Monsters, Inc. Hollywood Studios rumor

[RSoxNo1]

You might disagree with management's decision making processes but do you honestly believe they would let quality erode to the detriment of the brand just to save on maintenance expenses?

I believe it's already happening. We've heard from trusted people on here that the "good enough" mentality is very persistent in upper management. I think it's pure ignorance.

Yes, someone can be good at their job by going in and cutting costs without any emotional attachment. That approach can be taken to just about any business. However cutting costs changes more than just a balance sheet.

I'll make a baseball comparison to this. If you have a major league baseball team with a $150 million payroll you can get to $125 million payroll by cutting your $25.5 million MVP and replacing with someone making $500K. You've accomplished your goal of cutting payroll, but your team is undoubtedly worse.
To try and quantify this with relation to Disney:

• Say that hypothetically Guest satisfaction measured on a 100 point scale will result in a guest spending $3 per point of guest satisfaction per day.
• If a guest is 90% satisfied with Disney, they would get $270 from that guest per day (tickets, hotels, souvenirs, food).
• That same guest goes to the park and visits the Animal Kingdom only to find that the Yeti isn't working. It's still a fun ride though but they're less satisfied than they were before. Their satisfaction drops to 87%.
• That guest goes over to Tusker House and feels that the food quality has dropped and it isn't worth the price anymore. Their satisfaction drops to 83%
• At dinner, they go to an old favorite, Flame Tree BBQ and it's there that they notice the napkins are plain brown napkins, their satisfaction drops to 82%

That guest was formerly 90% satisfied, and is now 82% satisfied because of budget cuts. So that guest makes some budget cut decisions of their own. They elect to not buy the $24 Animal Kingdom t-shirt on the way out.

 

[Tim_4]

I believe it's already happening. We've heard from trusted people on here that the "good enough" mentality is very persistent in upper management. I think it's pure ignorance.

Yes, someone can be good at their job by going in and cutting costs without any emotional attachment. That approach can be taken to just about any business. However cutting costs changes more than just a balance sheet.

I'll make a baseball comparison to this. If you have a major league baseball team with a $150 million payroll you can get to $125 million payroll by cutting your $25.5 million MVP and replacing with someone making $500K. You've accomplished your goal of cutting payroll, but your team is undoubtedly worse.
To try and quantify this with relation to Disney:

• Say that hypothetically Guest satisfaction measured on a 100 point scale will result in a guest spending $3 per point of guest satisfaction per day.
• If a guest is 90% satisfied with Disney, they would get $270 from that guest per day (tickets, hotels, souvenirs, food).
• That same guest goes to the park and visits the Animal Kingdom only to find that the Yeti isn't working. It's still a fun ride though but they're less satisfied than they were before. Their satisfaction drops to 87%.
• That guest goes over to Tusker House and feels that the food quality has dropped and it isn't worth the price anymore. Their satisfaction drops to 83%
• At dinner, they go to an old favorite, Flame Tree BBQ and it's there that they notice the napkins are plain brown napkins, their satisfaction drops to 82%

That guest was formerly 90% satisfied, and is now 82% satisfied because of budget cuts. So that guest makes some budget cut decisions of their own. They elect to not buy the $24 Animal Kingdom t-shirt on the way out.

I understand your logic but it isn't playing out in reality. Satisfaction scores are NOT declining and guest spending is UP.

To use your baseball analogy, Disney is still winning the World Series.

 

[RSoxNo1]

I understand your logic but it isn't playing out in reality. Satisfaction scores are NOT declining and guest spending is UP.

To use your baseball analogy, Disney is still winning the World Series.

Look at merchandise right now? People are dissatisfied with the merchandise offerings compared to those available at Universal Studios, as such people are spending more money (relative to pre-Potter days) on Universal merchandise.

 

[Tim_4]

Look at merchandise right now? People are dissatisfied with the merchandise offerings compared to those available at Universal Studios, as such people are spending more money (relative to pre-Potter days) on Universal merchandise.

Potter was a game changer, I'll give you that, but it had nothing (okay, very little) to do with quality. Potter merch could have been complete crap and people would have gone ape sht over it. I don't think any Potter comparison is fair until 5 or 10 years from now. The Potter craze was a phenomenon that defined a generation. It was lightning in a bottle and I don't think it will have staying power.

EDIT: And, along those lines, Cars, Marvel, Princess, and Pirates merch is still selling like mad.

EDIT 2: Who says people aren't satisfied with merch? People around here maybe. But we're a VERY VEEEERY small percentage.

 

[RSoxNo1]

Potter was a game changer, I'll give you that, but it had nothing (okay, very little) to do with quality. Potter merch could have been complete crap and people would have gone ape sht over it. I don't think any Potter comparison is fair until 5 or 10 years from now. The Potter craze was a phenomenon that defined a generation. It was lightning in a bottle and I don't think it will have staying power.

EDIT: And, along those lines, Cars, Marvel, Princess, and Pirates merch is still selling like mad.

EDIT 2: Who says people aren't satisfied with merch? People around here maybe. But we're a VERY VEEEERY small percentage.

They have homogenized merchandise so much. Many of the same products are available in dozens of shops around WDW, including those where the merchandise doesn't fit in thematically. You can extend this to the same offerings being available on both coasts. There is less unique merchandise and therefore there are less options for guests. How can that be viewed as anything but dissatisfaction?

Part of what made Disney great is that they were providing guests with offerings that guests didn't know they wanted. They haven't done that since Magic Memories and You and they have the opportunity to do that with World of Avatar.

 

[bubbles1812]

Potter was a game changer, I'll give you that, but it had nothing (okay, very little) to do with quality. Potter merch could have been complete crap and people would have gone ape sht over it. I don't think any Potter comparison is fair until 5 or 10 years from now. The Potter craze was a phenomenon that defined a generation. It was lightning in a bottle and I don't think it will have staying power.

EDIT: And, along those lines, Cars, Marvel, Princess, and Pirates merch is still selling like mad.

EDIT 2: Who says people aren't satisfied with merch? People around here maybe. But we're a VERY VEEEERY small percentage.

It is a well known fact that merchandise sales are very low compared to years ago. Much of what you can get in the parks is crap you could have bought 5 years ago. So even visitors who come once every two to three years aren't buying at much because even they notice much of what's offered is something they could have bought their last trip. That "One Disney" approach to save on a few dollars (yes, it was a cost cutting measure) did not serve them well. And yes, those lines of toys are still selling like mad but much of that merchandise can be found online and some of it even at your local Target. People aren't compelled to buy at the parks when they can get it for a lower price at their local stores. The merchandise is not unique and it's often of much poorer quality, especially compared to what it used to be.

And on your comments about Potter... it has everything to do with quality. Many people recognize and want quality products, not all of course but many, especially in this day of ever increasing prices where people really are starting to have to pick and choose what they buy, and that is what Universal is definitely offering as compared to Disney. Their products are unique to their parks and much of it cannot be found online. It's a big deal. There may be some truth that people would have bought Potter merchandise regardless of it's quality, but again, that quality is a HUGE reason people are willing to fork over the money for it. Most people would rather have one quality item than a bunch of crappy items that will fall apart pretty quick. When quality goes down, people tend to buy less. And that uniqueness...that you can't get it anywhere else in the world, is also the other HUGE factor. Again, not something Disney is doing.

I believe your comment is wrong about Potter not having staying power. Adults who grew up with the series are having their kids read the stories (or are reading it to them). I've seen it over and over with my friends and family. It did define a generation...and people are carrying their love of the series forward. It's a perpetuating cycle. I know when I have kids, I will introduce the series to them as will my brothers. And as I have seen my friends do. I said once in another thread that it seems fantasy series seem to have a greater chance for longevity as compared to other genres. Case in point...The Lord of the Rings and The Chronicles of Narnia. Two fantasy series that are still being read 50+ years after they were first published. Potter has a great chance of having staying power. And even beyond that, WWOHP, especially with it's second edition being opened, is just a freaking cool place, even for those who haven't read the series. And Potter has a much better chance of being around 50 years from now than say...Avatar... I'd agree that Potter was lightening in a bottle but "lightenings in a bottle" tend to get remembered, and one that got a generation of kids to read again (ie that means it stands out in their minds as they grow up), even more so.

 

[menamechris]

You might disagree with management's decision making processes but do you honestly believe they would let quality erode to the detriment of the brand just to save on maintenance expenses?

Never heard of Paul Pressler or Cynthia Harriss?

It has happened before. It can happen again. This is Disney Company history that should be learned and not forgotten.

 

[WDW1974]

That wouldn't be arrogance. It would be flat-out stupidity. I just can't believe these men and women are that dumb.

It is arrogance. They are the kings of their market, and like so many fans, do not believe that will change. They lack a loyalty to the brand, so they've never cared why it is so successful. So they do what business school said to do for retail centers and tossed aside the decades old business model.

Exactly.

But it isn't pure arrogance, there's a spoonful of ignorance thrown in for good measure. You often wonder if they even know what their product is and who their audience is.

 

[WDW1974]

But they're successful, so...

I think (correct me if I'm wrong) that you're imagining this apocalypse scenario where all of a sudden these decisions come up to bite them in the a*s and they'll be screwed. The end of a dynasty. I think that's just over the top. If perception of quality starts to slide, they'll know it before the number of customers who are fed up hit critical mass. You need to remember that Disney isn't just making money. They're growing. Research has been ALL OVER the place at WDW lately and they're listening. No, they're not llistening for any warm and fuzzy reasons. They're listening to make big money. The way that change is gonna happen like people around here want is when the Dollars and the Fanboys (myself among them) are saying the same thing. RIght now, they're not. Make no mistake. They DO listen. The entire concept of DAAR (value family suites) is due to guest feedback. Stuff like that makes a difference, it really does. If those changes that you want to see aren't happening, it means the guests answering those surveys don't see the same decline that you and others around here seem to see.

Are they growing? In audience? I'd say that in addition to their anemic attendance gains over the past few years, many of the folks who are visiting are repeat/APers/DVCers ... I don't see Disney growing its audience, which is very scary for the stockholder in me.

 

[menamechris]

I understand your logic but it isn't playing out in reality. Satisfaction scores are NOT declining and guest spending is UP.

To use your baseball analogy, Disney is still winning the World Series.

Just a couple things to point out regarding most corporate strategies on things like this.

You seem to put alot of faith and credit into Disney's internal research and surveys (which are used more for PR spin as they choose, not to actually truly harness guest satisfaction on any specific issue), and the research is geared to get the results they desire. For example, going back to RSoxNo1's satisfaction scenario - A Disney research cast member may approach you and ask if, in fact, you bought any merchandise while at AK. If you answer is "no", they may ask why - but their response may also be "Thank you, but we are looking to interview guests who have bought AK merchandise today". A guest who has spent additional money in the park, as RSox stated, will ALREADY have a higher satisfaction rate - and provide the kinds of responses corporate is looking for.

As far as guest spending and attendance - those numbers are often manipulated too. Prices are going up all of the time - so an increase in revenue this year is not necessarily due to more people - just collectively higher prices. And Disney will never allow attendance to fall too low. Can you imagine how much attendance would have dropped in 2009 if they hadn't offered anyone and everyone a free admission on their birthday? It kept their attendance level - and created mini-vacations that otherwise would never have happened. Again, another manipulation of numbers on a spreadsheet.

 

[WDW1974]

I understand your logic but it isn't playing out in reality. Satisfaction scores are NOT declining and guest spending is UP.

To use your baseball analogy, Disney is still winning the World Series.

Satisfcation scores are totally bogus as anyone working in research will tell you. Disney makes it almost impossible for anyone to truly rip the product. I know, I've tried. They really need to get the word 'MAGICal' out of surveys entirely and use real world metrics.

And guest spending is up only because of price increases in ticket media, resorts and food and beverage ... they have yet to come close to hitting the merchandise numbers they did in 2007. If prices didn't keep increasing, then I'll bet you anything that guest spend numbers would show something vastly different -- and troubling. But there is a limit to raising prices and we're getting close to that level.

 

[WDW1974]

Potter was a game changer, I'll give you that, but it had nothing (okay, very little) to do with quality. Potter merch could have been complete crap and people would have gone ape sht over it. I don't think any Potter comparison is fair until 5 or 10 years from now. The Potter craze was a phenomenon that defined a generation. It was lightning in a bottle and I don't think it will have staying power.

EDIT: And, along those lines, Cars, Marvel, Princess, and Pirates merch is still selling like mad.

EDIT 2: Who says people aren't satisfied with merch? People around here maybe. But we're a VERY VEEEERY small percentage.

Potter is still immensely popular. UNI wouldn't be spending a billion dollars on Potter expansion in O-Town and new areas in Hollywood and Osaka (and possibly South Korea too!) because it's a flash in the pan. Folks said the same about Star Wars (and Star Trek for that matter) ... hell, they said it about DL too. It will have staying power.

I know Cars and Princess merchandise sells bigtime, but I have a hard time buying the Marvel deal. My local Disney outlet store has had loads of it for the past 18 months at least ... and even at 60% off, much of it wasn't moving, so they took it to the storerooms. I also didn't see ANY Marvel product at MK, EPCOT or TPFKaTD-MGMS at all when I was there this spring (and I looked at every place that I'd seen it before as it's sorta part of my job to pay attention to details and I don't lose that while at WDW). I also saw no Marvel product at both Paris parks in May.

So I don't know if they're just selling it at DD ... or it was soooo popular it all sold out, but I don't buy (pun intended) that Marvel crap is all that popular.

I am not happy with it and I don't buy it ... but more to the point, the average guest isn't spending as much as the average guest in 2007 and I don't see that changing since the merchandise isn't getting any better/different.

 

[COProgressFan]

I understand your logic but it isn't playing out in reality. Satisfaction scores are NOT declining and guest spending is UP.

You sure about that?

 

[Tim_4]

Are they growing? In audience? I'd say that in addition to their anemic attendance gains over the past few years, many of the folks who are visiting are repeat/APers/DVCers ... I don't see Disney growing its audience, which is very scary for the stockholder in me.

They are growing in attendance, yes. Domestic is roughly flat and international is increasing rapidly.

EDIT: By "international" I mean non-US guests visiting WDW, not growth at international Disney parks.

 

[Tim_4]

You sure about that?

Yes. Am I the only one who reads the annual report?

Revenue growth of 11% at our domestic operations reflected a 6% increase driven by higher average guest spending and a 3% increase due to volume driven by higher passenger cruise ship days due to the launch of our new cruise ship, the Disney Dream, in January 2011, and higher attendance. Higher guest spending was primarily due to higher average ticket prices, daily hotel room rates, and food, beverage, and merchandise spending.

From Fiscal 2010 to Fiscal 2011, per room guest spending increased from $224 to $241. Yes, a lot of this was driven by higher prices but the disclosure above also indicates that they're buying more crap. Per capita guest spending in the parks was up 8% year over year.

The increase in EPS for fiscal 2011 reflected higher operating results driven by higher revenues from MVSPs (Affiliate Fees) at our Cable Networks, increased guest spending and volumes at our domestic parks and resorts, higher advertising revenue at ESPN, lower film cost write-downs, decreased programming and production costs at the ABC Television Network, higher licensing revenue due to the strength of Cars merchandise and a full-period of results for Marvel, and higher equity income at AETN/Lifetime. These increases were partially offset by higher costs at ESPN and at our domestic parks and resorts, lower performance at our theatrical business, and the inclusion of a full-period of results for Playdom in the current year, which included the impact of acquisition accounting.

I'm too lazy to go back get all this stuff from Fiscal 2010 and earlier but it's all public information.

 

[Tim_4]

I know Cars and Princess merchandise sells bigtime, but I have a hard time buying the Marvel deal.

Searching for revenue beyond the box office has been a big part of the strategy at Disney, where the Marvel division generated $6 billion in retail merchandise sales last year, according to License! Global magazine. Disney’s consumer products division produced operating income of $816 million in 2011, more than the $618 million brought in by the company’s original business, its film studio.

 

[menamechris]

Yes. Am I the only one who reads the annual report?

Revenue growth of 11% at our domestic operations reflected a 6% increase driven by higher average guest spending and a 3% increase due to volume driven by higher passenger cruise ship days due to the launch of our new cruise ship, the Disney Dream, in January 2011, and higher attendance. Higher guest spending was primarily due to higher average ticket prices, daily hotel room rates, and food, beverage, and merchandise spending.

I'm too lazy to go back get all this stuff from Fiscal 2010 and earlier but it's all public information.

The problem is not anyone's ability to read - or not knowing where to find the information. The problem is that you are not properly analyzing a report that has been compiled for the benefit of shareholders. You also are dismissing the underhanded corporate strategies that were used to get said information and numbers. Disney has entire departments to get these numbers the way they are. They are NOT a true representation of the stability or profit/loss of WDW.

 

[Tim_4]

The problem is not anyone's ability to read - or not knowing where to find the information. The problem is that you are not properly analyzing a report that has been compiled for the benefit of shareholders. You also are dismissing the underhanded corporate strategies that were used to get said information and numbers. Disney has entire departments to get these numbers the way they are. They are NOT a true representation of the stability or profit/loss of WDW.

Are you the one who said you had your MBA? You really have that little faith in the financial reporting system (including the external auditors)? And since you continue passive aggressively attacking my intelligence, I'll just say that I'm a CPA and I analyze financial statements for a living.

 

[MKCP 1985]

Yes Harry Potter franchise is very popular. Once upon a generation ago (a couple generations maybe) so was Tom Sawyer. Still to this day, considered fine American literature, if somewhat controversial. And now there are rumblings about replacing his Island. The day will come (not anytime soon) when something new has captured the imagination of children and adults and Harry Potter is just not that exciting anymore.

But what does that matter? When that happens, Universal will tear it out and put something else in. Out with the old (Back to the Future) and in with the new (Simpsons). I remember an Orlando Sentinel report from the 80s that proclaimed Back to the Future the best ride in Central Florida. No joke!

How far back in this thread does one have to go to find anything about the Monsters Inc. coaster, anyway? I read recently there was some light construction going on in the space. Light construction won't get a coaster built, but it might be enough to stir a discussion if we aren't too distracted.

 

[Tim_4]

How far back in this thread does one have to go to find anything about the Monsters Inc. coaster, anyway? I read recently there was some light construction going on in the space. Light construction won't get a coaster built, but it might be enough to stir a discussion if we aren't too distracted.

On that topic.

It looks like it's coming.

Everyone blames Finance/Accounting that it got shut down in the first place but WDI went way over budget on the original design so it got shelved. It's been removed from that shelf.