News Dismal Q3 Earnings

[DanielBB8]

My only counter argument would be that if Disney didn't want to bring the land up to speed slowly they would have quickly removed the AP blackout. I'm sure they thought a few more non AP people would show up but that miscalculation will soon be a distant memory.

But they did bring back the Main Street Electrical Parade. Haha.

 

[MisterPenguin]

But they did bring back the Main Street Electrical Parade. Haha.

Which only proves that DLR and its fans are in a co-dependent abusive relationship.

 

[GoofGoof]

People need to stop clinging to two ridiculous extremes on Galaxy's Edge.

IT'S NOT A FAILURE. You obviously can't deem any attraction or land a failure this early. There's no way to say it won't provide Disney a solid return on the investment, that it won't attract major crowds for years to come, or how reaction will be different in Florida. Arguing otherwise is pointless and you're likely guilty of some heavy bias if that's your stance now.

BUT IT'S ALSO NOT A MASSIVE SUCCESS. Disney's intention with blocking out APs, raising prices, and then opening one of its largest expansions ever was not to have attendance go DOWN. Yes, the revenue impact is being overstated by the "it's a failure" crowd, but acting like this was Disney's plan all along is absurd. Why else would Iger be making excuses for it on an earnings call. The opening clearly did not go as either Disney or the majority of this fanbase expected, and refusing to admit that makes you as guilty of bias as those prematurely calling it a failure.

Anyone else want to join me in this valley of reason called the middle ground?

Anyone who is trying to argue that what happened when the land first opened was anything short of a train wreck is just kidding themselves. It was a pure greed play and it backfired pretty bad. I also agree 100% it’s way too early to deem this land a failure.

 

[mikejs78]

Anyone who is trying to argue that what happened when the land first opened was anything short of a train wreck is just kidding themselves. It was a pure greed play and it backfired pretty bad. I also agree 100% it’s way too early to deem this land a failure.

This. They shot themselves in the foot by opening 1/2 a land early and raising prices to $149/day. And then they blacked out most APs in an AP park, thinkjng that non-APs would suddenly come in droves. They did come at an increased level, but not nearly what they expected and it's their own fault.

Still, domestic parks revenue for the quarter is up half a billion from a year ago (or, 1/2 of the cost of one Galaxy's Edge), so I won't shed too many tears for them.

 

[LSLS]

Anyone who is trying to argue that what happened when the land first opened was anything short of a train wreck is just kidding themselves. It was a pure greed play and it backfired pretty bad. I also agree 100% it’s way too early to deem this land a failure.

Kind of how I feel. No inside info. But if my definition of a failure is that it fails to produce as expected, the opening at Disneyland would classify as a failure. If both parks are similar next year, then there are issues. But cant judge that yet. And likewise, if I define "success" as the sales in the land are covering the costs of running the land, I could see it being a success (my guess is they have such large margins, they can make money off smaller crowds anyways).

 

[Sirwalterraleigh]

I am specifically arguing against the narrative that Galaxy's Edge is such a failure that it caused Disney to significantly miss Q3 analyst expectations, and caused the stock to plummet (which was the argument presented), therefore Galaxy's Edge is a failure. After all, the topic of this thread is specifically Q3 earnings. We can argue about Star Wars in general in another thread.

No doubt response to Galaxy's Edge has been underwhelming in DL so far. But that has little to do with Q3 earnings.

I agree there...

But I think they built an underwhelming land in BOTH. Let’s knock this off...there’s no difference.

I’ll tell you what though...I haven’t read much in the way of actual reviews...only “reactions”. I’ll see for myself in bout 36 hours.

 

[Sirwalterraleigh]

This. They shot themselves in the foot by opening 1/2 a land early and raising prices to $149/day. And then they blacked out most APs in an AP park, thinkjng that non-APs would suddenly come in droves. They did come at an increased level, but not nearly what they expected and it's their own fault.

Still, domestic parks revenue for the quarter is up half a billion from a year ago (or, 1/2 of the cost of one Galaxy's Edge), so I won't shed too many tears for them.

They made business failures...

But the fact that there are no rabid Star Wars fans willing to pay the ransom is an indictment on 1731 different levels...that I can think of...pertaining to Star Wars

 

[RoysCabin]

Yeah, there's no way GE doesn't help the parks down the road in some way, likely in the near future. Suffice it say, many Disney parks, Studios in particular, have been starved for new content and attractions; I'm not keen on everything they've done in Orlando the past x-number of years, but even I felt it when I visited this year for the first time since 2015, just having more options around made for a nicer experience in some ways. Heck, I think it's a big reason for Pandora's success; just seeing something that big and new, not to mention nicely designed, is going to be a magnet for a lot of folks (I admit, I don't think I really "got" Pandora while I was there a couple of weeks ago, though admittedly besides being on line for FoP for a couple of hours I probably just didn't spend enough time in the land to get a feel for it; it was just ok to me, nothing game changing).

But yes, the issue here is that things have to be looked at in terms of industry and market expectations in these discussions, which is what these films and theme park attractions are being built to appeal to most, sad to say. The industry expectation for Disney acquiring Star Wars was that SW would become a bigger money maker than ever; ergo, the expectation for GE was that it was Disney's answer to Harry Potter across town, and it would be a massive, earth-moving success.

This has not happened, and even as the land undoubtedly becomes successful in a number of ways that'll still reflect poorly for some on the market side of things; they were expecting the moon, but they're not getting something that massive ("that's no moon...").

It's the same thing when discussing how to view the success levels of the new trilogy and other new Star Wars films; obviously from a box office standpoint all of them but Solo have been hits for Disney, arguing otherwise would be daft. But the issue comes from something that was brought up in an article posted before: that the industry/market expectation was that Disney could leverage Star Wars into a property that keeps certain demographics, in this case children and young teens, interested in a Disney property even after they've "aged out" of Toy Story or the princess movies. As of now, that looks a bit murky; obviously there are still kids who love Star Wars, there will be for a very, very long time, but analysis seems to indicate that Disney's not quite grabbing the young audience with their SW output the way they were had hoped they would. This can lead to things being deemed a "failure" despite them making tons of box office dollars: Disney won't sneeze at a Star Wars film making over $1 billion, of course, but they'll still be antsy if it makes that much but doesn't really hook the target demographics they want.

Like I said before, I think some of this can be attributed to Disney kind of forcing a Star Wars peg in a Harry Potter-shaped hole when it comes to the theme parks, or initially trying more of a MCU-shaped hole for the films, when SW's success over time never really fit those types of moulds.

 

[mikejs78]

but analysis seems to indicate that Disney's not quite grabbing the young audience with their SW output the way they were had hoped they would.

Most of what you say has merit, but I wanted to call this out as not having any real evidence behind it....

 

[culturenthrills]

I have no agenda other than reporting on how actual management views the SWGE opening. They are deeply concerned which is leading to draconian cuts at DLR. I would not hope for a similar response in WDW. Of course they are being short-sighted and should play the long-game.

Then again, they were short-sighted to make the cuts they made to SWGE. It may be that the impact of not including the original trilogy is being over played. However, the appeal of these nerdy franchises (I don't mean this in a judgmental way. I have a Ravenclaw tattoo!) is the ability to live in fantasy worlds. Management clearly thought merely building the locations was enough, but go to a comic con and you'll see that it's not. People want to dress as though they are actually in this fantasy world and interact with others doing the same. It was extremely stupid to not allow guests to dress themselves and their children in Star Wars garb (as though it would be impossible to make it clear who is a CM--give me a break!) and interact with aliens. This SHOULD have been set up like a Star Wars renaissance fair where cosplay is encouraged.

You know, like the Wizarding World model.

The decisions made on execution here are mind-boggling, but they SHOULD be easy to rectify. The land itself is gorgeous. Hire some freakin' actors and let guests dress as they see fit!

This is the problem when all of the pencil pushers haven't been with the company for long enough and/or have no actual knowledge of the parks. Anyone who attended Star Wars Weekends before they were foolishly cut would know what actually appeals to us nerds.

Trowbridge certainly should have known given his work on the Wizarding World, and I gather he did know. But elements he pushed for were cut in the 9th inning.

From what I've heard at least at Walt Disney World the entertainment budget aka Streetmosphere for SWGE was cut 80-90 percent. So much for all that interactivity and Black Spire Outpost residents going around and occasional battles or scenes happening like Imagineering promised.

 

[Sirwalterraleigh]

Most of what you say has merit, but I wanted to call this out as not having any real evidence behind it....

Only if you don’t use common sense.

The studio is in freeze...retail sales are way down on product. Both the sequels and the anthologies suffered large box office drops...

What are we looking at that shows “strength”??

The fact Disney Owns it? Yeah...we got it.

 

[GoofGoof]

They made business failures...

But the fact that there are no rabid Star Wars fans willing to pay the ransom is an indictment on 1731 different levels...that I can think of...pertaining to Star Wars

I don’t really agree with this. There are a lot of rabid SW fans paying a huge ransom in $200 lightsabers and $100+ droids. Nobody is paying that much without being a big fan. I couldn’t get a reservation for Cantina or the upsell (not that I wanted it) and you can’t look left or right without seeing someone carrying around the robot in the box. What seems to be missing some (at least early this summer) is the casual fans enthusiasm. People aren’t lapping it up and gushing about the land. Is that a sign of the decline of the popularity of the franchise or was it due to the AP blackouts or rising prices? I tend to think it’s a combination with a more heavy influence from 2&3 but it’s easy to argue any of the 3.

 

[GoofGoof]

From what I've heard at least at Walt Disney World the entertainment budget aka Streetmosphere for SWGE was cut 80-90 percent. So much for all that interactivity and Black Spire Outpost residents going around and occasional battles or scenes happening like Imagineering promised.

That’s too bad. Now that I’ve seen the land in person at DL I would say it could be truly amazing if they added some more Streetmosphere. The CMs I interacted with were actually pretty good and kept mostly in character. I guess maybe I went in with low expectations based on all the negativity thrown around here. The land is definitely calling for some roving droids. I can’t understand why this hasn’t happened already. They would really benefit from some random action sequences and spontaneous small shows. It doesn’t need to be an elaborate stage show.

 

[GoofGoof]

Kind of how I feel. No inside info. But if my definition of a failure is that it fails to produce as expected, the opening at Disneyland would classify as a failure. If both parks are similar next year, then there are issues. But cant judge that yet. And likewise, if I define "success" as the sales in the land are covering the costs of running the land, I could see it being a success (my guess is they have such large margins, they can make money off smaller crowds anyways).

I think the nuance here is that the opening at Disneyland was a failure, not necessarily both lands overall and I agree that if the same thing happens in the swamp and continues long term then the concept may be a failure too.

I can’t imagine Disney would be happy if the sales just cover the costs. In a lot of people’s minds this thing was supposed to be the building block that becomes the flagship of the parks segment. I do think they took a large margin on smaller crowds approach with the upsells and merchandise. It reminds me a lot of the concepts thrown around for the SW Resort.

 

[MisterPenguin]

LOl pixie snorters

Pixies are too big to fit in human nostrils.

 

[Sirwalterraleigh]

I don’t really agree with this. There are a lot of rabid SW fans paying a huge ransom in $200 lightsabers and $100+ droids. Nobody is paying that much without being a big fan. I couldn’t get a reservation for Cantina or the upsell (not that I wanted it) and you can’t look left or right without seeing someone carrying around the robot in the box. What seems to be missing some (at least early this summer) is the casual fans enthusiasm. People aren’t lapping it up and gushing about the land. Is that a sign of the decline of the popularity of the franchise or was it due to the AP blackouts or rising prices? I tend to think it’s a combination with a more heavy influence from 2&3 but it’s easy to argue any of the 3.

I’ll agree with you if that high end boutique merch stuff is sustainable. There’s really no way to know if it is at this point.

My guess is the “early” attendees are the ones that will shell out for it...and then the demand will dwindle.

I also think wdw patrons won’t be as inclined for those items over the long haul.

We shall see.

 

[John park hopper]

Star Wars has been around for 40 years--other than the die hard fans do you think Star Wars has run its course in popularity with the general public and if so do you think Disney has put to much stock in Star Wars. I guess time will tell

 

[larryz]

Pixies are too big to fit in human nostrils.

Ah, but if you shake them you get plenty of dust to snort...

 

[GoofGoof]

I’ll agree with you if that high end boutique merch stuff is sustainable. There’s really no way to know if it is at this point.

My guess is the “early” attendees are the ones that will shell out for it...and then the demand will dwindle.

I also think wdw patrons won’t be as inclined for those items over the long haul.

We shall see.

My kids wanted to do the lightsaber thing. It was a hard no. I’d consider it if the price was cut in half. The droid thing was a much softer no. I think if the $99 was an all-in price I would have been swayed easier.

I know it’s anecdotal, but I did see as many adults without kids holding the droid boxes as I saw kids. It could be they were more SW geek types.

 

[GoofGoof]

Star Wars has been around for 40 years--other than the die hard fans do you think Star Wars has run its course in popularity with the general public and if so do you think Disney has put to much stock in Star Wars. I guess time will tell

Outside of Solo the billion+ box office hauls of the movies says no, it hasn’t run its course.