Disney Seas...I'm gonna hurl...

[TokyoInsider]

I was really wondering how western audiences would react to the Tokyo DisneySea photo tour, and especially what visitors to DCA would think.

Wow- what a reaction!

Having talked directly with a few people who have been to both DCA and TDS, I can understand why some people are comparing the two parks- they share many similarities. Both will have opened in the same year, both are situated next to a Disneyland park, and both are 'uniquely' themed. But the consumer market of Tokyo is very, very different from the consumer market of Anaheim.

I can't emphasize that point strongly enough.

For example: Would a California-based Disneyland fan specifically make a lengthly trip down to the park and spend an hour in line to purchase a souvenir Pooh's Hunny Hunt honey popcorn bucket? Yes, perhaps a few dozen APers would, but thousands? DAILY?

Would a California-based Disneyland fan spend 30 minutes in line in front of a food cart selling barbecue ribs, because a celebrity endorsed it the previous day on television?(and only come down SPECIFICALLY to eat at that food cart?)

Yes- both of the above really happened at Tokyo Disneyland!

OLC built Tokyo DisneySea for this market. You can see how confident they are that they will recoup their expenses, and you can also see why they had the confidence to sink big money into this project. Also, it doesn't take a team of MBAs to see what drives Tokyo Disneyland's success- the large legions of dedicated repeat fans.

Every little thing is picked up on by the dedicated Disney fans. A lot of folks in the US like Disney. A lot of people in the US are dedicated Disney fans (like many of the people in this forum). Now imagine nationwide the total number of these Disney fans- the ones who REALLY appreciate the small details and multiply that by a factor of, lets say 10000. THIS is the Japanese market.

Now, I am not defending the suits at Disney on why they decided to hold back the purse strings on DCA, but I can understand why that, at least on paper, it was not considered economically viable to build a park up to Tokyo DisneySea calibur in Anaheim.

But now that DCA stands as a reality, (and judging solely on financial returns to date) it is clear that the 'on-paper' theory was a big miss indeed.

[Ralph Wiggum]

GOod point! Reading some of the comments from visitors at DisneySeas, it made me wonder. Though the park looks great and most likely is alot better than DCA, I wonder if people of american culture will find it appealing. Likewise, I havent heard many people from the Japanese culture comment on DCA. For all we know they would rave about DCA just like Disney Seas! I don't know if i have explained myself correctly here but hopefully you get where I am going with this:)

[Corith]

Granted there are differences in the demographics, but DCA didn't have to be so #$%$!@% cheap. Would a little less retail space, and a few recycled Disney attractions (epoct stuff) cost all that much more. A few less films, and few more "omnimover" rides would have made this park a bit more sellable than the over grown mall we ended up with.

[TokyoInsider]

Ralph- As it turns out, I have polled a fair number of Americans about their Tokyo DisneySea experiences, and the ones who haven't been to DCA are slack jawed, and the once who HAVE been to DCA are slack jawed and shocked at how DCA turned out, when it is painfully clear that Walt Disney Imagineering has the talent to do so much more.

If anything, I have found the Americans to be more critical about the 'fun-factor' of some attractions (yes, there are issues that need to be addressed in that area, but at a later time) than their Japanese counterparts. In addition, the Americans were more critical about long lines and long waits than the Japanese, but all were in total agreement on one point- NOBODY in the world has any idea of how amazing all of this is. NOBODY. (until the pictures got out, that is!). Bottom line- everyone was floored, and more than a few of us are still floored, every time we go out there.

[Ralph Wiggum]

Figured....but i thought i would throw out that possibility anyways. Thanx Insider!!

[Corith]

I really hope, to the depths of my being, that Einser will see Disney can build expensive projects like Seas and still see a profit.

[Ralph Wiggum]

Your not alone...your not alone at all. I think we all hope he see's the light or at least the share-holders do!!

[JeffG]

Originally posted by Corith
I really hope, to the depths of my being, that Einser will see Disney can build expensive projects like Seas and still see a profit.

The real question, though, is whether or not they >can< build a park as expensive as TDS and make a profit. As Islands of Adventure has painfully illustrated, spending a lot of money on a park and getting a lot of acclaim doesn't always translate into success. Disney themselves learned a similar lesson with Disneyland Paris.

As I already mentioned, TDS has not opened yet and there is not yet any certainty that it will be a runaway success. The park is pretty much the theme park equivalent of the movie "Titanic", when it comes to the level of risk. It was so expensive that normal levels of popularity aren't going to be sufficient to make a profit. With "Titanic", the risk did pay off largely because it became the most successful movie ever. TDS needs to accomplish a similar level of success. I hope it does, but there certainly isn't a guarantee.

TokyoInsider is also correct that opening a theme park in Japan is very different than opening one in the US. The cultural and economic differences are vast and absolutely cannot be ignored. In his recent interview with Laughing Place, Paul Pressler actually addressed these issues rather bluntly and directly. Quite simply, as risky as it is to open a park as expensive as TDS in Japan, the risk would be far greater here in the US.

I certainly recognize and agree that DCA is a smaller, less ambitious park than TDS. The combination of the space available and the nature of the US marketplace, opening a park of the scale of TDS simply wasn't realistic. These facts generally make direct comparisons between the two parks fairly meaningless.

While DCA isn't as ambitious a park as TDS, it certainly wasn't a cheap project either. Disney spent quite a bit more on this park than most other companies spend on theme parks, particularly one built on a fairly small piece of property. Despite some people insisting to the contrary, the park is extensively themed and has a variety of customized attractions. Just because the park isn't to your taste doesn't make it bad.

At this point, none of us really know the ultimate financial picture of either park. Attendance has been lower than hoped for at DCA, but we really don't know what that means with regards to the park's financial health. While I would imagine it probably isn't bringing in the amount of profit that Disney had hoped for, I doubt anyone here is privy to any information about where the park's breakeven point actually is. As for the long-term financial prospects for the park, it is way too early to do anything other than guess.

-Jeff

[twistedmickey]

What Tweedle DEE and DUM (Pressler and Eisner) have to done is degrade the American public. I dont believe Eisner can justify why DCA is so much more "poor" than Tokyo Sea. Its an embarrasment!!!!

How come Six Flags is spending all this money on two coasters and Disney is putting in Millionaire. And why would you want a Tower of Terror at DCA. Why doesnt DEE and DUM spend money on a brand new, well thought out attraction that can be a California exclusive. Stop manufacturing the same stuff thats in Florida. I see now why McDonalds (which is disgusting in and of itself to be even inside a Disney park) is at DCA...its starting to resemble a factory of reproduced rides. :(

[disneyhead]

Everybody says "DCA lacks themeing",What are they talking about. Look at the new "millionaire" building, it looks exactly like a sound stage it even has a big "Stage 17" painted on the side.

[DisneylandKid]

Originally posted by disneyhead
Everybody says "DCA lacks themeing",What are they talking about. Look at the new "millionaire" building, it looks exactly like a sound stage it even has a big "Stage 17" painted on the side.
Thank you! Oh, and Pacific Wharf is so well themed as well.

Someone said earlier that Eisner will see that putting so much money into TDS will pay off. TDS was not paid for by Disney to build (they only paid for the Imagineering part).

[Doodle Duck]

It was Thanksgiving...the Family on the Westside of the street decided to bring dinner to the two houses across the street.

House A, got a nice Frozen Swanson Chicken Dinner...quite tasty...but

House B, got a Full Home Cooked Turkey Dinner spread with all the trimmings and deserts.

House A wondered..what did we do to deserve this? They found it hard to appreciate the gesture once they saw what House B had recieved.

The End.

[TokyoInsider]

Here are some interesting numbers for you folks. According to OLC announced projections in media releases, annual attendance for both Tokyo Disneyland and Tokyo DisneySea will be around 25 million guests.

(Tokyo Disneyland alone had around 17 million guests last year)

And perhaps the most telling statistic- OLC projects that TDS will be operating 'in the black' by THE SECOND YEAR OF OPERATIONS.

Yes folks- a 2.3 billion dollar park OPERATING IN THE BLACK IN THE SECOND YEAR OF OPERATIONS.

AND- All OLC accumulated debts (including the Monorail line, land costs, etc) are projected to be cleared IN THE FOURTH YEAR OF OPERATIONS.

Kind of makes you wonder, doesn't it? What if Disney Parks and Resorts was a completely separate business unit, which kept all of it's profits to pay for operating expenses and future developments. In other words, what if Disney Parks and Resorts became an OLC- All profits going straight back into improving parks, INSTEAD of paying for corporate mergers and acquisitions, big budget films, etc?

[RideMax Mark]

Hmmm....

Reading all of this great stuff about TDS reminds me that my company puts on a trade show in Tokyo once a year, and I speak just enough Japanese to be dangerous.

If I can just get on the list to go do that show next year...

RideMax for TDS, anyone? :D

Mark

RideMax for Disneyland Software (http://www.ridemax.com)

[merlinjones]

>>The real question, though, is whether or not they >can< build a park as expensive as TDS and make a profit. As Islands of Adventure has painfully illustrated, spending a lot of money on a park and getting a lot of acclaim doesn't always translate into success. Disney themselves learned a similar lesson with Disneyland Paris.<<

Perception is critical to acceptance in the marketplace. Islands of Adventure is not a Disney product and its performace is not relevant to Disney's. Universal has no brand association for Disney-like quality with the American public... most just thought it was going to be cheap addition to Universal Studios Florida. Hardly anyone expected they were going to get an amazing park from that company (I still have trouble convincing some people how good it is - - they say "I don't like Universal" and dismiss it).

Conversely, everyone expects the BEST from Disney, and when they don't get it they reject the product. If Disney had built IOA on its property, it would have been a massive success for all the same reasons AK and DCA are not. Expectation.

This is the same marketing mystery that Disney enjoys with feature animation. People reject comparable films from other major studios (Anastasia) because they aren't from Disney... and reject Disney product when it doesn't live up to high standards (Atlantis). Very simple really. When Disney delivers on its long-established reputation it makes money... when it doesn't, the money stops.

Unfortunately, many marketing mavens reject this case of Disney having such a uniqe niche that its rules are different, but history bears this out repeatedly. Even this last weekend, Princess Diaries opened to 10 million more at the box-office than in-house projections had the "old fashioned Disney picture" pulling in. Guess what... people like "old fashioned Disney product" (read: Mermaid, Aladdin, B&B, etc.) that meets their expectations of the brand.

A version of Tokyo DisneySeas here, even scaled down would play well to the core Disney market... it is high quality, artful family escapism - - what the consumer demands from Disney. Pretty simple.

>>In his recent interview with Laughing Place, Paul Pressler actually addressed these issues rather bluntly and directly. Quite simply, as risky as it is to open a park as expensive as TDS in Japan, the risk would be far greater here in the US. <<

So what? Eisner said to Diane Sawyer on 60 Minutes in the late eighties that feature animation could never be profitable because audiences needs had changed and the economics were too harsh for the medium (sound familiar?). They would continue making domestic animation only because of tradition. We all know where that led, don't we. If the "wisdom" of the finance and marketing departments (and Michael's "vision") had been heeded (he wanted to shutter feature animation and ship it all to China), there would have been no Mermaid, no Beast, No Aladdin, no Lion King... and no Disney rennaissance of any major calibur at all (and no fortune to plundered by execs). Same thing here - - they need to just do what's expected of them at the parks well (and especially exceed expectations) and watch the crowds follow.

If Disney truly can't afford to give the public what it clearly wants (not a mystery). perhaps it has lost its mandate to exist (or at least the current management has). This whole notion of trying to re-educate the public to accept a lower standard or a different meaning to the brand obviously isn't working. It was an ill advised course. The name Disney and what it means is bigger than any spread sheet and also elicits extreme emotional reaction from mainstream consumers (both pro and con) based on what is delivered. This is simply historic fact.

>>I certainly recognize and agree that DCA is a smaller, less ambitious park than TDS. The combination of the space available and the nature of the US marketplace, opening a park of the scale of TDS simply wasn't realistic. These facts generally make direct comparisons between the two parks fairly meaningless.<<

DCA is poorly designed and conceived. It's not just the budget, it's everything the projects stands for. If only HALF of Disney Seas had been constructed here for budgetary purposes (let's say the Mysterious Island, Mermaid Lagoon and Arabian Coast), the project would still have been far more successful than DCA because it would have provided the public what it expects from the Disney brand. Quality. Escapism. Amazement. Wonder.

>>Just because the park isn't to your taste doesn't make it bad. <<

It does when your taste is ultimately shared by a majority of patrons exiting the park (or never going in the first place).

After spin, there is reality.

[DisLee]

Attendance has been lower than hoped for at DCA, but we really don't know what that means with regards to the park's financial health. Oh yeah we do...

A quote from a newspaper article on the recent quarterly earnings report: "It (California Adventure)... has been a drag on earnings. Since it hasn't fully met our initial expectations, it's impacted us more than we thought it would" said Tom Skaggs, Disney's CFO.

Ah, I think that means it's losing money - bigtime.

[DisLee]

>>In his recent interview with Laughing Place, Paul Pressler actually addressed these issues rather bluntly and directly. Quite simply, as risky as it is to open a park as expensive as TDS in Japan, the risk would be far greater here in the US. << I think with 20/20 hindsight I would rather build a "risky" DisneySeas or Westcot in Anaheim rather than the "low-risk" bomb that DCA has turned out to be.

[Kuzcotopia]

Imagineers I've talked to really rue the differences between the parks. They all see the difference, and hate that California Adventure sits next to Walt's Dream, while Tokyo Disney Sea will be something that they cannot show their families without great expense.

I've heard it called "Disney's Cardboard Adventure." That sums it up for me.

People like Pressler talk about the fanatical Disney fans that exist in Japan, and how that makes it so that they can make more elaborate parks for Japan.

I say nonsense! Epcot when it opened was every bit as ambitious as TDS. It opened during the biggest recession since Disney built parks.

The truth is, if the Japanese audience is all that FANATICAL about their Disney attendance....

well....


Didn't they get the parks backwards then?

Shouldn't the Skeptical, show-me-first Americans get the good park, and the fanatical we-love-everything-Disney Japanese get the crummy park?

Anyway, I'm going to Japan. Voting with my feet. Paying for a full on trip to Tokyo, instead of going to Disneyworld. (Actually going there too, but for just one day rather than two weeks.)


-Kuzcotopia

[Mr D]

Hey I back you up completely and I ernestly hope there are more and more that are seriously questioning their future spending habits, I also sense foreboding in the next 30 days that an escalation of events will snowball so out of control no amout of PR can control the simple fact that.......TDS is IT While few in numbers right now of Americans even willing to travel abroad there is the plain and simple fact that the American public will not settle for cardboard, if TDS was built by the OLC on their own anywhere in the US and Disney had DCA, what kind of upset would that become? I am hoping that Hawaii would be the next OLC expansion as the Japanese business has heavily invested in resorts there. Did you know that the predicted estimates are that of the (approx) $2.3 billion that was put into TDS will be Paid off in 2 years? DCA could not get in the black in 10 years at its current rate. I have frantically searched for ways to buy stock in OLC but as of now it appears only on the Japanese stock market is it available, I own Disney stock but my las purchase was last year and its in the red, its value now is less then what I paid for it, whereas I have indications that OLC will go up, and up, and UP! The mor it goes up the more investors want to "catch the wave" so are we gonna surf and "hang ten" with TDS or flounder in the surf with DCA? I go with the winning team and Eisner has a losing streak that is dragging the Disney company to oblivion, R.I.P Disneyland. I bet he bails out in the next 90 days and takes all his benifits.

[Doodle Duck]

Re: Merlin Jones post above...

I could have said that! But I let him say it.


hahaha...what a great post MJ...as good as any column.

Thanks.

[merlinjones]

Thanks, Doodle. An addendum:

In the history of the Walt Disney Company, the biggest financial success has always come with risk. When creative breakthroughs and quality product was put before prudent spread sheets and "common wisdom", the company became a magical cash cow. For those whose history is weak, let's repeat some highlights:

The upside:

1920's, 30's: Walt spends more than he makes on many of the Mickey Mouse and Silly Symphony shorts. Financial ruin is warned by distributors who want to cut costs, but the quality pays off as Mickey becomes a worldwide fad and marketing icon.

1937: "Disney's Folly" has Hollywood laughing at the very notion of a two million dollar animated full-length feature. Who will sit through that? Snow White becomes the top-grossing film of all time with 8 million gross worldwide (during the depression when tickets were ten cents).

1950: After a string of setbacks from the War, Disney is heavily indebted to Bank of America. The studio will have to close without a major cash infusion. Making another animated feature is too high risk, since the last few ere not immediately profitable. Cinderella is made anyway and saves the studio from closing.

1955: Disney is encouraged to sell off his library of films to televsion to settle the studio's debts. Hollywood wisdom positions televison as a fad for burning off old product and as a rival for boxoffice attention. Walt holds out control of his own product and uses the TV deal to sell his movies in theatres and to finance his theme park. Disneyland becomes one of top rated shows in television and runs for thirty years.

1955: Walt leverages his own personal fortune to finance design of a theme park dedicated to his films and the noistalgic ideals of his life. He is warned that such an amusement venture will never be profitable and is viewed as crazy by most in the industry. Disneyland becomes a tourism icon and eventually helps put the company solidly in the black after years of just scraping by.

1984: New management intends to reinvigorate the long mismanaged Walt Disney studio when common wisdom in the financial community is that the icon had seen its day with the public and would be better served in a corporate breakup of assets. The sudio blossomed with reinvestment in creative talent and new product in the traditional mold.

1984-88: Michael and the accountants want feature animation closed because it is too financially risky and no longer relevant to the public. Roy Disney insists that it stay put and reinvests in the long dormant art form to bring back modern classics such as Mermaid and Beauty and the Beast. These films form the core assets for marketing throughout the entire reinvigorated Disney company, each building on the success of the last until synergy reaches its peak with Lion King.

1984-94: Richly themed rides, additions, expansions and hotel developments are added to the Disney theme parks increasing attendance and cash flow for longer stays to see the new marvels. Finance would like lower costs and lower risk attractions but the creative breakthroughs bring in the guests.

Certainly there were failures at creative risk, such as the initial release of Fantasia or perhaps even DisneyQuest, but these rolls of the dice were far outweghed by the payoffs of the hits.

But the major downsides of the company have occurred when low-risk was chosen over creative vision:

1970-1983: After Walt's death a creative miasma falls over the studio as executive fight for control and limit the Disney product to repetitive low-risk comedies and the occasional blockbuster. Feature animation turns out cheaper product that pales in comparison to the classics. No creative chances are taken. Dependance grows on the Disney brand name alone to market and carry the product, not the product itself. Audiences abandon the Disney brand name and turn against it when it so clearly is not what they remember. Disney becomes a poison brand for all but tiny children.

1994-present: A near mirror of the seventies. The Disney brand is marketed alone, with no creative product to support it. The name is overexploited in Disney Stores and shallow marketing ventures just to increase growth. Characters are overexploited, creatives that demand integrity and risk are weeded out of the studio. Functionaries rule by formula and theory, not creative practice. Feature animation diversifies its slate beyond brand identification and turns out cheaper faster product that does not resemble the classics or modern classics. The rare chance to build a companion to Disneyland is blown by a low-risk attraction that turns off the public. The public begins to abandon the brand to tiny children alone.

Moral:
Without taking chances and believing in the creative worth of the product, there simply IS NO Disney. The brand does not exist in a vaccuum of generic, replacable product. Disney is not soap. There is historic expectation tied to the name that must be met or exceeded to be profitable. These people are paid a lot of money to think about this, but ultimately can't see past the end of their noses. Instead they expect us to care about their risk-to-profit charts and be impressed about what was able to be purchased on a budget. We're not, we want to be swept away from the real world by technological and artistic marvels - - leaving the spreadsheets to the CFO where it belongs. If we don't get what we expect or better, we stop spending. Pretty simple, and you don't need to go to marketing school to undertand it. It's a gut-level thing.

"When gazing at a graph that shows the profits up, their little cups of joy should overflow." "Precisely."

[Bluto]

Hello!!!,
The market over in Eastern Asia and Japan is totaly different than here in Cali. The Japanese love Disney and shell out tons of yen for it. Thats why TDS is a bigger, better park than DCA. I think Eisner would tell you as much. Its a business thing. Supply and demand. The demand was huge over in Tokyo. So they're taking care of that.
Now DCA leaves us wanting more. Aha!!! Demand again. So the DLR is probably going to get more in the next few years. Hold your water...not your breath.

[merlinjones]

>>The market over in Eastern Asia and Japan is totaly different than here in Cali. The Japanese love Disney and shell out tons of yen for it. Thats why TDS is a bigger, better park than DCA. I think Eisner would tell you as much. Its a business thing. Supply and demand. The demand was huge over in Tokyo. So they're taking care of that. Now DCA leaves us wanting more. Aha!!! Demand again. So the DLR is probably going to get more in the next few years. Hold your water...not your breath.<<

None of Disney's historic highs would have been reached by waiting for demand in the marketplace. There was no demand for animated features (in 1937 or in 1988), there was no demand for a lush theme park in 1955 (no one knew what it was) there was no demand for a second park at Disneyland at all. But in all these cases there was a need and a possibilty and a desire for cool stuff to do in one's leisure time. Demand was created along with the creation itself - - of a product that everyone would find astonishing. That's what marketing is for - - to SELL the cool product - - not to BE the product.

[Bluto]

I totaly agree with you.
But..Nowadays, people shiver at the thought of spending millions or even billions of dollars on something that may not turn a proffit. I dont see a huge problem with it. Thats business today.

But comming from a business point of view does that make at least some sense?

[Corith]

Lets face, Eisner, in his arrogance, thought we (the public) would visit any theme park disney built in droves. He and Paul planned out DCA with the only thought of how much they can milk the public out of dollars. Rather than spend the money on a "E" ticket attractions, they built a hotel. The cut every corner in construction so that the park would have a low initial building cost, and filled the park with places to spend money. Low cost, high income.

This same type of thinking is being used at Disneyland. Why spend money on new attractions, or on upkeep? They've got your money upon entry, and now they want more, so they need stores and resturants, not attractions. Paul is planning yet another make-over of the retail areas in NOS, yet mansion is in bad need of repair. Stores make money, rides don't.

I'm sure that Einser & Paul are sitting around saying to themselves that TDS can't make money, that is doomed to failure because they spent so much money on non-income related projects (a.k.a. rides) that will also need cash outlays for maintenance (stores are so much cheaper to operate).

If TDS takes off, and makes money (hopefully hand over fist), Eisner and his crew of "yes' men are going to have a lot to answer for to the board of the directors. The song-and-dance that Einser been spinning about how theme parks like DL can't be created anymore because of cost vs. guest spending isn't going to fly. The board is going to want to know why they aren't seeing the same cash flow from his park that OLC is seeing from TDS. Why the newest theme park he built isn't making that type of money, why its losing money, and why it has to give away tickets to get people to show up.