Disney and Universal: Two very different paths

mgf

Well-Known Member
Original Poster
I thought this was worthy of its own thread, especially since a SPIRITED debate has buried most of this info.

This OP is to recap recent announcements/coverage of Universal's shots across the bow of USS (HMS for our UK friends) Disney and Disney's (lack of?) reaction.

Universal wants to add thousands of hotel rooms

Warner Bros. to release J.K. Rowling's 'Harry Potter' spinoff

Disney to buy back $6-8 bn in shares

The following are major comments from a recent investor conference at which both Disney and Universal presented (from Garcia):

Universal
  • Whoa: NBCUniversal Steve Burke says, using the multiple SeaWorld currently trades at, Universal's theme parks are worth $9-10 billion now.
  • Also just repeated his belief that Universal Orlando has room for 10,000 hotel rooms (has only about 2,400 now, not incl. Cabana Bay).
  • Burke: “We love the theme-park business. We think there’s a real opportunity to increase the pace of new attractions.
  • "... We have far too few hotel rooms in Orlando….You’ll see us add attractions at a more rapid rate, add hotel rooms at a more rapid rate."
  • Sometimes I almost wonder if he's trolling them!...These quotes are unbelievable. Seriously. Is Disney awake?
  • "I think you'll see us open hotels. We've done a study that says we could have 10,000 or 15,000 hotel rooms and still have occupancy.....that makes those rooms profitable. And all of those people staying in those hotels would be more likely to go to our theme parks. So.....I think, strategically, we need to get those hotel rooms open and build out the resort."
  • Second, he said attendance at Universal Studios Florida has been up about 20 percent "most weeks" since Transformers opened.....
  • Also said NBCU wants to continue the cadence of opening up at least one new attraction in both Orlando and Hollywood every year.
  • And then a few fightin' words: Universal parks are becoming "a family destination in and of itself and not an add-on destination for...somebody that spends three or four days somewhere else." Gee, I wonder where that somewhere else might be.
  • I'm probably just jumping at shadows here, but when Burke was describing "the "right kind of attraction"........one of his criteria was "clear and easy to market." That could very well have been a subtle shot at Disney's $1 billion MyMagic+ project. One of the main criticisms I've heard from theme-park strategic-planning types about MM+ is how hard it will be to market to consumers.
  • From an analyst re: Steve Burke's comments today: "Universal Orlando clearly believes that they can offer a product that is every bit.....as attractive as Disney, if not more so. Being a weak number two player in the market has not been very profitable for the resort....in the past. They have shown in recent years that can meet or beat Disney in attraction quality at fraction of the price...." And so on.
Disney
  • Jay Rasulo says 125K Disney World visitors have now tested MyMagic+ systems. Said tests have produced "very, very positive results." /ducks
  • Rasulo also made a point of saying Disney had no weather impacts at WDW during the last quarter. Seemed like a subtle dig at SeaWorld.
  • Also repeated Disney's basic strategic premise w/NextGen: The more pre-planning Disney visitors do, the more time & money they spend at WDW
  • Rasulo also was a bit more direct in discussing the data-tracking motivation behind MM+, as well. "The more you share with us as a guest......the more we’re able to tailor services and, we think, get lift in selling those services.”
  • Rasulo is asked if Disney will build Star Wars lands in theme parks. He didn't answer. But of course they will.
  • That's it from Rasulo and Disney. Didn't hear anything new at all. Maybe they can bring Steve Burke back for an encore?
 

FrankLapidus

Well-Known Member
  • That's it from Rasulo and Disney. Didn't hear anything new at all. Maybe they can bring Steve Burke back for an encore?

Or, better yet, Disney could get rid of Rasulo altogether and bring Steve Burke back to the company. Its intriguing to think what might have been for Disney had Burke stayed and been in the mix to succeed Eisner given what he's done since he left.
 

danlb_2000

Premium Member
They're 2 completely different companies with different business plans. It's like comparing apples to mashed potatoes. I dropped out of the "Spirited" thread at page 30 - thank you for summarizing!

But the theme park portions of both companies are basically the same business and have the same goals and are in direct completion for the pretty much the same visitors so the comparison is quite valid.
 

Hobnail Boot

Well-Known Member
This almost sounds like the Microsoft and Sony showdown from earlier this year.

I'm thrilled with what Universal is doing. I've always loved the resort, but I only go about once every two years whereas I go to WDW about 5 times a year. I'm certainly not going to stop going to WDW, but I will definitely be swinging more cash and time toward Universal in the coming months and years. Lorax, Jurassic Park, Gringott's, possibly Kong... Universal has me excited like I haven't been in a long time.
 

bhg469

Well-Known Member
They're 2 completely different companies with different business plans. It's like comparing apples to mashed potatoes. I dropped out of the "Spirited" thread at page 30 - thank you for summarizing!

Yes the business plans are completely different. One is forcing you to stay on site and lock yourself into a vacation purely on nostalgia that no longer exists because they ruined it. The other is dumping boatloads of money into the resort and in the past year converted me from a disney defender to a universal fanboy and I havent been in that park in over 15 years.
 

GrumpyFan

Well-Known Member
I'm thrilled with what Universal is doing. I've always loved the resort, but I only go about once every two years whereas I go to WDW about 5 times a year. I'm certainly not going to stop going to WDW, but I will definitely be swinging more cash and time toward Universal in the coming months and years. Lorax, Jurassic Park, Gringott's, possibly Kong... Universal has me excited like I haven't been in a long time.

Personally, I don't really care what they're doing, just that they are doing something, and it's big. Competition is good. It keeps the other guys on their toes and moving forward. So, with Uni doing more, eventually it will force Disney into a position where they're going to have to do more to keep up, which is good, because they've rested on their laurels for too long, IMO.
 

bhg469

Well-Known Member
Personally, I don't really care what they're doing, just that they are doing something, and it's big. Competition is good. It keeps the other guys on their toes and moving forward. So, with Uni doing more, eventually it will force Disney into a position where they're going to have to do more to keep up, which is good, because they've rested on their laurels for too long, IMO.

But at current rate, do you think disney can right itself? Unless they break ground on new huge attractions within a few months, they are going to be left in the dust. And if there were plans in the works Im sure our insiders would be hinting at it.
 

ScoutN

OV 104
Premium Member
Personally, I don't really care what they're doing, just that they are doing something, and it's big. Competition is good. It keeps the other guys on their toes and moving forward. So, with Uni doing more, eventually it will force Disney into a position where they're going to have to do more to keep up, which is good, because they've rested on their laurels for too long, IMO.

Competition? I do not feel it is even that at this point. Saying there is competition between them is like saying Aston and Honda are competing. One's quality kills the other whilst the former is happy going from point A to B.
 

GrumpyFan

Well-Known Member
But at current rate, do you think disney can right itself? Unless they break ground on new huge attractions within a few months, they are going to be left in the dust. And if there were plans in the works Im sure our insiders would be hinting at it.

I don't think they're in any danger of being "left in the dust", at least not in capacity and number of visitors. Disney is still king by more than an estimated 34 million visitors, so Uni has a long way to go to catch up. However, in regards to innovation and themed entertainment, sure, I think that's already happening. If they haven't already, Disney will begin to notice a decline in revenue and number of days people stay on property, and some of their parks might see a slight drop in attendance, and that will hopefully lead them to look at new ways to gain that back.
 

GrumpyFan

Well-Known Member
Competition? I do not feel it is even that at this point. Saying there is competition between them is like saying Aston and Honda are competing. One's quality kills the other whilst the former is happy going from point A to B.

You're fooling yourself then. Because Universal is pushing some hot attractions centered around characters and environments that many people want to see.
Competition doesn't necessarily mean they're beating Disney, at least not in numbers, but you have to recognize that Uni is at least stealing some of Disney's numbers. People are coming to Florida, not just to go see Mickey Mouse, but they're also cutting off a day or so to go see Harry Potter. Sure, they're still completely different products, but both have an appeal, and in some cases that appeal just happens to cross the line of fans who want to see both products, which Universal is desperately trying to expand on.
 

ToTBellHop

Well-Known Member
Something that is important to remember here: Universal is playing catch up. Yes, they are putting out an incredible product, but why are they doing this and so rapidly? Because WDW has about a 30 year head start on them. We are comparing a resort with two theme parks and 3 resorts to one with 4 theme parks, 2 water parks, a much larger nighttime district, and 20 resorts. While Disney's pace of addition may frustrate us, it's because WDW is already so enormous. I am happy to see their efforts to maintain what they have has been improving recently. I'm sure when/if they see serious $$$ loss, they will respond. Remember, they are responding to a company that opened a major expansion in the late '90s and then did almost nothing for 10 years.
 

ScoutN

OV 104
Premium Member
You're fooling yourself then. Because Universal is pushing some hot attractions centered around characters and environments that many people want to see.
Competition doesn't necessarily mean they're beating Disney, at least not in numbers, but you have to recognize that Uni is at least stealing some of Disney's numbers. People are coming to Florida, not just to go see Mickey Mouse, but they're also cutting off a day or so to go see Harry Potter. Sure, they're still completely different products, but both have an appeal, and in some cases that appeal just happens to cross the line of fans who want to see both products, which Universal is desperately trying to expand on.

Paranoid much? Do you not open other threads? If you do then it should be fairly clear which is the Civic and which is a DB9 in my post.

You'll get a pass since this IS a Friday. ;)
 

1023

Provocateur, Rancanteur, Plaisanter, du Jour
It is strange that the creators of the "Theme Park" business are the one so far behind. At least, I find it strange. Of course we all see the near 5 year build out for a disappointing Fantasyland expansion.

The aggressive tone at the "Theme Park" down the road will force an re-investment in our beloved Walt Disney World as @GrumpyFan suggests. The battle must be joined, lest the gates be overtaken. While Comcast has a deep IP pool to go to, Disney has very formidable IP. The depth of IP at Disney is also greater.

But at current rate, do you think disney can right itself? Unless they break ground on new huge attractions within a few months, they are going to be left in the dust. And if there were plans in the works Im sure our insiders would be hinting at it.

At current rate, Disney can't keep pace with UNI. They will have to step it up. They will have to fast track development and build out of two entire "lands" at two of the three step children. They will also have to put effort into fleshing out EPCOT again with edutainment up front and pavilion upgrades in the back.

There is only one caveat here and it is unthinkable to most. What if Disney is packaging the P&R divisions for sale? A few posters in other threads have offered this probably because it is implausible and inflammatory. I, however, think that it is worth a modicum of consideration. (Although, it makes my skin crawl.)

On the idea of competition between the two, there is no doubt. Many debates here have been centered around the attendance reporting, (or lack thereof) from our beloved Disney. If Disney reports attendance in a way the sounds like the total visitor count is up, can that be misleading? Yes. Are all of the turnstile spins recording "unique" guests? Hmmm. Are they telling you that I counted as three people today because I was park hopping? There is no real way to know. If you think that the park down the road pulling folks from Disney isn't going to hurt creatively reported attendance, I think we have a point of contention.

@ ParentsOf4 frequently posts transcripts and publicly available information in regards to how Disney is presenting things to their investors. I would be very interested in their comments on this thread.

As an aside, many thanks to @mgf for getting this information into it's own thread.

*1023*
 

GrumpyFan

Well-Known Member
No paranoia, at least not in relation to Disney. I read many threads here, listen to podcasts, read blogs, etc. I think I'm pretty familiar with both properties, their offerings and their plans, and I don't need a pass. I'm not saying Uni has a better or even comparable product, just one that more and more people are beginning to notice, enjoy and spend money at.
 

Captain Neo

Well-Known Member
Something that is important to remember here: Universal is playing catch up. Yes, they are putting out an incredible product, but why are they doing this and so rapidly? Because WDW has about a 30 year head start on them. We are comparing a resort with two theme parks and 3 resorts to one with 4 theme parks, 2 water parks, a much larger nighttime district, and 20 resorts. While Disney's pace of addition may frustrate us, it's because WDW is already so enormous. I am happy to see their efforts to maintain what they have has been improving recently. I'm sure when/if they see serious $$$ loss, they will respond. Remember, they are responding to a company that opened a major expansion in the late '90s and then did almost nothing for 10 years.

What 30 year head start?

Disney opened MK in 1971
Universal Studios opened USF in 1990

That's only 19 years. In fact, Eisner quickly green lit and scrambled MGM Studios because he realized Universal was a threat and they had a nasty fued when those parks were opening in the early 90s.
 

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