Disney’s Q2 (Jan/Feb/Mar) FY 2020 Earnings Results Webcast on Tuesday, May 5, 4:30ET

[Lilofan]

It was a huge gamble for Disney to build in China. Everyone can pretend Disney owns those parks, but if relations deteriorate between China and other countries, China can take control of those parks at any time. Playing with real authoritarianism is always dangerous... and you're kidding yourself if you think that fire won't eventually burn.

If it was a gamble to build in China, count me in to roll the dice. China has just a few advantages that may lure a potential client/investor

World's most populous nation
330 million people living within a three hour car ride to Shanghai Disney
Disney opportunity to leverage its brand in a key market
China's upper middle class population at approx 100 million
Chinese people love going to movies and SHDL can only improve upon that

A number of people say could have, would have, should have.. but China is the biggest opportunity in emerging markets for many companies/investors that want in on the action.

"China is a sleeping giant. Let her sleep, for when she wakes up she will move the world." - Napoleon Bonaparte

 

[Lilofan]

I would assume it’s also based on what is open. Each ride/store/show has an expected number of people both in line and inside. Less attractions would in theory reduce overall capacity.

How can merchandise locations in the theme parks forecast daily expected sales? With social distancing and limiting the number of guests to be in the store makes it challenging to forecast sales targets the cast members should meet. Also some of the stores are no bigger than a bread box and all open space are utilized to sell more and more products.

 

[zengoth]

How can merchandise locations in the theme parks forecast daily expected sales? With social distancing and limiting the number of guests to be in the store makes it challenging to forecast sales targets the cast members should meet. Also some of the stores are no bigger than a bread box and all open space are utilized to sell more and more products.

I noticed over the past couple of years the store refurbs (i'm thinking of the ones near the front of DAK) have included much wider aisles - probably due to accomodating electric vehicles and xtra-xtra wide strollers - so these will do better when the parks reopen. Places like Memento Mori already have capacity issues because they are so tiny, I would think they would have to drastically reduce their offerings to increase walkable space - maybe not even being able to open when the parks open. Perhaps the writing is on the wall and browsing will become a thing of the past. Shop on your app while waiting in your six-feet-apart line and pick it up on your way out of the parks. (Of course, this would totally ruin the whole WorldShowcase experience for me, but how do you even handle something like Morocco??)

 

[WDW862]

I noticed over the past couple of years the store refurbs (i'm thinking of the ones near the front of DAK) have included much wider aisles - probably due to accomodating electric vehicles and xtra-xtra wide strollers - so these will do better when the parks reopen. Places like Memento Mori already have capacity issues because they are so tiny, I would think they would have to drastically reduce their offerings to increase walkable space - maybe not even being able to open when the parks open. Perhaps the writing is on the wall and browsing will become a thing of the past. Shop on your app while waiting in your six-feet-apart line and pick it up on your way out of the parks. (Of course, this would totally ruin the whole WorldShowcase experience for me, but how do you even handle something like Morocco??)

I don't see some of the stores reopening at Disney Springs, a lot of them are tiny.

 

[Lilofan]

I noticed over the past couple of years the store refurbs (i'm thinking of the ones near the front of DAK) have included much wider aisles - probably due to accomodating electric vehicles and xtra-xtra wide strollers - so these will do better when the parks reopen. Places like Memento Mori already have capacity issues because they are so tiny, I would think they would have to drastically reduce their offerings to increase walkable space - maybe not even being able to open when the parks open. Perhaps the writing is on the wall and browsing will become a thing of the past. Shop on your app while waiting in your six-feet-apart line and pick it up on your way out of the parks. (Of course, this would totally ruin the whole WorldShowcase experience for me, but how do you even handle something like Morocco??)

I think what can impact Disney earnings is merchandise sales. During Covid19 times, it would be interesting if we are allowed to try on clothing in the dressing rooms. I usually don't buy clothes on an app without at least trying them on..

 

[zengoth]

I think what can impact Disney earnings is merchandise sales. During Covid19 times, it would be interesting if we are allowed to try on clothing in the dressing rooms. I usually don't buy clothes on an app without at least trying them on..

That's not just a Disney question, but a consideration for all retail going forward. I haven't read anything about how retail will change going forward. Restaurants have been changing - more outdoor seating being the first movement beyond pickup and delivery. Retail needs to come up with its own new normal. I suspect online sales will have to do most of the heavy lifting. For apparel/shoes - I honestly don't know, but whoever comes up with the best model will win the post-Rona sweepstakes.

 

[DisneyOutsider]

If it was a gamble to build in China, count me in to roll the dice. China has just a few advantages that may lure a potential client/investor

World's most populous nation
330 million people living within a three hour car ride to Shanghai Disney
Disney opportunity to leverage its brand in a key market
China's upper middle class population at approx 100 million
Chinese people love going to movies and SHDL can only improve upon that

A number of people say could have, would have, should have.. but China is the biggest opportunity in emerging markets for many companies/investors that want in on the action.

"China is a sleeping giant. Let her sleep, for when she wakes up she will move the world." - Napoleon Bonaparte

That's all great... But there are some pretty massive risks you take for dancing with the devil, and the rent may be coming due on those sooner rather than later. BUT.. to get into it any further is clearly politics territory.

 

[seascape]

That's all great... But there are some pretty massive risks you take for dancing with the devil, and the rent may be coming due on those sooner rather than later. BUT.. to get into it any further is clearly politics territory.

Disney has consistently made large amounts of money in China from movies. Therefore, investing that money back into China costs them nothing if you are saying they shouldn't have done any business with them. Personally I am against American consumers buying things made there in retaliation to their handling of Covid19. However, The Walt Disney Company and Comcast should continue to show their movies there and use those profits to invest in other businesses in China.

 

[DisneyOutsider]

Disney has consistently made large amounts of money in China from movies. Therefore, investing that money back into China costs them nothing if you are saying they shouldn't have done any business with them. Personally I am against American consumers buying things made there in retaliation to their handling of Covid19. However, The Walt Disney Company and Comcast should continue to show their movies there and use those profits to invest in other businesses in China.

Like I said.. it's just too political to dive into here. See the mess that the NBA stepped in right before their season kicked off... And that was just a very light case of the tough spots Disney can be placed into.

It's a moral argument, and I'd rather not clutter up this forum with more of those. Would be happy to discuss via DM... The politics forum is bad for my health

 

[seascape]

Like I said.. it's just too political to dive into here. See the mess that the NBA stepped in right before their season kicked off... And that was just a very light case of the tough spots Disney can be placed into.

It's a moral argument, and I'd rather not clutter up this forum with more of those. Would be happy to discuss via DM... The politics forum is bad for my health

I think too many people keep thinking China is and will be the biggest market but they are wrong. India's population is almost as big as China's and is growing faster. That is why Disney's purchase of Fox was so important. Hotstar is by far the largest streaming company based on number of customers. India provides a great opportunity for Disney theme parks to grow and for their movies. I wish the company would invest more there today and not wait for their economy to pass Germany and Japan.

 

[brianstl]

It’s gonna be a lot more than you think.

The crowds are amazingly balanced now and there are no real discounts anymore.

And to your point: net zero is pointless...they only reason they operate their parks is for the profits...41% of the whole company take - give or take.

The profit has to be there...it’s a stock company, not a charity.

Disruption insurance doesn’t cover pandemics.

 

[brianstl]

That’s shell game accounting though...and in an ideal world they wouldn’t bother with that crap...

Same kinda nonsense DDC has when they are “negotiating” with parks. It’s silly.

It isn’t a shell game they have to do it that way for legal reasons are they will get sued by individuals due royalties from anything they put on D+.

 

[Sirwalterraleigh]

Disruption insurance doesn’t cover pandemics.

Under the current conditions...I suspect policy changes in the future...

...or dystopia

 

[Lilofan]

I think too many people keep thinking China is and will be the biggest market but they are wrong. India's population is almost as big as China's and is growing faster. That is why Disney's purchase of Fox was so important. Hotstar is by far the largest streaming company based on number of customers. India provides a great opportunity for Disney theme parks to grow and for their movies. I wish the company would invest more there today and not wait for their economy to pass Germany and Japan.

When Eisner was still in charge both he and Iger visited India. China is the world's second business market without question. India is still trying to build its infrastructure.

 

[Sirwalterraleigh]

When Eisner was still in charge both he and Iger visited India. China is the world's second business market without question. India is still trying to build its infrastructure.

They’ve had issues with Hong Kong for 20 years and nobody can say definitively the benefits of Shanghai at this point...

...you want them to stick their toe in the Ganges River at this point?!?

I wouldn’t

 

[Lilofan]

They’ve had issues with Hong Kong for 20 years and nobody can say definitively the benefits of Shanghai at this point...

...you want them to stick their toe in the Ganges River at this point?!?

I wouldn’t

I've never been to India but my friends have on vacation. Every time they visit they get violently ill with stomach issues.

 

[HauntedMansionFLA]

Thanks, Alan Greenspan...

Does this leave Disney vulnerable enough for a hostile takeover??

 

[WDW Pro]

If it was a gamble to build in China, count me in to roll the dice. China has just a few advantages that may lure a potential client/investor

World's most populous nation
330 million people living within a three hour car ride to Shanghai Disney
Disney opportunity to leverage its brand in a key market
China's upper middle class population at approx 100 million
Chinese people love going to movies and SHDL can only improve upon that

A number of people say could have, would have, should have.. but China is the biggest opportunity in emerging markets for many companies/investors that want in on the action.

"China is a sleeping giant. Let her sleep, for when she wakes up she will move the world." - Napoleon Bonaparte

It's a really big cookie jar. I really, really big communist cookie jar. And thus far, every communist country has turned into hell on earth. I'd say that millions of people in containment camps in China might think it's already there. I'm personally not enjoying the virus very much.

 

[SpoiledBlueMilk]

They’ve had issues with Hong Kong for 20 years and nobody can say definitively the benefits of Shanghai at this point...

...you want them to stick their toe in the Ganges River at this point?!?

I wouldn’t

China is no doubt a massive market for Hollywood, but it's becoming increasingly touchy from a political standpoint. Plus their economy isn't growing like it did when Shanghai was in the development phase. India doesn't make sense for a park - I just doubt there would be enough demand despite the sizable population. Just seems like quicksand. I'd expect them to increase investment in Tokyo beyond their current plans instead of expanding much in China or India.

 

[Sirwalterraleigh]

China is no doubt a massive market for Hollywood, but it's becoming increasingly touchy from a political standpoint. Plus their economy isn't growing like it did when Shanghai was in the development phase. India doesn't make sense for a park - I just doubt there would be enough demand despite the sizable population. Just seems like quicksand. I'd expect them to increase investment in Tokyo beyond their current plans instead of expanding much in China or India.

Frankly...nowhere else on earth makes sense for another Disney park...the world is what it is now.