"What's Next" Presentation cancelled.....

[danlb_2000]

Did JT just have another break with reality or did I (and the rest of us) miss something?

To have a break with reality would imply that he at some point had a connection with it.

 

[WDW1974]

I am sure they were hoping Disney would reveal more than they did. Just enough info to keep Uni guessing. I really think that much of the pressure generated in places like this to intimadate Disney into showing its cards comes from Universal management types. The mouse never steps into that trap.

Ah, that insanity.

You seem to think there are secrets in the business. When Disney or UNI does something (or is going to) the other knows it.

Right now, UNI is sitting on a royal flush and Disney thinks it's doing well with a pair of queens or princes as they're all the same thing (yeah, I had to do that!)

 

[The Empress Lilly]

WDW does have things coming, just no longer of the scale and frequency of what it used to accomplish in the past:
- 1971 - MK opens
- 1973 - Carousel of Progress
- 1973 - Tom Sawyer Island
- 1973 - Pirates of the Caribbean
- 1974 - Astro Orbiter
- 1974 - Discovery Island
- 1975 - Space Mountain
- 1975 - Mission to Mars
- 1976 - River Country opens
- 1979 - Epcot construction begins
- 1980 - Big Thunder Mountain Railroad
- 1982 - Epcot opens
- 1983 - Horizons
- 1983 - Journey Into Imagination
- 1984 - Morocco Pavillion
- 1986 - Living Seas
- 1986 - Captain EO
- 1986 - Disney-MGM Studios construction begins
- 1988 - Mickey's Toontown Fair
- 1988 - Norway Pavillion
- 1988 - Illuminations
- 1989 - Disney-MGM Studios opens
- 1989 - Typhoon Lagoon opens
- 1989 - Pleasure Island opens
- 1990 - Honey I Shrunk the Movie Set
- 1991 - Muppets Vision 3D
- 1992 - Splash Mountain
- 1992 - Voyage of the Little Mermaid
- 1994 - Honey, I Shrunk the Audience
- 1994 - The Timekeeper
- 1994 - Tower Of Terror
- 1995 - Blizzard Beach opens
- 1995 - WDW Speedway
- 1996 - Barnstormer at Goofy’s Wiseacre Farm
- 1996 - Fantasia Gardens Miniature Golf
- 1997 - Downdown Disney is reopened in its current configuration
- 1997 - Wide World of Sports
- 1998 - Disney's Animal Kingdom opens
- 1998 - Buzz's Spaceranger Spin
- 1998 - Test Track
- 1998 - DisneyQuest opens
- 1999 - Winnie the Pooh
- 1999 - Rock n Roller Coaster
- 1999 - Winter Summerland miniature golf
- 1999 - Kali River Rapids, Flights of Wonder, & Maharajah Jungle Trek
- 2001 - One Man's Dream
- 2001 - Who Wants to be a Millionaire
- 2001 - Magic Carpets of Aladdin
- 2001 - Playhouse Disney

This is not the complete list, only the highlights.

The point is that those of us who grew old with WDW remember a steady stream of real additions during it's first 30 years. We also remember a real commitment to quality and value.

But isn't there a logic to all of the above that dictates WDW would scale back development?

Forty years ago, there was swampland. Now, there is the world's largest theme park resort complex.

When I set off to build an aircraft carrier, then first decade I build a ship, the second I furbish it inside, and the third decade I supply it with planes. Then from that moment the investment will drastically reduce - because the thing is up and running.

WDW is a mature investment. They don;t have to invest anymore. They need to invest in further exploiting their investment. As they do with Timeshares and NextGen initiatives.
As for UNI, it is up to them to invest heavily if UNI wishes to catch up. WDW doesn;t need to follow, because WDW is already ahead.

 

[ParentsOf4]

When I set off to build an aircraft carrier, then first decade I build a ship, the second I furbish it inside, and the third decade I supply it with planes. Then from that moment the investment will drastically reduce - because the thing is up and running.

WDW is a mature investment. They don;t have to invest anymore. They need to invest in further exploiting their investment. As they do with Timeshares and NextGen initiatives.

WDW is not an aircraft carrier, it is a land. "Let's stop building on Manhattan; it's got plenty of buildings."

Once a company starts thinking, "We've done enough; our products are mature", that company is doomed. No one buys last decade's TVs, phones, or cars. No one pays see last decade's movies at the theater. No one goes to a football game to watch a game that was played last year. As soon as a consumer-driven company such as TWDC starts resting on its accomplishments of the past, it is doomed.

Even amusement parks that are 100+ years old know they have to build a steady stream of new attractions to keep bringing in customers. If needed, they tear down the old and build the new. WDW is no different. In fact, WDW is in a stronger position than most because it still has plenty of land, both within its existing parks and available for entire new parks. WDW's extremely large size means it should be building more, not less.

Based on information available, Next Gen will not drive new visitors. Instead, it is TDO's attempt to extract even more money from WDW's current 'guests'. In the end, people are not going to return because they got their FPs 60 days before they arrived, were able to book their ADRs with their Smart Phones, were able to walk through the turnstiles 30 seconds faster, or had some wiz-bang technology say to them, "Hello Mr. & Mrs. Smith. We hope you are having a wonder day. Did you know delicious soft drinks are sold only 57 feet from where you are standing?" They return because WDW built "Star Wars Land".

 

[bubbles1812]

But isn't there a logic to all of the above that dictates WDW would scale back development?

Forty years ago, there was swampland. Now, there is the world's largest theme park resort complex.

When I set off to build an aircraft carrier, then first decade I build a ship, the second I furbish it inside, and the third decade I supply it with planes. Then from that moment the investment will drastically reduce - because the thing is up and running.

WDW is a mature investment. They don;t have to invest anymore. They need to invest in further exploiting their investment. As they do with Timeshares and NextGen initiatives.
As for UNI, it is up to them to invest heavily if UNI wishes to catch up. WDW doesn;t need to follow, because WDW is already ahead.

From Disney's perspective, I suppose that makes sense... You are right, it is a mature investment and "production" would expect to be scaled back. For many many years Disney was on top and no competition was even close to being of Disney's caliber. Even say when Universal opened, Disney didn't have to worry. It just wasn't on the same level.

But from a business perspective, overall, your logic, no offense, makes very little sense. WDW is not one concrete thing like an aircraft carrier that can't involve over time and doesn't need to the way an entertainment product like WDW does. No one is going to keep coming back because of the introduction of Next Gen. That idea is just plain laughable. And the majority of customers aren't going to buy into DVC no matter how many they build, especially if there are few new offerings to keep them coming back. And there does come a time when a company needs to reinvest and not just exploit... You can only squeeze your customers for revenue so much before you reach the tipping point and they get fed up.

There has also been a huge change in the game between Universal and even Sea World, not to mention some of the smaller parks coming on strong. Disney is no longer the only one on the playing field. When a change happens, a company needs to adapt and Disney simply hasn't shown it's willing to... And history is littered with companies that were the kings in their field that no longer exist. I will say that again...there are countless examples of companies that were the king and eventually fell because they chose to not invest in upkeep and creating new product and focused on exploitation, to use your word. Disney is NOT immune. And it is a poor poor poor strategy for success. Not saying Disney is going to go poof overnight or anything but again, when there is a game change, all players need to make their own changes to compete. WDW is ahead..for now..but it's no given they'll always stay ahead (no not just talking about attendance numbers).

Ever heard of the tortoise and the hare? WDW and its management team are the hare, laying on the side of the road napping, thinking they could never be challenged...and a lot of tortoises are preparing to go on by

 

[The Empress Lilly]

WDW is not an aircraft carrier, it is a land. "Let's stop building on Manhattan; it's got plenty of buildings."

Once a company starts thinking, "We've done enough; our products are mature", that company is doomed. No one buys last decade's TVs, phones, or cars. No one pays see last decade's movies at the theater. No one goes to a football game to watch a game that was played last year. As soon as a consumer-driven company such as TWDC starts resting on its accomplishments of the past, it is doomed.

Even amusement parks that are 100+ years old know they have to build a steady stream of new attractions to keep bringing in customers. If needed, they tear down the old and build the new. WDW is no different. In fact, WDW is in a stronger position than most because it still has plenty of land, both within its existing parks and available for entire new parks. WDW's extremely large size means it should be building more, not less.

Look at it this way. Imagine it is five years ago, on the Westcoast. DL is a mature, functioning customer magnet. It needed some work to undo the Pressler damage and spruce it up a bit, most of which had been done for the fiftheith already. To the south lay DCA, a park worse than the parking lot that was there before..

What is the sound strategy here? To spend $1.5 billion on DL and nothing on DCA? Or to spend $1.5 on DCA and another $1.5 billion on DL for an extreme make-over of MS and to replace Fantasyland with Cars Land? Or to spend $1.5 billion on DCA and leave DL largely unfettered with?

Obviously, the last option is the sound strategy. DCA needed investment. DL, not so much. Fans may press for a new E-ticket every time they visit, but that's not how it works - after all, apparantly they are there for their repeat visit in the first place.

Based on information available, Next Gen will not drive new visitors. Instead, it is TDO's attempt to extract even more money from WDW's current 'guests'. In the end, people are not going to return because they got their FPs 60 days before they arrived, were able to book their ADRs with their Smart Phone, were able to walk through the turnstiles 30 seconds faster, or had some wiz-bang technology say to them, "Hello Mr. & Mrs. Smith. We hope you are having a wonder day. Did you know delicious soft drinks are sold only 57 feet from where you are standing?" They return because WDW built "Star Wars Land".

But WDW doesn't want you to return. WDW's parks are filled to capacity. What WDW wants is to have these capacity-filled parks filled with people who pay the most for their experience.
NextGen isn't about improving the experience, or drawing new customers. It is about exploiting existing property.

There is no reason for WDW to up the tally for the MK from 17 to 18 million. Why would they? The park and surrounding infrastructure are used to breaking point as is. The strategy is to fill these 17 million places with people willing to buy luxury timeshares along the shores of Seven Seas Lagoon, to sell them coffee in the park for $6,49 instead of $2.09, to individualise their experience to use stratified pricing levels.

 

[WDW1974]

But isn't there a logic to all of the above that dictates WDW would scale back development?

Forty years ago, there was swampland. Now, there is the world's largest theme park resort complex.

When I set off to build an aircraft carrier, then first decade I build a ship, the second I furbish it inside, and the third decade I supply it with planes. Then from that moment the investment will drastically reduce - because the thing is up and running.

WDW is a mature investment. They don;t have to invest anymore. They need to invest in further exploiting their investment. As they do with Timeshares and NextGen initiatives.
As for UNI, it is up to them to invest heavily if UNI wishes to catch up. WDW doesn;t need to follow, because WDW is already ahead.

You might make a 'great' (by today's standards) TDO exec, but I think you'd make on lousy admiral.

(and do you really want to start talking about former leaders in American business that are no longer in business at all or shadows of their former selves because they had the arrogant 'tude you espouse above?)

 

[ParentsOf4]

Look at it this way. Imagine it is five years ago, on the Westcoast. DL is a mature, functioning customer magnet. It needed some work to undo the Pressler damage and spruce it up a bit, most of which had been done for the fiftheith already. To the south lay DCA, a park worse than the parking lot that was there before..

What is the sound strategy here? To spend $1.5 billion on DL and nothing on DCA? Or to spend $1.5 on DCA and another $1.5 billion on DL for an extreme make-over of MS and to replace Fantasyland with Cars Land? Or to spend $1.5 billion on DCA and leave DL largely unfettered with?

Obviously, the last option is the sound strategy. DCA needed investment. DL, not so much. Fans may press for a new E-ticket every time they visit, but that's not how it works - after all, apparantly they are there for their repeat visit in the first place.

So, the strategy in Anaheim is to invest $1.1B to revamp Disney's newest North American theme park that everyone agreed was a mess while in Orlando the strategy is to invest $450M in their best theme park while effectively ignoring the other 3 aging theme parks in need of serious makeovers? Do you really think this is a sound business strategy?

Meanwhile, another $1.5B is spent on something that even insiders have a difficult time explaining how to recoup their capital investment, hoping that they will be able to convince a declining pool of customers to spend even more money on what are essentially the same rides and shows from 10 years ago. Does that seem like an economically sound business strategy to you?

But WDW doesn't want you to return. WDW's parks are filled to capacity. What WDW wants is to have these capacity-filled parks filled with people who pay the most for their experience.
NextGen isn't about improving the experience, or drawing new customers. It is about exploiting existing property.

Are you suggesting TDO's business strategy is: "We have too many customers. We don't want more."

You give TDO too much credit. This is the same TDO that had Harry Potter in the bag and let it go because they knew better. If you were to transport WWOHP from Universal to WDW we wouldn't be having this conversation. Universal would be on its last leg while Bob Iger and Jay Rasulo would proudly be announcing WDW's record attendance and profits. Instead, they try to gloss over a 3% decline in WDW occupancy rates while mentioning that "Walt Disney World attendance was down modestly", trying to emphasize instead "the great success of Cars Land, both from a quality and from a quantity perspective in terms of attendance and pricing", hoping Wall Street won't punish the stock too much the next day.

Wall Street is not dumb. They know a theme park's life blood is its attendance. This is why they always ask questions about trends. Increasing attendance is good, declining attendance is bad. It's that simple. It's really hard to increase revenue if your customer base is declining. Instead, you offer "Free Dining" and "30% off Room Only rates" to try to keep it from eroding even further. (Just imagine WDW's numbers if they discontinued those discounts.)

You can raise prices but the remaining customers are not stupid. They will want more for their money. Somehow, I don't think WDW's customer's will get their $1.5B worth out of Next Gen.

 

[lebeau]

Parentsof4 is preaching a lot of truth tonight! Disney, you should be taking notes.

 

[The Empress Lilly]

So, the strategy in Anaheim is to invest $1.1B to revamp Disney's newest North American theme park that everyone agreed was a mess while in Orlando the strategy is to invest $450M in their best theme park while effectively ignoring the other 3 theme parks in need of serious makeovers? Do you really think this is a sound business strategy?

Yes.

The MK is what drives a decision to visit WDW. It had some serious issues that the FL repurposing solved. Investments in the other parks can be limited to more restaurants and alcohol in EPCOT. Large expansions of DHS or DAK in the recent economic crisis years would've been frivolous. Cruise ships, DCA, oversees is where the money needed to go.

Are you suggesting TDO's business strategy is: "We have too many customers. We don't want more."

Yes.

What use to be overrun by a million more AP holders who click the turnstiles every week, clog your amenities but don't spend? No, the strategy is to outprice them to keep them out.
What TDO wants is not to desperately attract more guests, but the right guests at the right time spending the right amount of money. The strategy is to spread out the customers over the year, and increase their spending. The former is the reason behind the discounts. The latter behind NextGen.

Wall Street is not dumb. They know a theme park's life blood is its attendance. This is why they always ask questions about trends. Increasing attendance is good, declining attendance is bad. It's that simple. It's really hard to increase revenue if your customer base is declining. Instead, you offer "Free Dining" and "30% off Room Only rates" to try to keep it from eroding even further. (Just imagine WDW's numbers if they discontinued those discounts.)

I wouldn't count on Wall Street jumping Disney stock any time soon.

 

[The Empress Lilly]

You might make a 'great' (by today's standards) TDO exec, but I think you'd make on lousy admiral.

(and do you really want to start talking about former leaders in American business that are no longer in business at all or shadows of their former selves because they had the arrogant 'tude you espouse above?)

Leaders? Leaders, no, they grow a business.

But Disney isn't run by leaders. Very little of American industry is. It is ran by people who are judged by the results of last quarter, for whom long term is next quarter (As opposed to 'one hundred years' for the brightest in China, but let's not digress).

There are no bonusses being paid for 'WDW's strategic position in 2027'. Really only fifteen years, but well beyond the scope of modern managerial reward systems, so outside of their frame of reference.


Not that any of that means their shortsightedness will inevitably come back to bite them. For there is one thing worse than American corporate culture, and that is the American consumer. With his short attention span, poor taste, and his being so pressed for time he has come to accept the prefabricated known quantity as a convenience. Whatever gives people the idea that princess m&g's, $6.49 known-brand coffee and 'latest blockbuster tie-in' is not what the American audience craves?

 

[ParentsOf4]

I wouldn't count on Wall Street jumping Disney stock any time soon.

TWDC's stock was down 3% after Iger's and Rasulo's latest dog-and-pony show. Wall Street didn't like what they had to say. TWDC's market cap is about $90B. $90B X 0.03 = $2.7B. TWDC could have built 10 WWOHP's (well, maybe if Universal oversaw construction ) for the amount of market cap TWDC lost in one day.

I wonder what would have happened to the stock if Iger and Rasulo instead announced WDW's record attendance and profits from the opening of their brand new WWOHP, along with record attendance and profits from Carsland.

 

[lebeau]

TWDC's stock was down 3% after Iger's and Rasulo's latest dog-and-pony show. Wall Street didn't like what they had to say. TWDC's market cap is about $90B. $90B X 0.03 = $2.7B. TWDC could have built 10 WWOHP's (well, maybe if Universal oversaw construction ) for the amount of market cap TWDC lost in one day.

I wonder what would have happened to the stock if Iger and Rasulo instead announced WDW's record attendance and profits from the opening of their brand new WWOHP, along with record attendance and profits from Carsland.

Apparently "What's Next" was lower stock prices "Around the World".

 

[The Empress Lilly]

TWDC's stock was down 3% after Iger's and Rasulo's latest dog-and-pony show. Wall Street didn't like what they had to say. TWDC's market cap is about $90B. $90B X 0.03 = $2.7B. TWDC could have built 10 WWOHP's (well, maybe if Universal oversaw construction ) for the amount of market cap TWDC lost in one day.

I wonder what would have happened to the stock if Iger and Rasulo instead announced WDW's record attendance and profits from the opening of their brand new WWOHP, along with record attendance and profits from Carsland.

Why, market cap fluctuates even more than that! Disney could've build the entire WDW from the difference between this year's lowest and highest stock price. Were it not that it doesn't really work that way. It is money, virtual worth, that is outside of Disney's budget. It becomes relevant for Disney's financial position when Disney wants to issue more shares, or wants to support price share by raising dividend. Otherwise, daily market cap is for investors to obsess about. Or not, if they are serious investors.

As for Potter. Disney didn't miss out on that one. Potter in WDW would've meant a rethemed Barnstormer and giftshop. No, what WDW missed out on is quality immersive themed lands. Cars Land is as profitable for DCA as Potter is for IoA. Most probably, much more so. Whereas the Cars franchise can be exploited and developed by Disney itself, and Potter couldn't. Disney did well to let Potter pass them by. Iger needs to buy franchises that Disney can take full control of, can develop throughout its diverse divisions.

As for WDW, it is considered a well managed asset by Wall Street, it has done very well and held up admirably since 2008, thereby doing very much for the current image of Disney as a safe bet investment. This even without the need for massive investments like other areas of Disney required. Investments, incidentally, that Wall Street asked Disney to drastically reduce, not increase.

 

[ParentsOf4]

As for WDW, it is considered a well managed asset by Wall Street, it has done very well and held up admirably since 2008, thereby doing very much for the current image of Disney as a safe bet investment. This even without the need for massive investments like other areas of Disney required. Investments, incidentally, that Wall Street asked Disney to drastically reduce, not increase.

Consider this quote from the 1984 Walt Disney Company annual report:

Indeed, a major question in analysts' minds was why Disney had chosen to grow the theme-park segment as aggressively as it had. The initial cost estimate of Disney World/EPCOT Center had been $600 million; six years later, the cost had risen to $1.9 billion. One analyst commented, "The increment to the theme parks' operating earnings from Disney's ... investment probably did not exceed $80 million before taxes. After charging itself with taxes, Disney is left with about $45 million. That represents less than a 4 percent return on EPCOT. If Disney had invested in Treasury Bills it could have done better."

If it was up to Wall Street, Epcot never would have been built. If it was up to Wall Street, Disneyland and Walt Disney World would not exist. Walt Disney had a vision. It's because of Walt's creativity and drive to succeed along with Roy's decision to complete his brother's Florida Project that all of us get to enjoy DL and WDW, and Wall Street gets to enjoy the profits from them today.

But I grow tired. Uncle, you win.

 

[celluloid]

Ya know what is sad? By the time Avatarland actually happens(if it happens) it will only be able to get Animal Kingdom out of the hole it is going into without any attractions for nearly a decade as the second weakest attendance park WDW features.

 

[misterID]

I didn't know all of WDW was always working at compacity.

 

[danlb_2000]

But WDW doesn't want you to return. WDW's parks are filled to capacity. What WDW wants is to have these capacity-filled parks filled with people who pay the most for their experience.
NextGen isn't about improving the experience, or drawing new customers. It is about exploiting existing property.

There is no reason for WDW to up the tally for the MK from 17 to 18 million. Why would they? The park and surrounding infrastructure are used to breaking point as is. The strategy is to fill these 17 million places with people willing to buy luxury timeshares along the shores of Seven Seas Lagoon, to sell them coffee in the park for $6,49 instead of $2.09, to individualise their experience to use stratified pricing levels.

How are you defining "filled to capacity"? Magic Kingdom closes for capacity maybe 3 to 4 days a year, Epcot maybe once or twice, the other two never.

 

[danlb_2000]

But isn't there a logic to all of the above that dictates WDW would scale back development?

Forty years ago, there was swampland. Now, there is the world's largest theme park resort complex.

When I set off to build an aircraft carrier, then first decade I build a ship, the second I furbish it inside, and the third decade I supply it with planes. Then from that moment the investment will drastically reduce - because the thing is up and running.

WDW is a mature investment. They don;t have to invest anymore. They need to invest in further exploiting their investment. As they do with Timeshares and NextGen initiatives.
As for UNI, it is up to them to invest heavily if UNI wishes to catch up. WDW doesn;t need to follow, because WDW is already ahead.

The air carrier analogy is a good one, but not for the reason you think. Once you "finish" your aircraft carrier, your opponents will continue to improve the weapons and defenses on theirs until they reach a point where your ship is no match for theirs. You have to continue to improve and spends money to remain comparative.

 

[Skibum1970]

The air carrier analogy is a good one, but not for the reason you think. Once you "finish" your aircraft carrier, your opponents will continue to improve the weapons and defenses on theirs until they reach a point where your ship is no match for theirs. You have to continue to improve and spends money to remain comparative.

Plus, if the aircraft hydraulic launch breaks, you don't put a strobe light on to simulate take-offs.

So sorry, I couldn't resist. In truth, carriers require a lot of upkeep and the Navy does a very good job at keeping them shiny and in working order.