Trouble in paradise officially?

[GimpYancIent]

I always understood the basic Disney entertainment business model to be very simple. To do what they do so well that people will want to come again to see it again and bring family and friends with them. I do not think that working to generate a high quality product that the public will want to repeatedly consume is an antiquated business model. The current issue is not to deviate from that model for a fast $$$.

 

[jt04]

I say that too. who cares what Walt would do. Walt's been dead over 50 years now. For the love of all that is holy, let him go.

He held to certain concepts that are foundational and don't change. That is what people value. IMO.

 

[Naplesgolfer]

Disney is made up of 4-5 parts that each have different needs and can at times run counter cyclical to each other. Theater run movies, streaming, parks, merchandise and Cruise line all feed of each other but are very different ( except for parks and cruise)businesses to run optimally. Espn ,NBC are kind of a little apart.

I detect a distain from Iger and Chapek for the "messy" business of running parks and cruises. I highly suspect they would love to be a strictly a digital media company. It shows in how they run the company and many comments they make.

 

[PrincessNelly_NJ]

Granted polling a few people is not the same as polling everyone and we've all see the crowds and the people who buy into everything.

People who make under $75,000 per year are most eager to visit Disney, but it's almost unaffordable for them

Though Disney vacations become increasingly expensive each year, diehard fans are still eager to visit the company's theme parks.

www.insider.com

I feel like this article didn't say much of anything.

Most people making $25-$75k tend to be younger individuals who would be more interested in a disney vacation. While others making $75k+ tend to be well off older adults who are more interested in international or beach vacations.

Its less about wealth than interest/age. But I will never argue that Disney isn't pricing out alot of guest - its expensive. But with little guest incentive to stay on property, we will see how that impacts disneys bottom line as more guest opt to stay offsight.

 

[Goofyernmost]

Publically traded companies are driven by returns especially those who have institutional investors are their majority shareholders so, despite your wishes, their business strategy is not yours. Significant investment in new parks, attractions, and employee wages in this environment requires revenue increases.

Why does everyone keep repeating what I just said. I know all about what drives it, but I think that there is an alternate way of making profit without robbing people blind. They and their shareholders all agree, currently, that this is the way to go. I say it's not the right way for long term growth and profit. Strictly opinion.

 

[Magenta Panther]

I say that too. who cares what Walt would do. Walt's been dead over 50 years now. For the love of all that is holy, let him go.

Stick it. I don't care how long Walt's been dead, his devotion to quality, innovation and creativity should never be let go. If you don't care about that, I'm surprised you're on a Disney park forum. Surely the average Six Flags park would serve your needs?

 

[jt04]

Why does everyone keep repeating what I just said. I know all about what drives it, but I think that there is an alternate way of making profit without robbing people blind. They and their shareholders all agree, currently, that this is the way to go. I say it's not the right way for long term growth and profit. Strictly opinion.

We all look forward to the comprehensive business plan from anyone who holds to this opinion. They are numerous on these forums. And if we can't get a comprehensive plan, can we at least get an outline of a plan?

Asking for a mouse.

 

[Goofyernmost]

I say that too. who cares what Walt would do. Walt's been dead over 50 years now. For the love of all that is holy, let him go.

Because if Walt didn't do what Walt did there would be no Disney Company, No Disneyland, No WDW and no variety of other things that the Disney Company encompasses. He may very well be dead and not speaking to anyone, but what he accomplished with "what Walt would do" should be recognized as sound, legacy creating relevant stuff with what and how Walt created to start the solid foundation of one of the largest companies in the world. In this country alone we have to ask What would Anaheim look like today without what Walt would do. What would Orlando be like without what Walt would do.

To just toss aside a process that is still promoted to bring people in but run as if it didn't exist and implying that the current management is what made these park so popular. It was Walt and Walt's crew that created that mission a valid actuality and it was subsequent management and publicly held a bunch of lies because greed is now the motivator. Greed can have a long life but, not as long as Walt's legacy and positions on the subject will. Free enterprise is a wonderful thing as long as it has a moral compass to go along with it. Walt invented theme parks as we see them today. So yea, we should at least give lip service to what he might think about any given move within that company. However, like so many thing in life today we toss it off as irrelevant thoughts of yesteryear and think that it is only modern thinking that is the right way.

 

[DisneyHead123]

I know I'm a broken record about supply and demand, but I think the problem is that we're just not used to limited supply in 2021, at least not in the US. For the most part, if you want something, someone will clamor to make it and sell it to you. There are a few exceptions - diamonds, gold, oil, and so on, but they are fairly rare for the average consumer. Typically, the more people want something, the more of it is produced.

Because Disney World sits on a finite piece of land in one location in the US, there is just no way to have low prices and low crowds unless you went to a "sell out immediately" or a lottery style system, the way they do for concerts that they know will sell out. That would work. Anything else (other than real competition to divert customers) will result in wall-to-wall people or ever-escalating prices.

 

[jt04]

Because if Walt didn't do what Walt did there would be no Disney Company, No Disneyland, No WDW and no variety of other things that the Disney Company encompasses. He may very well be dead and not speaking to anyone, but what he accomplished with "what Walt would do" should be recognized as sound, legacy creating relevant stuff with what and how Walt created to start the solid foundation of one of the largest companies in the world. In this country alone we have to ask What would Anaheim look like today without Walt would do. What would Orlando be like without what Walt would do.

To just toss aside a process that is still promoted to bring people in but run as if it didn't exist and implying that the current management is what made these park so popular. It was Walt and Walt's crew that created that mission a valid actuality and it was subsequent management and publicly held a bunch of lies because greed is now the motivator. Greed can have a long life but, not as long as Walt's legacy and positions on the subject will. Free enterprise is a wonderful thing as long as it has a moral compass to go along with it. Walt invented theme parks as we see them today. So yea, we should at least give lip service to what he might think about any given move within that company. However, like so many thing in life to day we toss it off as irrelevant thoughts of yesteryear and think that it is only modern thinking that is the right way.

Disney's pricing structure is not due to internal forces nearly as much as external forces. Big picture.

 

[networkpro]

Why does everyone keep repeating what I just said. I know all about what drives it, but I think that there is an alternate way of making profit without robbing people blind. They and their shareholders all agree, currently, that this is the way to go. I say it's not the right way for long term growth and profit. Strictly opinion.

It seems to have worked well for DeBeers over the last century.

 

[Goofyernmost]

Disney's pricing structure is not due to internal forces nearly as much as external forces. Big picture.

Outside forces would have been that they were deleting a large part of the middle class? That is a goal? There were outside forces when Mr. Disney created his park, but he had the courage and understanding of human nature to ignore those forces and it created a model that not only survived but survived spectacularly. Wall Street influence is mostly an arm of the wealthy. Many people have purchased Disney Stock, many just to say they owned a piece, albeit small, of Disney. They aren't the movers and the shakers that determine the actions of corporations. It's the big boys that play the game for money that do that. If they thought that selling off Disney was going to be more profitable for them, they would do it in a heart beat. That is the Big picture.

 

[networkpro]

Outside forces would have been the they were deleting a large part of the middle class? That is a goal? There were outside forces when Mr. Disney created his park, but he had the courage and understanding of human nature to ignore those forces and it created a model that not only survived but survived spectacularly. Wall Street influence is mostly an arm of the wealthy. Many people have purchased Disney Stock, many just to say they owned a piece, albeit small, of Disney. They aren't the movers and the shakers that determine the actions of corporations. The big boys that play the game for money that do that. If they thought that selling off Disney was going to be more profitable for them, they would do it in a heart beat.

One could argue that indeed what comprises the "middle class" was hollowed out with globalization and the subsequent outsourcing of copious manufacturing jobs.

 

[Parker in NYC]

I love coming to Disney forums for unsolicited economics 101. So many experts, so much time.

 

[orky8]

I know I'm a broken record about supply and demand, but I think the problem is that we're just not used to limited supply in 2021, at least not in the US. For the most part, if you want something, someone will clamor to make it and sell it to you. There are a few exceptions - diamonds, gold, oil, and so on, but they are fairly rare for the average consumer. Typically, the more people want something, the more of it is produced.

Because Disney World sits on a finite piece of land in one location in the US, there is just no way to have low prices and low crowds unless you went to a "sell out immediately" or a lottery style system, the way they do for concerts that they know will sell out. That would work. Anything else (other than real competition to divert customers) will result in wall-to-wall people or ever-escalating prices.

Disney World is supply constrained because they have chosen to be such. Much like a monopoly, Disney will set supply to meet the target profit in the face of demand. Disney still has plenty of real estate with which to build upon, including in the existing parks. They are supply constrained because for the last 10+ years, their strategy has not been to increase supply (i.e., park capacity), but rather to "better utilize" existing capacity. FP+ was all about shifting demand to lesser demand rides. The next trick up their sleeve is to double sell the parks, with a standard ticket and an after hours ticket. Now they can cater to twice the guests with the same amount of capacity (in their minds). Disney's capacity today is, I believe, probably lower than it was 10 years. I've not done the math, but seeing as there have been no major additions, and many losses or replacements with diminished capacity to what was there before, I'm fairly confident that's accurate.

Of course, we would all prefer that Disney build more capacity so they could increase the quantity of sales. Instead, they are focused on (1) the "quality" of the guest they want to sell their limited capacity to and (2) reducing the hours a ticket is good for so that they can then also sell an after hours ticket. And then, they don't need to ask the board for investment money, they'll continue to bleed the parks for every once they can get, and sadly, continue to reap the value from the hard-plowed investments of those that came before them.

 

[Jedijax719]

The danger is Disney pricing out the middle class and families with younger kids is that there may not be enough of a demand among the older, higher earning people to keep that model going. As many have said, those with more money might trend toward more "posh" vacations and international trips. Disney has always been expensive but if price rises TOO high TOO fast (due to COVID-19, either panic or desperation), then it will no longer seem approachable for the middle class who still seemed able to save for it. THAT is where things will fall apart.

 

[Magenta Panther]

Outside forces would have been the they were deleting a large part of the middle class? That is a goal? There were outside forces when Mr. Disney created his park, but he had the courage and understanding of human nature to ignore those forces and it created a model that not only survived but survived spectacularly. Wall Street influence is mostly an arm of the wealthy. Many people have purchased Disney Stock, many just to say they owned a piece, albeit small, of Disney. They aren't the movers and the shakers that determine the actions of corporations. The big boys that play the game for money that do that. If they thought that selling off Disney was going to be more profitable for them, they would do it in a heart beat. That is the Big picture.

I've read Bob Thomas' excellent Walt Disney biography - which he wrote without interference from the family while being given full access to all records, etc. - and two things relevant to your statement stand out to me now: Walt once said "Poor kids will never have to pay to go to Disneyland", and "There will always be 10 cent coffee in Disneyland". You are quite right, Walt didn't give a damn about "outside forces". He knew what he wanted his park(s) to be. He loved Disneyland most of all his creations because of the good it could do. Anyone who dismisses Walt is profoundly ignorant and really ought to educate themselves. And...speaking of selling off Disney...didn't Iger try to sell Disneyland to Saudi Arabia once? I thought I read that here some time ago...

 

[Dan Deesnee]

I don't hear many people mentioning this but what Disney is doing now is very short-sighted. Much of their current park business is what I would call nostalgia-based.

Many, many adults go back to the parks and fall in love with them again because they went when they were children and loved the parks then. Greatly reducing how many people are going into the parks because it's too expensive has a multi decade ripple effect. How many countless thousands if not millions are not going to become future Disney diehards because they never got to go as a kid?

 

[GimpYancIent]

I don't hear many people mentioning this but what Disney is doing now is very short-sighted. Much of their current park business is what I would call nostalgia-based.

Many, many adults go back to the parks and fall in love with them again because they went when they were children and loved the parks then. Greatly reducing how many people are going into the parks because it's too expensive has a multi decade ripple effect. how many countless thousands if not millions are not going to become future Disney diehards because they never got to go as a kid?

Absolutely.

 

[Jedijax719]

I don't hear many people mentioning this but what Disney is doing now is very short-sighted. Much of their current park business is what I would call nostalgia-based.

Many, many adults go back to the parks and fall in love with them again because they went when they were children and loved the parks then. Greatly reducing how many people are going into the parks because it's too expensive has a multi decade ripple effect. How many countless thousands if not millions are not going to become future Disney diehards because they never got to go as a kid?

Right on! And how many people pass on the WOM and excitement by telling other families "oh you need to go and take your kids some day". If they lose those people who can "pass the torch" onto others, they will lose that PR chain that has also helped to keep Disney what it is.