Why Is Everybody Picking on Disney?
The article poses the question as to why so many investors are picking on Disney. But the interesting part of the article is the comment on the bottom of it. The comment reads:
"Why is everyone picking on Disney? Because underneath its cash-churning exterior lies the cold, dead heart that used to beat so vividly. Disney's massive, enormous challenge is this: Get the consumers BACK after they take an economy-induced break. Parks were the leading cause of worry for the analysts, and they're slumping. Disney is now resorting to tactics that only its competitors used to do, things like "Buy 4, Get 3 Free."
Guess what? Consumers get USED to that. Universal has never been able to get rid of its deeply, deeply discounted annual passes ("buy one day, get a year free") because once fire sales like that happen, consumers would rather wait until the NEXT sale.
Disney is botching this one big time. No noticeable capital improvement in most of its parks (but a waste of good money "fixing" California Adventure), dramatically increased costs, remarkably less impressive "cast members," and an incessant and sometimes painful insistence that the parks are for kids ... ignoring the core adult consumer who have traditionally (despite Disney's absolute insistence) been the biggest spenders and the most loyal consumers.
Disney's theme parks division is suffering and it's going to get worse before it gets better.
Combine that with slumping ad sales, a questioning by Tom Staggs of whether online ads are actually effective, and an ignorantly blissful Andy Mooney over at Consumer Products saying holiday 2008 is going to be GOOD for Disney ... and you can see that Disney's management is woefully out of touch with what its consumers and advertisers want.
I predict much tougher sledding ahead for Disney this winter, and well into FY and calendar 09."
Do you side with the viewpoint of the article or is Disney really a cold shell of its former self?
BTW, the comment about Cast Members is particularly harsh. True, but harsh.