A Spirited Perfect Ten

[Tony Perkis]

"Do not go gentle into that good night....do not go gentle into that good night....do not go gen...zzzzzzzzzz"

Of all the things to criticize from that film, you choose a quote from a piece of work that existed well before the film existed?

 

[Next Big Thing]

Being that the Academy is 90% white, they must all hate themselves then. The Oscars are not a popularity contest. If so movies, like Avatar and Transformers would win Best Picture. It sounds like the MTV movie awards are more your speed if you are looking for movies to win awards that you find entertaining.

Avatar was actually nominated for Best Picture...

 

[ParentsOf4]

You asked "In what measurable standards (not based on opinion) is Uni "kicking Disneys butt) in?" and I gave you measurable standards, greed or not has no bearing on it.

Considering Universal has cheaper hotels, cheaper park tickets, cheaper in-park food etc., those profit margins are pretty impressive. I don't care how greedy a corporation is if they're delivering a great experience providing good value for money for the guests. If Disney was making those sort of margins I'm sure you'd be the first to congratulate them on trouncing the competition.

This kind of margin speaks to the EFFICIENCY of UNI's operations, Disney for all it's customer facing penny pinching is very inefficient and their margins reflect that inefficiency.

Disneyworld is also much larger and harder to maintain and manage than Universal Orlando.

You've been having an interesting discussion about Disney and Universal operating margins on another thread, but since that other thread is specific to the Toy Story Mania expansion, I thought I'd reply over here instead.

After all, we discussed margin on this thread before and, besides, everyone expects a Spirit thread to drift.

Unlike other amusement park companies, Disney's Parks & Resorts (P&R) and Universal's Theme Parks are business units within larger multifaceted corporations. Neither The Walt Disney Company nor Comcast report net income for their respective business units. However, they do report operating income. As a result, it's possible to compare their theme park operating margins (operating income / revenue) with other companies.

Operating margin is interesting because it indicates how efficient an organization is at making money. It’s like a pretax rate of return; the higher the return, the better the investment.

The following graphs operating margin over the last 5 years for several major amusement park companies:

Universal has had the highest operating margin for years.

SeaWorld and Six Flags are at the bottom. SeaWorld includes Busch Gardens.

Disney is towards the lower end but has been climbing steadily.

Cedar Fair operates about a dozen well-known theme parks in North America, including Cedar Point in Ohio, Knott's Berry Farm in California, and Kings Dominion in Virginia.

The Oriental Land Company ("OLC" in the graph) owns and operates Tokyo Disney Resort through a licensing agreement with Disney. Presumably, their operating income would be appreciably higher if not for the royalties they pay to Disney, and their margin would be closer to Universal's if not for this fee. It's an interest topic since it hints at what Disney's margins could be if they operated their theme parks as efficiently as OLC. I'm sure someone will chime in about ticket prices at Tokyo Disneyland.

Merlin operates in Europe.

Focusing on Disney and Universal, there are some points to consider:

1. Disney's domestic operations (mostly WDW and DLR) have much better margins than Disney's international operations (mostly DLP & HKDL). Disney's domestic margin is lower than Universal's but the single largest factor dragging down Disney’s margin is what's happening overseas. It's one of the reasons investors are worried about a big project in Shanghai. Disney's overseas P&R track record is not particularly good.
2. Because of its size, WDW is more expensive to operate but this is offset by the hotels. Disney's hotels are significantly overpriced for what they are. Disney collects roughly $2.4 billion from its domestic hotels, whereas Universal's total revenue is only about $2.6 billion. Between the theme parks, hotels, Downtown Disney, and other facilities, WDW really is an incredible money making machine.
3. Disney's theme parks have higher attendance than Universal. It's more efficient to run a theme park with 50,000 daily guests than 25,000 daily Guests. Similarly, the cost of food generally is higher at WDW. Some TS meals at WDW are obscenely overpriced. You'd think WDW theme parks would have better margins, but Universal might generate a larger percentage of revenue through licensing agreements, lowering operating costs.
4. Disney used to have higher margins than they do today, even though WDW is basically the same size it was years ago. Disney's margins fell apart when P&R leadership were replaced by executives who managed the theme parks 'by the numbers'. In the past, Disney frequently went against conventional business wisdom and its margins were better for it. As Disney executives who cut their teeth using Disney's unconventional style of theme park management were replaced by executives with more conventional thinking, margins suffered. Good instincts often are more important than numbers on a spreadsheet. Backed by data, Disney executives considered Orlando to be a mature market, not worthy of major investment, and were content to stand pat. Universal executives went against this thinking and invested in Orlando, growing both revenue and margin as a result. Sometimes, managing is art.
5. Disney appears to be significantly more bureaucratic than most of its competitors, which might partially explain why its margin is towards the low end. In 2014, the only 2 companies with lower margins were struggling whereas Disney experienced record attendance.

The good news for Disney is that its domestic margin has rebounded nicely in recent years. Those price increases, delayed projects, and quality cuts that drive WDW fans crazy are paying off. IMO, Disney's domestic margin is good now, even if it doesn't quite match Universal's. Domestically, I believe it's time for Disney to focus on growing revenue rather than improving margin. It's time for Pandora. It's time for Star Wars Land.

Overseas, it's a different matter. Overseas, Disney P&R still has a lot of work to do.

 

[Next Big Thing]

Yes, That's EXACTLY what I mean in China the pattern has been that Disney movies make 1/3 or less than an equivalent picture by NBC/Universal. So I'd say that is a strong indicator that Disney does not UNDERSTAND the Chinese market well enough to make money there.

lol, Transformers is Paramount/Dreamworks.

Just because the ride is in a Uni park doesn't mean they had anything to do with the movie.

 

[hopemax]

My biggest 'issue' with current WDW projects is they seem totally lacking in art direction. Things are decorated and not themed way too often . The Cracker Barrel may have great Sunday chicken, right @Lee?, but assorted country mass-produced and aged knick knacks are not theming. Disney seems to have forgotten this. Decisions are made (take the new Hub, please, because I sure as hell don't want it!) with no sense of the staging that was part of the original build of the area. Sure, it started with toonish giant hats and wands, but now it is seen in everything from park infrastructure 'enhancements' to attraction show buildings and queues to retail and dining decor.

Art design basically exists only in individual projects and in no way takes into account the environment in which the new things exist. It is terrible. It shows no depth, unlike the layers of intricate theming you just get at DAK, not to mention state of the art stuff like UNI's Diagon Alley.

Disney used to be about transporting you somewhere and now the only place they want to take you is to BRAND advocate brainwashing sessions.

This, 1000 times. And what I said over on LP, about the Hub and other recent projects. My Mom has been in and out of the hospital lately, and so if there is any positives, I've been catching up on my reading. Finally, got around to reading Devil In the White City, and reading about the design philosophies of the Burnham, Olmsted and the other lead designers of the Chicago World's Fair, I was struck by the idea, that if Elias Disney really loved the Fair as is implied, the stories he told must have impacted a very young Walt. Many of the philosophies they espoused would be kindred to the ones we hear about Walt and his people like Harper Goff, Emil Kuri and Bill Evans to create Disneyland's spaces.

My Dad has been using his hospital time to catch up with his reading, which means finishing off Walt's People interviews. And he read one from Bill Evans about doing a lot of the initial landscape work for WDW. First, he was struck by how learned Bill Evans was, and the people he drew inspiration from. Second, how budget mindful his decisions were. And in general, my Dad has been struck by how many geniuses were working at the Walt Disney Company throughout Walt's time, and that he doesn't get the sense that those type of people would have anything to do with today's Disney company.

Diagon Alley, certainly reinforces how critically important having properly trained art and production directors involved in the design of theme park areas if you really want an area to come alive. And after years, of commenting on how many Valley Crest trucks and staff are running around WDW property, seeing it come to full fruition on how damaging it is to the overall spirit and impact of the parks and resorts. The Hub is destroyed, but it looks nice enough that you don't really feel how ruined it is, if you aren't paying attention. The Polynesian lobby looks like a convention center, I can't even talk about the Pandora space in Uptown Jewelers.

But yep, all attempts of creating positive reinforcing landscapes and sense of place are quickly being wiped out.

 

[Mike S]

You've been having an interesting discussion about Disney and Universal operating margins on another thread, but since that other thread is specific to the Toy Story Mania expansion, I thought I'd reply over here instead.

After all, we discussed margin on this thread before and, besides, everyone expects a Spirit thread to drift.

Unlike other amusement park companies, Disney's Parks & Resorts (P&R) and Universal's Theme Parks are business units within larger multifaceted corporations. Neither The Walt Disney Company nor Comcast report net income for their respective business units. However, they do report operating income. As a result, it's possible to compare their theme park operating margins (operating income / revenue) with other companies.

Operating margin is interesting because it indicates how efficient an organization is at making money. It’s like a pretax rate of return; the higher the return, the better the investment.

The following graphs operating margin over the last 5 years for several major amusement park companies:

View attachment 86009


Universal has had the highest operating margin for years.

SeaWorld and Six Flags are at the bottom. SeaWorld includes Busch Gardens.

Disney is towards the lower end but has been climbing steadily.

Cedar Fair operates about a dozen well-known theme parks in North America, including Cedar Point in Ohio, Knott's Berry Farm in California, and Kings Dominion in Virginia.

The Oriental Land Company ("OLC" in the graph) owns and operates Tokyo Disney Resort through a licensing agreement with Disney. Presumably, their operating income would be appreciably higher if not for the royalties they pay to Disney, and their margin would be closer to Universal's if not for this fee. It's an interest topic since it hints at what Disney's margins could be if they operated their theme parks as efficiently as OLC. I'm sure someone will chime in about ticket prices at Tokyo Disneyland.

Merlin operates in Europe.

Focusing on Disney and Universal, there are some points to consider:

1. Disney's domestic operations (mostly WDW and DLR) have much better margins than Disney's international operations (mostly DLP & HKDL). Disney's domestic margin is lower than Universal's but the single largest factor dragging down Disney’s margin is what's happening overseas. It's one of the reasons investors are worried about a big project in Shanghai. Disney's overseas P&R track record is not particularly good.
2. Because of its size, WDW is more expensive to operate but this is offset by the hotels. Disney's hotels are significantly overpriced for what they are. Disney collects roughly $2.4 billion from its domestic hotels, whereas Universal's total revenue is only about $2.6 billion. Between the theme parks, hotels, Downtown Disney, and other facilities, WDW really is an incredible money making machine.
3. Disney's theme parks have higher attendance than Universal. It's more efficient to run a theme park with 50,000 daily guests than 25,000 daily Guests. Similarly, the cost of food generally is higher at WDW. Some TS meals at WDW are obscenely overpriced. You'd think WDW theme parks would have better margins, but Universal might generate a larger percentage of revenue through licensing agreements, lowering operating costs.
4. Disney used to have higher margins than they do today, even though WDW is basically the same size it was years ago. Disney's margins fell apart when P&R leadership were replaced by executives who managed the theme parks 'by the numbers'. In the past, Disney frequently went against conventional business wisdom and its margins were better for it. As Disney executives who cut their teeth using Disney's unconventional style of theme park management were replaced by executives with more conventional thinking, margins suffered. Good instincts often are more important than numbers on a spreadsheet. Backed by data, Disney executives considered Orlando to be a mature market, not worthy of major investment, and were content to stand pat. Universal executives went against this thinking and invested in Orlando, growing both revenue and margin as a result. Sometimes, managing is art.
5. Disney appears to be significantly more bureaucratic than most of its competitors, which might partially explain why its margin is towards the low end. In 2014, the only 2 companies with lower margins were struggling whereas Disney experienced record attendance.

The good news for Disney is that its domestic margin has rebounded nicely in recent years. Those price increases, delayed projects, and quality cuts that drive WDW fans crazy are paying off. IMO, Disney's domestic margin is good now, even if it doesn't quite match Universal's. Domestically, I believe it's time for Disney to focus on growing revenue rather than improving margin. It's time for Pandora. It's time for Star Wars Land.

Overseas, it's a different matter. Overseas, Disney P&R still has a lot of work to do.

So even OLC has better margins than Disney. If that doesn't show that there's a problem that needs fixing and the old way of doing things was indeed better than the current penny pinching strategy, nothing will.

 

[Smiddimizer]

Of all the things to criticize from that film, you choose a quote from a piece of work that existed well before the film existed?

Repeating that poem ad nauseam says just as much about how uninspired the dialogue was, which is what they were talking about.

 

[tirian]

This, 1000 times. And what I said over on LP, about the Hub and other recent projects. My Mom has been in and out of the hospital lately, and so if there is any positives, I've been catching up on my reading. Finally, got around to reading Devil In the White City, and reading about the design philosophies of the Burnham, Olmsted and the other lead designers of the Chicago World's Fair, I was struck by the idea, that if Elias Disney really loved the Fair as is implied, the stories he told must have impacted a very young Walt. Many of the philosophies they espoused would be kindred to the ones we hear about Walt and his people like Harper Goff, Emil Kuri and Bill Evans to create Disneyland's spaces.

My Dad has been using his hospital time to catch up with his reading, which means finishing off Walt's People interviews. And he read one from Bill Evans about doing a lot of the initial landscape work for WDW. First, he was struck by how learned Bill Evans was, and the people he drew inspiration from. Second, how budget mindful his decisions were. And in general, my Dad has been struck by how many geniuses were working at the Walt Disney Company throughout Walt's time, and that he doesn't get the sense that those type of people would have anything to do with today's Disney company.

Diagon Alley, certainly reinforces how critically important having properly trained art and production directors involved in the design of theme park areas if you really want an area to come alive. And after years, of commenting on how many Valley Crest trucks and staff are running around WDW property, seeing it come to full fruition on how damaging it is to the overall spirit and impact of the parks and resorts. The Hub is destroyed, but it looks nice enough that you don't really feel how ruined it is, if you aren't paying attention. The Polynesian lobby looks like a convention center, I can't even talk about the Pandora space in Uptown Jewelers.

But yep, all attempts of creating positive reinforcing landscapes and sense of place are quickly being wiped out.

You mean that the lackluster forced perspective in New Fantasyland, the bone-headed decision to squeeze Disney's hottest IP into the tiniest World Showcase pavilion, and the move to force FP+ onto high-capacity attractions didn't tip you off that Disney no longer employs the greatest creative minds?

I think Buena Vista Street at DCA is another missed opportunity. For all the love it gets from MiceAge, I was expecting something on the level of DHS' entrance. Heck, Disney practically lifted the DHS front gate and plopped it in front DCA. The Fifer/Fiddler/Practical Café is "Disney" quality. Everything else on that street seems flat, with no details or layers—exactly the kind of things the movie art directors and set designers who created DL, the MK, and World Showcase understood. Buena Vista Street cannot be compared to Hollywood and Sunset in DHS—it feels like a façade, not a place.

 

[GoofGoof]

1. You'd think WDW theme parks would have better margins, but Universal might generate a larger percentage of revenue through licensing agreements, lowering operating costs

Good post. I just grabbed this one statement to make a point. If anyone is wondering why Disney Springs is going to be primarily 3rd party vendors that are just paying a lease to operate on Disney property this should answer your question. It's a classic example of the market leader learning something from number 2.

 

[tirian]

Good post. I just grabbed this one statement to make a point. If anyone is wondering why Disney Springs is going to be primarily 3rd party vendors that are just paying a lease to operate on Disney property this should answer your question. It's a classic example of the market leader learning something from number 2.

Funny thing is, that's similar to how DL, the MK, EPCOT, and the Disney Village operated for years. WDI designed, other companies sponsored and stocked (or operated), and everybody was happy.

 

[ParentsOf4]

So even OLC has better margins than Disney. If that doesn't show that there's a problem that needs fixing and the old way of doing things was indeed better than the current penny pinching strategy, nothing will.

I'm surprised you (or no one else) has chimed in about Tokyo Disneyland (TDL) ticket prices yet.

I just did a quick conversion. A 1-day ticket at TDL is $53.12. A 4-day hopper ticket is $136.95.

Of course, Disney just raised the price of a 1-day ticket to the Magic Kingdom to $105. A 4-day hopper MYW ticket is $369.

"But Disney is a business ..." blah, blah, blah.

 

[Mike S]

You mean that the lackluster forced perspective in New Fantasyland, the bone-headed decision to squeeze Disney's hottest IP into the tiniest World Showcase pavilion, and the move to force FP+ onto high-capacity attractions didn't tip you off that Disney no longer employs the greatest creative minds?

I think Buena Vista Street at DCA is another missed opportunity. For all the love it gets from MiceAge, I was expecting something on the level of DHS' entrance. Heck, Disney practically lifted the DHS front gate and plopped it in front DCA. The Fifer/Fiddler/Practical Café is "Disney" quality. Everything else on that street seems flat, with no details or layers—exactly the kind of things the movie art directors and set designers who created DL, the MK, and World Showcase understood. Buena Vista Street cannot be compared to Hollywood and Sunset in DHS—it feels like a façade, not a place.

I have to agree with this. Buena Vista Street, as nice as it is, didn't really feel special. Especially when compared to Hollywood and Sunset Blvd. at DHS. Hey, there's another thing I can add to my list of what's better in WDW

 

[Mike S]

Funny thing is, that's similar to how DL, the MK, EPCOT, and the Disney Village operated for years. WDI designed, other companies sponsored and stocked (or operated), and everybody was happy.

I find it funny how what Universal is currently doing and finding great success with is pretty much what Disney used to do. Funny how that works, huh? But for whatever reason Disney ditched their sure fire winning strategy. If it's not broken, don't fix it.

 

[tirian]

I'm surprised you (or no one else) has chimed in about Tokyo Disneyland (TDL) ticket prices yet.

I just did a quick conversion. A 1-day ticket at TDL is $53.12. A 4-day hopper ticket is $136.95.

Of course, Disney just raised the price of a 1-day ticket to the Magic Kingdom to $105. A 4-day hopper MYW ticket is $369.

"But Disney is a business ..." blah, blah, blah.

The biggest problem with WDW is that once you pay admission, there aren't enough attractions to justify the cost or spread out crowds. If one mountain and one dark ride break down or undergo refurbishment in the MK, the rest of the park is gridlocked. EC has two E-tickets and a single D+ dark ride. DHS has only two attractions suitable for all ages. DAK doesn't have enough to do on a WDW vacation, because most guests feel (rightly!) they can see animals in a zoo back home. If Disney wants to charge premium admission prices, it needs to offer premium products. Right now, it can't keep its screen-based attractions operating at the same level as the AA-heavy dark rides in EC c.1989.

 

[tirian]

I have to agree with this. Buena Vista Street, as nice as it is, didn't really feel special. Especially when compared to Hollywood and Sunset Blvd. at DHS. Hey, there's another thing I can add to my list of what's better in WDW

For all the love DLR gets on fan forums, quite a bit is significantly better in Florida. But wow, DL's coasters are light years ahead of the rickety old things in FL.

 

[Mike S]

The biggest problem with WDW is that once you pay admission, there aren't enough attractions to justify the cost or spread out crowds. If one mountain and one dark ride break down or undergo refurbishment in the MK, the rest of the park is gridlocked. EC has two E-tickets and a single D+ dark ride. DHS has only two attractions suitable for all ages. DAK doesn't have enough to do on a WDW vacation, because most guests feel (rightly!) they can see animals in a zoo back home. If Disney wants to charge premium admission prices, it needs to offer premium products. Right now, it can't keep its screen-based attractions operating at the same level as the AA-heavy dark rides in EC c. 1989.

I agree but just one correction. Epcot has three E Tickets. TT, Soarin', and SSE. Maybe M:S too to make it four. Five if the still amazing American Adventure can count as an E Ticket show.

 

[GoofGoof]

Funny thing is, that's similar to how DL, the MK, EPCOT, and the Disney Village operated for years. WDI designed, other companies sponsored and stocked (or operated), and everybody was happy.

In the Disney fan community it seems like everyone is against bringing in 3rd party vendors for anything. Whether it's Starbucks in the parks or new vendors for Disney Springs you hear it repeatedly stated. People are upset that they are bringing in 3rd party stores and more 3rd party restaurants at DS, but City Walk is nothing but that. I loved PI when it was open, but it's pretty obvious from a business prospective that the 3rd party vendor approach is more profitable. I know not everything should be just about profits.

 

[Smiddimizer]

You mean that the lackluster forced perspective in New Fantasyland, the bone-headed decision to squeeze Disney's hottest IP into the tiniest World Showcase pavilion, and the move to force FP+ onto high-capacity attractions didn't tip you off that Disney no longer employs the greatest creative minds?

I think Buena Vista Street at DCA is another missed opportunity. For all the love it gets from MiceAge, I was expecting something on the level of DHS' entrance. Heck, Disney practically lifted the DHS front gate and plopped it in front DCA. The Fifer/Fiddler/Practical Café is "Disney" quality. Everything else on that street seems flat, with no details or layers—exactly the kind of things the movie art directors and set designers who created DL, the MK, and World Showcase understood. Buena Vista Street cannot be compared to Hollywood and Sunset in DHS—it feels like a façade, not a place.

Honest to God I don't mean any snark, but have you actually been there? I had the same thoughts but they changed dramatically when I set foot in the place and appreciated the scale of it outside of pictures. It's still "brandist" despite how authentic it looks, but it doesn't follow the sheer emphasis on aesthetics that undermines a lot of Disney's current catalogue.

 

[michmousefan]

I'm a dude in the 30's.. kinda hard to just "go there" and see a childrens movie.
I already feel funny watching cartoons and movies ALONE... movies like "The penguins of madagascar"

I hear ya, just go to a later show. Been my experience that it's less crowded, more adults and more genre fans there at that time. Plus hopefully LESS of those that are just going only for the Frozen short!

 

[tirian]

Honest to God I don't mean any snark, but have you actually been there? I had the same thoughts but they changed dramatically when I set foot in the place and appreciated the scale of it outside of pictures. It's still "brandist" despite how authentic it looks, but it doesn't follow the sheer emphasis on aesthetics that undermines a lot of Disney's current catalogue.

I've been there many times.