A Spirited Perfect Ten

[ford91exploder]

And yet the Chinese built environment is centered around the private house, with a high surrounding wall and no outward facing windows that only became more private once entered. Or the high level of personal achievement necessary to rise through the civil service. Or how one could assume the Mandate of Heaven. There would have been no need for a Chinese Communist Party or Cultural Revolution if what you describe is true, because it would mean that the dynasties had achieved communism.

Interesting that you mention the Chinese family house which as you correctly note is the center of family life, The ENTIRE extended family lives there from the oldest grandparent to the babies. Once again more of a community asset than an individual one.

There have been many revolutions in China's time all due to corruption in the leadership, After the United States is a distant memory, China will STILL be having revolutions, The communist one is simply the most recent.

 

[Cesar R M]

No strategic advantage - there is no great benefit for China in seizing those assets, Just ask Fellowes about building shredders in China - google it.

Agree, I think it depends if you fall out with the government or if you had to bribe a top official and the others found it.

The top official might get executed and your stuff seized.

Almost sounds like the good old Imperial countries when expanding to Asia and India.
They would trigger invasions if you didnt do business in the way they wanted.

 

[WDWFigment]

Great string of posts by @BrianLo @GoofGoof and @lazyboy97o (perhaps others, I've only read the last page) presenting counterpoints to a discussion that seemed to me getting a bit overzealous. If China were truly the wild west, the government would have simply built their own park using Disney IP and not involved Disney at all. After all, as the argument goes, Disney has no recourse in China. Nevermind the fact that the government there has demonstrated a strong desire to be recognized as a legitimate world power (and not just economically--culturally) and "taking" the park from Disney would be debilitating to its future business endeavors with Western brands, among other far-reaching repercussions.

I have not been to Shanghai or Beijing, but I don't view that as a prerequisite for speculating upon what might be happening there. All you have to do is read some of the news and exposés about construction in China (60 Minutes had a particularly good one maybe a year ago and there also have been articles in a multitude of other sources) to understand what is likely happening with construction in terms of the need to rebuild or spend extra costs on labor due to the high rate of turnover and/or health issues. I'm not saying this is where all of that extra money has gone, but my guess would be a significant chunk went to those things.

As for Iger not being photographed in Shanghai, look at the vast number of news stories and commentary about cultural imperialism around the time of EuroDisney's opening. It would be pragmatic from Disney's perspective to avoid that kind of conversation in a country that, as the argument goes, is not completely receptive to Western brands. I don't have any inside information, so I have no idea whether it was a mandate from Shendi that Iger not be photographed on site, but it could just as easily be an exercise of discretion by TWDC. In my opinion, that would be a wise move. No one at TWDC can control where Eisner goes or what he does.

There's clearly an interesting story that Disney doesn't want to be told with what's happening in Shanghai, but some of the speculation here about what's going on seems like it's reaching just a tad...

 

[WDW1974]

True. It may actually be less than 5%. I would think Hong Kong is a lot more likely than Shanghai. I know I am very unlikely to ever visit.

I do have an interest in what goes on there even without planning on visiting. It may be more of an academic interest than a practical one. If TWDC is going to spend money on P&R projects anywhere I am interested. Success or failure could have a major impact on the domestic parks. The issues with Euro Disney had a major impact on the stripped down version of DCA that eventually opened. If this project is a flop and it's a drain on P&R results and capital spend it could be very bad news for future projects at DHS or further down the road at EPCOT or even a WDW 5th gate. If the park is a smash hit it makes justifying future P&R capital spend a lot easier. This project has the size and scope to potentially set the company back a decade or more if it's a real train wreck. I know people want Iger to look bad, but as a fan of WDW I can't see how failure on this project would be a good thing.

The situation with Disney in Shanghai doesn't simply impact P&R, it impacts the entire company across every business unit. People don't seem to grasp that.

Blaming Euro Disney for DCA is a stretch. It was more a case of Disney pitting Anaheim and Long Beach against one another and when one fell away, not having enough power to get the concessions needed from the other for a truly HUGE makeover of the area mixed in with a crazy weekend in the Rockies gave us DCA.

Paris and Hong Kong started slow out of the gates for a variety of reasons that are constantly rehashed and, often, misunderstood. One reason why they struggled was NOT because people didn't know Disney or have an affinity for it.

Shanghai remains a different story. I get that for some fanbois it's hard to believe there could be a place where hundreds of millions of people have little or absolutely no knowledge of Mickey Mouse or Disney in general. Disney's strategy to expand ALL of its business units is dependent on SDL's success. Understand why it is so damn important that Disney would censor stories that tells the real tale of the challenges?

I want SDL to be successful, but I also want Iger out of the company. He is a lousy leader and not my idea of a standup member of the species.

To that end, one must wonder why Disney is planting one story after another in the Motley Fool on almost a daily basis now. Is it so people forget about the HuffPo piece that was wiped from the 'net? All of it is total PR BS ... this story I think is designed for folks like @ParentsOf4 who follow the numbers closely ... this one just explains away a $143 million dollar loss as necessary and blames it on Venezuela (my neighbors would like that!) I wonder if paying off party officials in China is also OK since it is necessary?

http://www.fool.com/investing/gener...r-guess-how-disney-just-lost-143-million.aspx

 

[WDW1974]

Jumping out of order because 1.) I want to; 2.) Mr. Bricker showed up and I saw his post; 3.) I think he brought up some interesting points (BTW, read the 3rd and 4th installments on your HKDL trip report and enjoyed it quite a bit. One thing that I can't comment on, but I have heard from others that while MM has lots of merchandise that most of it is very cheap crap, including those Albert plushes!)

Onward to zee post ...

I have not been to Shanghai or Beijing, but I don't view that as a prerequisite for speculating upon what might be happening there. All you have to do is read some of the news and exposés about construction in China (60 Minutes had a particularly good one maybe a year ago and there also have been articles in a multitude of other sources) to understand what is likely happening with construction in terms of the need to rebuild or spend extra costs on labor due to the high rate of turnover and/or health issues. I'm not saying this is where all of that extra money has gone, but my guess would be a significant chunk went to those things.

Many folks are speculating on that. I know structures have had to be rebuilt. I know there have been health issues, apparently more with Americans not used to the pollution than with locals who live with that reality. But the question really is that $800 million was added in spring of 2014 with Iger quoted by media as saying specifically that the cash was going for extra attractions and added capacity. Nothing was announced. Nothing can be seen being built that wasn't originally planned. Where did the money go? I'm a shareholder, I damn well want to know. There already appears to be another $200 million discrepancy in the cost of the project, not quite sure if that is bad reporting or more money that is just 'out there'.

Disney is simply desperate to deflect any notion it went to payoffs. I get why. No, Zenia Mucha, I wouldn't want an SEC investigation either. Try damage control on that one!

As for Iger not being photographed in Shanghai, look at the vast number of news stories and commentary about cultural imperialism around the time of EuroDisney's opening. It would be pragmatic from Disney's perspective to avoid that kind of conversation in a country that, as the argument goes, is not completely receptive to Western brands. I don't have any inside information, so I have no idea whether it was a mandate from Shendi that Iger not be photographed on site, but it could just as easily be an exercise of discretion by TWDC. In my opinion, that would be a wise move. No one at TWDC can control where Eisner goes or what he does.

Pragmatism has nothing to do with it. There was/is a free press in Paris (and most of Europe) when Euro Disney debuted. ... If Iger were photographed at SDL, it's very, very likely it wouldn't be placed into the news over in the mainland. So, why can't he put one out in America? Could it be that he isn't allowed. I know there has to be pics. He's been there enough. But nothing. It must be tough being so important and so impotent at the same time.

Forget Eisner, no offense to Michael. But I am reasonably sure that with my friends in China (more like brothers really) that if I wanted access to the site, I'd get it and you'd get a new avatar from me with my fingers pointed at some as of yet unannounced attraction!

It's very troubling to me that Iger appears unable to show any oversight of the project whatsoever, any leadership. Of course, it's not really his park anyway. Don't tell the analysts or the folks who like to short stocks.

There's clearly an interesting story that Disney doesn't want to be told with what's happening in Shanghai, but some of the speculation here about what's going on seems like it's reaching just a tad...

Really, Tom, I have a strong feeling that what is really happening is so much wilder. I've lived and worked in Beijing, Guangzhou and Hong Kong and have spent considerable time in Shenzhen and Macao. It's a whole lot different than being a tourist for a week or so in HK. ... The stories I could tell, but won't because I want to work over there again. I love the people, the food, the history, the amazing buildings ... but everything is never close to what it seems. Sorta like dealing with a Guest Relations host at City Hall at the MK who wants to screw with you because he's never heard of a problem with selling taco salads without the salad at Pecos Bill's.

 

[WDW1974]

Precisely, they made the model fit the market and were successful. This is no different than what Disney is currently attempting. Also the coffee isn't just for the Expats as @GoofGoof mentioned, it's pretty much the full Starbucks experience, no different than the modifications for any other foreign country they are in (Anglo-Saxon or otherwise).

Another one of my favourites brands is SPG, they've very successfully cracked the Chinese market as well.

If Disney were building SDL on the cheap, I agree, I think the whole project would fall flat, but this isn't HKDL redux. They have to start from somewhere.

I've said this before and will repeat, some companies are doing great over there and seem to have no trouble explaining their BRANDS. Companies like YUM (Pizza Hut and KFC, no Taco Bells there that I have seen), Starbucks (as you mentioned), GM (when the company was about to under in the USA, it was making billions selling Buicks in the mainland) and, more recently, McDonald's.

Of course, I think those companies offer products that are much easier to understand than a Disney theme park.

People from the mainland are actually afraid to enter showbuildings at HKDL. It's why you'll see large lines for the flat rides and the train and even the stage shows. But MM may well be a walk-on even if the park is busy. Why is that? People are afraid of what's inside. Same with Space Mountain or even PhilharMagic.

And before you think this is some bizarre Chinese issue, I can recall people spending the day at EPCOT Center in the early 80s and saying nothing much was there, just some giant buildings and replicas of countries. Yes, good old Americans never thought maybe I should walk into The Land or Journey Into Imagination.

 

[WDW1974]

How does building this park in China effect the entirety of TWDC? Would that 6 billion have been used on a 5th gate? A knock your socks off Star Wars Land? ANOTHER Marvel universe movie?

I read a few pages back that Euro Disney set the company back some when it opened and promptly began loisng money. But this is a much different, much larger Disney Company. If this China Park struggles, is it really going to destroy Bobby's bottom line? How big of a failure would it need to be to stop capex stateside?

Basically, already asked and answered.

But, no, it wouldn't (thank God!!!) have been used on a fifth gate because Disney is overbuilt as is. We're already getting a Star Wars Land, how many socks it knocks off depends on the budget, which should be finalized before spring turns to summer. And Marvel films are coming ad nauseum. But so long as a few are GotG sequels, then I'll be happy. You can keep the rest.

I've already talked about how SDL is about the entire Disney BRAND in the largest consumer market on the planet. Even if you know nothing about China it should be simple to figure out that failing there would harm the company greatly.

 

[Lee]

Since the topic is China, and the potential hazards that Disney might face over there, I thought this little aside would be relevant.

I just stumbled onto this article on Facebook:
http://www.upworthy.com/everyone-wa...-views-later-its-still-up-watch-it-here?c=bl3

I've never been over to China so I can't say from personal experience, but....wow...they really have a problem with their air over there.​

 

[PhotoDave219]

I think the largest problem (IMO) is simply the vast difference between how the two cultures do business.

On one hand, you have cut throat American Capitalism. People who are very much used to things being a certain way.

On the other? China. A very misunderstood business culture. I sure don't understand it beyond "they do things their own way." They are a people who are very much used to getting their own way.... For much longer than America has been around.

I don't think we can really analyze the nuances of What is going on without a crash course in Chinese Business Culture and Economics. They have their own set of rules and frankly, I don't see them playing by Wall Street's rules or models.

So if @Lee or @ParentsOf4 or anyone else can give us a crash course on how China works, maybe we can go from there.

And this might be where TWDC is having problems with China. Perhaps they simply don't get how business is done in Shanghai? Perhaps that part of the world is incomprehensible to the army of Harvard-educated MBAs that take up space in the Team Disney building in Glendale?

Alas my larger concerns are about making sure it's done right, so Disney can capture the emerging middle class in China and to a lesser extent, India.

I just don't want to see this being a foreign money pit 2.0 (see also "EuroDisney") where money that could go towards expanding the domestic parks and the #1 international family vacation destination. There's a giant element of risk and if Bobby "screws the pooch" (see "the right stuff" for that reference), I cannot see the shareholders or the board reacting in a calm and dignified fashion. I can see them going absolute Ape if the stock price drops significantly.

If anything, this missing $800M is reinforcement of why Disney needs better corporate governance and greater transparency to the shareholders. They seem more interested in their image rather than actually accomplishing anything or doing things the right way. I will give it to Zenia (I've heard my own stories. She's not to be trifled with), her and the PR machine is doing their best at crafting and controlling the message and the story.

However, eventually the truth will leak out. There's too much money involved. The question IMO is will anyone be paying enough attention to care when it does?

Such is my thoughts. I don't know enough about how business is done in China to evaluate if Bobby has doomed himself. Alas I know enough about American Capitalism to know that someone's going to ask where that $800M went and likely someone will be held accountable.

Screwing up a timeshare in Hawaii cost a bunch of mid level jobs. Screwing up The entry into China? That's going to be senior level departures, likely without a golden parachute.

IMO.

 

[BrerJon]

It's for another thread, but it would be fun to go through just the "main street" photo of that park and point out everything so utterly wrong. In short, a convincing structure in any park has, at its foundation, an actual believable source (20th/19th western architecture for Main Street). The designer needs to understand established principles to create anything believable. The designers of that park had no understanding of real architecture upon which Disneyland was based, just the Disneyland model (which they so poorly copied). Note the windows (not indicating where the actual floors would be), the windowless dormers, etc. The knock-off park becomes absurdist when you study it.

The thing is though, people like us who are connoisseurs of quality theme parks, know the importance of theming and the little details, but how important is this really to a completely foreign audience?

There are numerous instances of Disney in the USA parks dropping little details and thematic touches which fall into the 'you don't notice them but you would if they weren't there' category in the hope that people won't notice after all, and attendance figures seem to show that they didn't.

Now apply that to China, where the average person doesn't have a clue whether a street is an authentic representation of a 19th Century American town or whatever. Those details matter even less.

Disney is banking on crowds flocking to the park because of the tight theming and attention to detail that the other parks lack, but if the other parks are getting 80% of the way there, how important is that extra 20% to the average Chinese guest? That's what remains to be seen, and why some of us are doubtful that SDL will be the smash-hit most people seem to think it will be.

 

[Nubs70]

I think the largest problem (IMO) is simply the vast difference between how the two cultures do business.

On one hand, you have cut throat American Capitalism. People who are very much used to things being a certain way.

On the other? China. A very misunderstood business culture. I sure don't understand it beyond "they do things their own way." They are a people who are very much used to getting their own way.... For much longer than America has been around.

I don't think we can really analyze the nuances of What is going on without a crash course in Chinese Business Culture and Economics. They have their own set of rules and frankly, I don't see them playing by Wall Street's rules or models.

So if @Lee or @ParentsOf4 or anyone else can give us a crash course on how China works, maybe we can go from there.

And this might be where TWDC is having problems with China. Perhaps they simply don't get how business is done in Shanghai? Perhaps that part of the world is incomprehensible to the army of Harvard-educated MBAs that take up space in the Team Disney building in Glendale?

Alas my larger concerns are about making sure it's done right, so Disney can capture the emerging middle class in China and to a lesser extent, India.

I just don't want to see this being a foreign money pit 2.0 (see also "EuroDisney") where money that could go towards expanding the domestic parks and the #1 international family vacation destination. There's a giant element of risk and if Bobby "screws the pooch" (see "the right stuff" for that reference), I cannot see the shareholders or the board reacting in a calm and dignified fashion. I can see them going absolute Ape if the stock price drops significantly.

If anything, this missing $800M is reinforcement of why Disney needs better corporate governance and greater transparency to the shareholders. They seem more interested in their image rather than actually accomplishing anything or doing things the right way. I will give it to Zenia (I've heard my own stories. She's not to be trifled with), her and the PR machine is doing their best at crafting and controlling the message and the story.

However, eventually the truth will leak out. There's too much money involved. The question IMO is will anyone be paying enough attention to care when it does?

Such is my thoughts. I don't know enough about how business is done in China to evaluate if Bobby has doomed himself. Alas I know enough about American Capitalism to know that someone's going to ask where that $800M went and likely someone will be held accountable.

Screwing up a timeshare in Hawaii cost a bunch of mid level jobs. Screwing up The entry into China? That's going to be senior level departures, likely without a golden parachute.

IMO.

I wonder about how/if the "older" crop of MBA's education had a large cultural component to their curriculum.

Why I ask is that in Chinese culture age begets credibility. If the older Disney MBA's did not have cultural awareness pounder into their heads, in the Chinese eyes, those at Disney with business credibility are cultural bafoons and are offensive.

The younger MBA's at Disney very well have had cultural awareness pounded into their heads but do not have sufficient credibility with the Chinese due to the age factor nor with Disney due to lack of tenure.

Disney is in a cultural pickle.

 

[Goofyernmost]

Funny that I can't seem to find ANYTHING wrong with this choice..

Neither do I. You can see down her body as far as possible. In order to see possible you would probably have to buy her dinner.

 

[flynnibus]

In some interesting business news, Invesco, Euro Disney's third largest shareholder, reportedly dumped its entire stake in Euro Disney.

Buying up shares while the market and company was weak... I guess they were hoping to get a controlling share or cash out when things got great. Disney's new re-capitalization plan obviously torpedeo'd that concept

 

[flynnibus]

The Chinese park posted by RandySavage certainly looks like they have the skills to pull off the level of theming WDI can accomplish.

The difficult part of theming is not about the level of detail built... The Chinese can easily copy anything.

The art is in knowing how to CREATE and apply the principles to new things and ideas. It's easy to COPY ideas, it's hard to CREATE new ones.

Copiers tend to just repeat, and miss apply the principles.. because all they know how to do is copy what has already been done.

 

[Nubs70]

The difficult part of theming is not about the level of detail built... The Chinese can easily copy anything.

The art is in knowing how to CREATE and apply the principles to new things and ideas. It's easy to COPY ideas, it's hard to CREATE new ones.

Copiers tend to just repeat, and miss apply the principles.. because all they know how to do is copy what has already been done.

And this is a byproduct of the age based culture found in China. The young and powerless are not allowed to innovate and the old and powerful do not know how to innovate.

Since when has China created an innovative product or service? "New" products from China are replicative.

 

[wdisney9000]

I logged on to the Shanghai Disney website and noticed they now have a 'Stories' section for each character that gives you the basic background for Mickey, Minnie, Donald, Pluto. Was this always there or did they just add it after the HuffPo article? I never saw it before. Its just basic character info.

Im talking basic, like for Mickey, it says, "Mickey Mouse is a humble, friendly little guy who loves to spend time with his friends". Thats all it says. (i added the huffpo image just for fun)

 

[flynnibus]

Since when has China created an innovative product or service? "New" products from China are replicative.

Yeah, but the same 'copy a product' vs 'understand the design' problem happens here too... especially in theme parks and armchair engineering People reject ideas that have been lifted from Disney as not Disney or not as good as the original.. and generally because the people copied what they saw instead of adapting the principles to their needs.

And why we can get very intricately decorated things... that still fall flat with the consumer. Disney itself is fueling this problem in how they say "look at all the detail we did!" over and over instead of coaching the principles and showing how they play out in an attraction. Those that understand can create the examples... those that copy the idea, just copy the example.

 

[JediMasterMatt]

But I am reasonably sure that with my friends in China (more like brothers really) that if I wanted access to the site, I'd get it and you'd get a new avatar from me with my fingers pointed at some as of yet unannounced attraction!

I for one would be most interested in seeing this come to fruition. Not to see the mythical unannounced attraction; but, just to see what finger or fingers Spirit would be using to point with.

I would guess; but, this is a family friendly forum.

 

[FigmentJedi]

I logged on to the Shanghai Disney website and noticed they now have a 'Stories' section for each character that gives you the basic background for Mickey, Minnie, Donald, Pluto. Was this always there or did they just add it after the HuffPo article? I never saw it before. Its just basic character info.

Im talking basic, like for Mickey, it says, "Mickey Mouse is a humble, friendly little guy who loves to spend time with his friends". Thats all it says. (i added the huffpo image just for fun)

I believe they did the same thing with Hong Kong's site.

 

[ford91exploder]

I wonder about how/if the "older" crop of MBA's education had a large cultural component to their curriculum.

Why I ask is that in Chinese culture age begets credibility. If the older Disney MBA's did not have cultural awareness pounder into their heads, in the Chinese eyes, those at Disney with business credibility are cultural bafoons and are offensive.

The younger MBA's at Disney very well have had cultural awareness pounded into their heads but do not have sufficient credibility with the Chinese due to the age factor nor with Disney due to lack of tenure.

Disney is in a cultural pickle.

^^^^ THIS ^^^^

In China age implies wisdom, Most of our China senior management/technical team is older and born in HK and Macao for that very reason because they UNDERSTAND the culture.