Disney has proven, time and again, they know what they're doing ---- in the domestic market.
Internationally....? Let's be honest. Their one true success is that wonderful set of Parks in Japan. That's a royalty gig - in the one overseas country that's as consumptive of American culture as we are - or more. ( I lived it and am still amazed by it).
Paris ...? Just had to jump in and rescue that one.
HKDL...? I think you highlighted earlier the historical issues there. Plus the additional investment needed to get it to the plus side.
China...? See any good signs? An additional 800 mil shoved into an already 5.4 billion investment (in China!) prior to opening... for expanded capacity, additional rides, yada, yada. Yet none of that is actually happening. And the pictures show where the schedule really is.
It's hard to get past the fact that every P&R CapEx dollar spent over there is one not spent here.
Look, full disclosure. I'm as happy as anybody about the stock price. Absolutely no doubt about that. But, aren't they forcing the same formula, over and over to the overseas markets? The same easy footprint. Ignoring the IP that might work better. Like the WALL-e's, Incredibles, Star Wars, etc. Investments that we might also benefit from. Why not risk a few new E-Tickets in a country that has proven which genres generate revenue...?
Every major US company would be stupid not to try as hard as possible to penetrate that huge market. But, why not give them what we know they want? And delve into that huge, untapped, to a large extent, IP portfolio
Rteetz pointed to that thread on the other site. And, there was one comment I saw that really hit home - did Frozen really only do 46 million in the box office in China? How many years of domestic investment will it take to change that outlook in a generationally closed, homogenous society so they'll accept the footprint they're getting, much less love it...?
And why Shendi? Because that was the "price" of entry. Don't forget that it's a no lose proposition for Shendi. It's a government holding company. Meaning they hold all the cards. Meaning, in old Disney terms - they're the tar baby...
Hence the issue. Which we really won't know if it has legs for a long time. If there's fire under the smoke this may have generated, we won't see the big dogs come out until they're absolutely sure all of their ducks are in a row....
Here's the interesting thing. I think Iger gets it. He realizes that the strategies generated in Burbank California aren't going to work around the world. He realizes that decisions must be based on meeting, and respecting the cultural differences of different markets. Does that mean selling out? Nope, but it does mean adapting business. I think we can look to no finer example then Disney's choice to restructure their teams in Europe. Before each division of the Walt Disney Company had disjointed teams that controlled messaging, and branding in Europe. Some placed no priority on meeting the European differences, and in turn had problems. This was only compounded by the fact that many of the teams were based in California or the teams overseas would be overpowered by their domestic bosses. Iger came in, and created one Central European based entity that now handles all European matters. What's funny, they're actually led by Europeans in Europe. That may seem logical, but it took Iger to make it happen. He realizes that Americans aren't the best at making those international calls.
Now your parks thing is thought provoking.
Tokyo, spot on. (You wouldn't have happened to be over there in an armed forces capacity?)
Euro Disney- Interesting thing. Eisner didn't make a great assessment of European travel tastes, and accordingly had issues with Resort stays. As for the park itself, it was very well received. A great success. This was Disney's first foray into the international space. (Tokyo, between the extremely accepting culture, wealth, and partners is hard to count) They missed the ball completely in certain aspects, and at the same time found that a well themed Magic Kingdom would be well received. Lessons were learned that changed perspective.
Hong Kong
Disneyland- A note about Hong Kong. I believe this park is much less a rejection of Disney's foriegn strategy, and more to do with a rejection of cheap theme parks. DCA, DAK, and WDS. They all bombed just like Hong Kong. The more Disney builds the more the attendance moves up. It's increasingly becoming less true that old mantra "if you build it they will come." Hong Kong is an exception. While profit is still somewhat suppressed they're doing everything right with new attractions and that new hotel. I wouldn't be surprised if they had $1 Billion Revenue by 2020.
Spirit is really making a big deal about this. They really could be adding more attractions, not meeting budgets, or having to replace stuff. Who knows? I'm less concerned about that then maybe I should be. Why? Disneyland, WDW, Epcot, Euro Disney, and DAK all went over budget or faced substantial cuts to opening day lineup due to budget constraints. These are some of Disney's greatest hits (and failures). This is a big construction project spanning multiple years. There are a lot of unknown variables that have to be worked out that can lead to cost overruns. They have a good track record. I'll give them the benefit of the doubt.
This is undeniable, and a 100% true. The problem I see is if they're getting away with minimal new cap ex right now, what incentive would they have to spend it on domestic? How do we know it wouldn't just be added into the operating income part of the spread sheet? My view is at least it's being spent on actual attractions. At least Walt Disney Imagineering is still in business. At least my vacation dollars will lead to delight for some other guest, even if they are half a globe away. Better that then one additonal cent in a dividend. (Full disclosure, small shareholder)
This is perhaps the most compelling argument. Why do we have to treat all consumers equal? This could be problem as Disney pushes entrance into the market. Makes me wish Walt Disney Imagineering was still an original creative force within the company. However, I think the themeing, rides, and attractions will speak for themselves. They don't necessarily need to know the background. They'll just enjoy the story, technology, and experience. Disney is great at catching everyone up to speed, and telling and giving a great adventure.
This theme park may be the reverse of what's been done in the past. Instead of movies introducing the theme park, this theme park will introduce the movies.
Oh, I'm certainly not asking why Disney joined with Shendi. Last time I checked there were several billion (dollars) reasons to do that. Along with the fact China would never allow a foreign company to walk in without a state run ownership, and build something like this. Plus there's also the benefit of the government muscle in displacing thousands of people.
No, what I vaguely put was my question toward
@lockedoutlogic about why Shanghai would go along. I put down reasons like prestige, jobs, spending requirements, etc. It's possible that they're fine never making money, and acting like Disney's ATM. I just don't think that the Chinese local authorities are that submissive. I think that they, and Disney are expecting results.
I wouldn't be so sure about placing Disney into the category of Brer Rabbit. They're shrewd. If anyone is going to get burned by low profitability it's going to be Shanghai, as they explain to central government why they blew through billions with little chance of return. Heads may roll...
Disney can bury results in increased profitability at domestic operations. Shanghai isn't so lucky. Keep in mind with 70% control of the Managment company Disney has the decision making power on this Resort. It will be completely in charge of how this property is going to be conecting with the public.
Indeed, Spring of 2016 can't come soon enough...
)...and for things that didn't exist. Not surprising how quickly that support dried up and everybody "headed off" to the ranch.....
