there wasn't a loyalty program for repeating customers. Then discounts started to get reduced, perks were cut, online dining reservations were introduced and the rest is history. Now I get everyone saying supply and demand, capacity etc. but Disney resorts used to be something where you could spend the day at your hotel because there was so much going on in terms of activities such as random character meet and greets, live bands, special parties etc. that they got rid of but that eased some of the pressure off of the parks. I remember Caribbean Beach being packed in the early 2000's because they had an exotic bird show, a steel drum band, sailing lessons and a beach volleyball competition all going on at the same time and it was no additional cost.

Iger gets alot of credit as Disney CEO because of his Marvel, Star Wars and Pixar acquisitions among other things but parks were completely squeezed during his tenure. And you can look back at the history of these boards, even going back to 2008. Plenty of people were jumping ship because of the cost hikes in the middle of a recession while simultaneously laying off 2000 people that supported WDW. Chapek is taking it to new heights but this has been going on for years. And like always some die hards will leave, some will stay, and new die hards will hop on board.

You're right that some of the problems started with Iger in charge (but with Chapek in charge of the parks). I'm not an Iger lover either. I similarly don't give Josh D'maro a pass since a lot of this has occurred on his watch too. But I guess I haven't been an AP holder long enough to remember how long the war has been going on

I will say Disney had always seemed to be a value for your dollars vacation. Yes it is expensive and always becoming more expensive (at least since 1995), but in exchange for all of that money you're spending you got a high quality experience with great customer service and perks. I might be too young to remember exactly how it was before 2005, but since the pandemic started Disney under Chapek has continued to raise prices in excess of inflation while removing almost all perks and benefits to its guests. It is the first time I can remember so many things being cut around the same time while raising prices. Sure some perks have come and gone but in a 2 year span - I don't know if I can remember so many things being cut.

If you were a WDW resort guest in 2019 vs. 2021, you've lost all of these perks:
1. Fastpass+ no longer included and no resort stay advantage for Genie+
2. Disney's Magical Express no longer included
3. Resort Airline Check-in / luggage checking no longer included / airport to resort baggage delivery
4. Resort package delivery no longer available at WDW (maybe this gets brought back eventually?)
5. Extra Magic Hours for morning/evening; (Now only 30 mins for morning and Deluxe guests only for evening)
6. New Annual Pass sales halted (except Pixie pass)
7. Daily Mousekeeping / Gift cards if you pass on Daily Mousekeeping
8. Free Magicbands for Resort stays and Annual Pass purchases/renewals
9. Resort transfer for refrigerated items
10. Dining Plan
11. Park Hopping anytime
There are probably ones I'm missing too - I know paid parking at the resorts is one, but that occurred in 2018.

To replace these perks - we've instead gotten things like:
1. Park Pass required to enter park - this made sense at the start of the pandemic, but as Disney has increased capacities, it doesn't continue to make sense and it penalizes Annual Passholders (5 Park Passes per person at a time, limits number of APs that can enter parks, etc)
2. Paid Individual Lightning Lane and Genie+
3. Park Hopping at 2pm (doesn't currently require a park pass, but there is a rumor it will?)

I think if 1 or 2 of the above perks were lost - it wouldn't sound so bad, but with all of that above, it again seems to be that Chapek and team are more concerned with squeezing every ounce of profit out of their guests and not worrying as much about the guest experience.

Even for new guests, the ones that spend a lot of money that they seem to covet - they have made things increasingly more and more confusing to the point that I think they're turning away guests because it is too complicated.

I do hope that in the next few years Disney will reconsider (whether due to lower demand or a change in focus) and maybe bring back some of the perks or create new ones.

 

[Jaymarkm]

Captain Obvious—Over the past 20 years the world has changed (I’m a mid-40s Prof so I kind of watch time pass in a natural experiment via classes). Younger people live on (in?) their phones. Their phone is an appendage. So Disney makes things phone-centric. Companies can track customer lifetime value like never before (we give data away all day every day), down to the individual in Disney’s case. Even if not at the individual level, they use cluster analysis and segment consumers into homogeneous groups and analyze. What I would bet is that a lot of people on here complaining are literally the lowest profit Disney customers, period. You’ve already bought DVC decade-plus ago for what is now way below-market. You know the cheapest way to max out everything. Etc.

My question is just theoretical—if Disney has identified that, for instance, long-time DVC users who know the company so well are not profitable (or much less profitable), what do they do? If they literally identify “long-term DVC loyals” as the most unprofitable group, what do they do?

The problem is this: the majority of many companies’ profits come from a relatively small group, and once they figure this out, they can’t just be like “well, these people love us the most so we’ll just run a loss.”

So just theoretically, let’s assume you are unprofitable (or have a much lower marginal contribution than a new DVC member or infrequent visitor or other clusters). What would you have Disney do?

It’s a lifestyle for many, but that lifestyle is, end of the day, a business.

 

[Obi-J Kenobi]

At the risk of getting flamed, I'll put this out there - hire John Lasseter back. He IS Pixar.

YIKES! This is a catastrophically bad idea.

If if Lasseter were to actually return and I was in charge of TWDC I would immediately: (1) contact the CFO and direct the creation of a new a line-item in the budget to settle future lawsuits; and, (2) contact the liability insurance carrier and beg them to keep TWDC as a client.

Fixing Pixar is very simple, just make movies that are singularly focused on entertaining families.

 

[Obi-J Kenobi]

Anyway back on topic, I doubt Mr. Chapek needs anybody to defend him so why bother?

As the self-appointed Unofficial Bob Chapek Apologist, I'd like you to be aware that I'm always defending Bob C. at every turn and opportunity.

It's lonely being a warrior for Bob.

 

[wabbott]

Fixing Pixar is very simple, just make movies that are singularly focused on entertaining families.

Not such an easy thing for Pixar to do, anymore, as evidenced by the "Lightyear" bomb.

 

[Sweettears]

As the self-appointed Unofficial Bob Chapek Apologist, I'd like you to be aware that I'm always defending Bob C. at every turn and opportunity.

It's lonely being a warrior for Bob.

Not a huge fan but I understand that the job of CEO realy has nothing to do with satisfying the fanatical masses.

Its been a challenging time. I still think Igor saw it coming and bailed out

 

[wabbott]

As the self-appointed Unofficial Bob Chapek Apologist, I'd like you to be aware that I'm always defending Bob C. at every turn and opportunity.

It's lonely being a warrior for Bob.

Three months ago, were I a DIS board member, I would have voted to fire Chapek. Now after listening to all the discussion and reading all the ink put out by the "business" press, I'm not so sure. I'm not in the apologist class, though.

Chapek was handed a disaster with covid right after he took over. Cash flow evaporated from parks and cruises. No movies, save streaming. A company with a sizeable cadre of employees who think the purpose of a commercial enterprise should be to engineer social change, rather than to serve customers and guests, and willing to wreck the company to prove that point.

He's taking a big risk of damaging DIS' largest capital assets - the parks and cruise line - by milking the profits to keep movies and streaming propped up. We shall see how it plays out.

 

[Jaymarkm]

Not such an easy thing for Pixar to do, anymore, as evidenced by the "Lightyear" bomb.

Lightyear was a creative risk (vs, say, the latest Minions) but think about Encanto. Box-office “bomb,” huge success on D+. Disney/Pixar/Marvel/Star Wars movies are going to have to be EVENTS to make serious coin because folks know they are coming to D+ pretty quickly. It’s part of the double-edged sword of D+ (I think one side is a heck of a lot sharper than the other tho).

If Lightyear doesn’t have great streaming success on D+, I’d say then and only then is it a “bomb.”

 

[BrianL]

Lightyear was a creative risk (vs, say, the latest Minions) but think about Encanto. Box-office “bomb,” huge success on D+. Disney/Pixar/Marvel/Star Wars movies are going to have to be EVENTS to make serious coin because folks know they are coming to D+ pretty quickly. It’s part of the double-edged sword of D+ (I think one side is a heck of a lot sharper than the other tho).

If Lightyear doesn’t have great streaming success on D+, I’d say then and only then is it a “bomb.”

Encanto wasn't quite a box-office bomb, but it wasn't a huge hit either. It did about $250M worldwide, with budget estimates betweem $120M, and $150M - assuming the lower end of that budget is accurate, then it was okay. It wasn't unitl the Bruno song got hot that it blew up though.

 

[wabbott]

Movie making is a risky business, and has been ever since Hollywood came to be. A half-dozen duds to one blockbuster, or whatever the ratio is. It's the same with all studios - Sony, Columbia, MCA, Universal, etc. DIS began as a moviemaker and should continue to make movies, as that's where the creativity is. The parks changed that dynamic with DIS and that's why skimping on maintenance and gouging the guests frightens the dickens out of me.

 

[Jrb1979]

You're right that some of the problems started with Iger in charge (but with Chapek in charge of the parks). I'm not an Iger lover either. I similarly don't give Josh D'maro a pass since a lot of this has occurred on his watch too. But I guess I haven't been an AP holder long enough to remember how long the war has been going on

I will say Disney had always seemed to be a value for your dollars vacation. Yes it is expensive and always becoming more expensive (at least since 1995), but in exchange for all of that money you're spending you got a high quality experience with great customer service and perks. I might be too young to remember exactly how it was before 2005, but since the pandemic started Disney under Chapek has continued to raise prices in excess of inflation while removing almost all perks and benefits to its guests. It is the first time I can remember so many things being cut around the same time while raising prices. Sure some perks have come and gone but in a 2 year span - I don't know if I can remember so many things being cut.

If you were a WDW resort guest in 2019 vs. 2021, you've lost all of these perks:
1. Fastpass+ no longer included and no resort stay advantage for Genie+
2. Disney's Magical Express no longer included
3. Resort Airline Check-in / luggage checking no longer included / airport to resort baggage delivery
4. Resort package delivery no longer available at WDW (maybe this gets brought back eventually?)
5. Extra Magic Hours for morning/evening; (Now only 30 mins for morning and Deluxe guests only for evening)
6. New Annual Pass sales halted (except Pixie pass)
7. Daily Mousekeeping / Gift cards if you pass on Daily Mousekeeping
8. Free Magicbands for Resort stays and Annual Pass purchases/renewals
9. Resort transfer for refrigerated items
10. Dining Plan
11. Park Hopping anytime
There are probably ones I'm missing too - I know paid parking at the resorts is one, but that occurred in 2018.

To replace these perks - we've instead gotten things like:
1. Park Pass required to enter park - this made sense at the start of the pandemic, but as Disney has increased capacities, it doesn't continue to make sense and it penalizes Annual Passholders (5 Park Passes per person at a time, limits number of APs that can enter parks, etc)
2. Paid Individual Lightning Lane and Genie+
3. Park Hopping at 2pm (doesn't currently require a park pass, but there is a rumor it will?)

I think if 1 or 2 of the above perks were lost - it wouldn't sound so bad, but with all of that above, it again seems to be that Chapek and team are more concerned with squeezing every ounce of profit out of their guests and not worrying as much about the guest experience.

Even for new guests, the ones that spend a lot of money that they seem to covet - they have made things increasingly more and more confusing to the point that I think they're turning away guests because it is too complicated.

I do hope that in the next few years Disney will reconsider (whether due to lower demand or a change in focus) and maybe bring back some of the perks or create new ones.

I can see park hopping hours change and how park passes operate for resort guests change. I for don't see Genie+ or individual LL going back to advanced booking or being included with a stay. They make too much money off of it.

 

[Liquidice]

I can see park hopping hours change and how park passes operate for resort guests change. I for don't see Genie+ or individual LL going back to advanced booking or being included with a stay. They make too much money off of it.

Yeah I doubt Genie+ or ILL goes back to the way it was anytime soon. Could they offer a promotion like "free dining" where it is instead "free Genie+" ? I could definitely see that happening.

I do think from some of the rumors I'm reading that its feasible park pass is heavily changed or goes away completely for some guests along with park hopping restrictions.

But could some other perks eventually come out to entice people to stay at the resorts or come back to Disney? I think if demand starts to wane it is almost a certainty.

Captain Obvious—Over the past 20 years the world has changed (I’m a mid-40s Prof so I kind of watch time pass in a natural experiment via classes). Younger people live on (in?) their phones. Their phone is an appendage. So Disney makes things phone-centric. Companies can track customer lifetime value like never before (we give data away all day every day), down to the individual in Disney’s case. Even if not at the individual level, they use cluster analysis and segment consumers into homogeneous groups and analyze. What I would bet is that a lot of people on here complaining are literally the lowest profit Disney customers, period. You’ve already bought DVC decade-plus ago for what is now way below-market. You know the cheapest way to max out everything. Etc.

My question is just theoretical—if Disney has identified that, for instance, long-time DVC users who know the company so well are not profitable (or much less profitable), what do they do? If they literally identify “long-term DVC loyals” as the most unprofitable group, what do they do?

The problem is this: the majority of many companies’ profits come from a relatively small group, and once they figure this out, they can’t just be like “well, these people love us the most so we’ll just run a loss.”

So just theoretically, let’s assume you are unprofitable (or have a much lower marginal contribution than a new DVC member or infrequent visitor or other clusters). What would you have Disney do?

It’s a lifestyle for many, but that lifestyle is, end of the day, a business.

Your question on DVC - I don't agree with the premise. While DVC members have a sunk cost, they do still need to keep selling DVC and member perks is one way to continue doing so. If they weren't interested in DVC anymore and DVC customers, they wouldn't be building 2 new DVC resorts (Disneyland Tower and Poly Tower).

Disney's issues with Annual Passholders seems to be that many live locally and prior to the pandemic could come to the parks whenever they wanted and spend no money. For someone that might go to the parks 50+ times a year and only spend money on the pass itself, Disney doesn't want that type of customer. There also seemed to be a problem with Disneyland annual passholders who had grandfathered rules like free parking that they wanted to get rid of which is why they created the Magic Key program to replace their previous program.

Most DVC members live out of state and they come to Disney consistently - and because they live out of state (travel there) they do eat in the parks and shop there. You might say that the larger DVC rooms have kitchens and so you could cook but I don't think most DVC members go on vacation and cook their own meals - and studios are by far the most popular and the largest percentage of rooms available to DVC members and they don't have kitchens. You said that DVC members know the best ways to maximize things - but you're still most likely spending money and I've seen most DVC members because they go year after year want to try the newest things like new restaurants, etc.

It is why I think that DVC members have gotten caught in the middle. If profit per customer is important to Disney, I don't think DVC members are the issue. But I do think DVC may be such a small percentage of customers that we're not significant enough to do something specific for us (although again the rumored paid Diamond tier may be their way of fixing this) - they just lump us in with resort guests, which previously had enough perks that it made sense.

If DVC Members are truly the most unprofitable group though - what would I have Disney do? Get out of the timeshare business. Don't build Disneyland Tower as a DVC Resort, don't build the Poly Tower as a DVC resort. Build them as hotels. In 2042 when multiple resorts expire, sell off the ones not near Disney parks - turn the rest into hotels. But there doesn't seem to be evidence that Disney is trying to get rid of DVC Members. It seems like they're trying to get more members. Even if new members are more profitable than old ones, you're creating a problem if you keep trying to add new members because the ones that are new today will become old members eventually.

Of course, if you're only thinking short term and about quarterly profits - building a DVC resort and getting people to spend thousands buying a time share will certainly help boost short term profits. Getting stuck with a DVC member for the next 50 years is a problem you can worry about another day or someone else's problem.

I guess I should be thankful that Florida has very specific timeshare laws, otherwise Disney could decide to just raise our annual dues to be as expensive as paying for a hotel room - since its after all just a business and if DVC members are so unprofitable, they may as well just start to add fees onto the membership so we're more profitable than other guests.

 

[Jaymarkm]

(Oops my bad, not sure what I did to quote you too!)

Your question on DVC - I don't agree with the premise. While DVC members have a sunk cost, they do still need to keep selling DVC and member perks is one way to continue doing so. If they weren't interested in DVC anymore and DVC customers, they wouldn't be building 2 new DVC resorts (Disneyland Tower and Poly Tower).

Disney's issues with Annual Passholders seems to be that many live locally and prior to the pandemic could come to the parks whenever they wanted and spend no money. For someone that might go to the parks 50+ times a year and only spend money on the pass itself, Disney doesn't want that type of customer. There also seemed to be a problem with Disneyland annual passholders who had grandfathered rules like free parking that they wanted to get rid of which is why they created the Magic Key program to replace their previous program.

Most DVC members live out of state and they come to Disney consistently - and because they live out of state (travel there) they do eat in the parks and shop there. You might say that the larger DVC rooms have kitchens and so you could cook but I don't think most DVC members go on vacation and cook their own meals - and studios are by far the most popular and the largest percentage of rooms available to DVC members and they don't have kitchens. You said that DVC members know the best ways to maximize things - but you're still most likely spending money and I've seen most DVC members because they go year after year want to try the newest things like new restaurants, etc.

It is why I think that DVC members have gotten caught in the middle. If profit per customer is important to Disney, I don't think DVC members are the issue. But I do think DVC may be such a small percentage of customers that we're not significant enough to do something specific for us (although again the rumored paid Diamond tier may be their way of fixing this) - they just lump us in with resort guests, which previously had enough perks that it made sense.

If DVC Members are truly the most unprofitable group though - what would I have Disney do? Get out of the timeshare business. Don't build Disneyland Tower as a DVC Resort, don't build the Poly Tower as a DVC resort. Build them as hotels. In 2042 when multiple resorts expire, sell off the ones not near Disney parks - turn the rest into hotels. But there doesn't seem to be evidence that Disney is trying to get rid of DVC Members. It seems like they're trying to get more members. Even if new members are more profitable than old ones, you're creating a problem if you keep trying to add new members because the ones that are new today will become old members eventually.

Of course, if you're only thinking short term and about quarterly profits - building a DVC resort and getting people to spend thousands buying a time share will certainly help boost short term profits. Getting stuck with a DVC member for the next 50 years is a problem you can worry about another day or someone else's problem.

I guess I should be thankful that Florida has very specific timeshare laws, otherwise Disney could decide to just raise our annual dues to be as expensive as paying for a hotel room - since its after all just a business and if DVC members are so unprofitable, they may as well just start to add fees onto the membership so we're more profitable than other guests.

My hypothetical was about a cluster identified as “long-term DVC loyals” being unprofitable, not all DVC members or the program as a whole being so. There are undoubtedly a whole lot of ways Disney slices and dices data on DVC folks. I’d never guess the whole program to be unprofitable/lower profit as they continue to invest substantially in it, but I’d bet the proverbial farm there are sub-segments of DVC owners who are unprofitable/lower profit and I’d double down on the farm that Disney knows who they are and probably aren’t quite as concerned about hurting their feelings as perhaps those folks would like them to be.

 

[TsWade2]

I have to agree. Even though I don’t think Chapek is a good CEO, but I don’t think it’s his fault of the declining. And you’re right, it’s most likely COVID. Also, people are blaming him for controversies that I don’t mention here. Ever since Bob Chapek fires Peter Rice, I’ve found out why and it makes sense. Again, I can’t mention why. I just hope Disney will eventually return to normal, whatever the normal is.

 

[TiggerBouncy]

My problems with Chapek have nothing to do with Covid, the re-opening process, the staffing issues that Disney has had (which a lot of companies have), supply chain issues, or any other operational aspect of the parks. My issues with Chapek have nothing at all to do with Genie+, Disney+, Lightening Lanes, or any other programs that were put into place before he took over, or things he has no control over.

My problems with Chapek have to do with:
* his terrible, horrible, worst possible scenario handling of the Florida law and subsequent actions. Not that what he did was wrong, necessarily - but the way that he handled it was wrong.
* his terrible, horrible, worst possible scenario handling of the negotiations with Scarlet Johansson.
* his terrible, terrible, terrible stage personality.

He presents himself poorly. He represents the company poorly. He does not demonstrate confidence. He does not give me any reason to believe in him. Investing is more than investing in a product. It's often investing in a CEO. He is just not a CEO to invest in. I want a CEO who gives me a vision that I believe in with results that I believe are realistic and achievable and with a goal that I understand, is measurable, and is leading the way into the future. Chapek doesn't give me any of those things.