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  1. #1

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    Article on Motley Fool and further comments

    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.


    Your opinions?

  2. #2

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    Re: Article on Motley Fool and further comments

    My thoughts...

    The question was, do we agree with the article? My answer, I think the Motley Fool article makes some very valid points that need to be taken into consideration.

    The other part to that question, do we agree with the comment attached to the article? No, I felt it was a very narrow minded response to the article.

    First, there is A LOT we don't know. Not just about Disney and the "business of making magic" but about the economy and it's affect on consumer spending. Frankly, there is no confidence in the market right now, none. Whether you agree with the actions taken or not, the government has taken some bold steps in trying to right-side the economy and gain confidence back in the market. Hoover's approach during the Great Depression was very hands off.

    But even with all the intervention, the confidence is still dwindling. What that tells me is that NO ONE has the silver bullet idea of what needs to be done to gain the consumer confidence back.

    So it's laughable for me to read how a Motley Fool registered user has any "insight" into what today's consumer needs from Disney in order for the TWDC to be successful.

    The Motley Fool said it very appropriately,

    "Even on an adjusted basis, this is the first time that Disney has missed analyst estimates since CEO Bob Iger took over."
    Bookings were healthy, we were seeing signs of capital investments into the Resorts (the fact that the reader only listed the heavily publicized DCA remodel only validates my opinion on the reader. Forget the fact that the investment in DLRP, while not incredibly pleasing to the Disney Fan Club, is said to have a positive impact in driving business in Q4), the cruise line is still seeing positive growth and bookings (source: President for a travel company in Orlando for DCL), DVC is said to be experiencing some healthy growth. Even with high gas prices and a rise in ticket costs during the summer, the guests were still seeing the value of the "Disney Difference" and vacations at a Disney Resort were holding up pretty well.

    The past few months, we witness a dramatic difference in the economy, watching the roller coaster on Wall Street and it's a surprise that Holiday bookings are down 1% at WDW in Orlando?

    Are the theme parks suffering? That's debatable. The company's parks and resorts division posted a 7% increase in revenue. Operating income did drop 4%, but that's the result of higher labor costs and the spike in fuel costs at its cruise line (which have since retreated dramatically).
    Will it get worse? Probably. No one is really sure we have reached the bottom yet. China is pushing a stimulus package which will help boost the markets.

    Is Disney's approach different than what it was years ago? Absolutely... Good or Bad, it's definitely different. But the consumer mind has changed, the game has changed, the competition has changed, and the market has changed. There are perspectives into the Theme Park Industry that, quite frankly, I have no knowledge of in order for me to say "Disney should" or "They're doomed if they don't." And judging from the readers post, neither do they.

    I know what I would like to see and I know what would bring back fond memories, but that doesn't mean, nor do I think, it will increase the bottom line.
    "If you build it right, they will come." - Bob Iger

    "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



    "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

  3. #3

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    Re: Article on Motley Fool and further comments

    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.


    Who wrote this? A MiceChatter?

    To a certain extent, I agree. Disney IS distancing itself from the adult consumer. Darkbeer's Monday in the Parks column this past week mentioned: "In the first 5 years, Adults outnumbered children by nearly a 4 to 1 ratio based on a 1960 article." -- I'd be curious to find out how long adults had the lead over children. When did the public's view of Disneyland change from all-ages fare, to child's play?

    I believe that Disney's embrace of child-friendly instead of family-friendly (there is a difference!) has impacted the park's overall experience, and has the potential of creating deeper, longer-lasting issues. Disney needs to step up its game. Pixie Hollow is nice, seasonal overlays are fun, and new shows are great -- but they need more than that. I disagree that fixing DCA is wrong -- but I could argue that the direction Disney is taking with the DCA fix is questionable.

    Disney needs to go back to its roots. As much as they like to throw around terms like "relevance," I think the only thing Disney needs is its own creativity. Let the parks thrive without bogging them down with kid-friendly overlays or franchise additions that cater to kids who encourage their parents to spend on souvenirs.

    There's a reason why classic attractions like The Haunted Mansion, Pirates of the Caribbean, or Space Mountain are still around at Disneyland.

    Photos, news, and commentary every week from Walt Disney's Magic Kingdom!

    | | |

  4. #4

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    Re: Article on Motley Fool and further comments

    Just about the ads that only the competitors run. the Buy 4 get 3 free actually has happened in WDW about 5 years ago, around 9/11. People don't seem to remember that and haven't waited for the next one either.

    While there are some valid points, it doesn't seem to reach the entire point it't trying to make.
    It's a Zip-A-Dee-Doo-Dah...Tip for Today!










  5. #5

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    Re: Article on Motley Fool and further comments

    Quote Originally Posted by Motley Fool View Post
    Why Is Everybody Picking on Disney?
    ...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.
    Wow, that's something Disney would never do......
    "Here You Leave the World of California Today and Enter the World of, um, er, California Today."

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