Possible Disney profit trend woes?

[pilferk]

I've really been enjoying the new rumor blogs and podcast shows. I think you have to have the Disney Blinders on pretty tight not to see some obvious red flags out there. Putting all the info together, I think Disney's biggest "problem" right now is it's corporate culture. It has too many cooks in the kitchen, so to speak. Too much of a top heavy management structure trying to justify its largesse. Whereas Universal is still relatively lean and mean, for Disney to do something it's like an iceberg having to change course. There's a good chance we're going to get the announcement soon that Transformers: The Ride will be open in Orlando by the end of next year whereas Disney Imagineers have to have meeting after meeting after meeting and get who knows how many people to sign off on a project, so nothing happens.

I agree, we may actually see some real change at Disney if Universal challenges Epcot. The very idea of this happening would seem unfathomable just a couple years ago.

Remember: USF is it's own RESORT entity, really. It's not controlled by a monolithic corporate RESORT entity. Yes, it's owned by NBC/Universal..but other than approve it's budget every year, they're pretty hands off. Yes, there is some synergy with USH...but they basically operate independantly. The corporate structure at USF IS leaner and meaner.

Disney's (the monolithic mothership) corporate structure is BASED off of reaping WDW's profits, and putting them back into the rest of the business. They're much more involved, at a much higher level, with the "day to day" management at WDW (yes, micromanagning). Combine that with the fact that the WDW executive teams over the past few years have...how to say this nicely??...lacked vision. You have Lassiter driving the boat (if you'll excuse the obvious pun) at his beloved Disneyland...but there is no similar creative visionary or champion for WDW. And there hasn't been for awhile.

 

[Uncleromulus]

Do I remember correctly tho that Universal almost had to rush Potter Land into completion to save themselves from horrible attendance numbers?? I believe they were nearly in the tank.

And it worked..for now.

But I'm still convinced that something new and equally fashionable will come along and in time we'll see Potter fade into the realm of the ordinary. And then the price of Cream Soda, brooms and magic wands will level off---

And I always remember that Disney is a BIG company. A loss in one area can easily be overcome by profits in another.

 

[derekburgan]

And it worked..for now.

But I'm still convinced that something new and equally fashionable will come along and in time we'll see Potter fade into the realm of the ordinary. And then the price of Cream Soda, brooms and magic wands will level off---

And I always remember that Disney is a BIG company. A loss in one area can easily be overcome by profits in another.

This was the same type of feeling I got from Pete and John on the DisUnplugged when the Wizarding World of Harry Potter opened. They treated it like a fad. I distinctly remember John saying, almost dismissively, "let's see where it is in year three." Well, we are finished with Year Two and the WWOHP, Islands of Adventure, and Universal Orlando are skyrocketing.

I think the problem may be some people don't understand the cultural impact of Harry Potter. They see it like Avatar, or Hunger Games, or something similar that can be red hot for a short period of time, but really only appeal to a limited demographic and then fades away. Harry Potter needs to be seen like Star Wars, it's that popular. I think it's working upward on selling 500Million copies of the books. The movies were all massive hits. There is a generation of people who grew up with Harry Potter, and will see them the same way I saw Star Wars. The series resonates with EVERY demographic, young, teen, young adult, older adult, male, female. It's also bigger outside America than it is here, something which is hard to even understand because it's still so big here.

Here's another thing that is NEVER discussed by the Dis, that the WWOHP completely changed the dynamics of foreign visitors. Not only are they now coming to Universal (whereas before it was Disney-only trips), many are coming to Universal first. Will the Wizarding World of Harry Potter all of a sudden just drop in popularity? I don't think you're looking at the Big Picture if you're putting your eggs in that basket.

 

[Waltgirl]

Agree with everything everyone has said.

It's true, there seems to be no Lassiter equivalent looking out for WDW, only bean counters looking at the bottom line. There are many threads on the Theme Park forum where people are lamenting the little cutbacks they are noticing in regards to the parks and resorts. Perceived value is a totally subjective thing. What some consider no big deal, others are screaming about. In a struggling economy ( which nobody can deny) everyone looks more closely in how their dollars are spent. The costs for a night onsite, especially Mods and Deluxes have skyrocketed, $400 for the Wilderness Lodge? We stayed at the HRH 2 years ago and it was fantastic! I really felt the resort blew away anything Disney offered. Much more in line with what you'd expect for your money than what you get at WDW. Really beautiful hotel, beautiful grounds, fantastic room. Many international guests. And WWoHP is fantastic. WDW had to do something to compete, I hope the FLE will turn out to be as grand. Everyone I know thinks the Avatarland is a BAD idea. I hope they reconsider. I read on another thread that Joe Rohde was in the AK today with a bunch of suits, so who knows.

As for the resorts, unfortunately, TDC seems to have dug themselves a little hole. They seem to have raised the hotel rates in order to offer more discounts, but now they are attempting to ease away from the discounts and the public is not buying. Guests are waiting for the hotel and dining discounts to be offered before booking.

The last couple of years I have visited, I have noticed mostly foreign visitors in the resorts. The Brits basically took over the AKL last August. But the way things are looking in Europe, I am not sure what the situation is this year, I'll find out in Oct when I'm down for a wedding. BTW, haven't made my hotel ressies yet, waiting for a discount or I'll stay offsite. No way am I paying rack rate.

 

[Uncleromulus]

derekburgun:
I'm sure in the camp that dosen't understand the "cultural impact" of Potter!!

Saw the movies and they were "good" but nothing to get excited about. The books seem to have been written for children.

I just think the publics attention can easily be diverted to some other fad that shows up. Star Trek has faded, Star Wars has faded and so too will Potter.

But no question it saved Universal and at the moment, it's what's happening!!

 

[lockedoutlogic]

derekburgun:
I'm sure in the camp that dosen't understand the "cultural impact" of Potter!!

Saw the movies and they were "good" but nothing to get excited about. The books seem to have been written for children.

I just think the publics attention can easily be diverted to some other fad that shows up. Star Trek has faded, Star Wars has faded and so too will Potter.

But no question it saved Universal and at the moment, it's what's happening!!

Potter fans always tend to pump it up for more than it is...a great property franchise that has had pretty good staying power and made one lady in britain enough to buy ireland and make it her own private driving range.

But its going to fade pretty quickly...and then the universal expansions will start to look pretty ho hum right along with it.

I make this argument all the time: with technology now it is impossible to have the kind of staying power in pop as the original star wars...or...mickey mouse and the disney animated films did.
It's just not realistic...there is too much out there that can be had too easily and the collective public attention span continues to diminish with it.

So too will be harry potter.
people tend to look at gaudy earnings in the wrong light too. things just cost ridiculous rates well over inflation and costs and are peddled to more of the world now.

Avengers was a good example: a good popcorn flick that was fun and made a heap of cash...but no lasting impact. As predicted: it hasn't been mentioned in over a month and largely forgotten by MOST who got ripped off to watch it...it will sell some nice high profit blu rays for disney - but it didn't change the world.

Potter fans get ga-ga over the money in a big way...because people pay for things on mastercard and then pay 24.99% APR on it for 12 years...doesn't mean that what they bought has a cultural grip on them.

Its just completely cheap computer monetary figures...not even paper anymore.

The reality is that nothing will keep harry potter as a cultural phenomena unless they keep grinding out new stuff. OR take the lucas approach and repackage the same crap every year and try to sucker kids and geeks into buying over and over again (i'll admit...as a younger dude in college leading into the run-up of the "new" star wars movies...i fell for that all the time. But the stuff was horribly written garbage and he's been exposed as someone that can't tell a story...so the question now is was it the gobs of money he saw delivered by armored car for 15 years with no new material that pickled his brain? or simply that he had better writers and directors (my theory) save his can when it wasn't ALL CG and something had to be decent to get people to show up?)

if rowlings knows that you can only collect so much money (cough LUCAS cough)...and doesn't go back to the well...then it will be a very interesting end result for HP...
Star wars...as mentioned...and star trek faded for exactly the opposite reason: bad quality and overzealous attempts to saturate/ capitalize.

Kinda seems like what could happen to certain global theme park/ IP marketers, huh? (we're already up to "diamond edition" on pinnochio an snow white...what's next? bauxite?)

this is the same post i've made probably 25 times about the misreading of the longevity of harry potter...so i can't wait to get the proverbial "oh no...potter is different...GRIFFINDOR!!!" response...

yeah...not really.

 

[derekburgan]

this is the same post i've made probably 25 times about the misreading of the longevity of harry potter...so i can't wait to get the proverbial "oh no...potter is different...GRIFFINDOR!!!" response...

yeah...not really.

My only question would be, how many times do you have to make this post before you realize you might be wrong? The last book came over five years ago and the Wizarding World opened two years ago. Universal is still setting records for attendance and merchandise. So when does it not become a fad like the one month for Avengers (which discounts how crazy the Avengers toys did possibly a huge DVD coming this fall) Five years? 10 years? 15? The Harry Potter movies are still big sellers on iTunes.

This wasn't a reality TV show or game show that got hot for one season and then people got tired of it. This is a book series that people loved. That a generation of people grew up with. A movie series in which 7 of the 8 films are in the top 25 all time grosses Internationally. Not to mention a land in a theme park which out-Disney'd Disney when it comes to theming.

I'm not sure if Disney fans don't realize it, or are just in denial that the reason the company had to pay so much money to buy Pixar and Marvel is because their own in house characters were becoming irrelevant. The question now is this: Will the company structure at Disney, which destroyed the salability of it's own characters outside of its own hardcore audience, also destroy what people loved about Pixar and Marvel?

 

[lockedoutlogic]

My only question would be, how many times do you have to make this post before you realize you might be wrong? The last book came over five years ago and the Wizarding World opened two years ago. Universal is still setting records for attendance and merchandise. So when does it not become a fad like the one month for Avengers (which discounts how crazy the Avengers toys did possibly a huge DVD coming this fall) Five years? 10 years? 15? The Harry Potter movies are still big sellers on iTunes.

This wasn't a reality TV show or game show that got hot for one season and then people got tired of it. This is a book series that people loved. That a generation of people grew up with. A movie series in which 7 of the 8 films are in the top 25 all time grosses Internationally. Not to mention a land in a theme park which out-Disney'd Disney when it comes to theming.

I'm not sure if Disney fans don't realize it, or are just in denial that the reason the company had to pay so much money to buy Pixar and Marvel is because their own in house characters were becoming irrelevant. The question now is this: Will the company structure at Disney, which destroyed the salability of it's own characters outside of its own hardcore audience, also destroy what people loved about Pixar and Marvel?

Everything that people postulate here has a legitimate chance of being completely WRONG...including what i think.

But we all look at it through our own prism...and your responses are exactly what I am talking about...

First, Harry potter has been pretty impressive...but it has never had the kind of grip on the masses that the fans give it credit for...
It has made gobbs of money and been big for awhile now - but it also has been paced well (to the credit of those in control) and has hit on a good formula of tween demographic with big budget Hollywood eye candy...

But Justin Beiber makes a ton too...so let's not set the bar that high. As do transformers movies... Which couldnt suck more.

My contention is that potter cannot last with no new material...and we are very EARLY in that process. But as far as a star wars type thing then no - its not very realistic in today's world.

its an extremely successful franchise that has played its cards right...but potter fans contention that it is somehow "transcendent" is foolhardy - my opinion.
They will forget and forget quickly...in today's world - that is to be expected.

But as you point out - I may be all wrong. But I'm ok with that an will just sit back and watch from home and let it play out.

 

[derekburgan]

But Justin Beiber makes a ton too...so let's not set the bar that high. As do transformers movies... Which couldnt suck more.

Are you seriously comparing the world of Harry Potter to Justin Bieber and the Transformers movies? Other than they all make a lot of money, what else do they have in common? Bieber is mega popular with a very small demographic, and when he tried to extend his brand to another media (his movie), it failed. The Harry Potter book series, already the biggest phenomenon in books in my lifetime, went on to become the biggest series of movies ever. And if you think the only people buying the books or seeing the movies were the tween audience, I don't know what to say. I've seen them with my 8 year old niece, my 17 year old nephew, my 40 year old girlfriend and her 60 year old parents. How many of those groups do you think would want to go to a Justin Bieber concert, see a Justin Bieber movie, or see a Justin Bieber attraction in a theme park?

It's that type of thinking which made Disney make a horrible decision and think Avatar would be a good counter to WWOHP. Hey, the movie made a lot of money, and that's all Harry Potter did, right? Wrong. Outside of the movie, no one had any desire to visit the world of Pandora. All of the merchandise for the movie sat on the shelves. The entire theme park model is built on retail, and the Harry Potter universe is not only filled with things for people to buy, but they showed long before the land was created that they wanted to spend money on this property. Outside of young boys in the toy aisle, how many people are buying Transformers merchandise?

Men In Black is a fad. They are really fun movies that people enjoy. The source material was a minor success, if that. Sales of toys, clothes and other related merchandise is relatively very small, and non existent when a movie is not out. A ride was created that is truly fantastic, but it certainly didn't change any travel patterns in the US, let alone internationally. I think that's what you are thinking of when you are talking about the Wizarding World of Harry Potter.

 

[Uncleromulus]

To which I'll only add that Disney's house characters--if you mean Mickey, the Princesses, etc--have hardly become irrelevant.

Time alone will tell who's right about Potter. For me tho, it's mostly Hogwash.

Or is that Hogwarts???

 

[lockedoutlogic]

Are you seriously comparing the world of Harry Potter to Justin Bieber and the Transformers movies? Other than they all make a lot of money, what else do they have in common? Bieber is mega popular with a very small demographic, and when he tried to extend his brand to another media (his movie), it failed. The Harry Potter book series, already the biggest phenomenon in books in my lifetime, went on to become the biggest series of movies ever. And if you think the only people buying the books or seeing the movies were the tween audience, I don't know what to say. I've seen them with my 8 year old niece, my 17 year old nephew, my 40 year old girlfriend and her 60 year old parents. How many of those groups do you think would want to go to a Justin Bieber concert, see a Justin Bieber movie, or see a Justin Bieber attraction in a theme park?

It's that type of thinking which made Disney make a horrible decision and think Avatar would be a good counter to WWOHP. Hey, the movie made a lot of money, and that's all Harry Potter did, right? Wrong. Outside of the movie, no one had any desire to visit the world of Pandora. All of the merchandise for the movie sat on the shelves. The entire theme park model is built on retail, and the Harry Potter universe is not only filled with things for people to buy, but they showed long before the land was created that they wanted to spend money on this property. Outside of young boys in the toy aisle, how many people are buying Transformers merchandise?

Men In Black is a fad. They are really fun movies that people enjoy. The source material was a minor success, if that. Sales of toys, clothes and other related merchandise is relatively very small, and non existent when a movie is not out. A ride was created that is truly fantastic, but it certainly didn't change any travel patterns in the US, let alone internationally. I think that's what you are thinking of when you are talking about the Wizarding World of Harry Potter.

i'm point out that making money...particularly at the box office...has never been easier.

"dung on film" would open to 60 million opening weekend...

I think i see where you're coming from...and since that is Hogwarts your not coming off as being anywhere close to objective. I'm fully aware of all the money and popularity that HP has had...but that does NOT signal sustainability in the long term without new exposure.

I give Rowlings, Harry Potter, the films, WWOHP, and the movement all the credit its due...

But you're giving it far too much.
We obviously differ...and we'll wait to see who's right.

My contention is that no new material will render potter forgotten pretty quickly. But we'll have to see.

And don't think that i'm defending disney, or any other franchise (certainly not Avatar)...you just have to try to look at it objectively. Juggernauts don't stick around for long these days without constant pumping.

You think they are making more pirate movies for love of the genre? Hell no...its because they need to inject blood into it to keep moving merchandise.

Harry Potter will be no different...she needs to start it again or its going to be forgotten. A niche following or hardcore fan base does NOT indicate longterm dominance.

Look at Star Wars...he was playing with house money, but boned it with bad material - lost most of the old fan base that kept him relevant for 30 years - and now relies on kids in walmart to keep the money coming...and they're going to forget him quickly.

 

[ChipnDale79]

i'm point out that making money...particularly at the box office...has never been easier.

"dung on film" would open to 60 million opening weekend...

I think i see where you're coming from...and since that is Hogwarts your not coming off as being anywhere close to objective. I'm fully aware of all the money and popularity that HP has had...but that does NOT signal sustainability in the long term without new exposure.

I give Rowlings, Harry Potter, the films, WWOHP, and the movement all the credit its due...

But you're giving it far too much.
We obviously differ...and we'll wait to see who's right.

My contention is that no new material will render potter forgotten pretty quickly. But we'll have to see.

And don't think that i'm defending disney, or any other franchise (certainly not Avatar)...you just have to try to look at it objectively. Juggernauts don't stick around for long these days without constant pumping.

You think they are making more pirate movies for love of the genre? Hell no...its because they need to inject blood into it to keep moving merchandise.

Harry Potter will be no different...she needs to start it again or its going to be forgotten. A niche following or hardcore fan base does NOT indicate longterm dominance.

Look at Star Wars...he was playing with house money, but boned it with bad material - lost most of the old fan base that kept him relevant for 30 years - and now relies on kids in walmart to keep the money coming...and they're going to forget him quickly.

I'm the type of person who won't do something simply because everyone else is doing it, I don't like to be a part of the "it" crowd. So when Harry Potter came out and it exploded, I rolled my eyes and didn't have anything to do with it.

Last year my father said he was tired of hearing about it and wanted to figure out what all the hype was about. He read all 7 books and loved it, so I thought I'd give it a try.

I finished book 7 about a month ago, I simply could not put the books down, they were that good. Every now and then something comes along that's not a fad, something that will be passed down from generation to generation. Something like Star Wars or Lord of the Rings, personally I put Harry Potter in that category. Harry Potter will be around for a long long time. All three of those franchises are something I can't wait to share with both of my sons when they are old enough.

I haven't been to Universal in 15 years, I've been to WDW 7 times in the last 4 years alone. After reading Harry Potter, Universal is on my must do list now.

 

[Disco]

Last year my father said he was tired of hearing about it and wanted to figure out what all the hype was about. He read all 7 books and loved it, so I thought I'd give it a try.

I finished book 7 about a month ago, I simply could not put the books down, they were that good. Every now and then something comes along that's not a fad, something that will be passed down from generation to generation. Something like Star Wars or Lord of the Rings, personally I put Harry Potter in that category. Harry Potter will be around for a long long time. All three of those franchises are something I can't wait to share with both of my sons when they are old enough.

LOL, IMO they were not that great. Only book 3 and 4 were good the rest were meh.
A couple read like detective novels, with the murder suspect being unveiled at the end and everything. Except that the big unveiling at the end of the book ends up being an unknown character. It was the butler's cousin's son!
Others she killed the most interesting characters off just so she wouldn't have to write about them I think.
Then she sums up the plots and motives at the end of each book even though they were obvious.
At least they weren't as bad as that Eragon dragon series. Gawd I hate myself for reading those...
Any who, despite my opinion I think they will be around for a long time and are not a passing fad. While they're nothing compared to the Hobbit and LotR series they've made a big impression with the youth for some reason.

 

[Peter Pirate 2]

The potter books were not of the critical quality of LOTR or The Hobbit to be sure. But they did hit a market, young people, like no series in a long, long time. They were written well enough to appeal across the board despite what their overall quality was.

The potter movies, as locked said, were produced and released in genius fashion to maximize exposure and tenure but they also were much better suited to crossing demographic lines including world wide acceptance than LOTR and Hobbit. They also specifically drew the family demographic that I think was kind of a shock to everyone.

Universal, using real imagineers, completed a land of such quality, whimsy and realism that Walt would be proud. With appealing attractions that are destined to remain crowded favorites regardless of their being potter related, I see no reason the land will not continue to be huge for a solid 10 years. After that they rest on their laurels or improve - At that time something new will demand to be built and potter will become the other great land at IOA.

 

[kbelle8995]

I can't speak for others this is simply my opinion.

For the first time in a very long time, I am going to Disney parks but I am not staying at a non-Disney hotel. For the same price a little less than staying at a value I am staying at a nicer hotel. It is close and I still get the perks of extra magic hours.

I also plan to downgrade to a Seasonal pass come November. Yes I'm still going but I'm cutting back.

What with the price hike and now stating that they want 11% more out of me and every guest. I'm becoming disenchanted with the Parks division. As for Potter books, I think that will see this series gaining in popularity. They are imaginative and interesting plus they offer very good ideas and values. Certainly much better than the Twilight series.
Avatar is in danger of being Oh that old movie. Sorry I just don't see it as being a classic.

 

[pilferk]

Universal, using real imagineers, completed a land of such quality, whimsy and realism that Walt would be proud. With appealing attractions that are destined to remain crowded favorites regardless of their being potter related, I see no reason the land will not continue to be huge for a solid 10 years. After that they rest on their laurels or improve - At that time something new will demand to be built and potter will become the other great land at IOA.

To be clear:

They created TWO attractions...and that's only if you count the one who's primary purpose is to sell you something (a wand). The headliner is a masterpiece of mythic (if you'll excuse the pun) proportions, to be sure.

The rest are re-skinned/re-themed leftovers from the previous area.

The theming is amazing, I'll grant you. And we have a blast there, I'll grant you that, too.

 

[Jason71]

The books seem to have been written for children.

Serious question, I have to ask--was this a joke?

 

[Peter Pirate 2]

To be clear:

They created TWO attractions...and that's only if you count the one who's primary purpose is to sell you something (a wand). The headliner is a masterpiece of mythic (if you'll excuse the pun) proportions, to be sure.

The rest are re-skinned/re-themed leftovers from the previous area.

The theming is amazing, I'll grant you. And we have a blast there, I'll grant you that, too.

Agreed. But the retooled attractions are successful because they are fun no matter what the theme happens to be. Individually or as a whole the land and its parts are successful. How they came to be isn't really important.

This is why the negative Avatar arguments are silly. If Disney spends a billion dollars (whatever) on something it should be good regardless of the trappings. TheTower of Terror would have still been great with no affiliation to the twilight zone.

 

[pilferk]

Agreed. But the retooled attractions are successful because they are fun no matter what the theme happens to be. Individually or as a whole the land and its parts are successful. How they came to be isn't really important.

It's only important when you mention that "real imagineers" created "attractions" that "are destined to remain crowded favorites regardless of their being potter related".

Really, so far, they've created ONE attraction...and one really neat way to sell a wand. I'm not saying I don't enjoy them...I do..but let's put it all in context.

Dueling Dragons is great (and it was, prior)...but the only difference between it's previous incarnation and it's current one is it's queue. And the previous queue was pretty darn astounding, in terms of theme and execution.

Flight of the Hippogryph is.....underwhelming (even as a kiddy coaster...or so my kids tell me). They reskinned the cars and wove in some HP set pieces.

Again, the theming in the area is astounding..and we have fun just checking out the small details. The shops are REALLY well done.

I just don't want to go TOO overboard when it comes to the creation of the attractions, there. The headliner is AMAZING. The wand shop is a creative way to sell merch. But, in terms of ride creation/content....I'm not ready to fawn all over them.

 

[lockedoutlogic]

No to go "off topic"...which is in this case kinda back "on topic"

But Disney released its quarterlies...and they're raking...

Revenues up 31% over the previous on the whole - and theme park PROFITS up 21%...630 million bucks free and clear

So whatever they're doing...it's not gonna change.
It makes further capital investment look like a fools errand as well.

It's also important to note that revenues were up...but "sales" are down - aka they're making more by selling less.
Which means that while they may not be driving Chinese manufacturing...the suits were lining their pockets

It also makes there "no discount" strategy the right one - which we all pretty much knew to be true...
Less crowds, more affluent crowds, more comfort, more spending per person, less overhead

All "W s"

And of course iger gave the "uniquely positioned for longterm success" line of crap...
Shut up, CMB