Will Disney rightsize? Q3 2023 Earnings Takeaways

WEBVTT

1
00:00:00.480 --> 00:00:06.320
From our studios in Orlando, both
of us. This time this is Yeah,

2
00:00:06.599 --> 00:00:09.480
This is Green tag theme Park and
thirty where each week we take the

3
00:00:09.519 --> 00:00:12.560
top theme park news and break it
down to why it matters to you.

4
00:00:13.000 --> 00:00:17.879
And this week we're going to start
off with the takeaways from Disney's earning call,

5
00:00:17.960 --> 00:00:24.519
their latest earnings call. So the
short end of it is that it

6
00:00:25.160 --> 00:00:28.920
was a good Arns call and mainly
due to the theme parks. I'll go

7
00:00:29.000 --> 00:00:33.200
through some of the takeaways from the
Arnes call and we'll link to a really

8
00:00:33.240 --> 00:00:37.880
great analyst article in the show notes, I will just kind of break them

9
00:00:37.960 --> 00:00:41.520
up and then we'll talk about them. But it basically beat expectations, with

10
00:00:41.600 --> 00:00:47.719
revenues for the quarter growing five percent
and seven percent, respectively. In streaming,

11
00:00:48.240 --> 00:00:51.640
it's still not profitable, but it's
losing a lot less. We talked

12
00:00:51.640 --> 00:00:56.399
about We've talked about this trend in
the last several earnings calls, as it's

13
00:00:56.479 --> 00:01:00.479
kind of been trending in this direction. But this time last year the streaming

14
00:01:00.479 --> 00:01:03.480
service lost a billion and a half
dollars and the past quarter only lost three

15
00:01:03.560 --> 00:01:08.760
hundred and eighty seven million. They
added seven billion subscribers and Iiger believes that

16
00:01:08.799 --> 00:01:14.840
it'll be profitable in the latter part
twenty four. This isn't really a surprise,

17
00:01:15.159 --> 00:01:19.560
but I think it's also the same
thing we've been talking about where it's

18
00:01:19.599 --> 00:01:22.560
like the streaming wars, Right,
it's the same like rule of three,

19
00:01:22.760 --> 00:01:26.480
Like there's probably going to be three
streaming services that people are going to pay

20
00:01:26.480 --> 00:01:32.000
for individually, and Netflix has solidified
itself as one, and Disney is trying

21
00:01:32.040 --> 00:01:37.280
to become one of the three choices, right, I mean it is one

22
00:01:37.280 --> 00:01:40.159
of the three choices. It's just
Scott, do you have any thoughts on

23
00:01:40.200 --> 00:01:42.799
that. Yeah, it's it's may
not be one of the three, one

24
00:01:42.799 --> 00:01:49.040
of the three choices, just not
necessarily one of the profitable choices. Yeah,

25
00:01:49.280 --> 00:01:57.760
I think I see it getting closer
to you know, to the projection

26
00:01:57.840 --> 00:02:01.920
of it it getting into profitability.
I still think it's a it's a great

27
00:02:02.000 --> 00:02:07.840
asset for them because it utilizes all
of all of their ips in the past.

28
00:02:07.280 --> 00:02:10.479
It'll just yeah, it'll just be
a question of again execution. I

29
00:02:10.479 --> 00:02:15.960
do think that though watching how much
it's it's it's become closer to profitability.

30
00:02:16.080 --> 00:02:20.680
I do think it's going to get
closer and ultimately it's going to be what

31
00:02:20.960 --> 00:02:24.759
Eiger had said. I mean,
he talks about cost cuttings when he talks

32
00:02:24.800 --> 00:02:30.599
about bringing back the back the company
to its core. Really it sounds like

33
00:02:30.639 --> 00:02:37.639
they're going to really stop stop producing
as much original content for it and get

34
00:02:37.639 --> 00:02:43.639
it back to making great movies that
then will live on Disney Plus that will

35
00:02:43.639 --> 00:02:46.520
be able to feed the theme parks, which was the original business model,

36
00:02:46.759 --> 00:02:52.639
instead of putting so much money behind
original content that not that many people necessarily

37
00:02:52.680 --> 00:02:55.080
saw and that didn't really you know, see the return on investment based on

38
00:02:55.080 --> 00:03:00.960
how many subscribers. There's just too
few subscribers to to make up for that

39
00:03:00.080 --> 00:03:04.680
much for what eighteen billion that there's
a lot, it's a lot. Yeah,

40
00:03:04.719 --> 00:03:06.479
I think what was I think that
what they were trying to do is

41
00:03:06.520 --> 00:03:07.840
they had to cut through the noise. They had to make sure they were

42
00:03:07.879 --> 00:03:13.240
cutting through the noise by creating that
original content so that it would be well,

43
00:03:13.319 --> 00:03:16.039
here's stuff that you can only get
here because unlike you know, so

44
00:03:16.199 --> 00:03:20.719
much so much content out there that
eventually you figure, well i'll see it.

45
00:03:20.719 --> 00:03:23.759
Eventually, I'll see it on some
other It'll come to the streaming channel

46
00:03:23.840 --> 00:03:25.840
or the streaming network that I'm using
I'll be able to find it online,

47
00:03:25.840 --> 00:03:29.360
I'll be able to YadA YadA YadA. And I think what they were trying

48
00:03:29.360 --> 00:03:35.000
to do is to create that sense
of exclusivity. And in many cases that

49
00:03:35.080 --> 00:03:38.599
has worked for the Disney brand,
but in this particular case, it hasn't

50
00:03:38.639 --> 00:03:43.039
worked yet. Now I'm not saying
it's not going to but it hasn't worked

51
00:03:43.120 --> 00:03:47.240
yet. And so I think we've
all learned that if you just hang out

52
00:03:47.240 --> 00:03:52.000
and wait long enough, eventually the
content will be available to you. And

53
00:03:52.080 --> 00:03:53.240
I think that's what people are waiting
for. As you say, Philip,

54
00:03:53.280 --> 00:03:58.039
there's so much competition out there,
so many streaming networks out there that people

55
00:03:58.039 --> 00:04:00.800
are going to have to subscribe to
individually. And we've talked about this on

56
00:04:00.840 --> 00:04:04.319
the show before, and you're much
more attuned to this this than I am.

57
00:04:04.360 --> 00:04:11.400
But the idea of for years it
was those a bunch of the It

58
00:04:11.439 --> 00:04:14.759
started with a couple of individual streaming
or pay pay per view kinds of things,

59
00:04:14.919 --> 00:04:16.680
and then they's got more and more
and more, and then they had

60
00:04:16.680 --> 00:04:20.000
to bundle them all together, and
they split them all up now and they're

61
00:04:20.040 --> 00:04:24.439
going to come back together, I
think, I think, in my opinion,

62
00:04:24.600 --> 00:04:30.199
I think that uh, customer behavior
is going to make it. We

63
00:04:30.240 --> 00:04:31.600
want something easy, we want we
want what we want, and we want

64
00:04:31.639 --> 00:04:35.319
it easily, and so we're going
to have to start making bundles even more

65
00:04:35.399 --> 00:04:42.720
robust or even a cross company.
Yeah, and they are doing that with

66
00:04:42.879 --> 00:04:46.079
the Disney Plus and Hulu and trying
to make that more seamless. I mean,

67
00:04:46.560 --> 00:04:51.920
I think I can see it working
if they're again continuing down that making

68
00:04:51.920 --> 00:04:55.959
it more seamless, like Scott just
said, by you know, they'll combine

69
00:04:56.319 --> 00:05:00.360
Zy Plus and Hulu and then they
will focus on making better movies that can

70
00:05:00.399 --> 00:05:04.800
feed the engine of their theme parks
and merchandising, because you know, their

71
00:05:04.879 --> 00:05:10.319
last many movies have not been good. It's like just having a lot of

72
00:05:10.920 --> 00:05:14.399
It's like they tried the version of
just having a lot of content, making

73
00:05:14.399 --> 00:05:19.360
all these original series and all this
stuff for Disney Plus and then still trying

74
00:05:19.360 --> 00:05:23.560
to keep the movies and it's just
what it's not working and it costs too

75
00:05:23.600 --> 00:05:28.720
much. So I think shifting over
back to the original you know focus of

76
00:05:28.759 --> 00:05:33.480
the company making less but good,
excellent content that you have to see,

77
00:05:33.560 --> 00:05:36.240
like you have no choice put to
see it. And then they leverage that

78
00:05:36.360 --> 00:05:40.600
through the theme parks and through all
that, and they say, if you

79
00:05:40.639 --> 00:05:43.319
want to keep seeing this, it's
only available on Disney Plus. Right,

80
00:05:43.319 --> 00:05:46.040
So we're going to make excellent content. They're going to watch multiple you're going

81
00:05:46.079 --> 00:05:47.639
to want to watch, and then
you can only get it here. And

82
00:05:47.680 --> 00:05:50.319
that's how we're going to do it. And then we're not going to worry

83
00:05:50.319 --> 00:05:53.759
about having a bunch of new content. We're just going to give you our

84
00:05:53.759 --> 00:05:56.639
library because you can't possibly watch our
whole library, right. Well, And

85
00:05:56.680 --> 00:06:01.160
I think that also they were,
at least from an anecdotal consumer standpoint,

86
00:06:01.319 --> 00:06:05.199
I think they were leading really heavily
into the power of the Star Wars ip

87
00:06:05.759 --> 00:06:10.680
and I think they were leading really
heavily into you only get this on Disney

88
00:06:10.720 --> 00:06:13.839
Plus. Then everybody, I mean, let's face it, everybody in the

89
00:06:13.839 --> 00:06:17.160
whole wide world loves Star Wars.
But I think this is the second time

90
00:06:17.199 --> 00:06:23.600
they've discovered they don't love it enough
to pony up money to either spend the

91
00:06:23.680 --> 00:06:29.920
night on a starship or go ahead
and subscribe to Disney Plus just for the

92
00:06:29.959 --> 00:06:31.959
Star Wars content, because so much
of that, again is available elsewhere.

93
00:06:32.000 --> 00:06:39.079
It's kind of what Paramount did with
Paramount Plus did with the Star Trek universe

94
00:06:39.240 --> 00:06:44.680
and all of its many incarnations.
They've kind of let that dwindle, but

95
00:06:44.720 --> 00:06:49.079
that was certainly how they kicked off
their streaming services or their streaming network.

96
00:06:49.199 --> 00:06:53.879
And I don't know whether I think
Disney Plus did the same thing, but

97
00:06:53.920 --> 00:06:56.800
I think they just did it in
such an expensive way that it's going to

98
00:06:56.839 --> 00:07:02.920
take longer for them to recover from
that cotual investment. Yeah, well,

99
00:07:03.079 --> 00:07:08.680
moving on, the parks are doing
very well. The division saw a thirteen

100
00:07:08.720 --> 00:07:14.040
percent increase in revenue to eight point
one six billion with gross with growth at

101
00:07:14.079 --> 00:07:18.160
almost almost all of its parks.
It's also, of course, they announced

102
00:07:18.160 --> 00:07:23.160
we talked about this previously, but
they announced a sixty billion dollar investment to

103
00:07:23.360 --> 00:07:30.439
really turbocharge those properties. So the
only place that didn't do well is Wealth

104
00:07:30.560 --> 00:07:34.759
and World in Florida. Now.
The company said in the call that this

105
00:07:35.000 --> 00:07:40.279
was due to the end of its
sifty anniversary, the closing of the Star

106
00:07:40.319 --> 00:07:44.800
Cruiser, and wage inflation. And
just as a reminder, after several months

107
00:07:44.839 --> 00:07:49.120
of negotiation, Dissing did agree to
the pay rays of eighteen dollars per hour

108
00:07:49.360 --> 00:07:53.519
by the end of twenty twenty three, which with additional increases over the next

109
00:07:53.519 --> 00:07:56.759
three years. I'm going to say
I think there are a lot of other

110
00:07:56.800 --> 00:08:03.839
factors in that. I think that
weather probably did play a part in this,

111
00:08:03.000 --> 00:08:05.680
especially when, as I've talked about
multiple times, right, there are

112
00:08:05.720 --> 00:08:11.360
not kind of guest comfort mitigation areas
at Disney at all. Really, there's

113
00:08:11.399 --> 00:08:18.399
not even like there's not even enough
water refill stations or they're just not they're

114
00:08:18.439 --> 00:08:22.759
not planning for the weather at all
portion of this. And also, as

115
00:08:22.759 --> 00:08:28.199
Scott and I have talked about a
lot, the guest experience day to day

116
00:08:28.680 --> 00:08:33.000
has really been going down with the
reliance on the app and charging for everything

117
00:08:33.000 --> 00:08:37.000
that used to be included. I
mean, there's so I think there are

118
00:08:37.120 --> 00:08:41.879
there's there might be more at play
here. Plus the fiftieth anniversary celebration,

119
00:08:43.440 --> 00:08:50.440
what was that, I mean what
fiftieth anniversary celebration because I didn't remember seeing

120
00:08:50.440 --> 00:08:52.240
hardly. I mean, there really
was not there. Again, we've talked

121
00:08:52.240 --> 00:08:56.639
about this too. Compared to previous
celebrations, what they offered for the fiftieth

122
00:08:56.840 --> 00:09:03.879
was was almost anecdot. So yeah, I think I think I would say

123
00:09:03.879 --> 00:09:05.399
this is what the company's saying,
But I think there are other other things.

124
00:09:05.399 --> 00:09:11.360
Well, I think instead of saying
the end of the fiftieth fiftieth anniversary,

125
00:09:11.639 --> 00:09:16.960
it's more like the disappointment with the
fiftieth anniversary because being Florida based,

126
00:09:18.039 --> 00:09:20.600
yes, we did see I saw
a lot of promotion. I saw a

127
00:09:20.600 --> 00:09:26.159
lot of promotion of it. I
haven't been to Disney since they, you

128
00:09:26.200 --> 00:09:28.519
know, made it so that I
can't just go and enjoy that. Everything

129
00:09:28.519 --> 00:09:35.200
has to be digital and cyber inspired. But so for me, that's why,

130
00:09:35.279 --> 00:09:39.879
that's why I don't go. But
the idea of it's I think it's

131
00:09:39.919 --> 00:09:43.720
an over promise and under delivered scenario
when it comes to the fiftieth, I

132
00:09:43.720 --> 00:09:46.039
think they they made it so that
the fiftieth anniversary, it's fiftieth anniversary,

133
00:09:46.159 --> 00:09:48.799
and you can buy this that says
fiftieth anniversary, and you can buy that

134
00:09:48.799 --> 00:09:52.240
that says fiftieth anniversary. You can
buy this. But it didn't really change

135
00:09:52.279 --> 00:09:56.120
the product mix all that much.
I mean, I'm I've been in Florida

136
00:09:56.159 --> 00:09:58.960
long enough to remember. Was it
the twenty fifth where they turned the castle?

137
00:10:00.679 --> 00:10:03.799
You know, I remember that,
and that was you had to see

138
00:10:03.799 --> 00:10:07.559
it, you know, you absolutely
had to see the castle, which was

139
00:10:07.799 --> 00:10:11.519
completely reconstructed as a big pink confection
birthday cake, and whether you loved it

140
00:10:11.639 --> 00:10:16.679
or hated it, because it was
very divisive at the time, it was

141
00:10:16.960 --> 00:10:18.759
a reason to go to the park
and I went, and I had my

142
00:10:18.799 --> 00:10:22.279
picture taken, and I got the
maquette, and I have the whole nine

143
00:10:22.360 --> 00:10:28.080
yards. But it was it was
something that was physical, tangible as part

144
00:10:28.080 --> 00:10:31.519
of the guest experience, and I
don't think I saw much of that with

145
00:10:31.720 --> 00:10:35.600
the fiftieth Now. I haven't been, but I certainly don't know what it

146
00:10:35.679 --> 00:10:39.440
is if it existed. I knew
exactly what the castle was even before I

147
00:10:39.480 --> 00:10:43.279
went, and that's why I went
and enjoyed it, So I think that's

148
00:10:43.320 --> 00:10:46.039
part of it. I think the
wage issue may play into it to a

149
00:10:46.080 --> 00:10:52.080
certain extent. I think the closing
of Galactic Star Cruiser, I think that's

150
00:10:52.639 --> 00:10:58.879
a bigger factor than we want to
even recognize because they invested so much.

151
00:10:58.120 --> 00:11:01.759
Now they have to they just have
to put that towards the bottom line as

152
00:11:01.759 --> 00:11:05.799
a loss. You know that that
investment. I'm sure that was not amortized

153
00:11:05.080 --> 00:11:09.360
to pay for itself in the short
time that it was open. I'm sure

154
00:11:09.399 --> 00:11:11.960
it was put into the books that
it was going to be admortized over a

155
00:11:11.000 --> 00:11:13.799
long period of time and they would
be able to pay for it. But

156
00:11:15.120 --> 00:11:16.279
you know, even if they said
five years, they were going to advertise

157
00:11:16.320 --> 00:11:20.200
it over five years to pay to
pay for it. It closed in what

158
00:11:20.440 --> 00:11:26.279
one you know, one fifth of
the amortization time two two years? Okay,

159
00:11:26.440 --> 00:11:31.360
so a little less than half of
the amortization time. And uh yeah,

160
00:11:31.399 --> 00:11:33.279
So now all of a sudden bam
that hits the books all in one

161
00:11:33.360 --> 00:11:37.240
chunk because it's no longer operational.
Yes they still own it, but it's

162
00:11:37.240 --> 00:11:43.440
no longer operational. So that's I
think that's a I think that's a bigger

163
00:11:43.480 --> 00:11:46.480
factor than we want to let on. Did it say and Philip, I

164
00:11:46.480 --> 00:11:48.519
don't know this, and I'm not
trying to put you on the spot,

165
00:11:48.600 --> 00:11:54.519
but did they say anything about uh
attendance in this call? Did you know?

166
00:11:54.559 --> 00:12:00.240
Because again, attendance, if if
the if it was that giant to

167
00:12:00.360 --> 00:12:03.080
hit because all of this capital,
all of these capital dollars hit the books

168
00:12:03.240 --> 00:12:09.360
in one year versus five, or
two years versus five. They could still

169
00:12:09.360 --> 00:12:13.320
have had a great year, but
it doesn't matter because you know on the

170
00:12:13.320 --> 00:12:18.000
books you're screwed. Yeah, I
don't know attendance is down at Walt disney

171
00:12:18.039 --> 00:12:22.720
World, but it is. It
is up everywhere else, including Disneyland and

172
00:12:22.759 --> 00:12:28.399
all the international parks. The international
parks are much easier to because you know,

173
00:12:28.840 --> 00:12:33.240
it's one of the first years they've
been fully open without restrictions internationally,

174
00:12:33.679 --> 00:12:37.919
and Disneyland it's been up, but
it is down at disney World. And

175
00:12:37.639 --> 00:12:43.399
I think that's all. It's all
these things together. I'm sure that the

176
00:12:43.440 --> 00:12:46.600
Star Cruiser, you know, didn't
help things, but I think I think

177
00:12:46.639 --> 00:12:52.200
it's more it's that plus the other
items, which is that it's really I

178
00:12:52.279 --> 00:12:56.759
think you said it earlier perfectly where
you said you didn't have to see it.

179
00:12:56.759 --> 00:13:01.600
It's exactly. I think that's the
problem. You don't have to see

180
00:13:01.120 --> 00:13:05.960
anything that they're doing at disney World. And it's the same problem if you

181
00:13:05.960 --> 00:13:11.000
think about it with Disney Plus.
You don't have to see that they're making

182
00:13:11.159 --> 00:13:18.159
nothing. The products that they are
releasing now are not have to see.

183
00:13:18.320 --> 00:13:22.360
And that's the whole company. And
so if Eiger is trying to refocus them

184
00:13:22.679 --> 00:13:26.679
to say, we're going to create
content that you have to see, so

185
00:13:26.720 --> 00:13:31.039
you need Disney Plus and we're going
to create in park experiences that you must

186
00:13:31.200 --> 00:13:35.080
see. I think that's gonna that'll
win it back. But I think that's

187
00:13:35.200 --> 00:13:37.240
that's the problem the company is having
as a whole. Well. And I'm

188
00:13:37.240 --> 00:13:41.200
also wondering if because the company,
because the theme park, we're almost doing

189
00:13:41.279 --> 00:13:46.480
well everywhere except in Florida. I'm
also wondering, and I hate to say

190
00:13:46.480 --> 00:13:52.840
this, but has Orlando hit a
market saturation because there's I think that so

191
00:13:52.960 --> 00:13:56.840
much to do in Orlando and I
and you're living in Tampa. I know,

192
00:13:56.840 --> 00:13:58.759
people say, you're in Florida.
Why aren't you over there all the

193
00:13:58.840 --> 00:14:03.240
time? Because I'm not always in
Florida. But the the other part of

194
00:14:03.519 --> 00:14:07.080
that, though, is now that
I'm over here and I'm seeing all the

195
00:14:07.120 --> 00:14:11.720
competition, you know, I'm staying
on iDrive, I'm seeing all the competition

196
00:14:11.840 --> 00:14:15.759
for things that are not Disney,
all the Universal offerings, you know,

197
00:14:15.840 --> 00:14:18.600
all of the even things like even
things like fun Spot. You know,

198
00:14:18.679 --> 00:14:26.240
you you've got these these great amusement
ride parks that are just fun and they

199
00:14:26.279 --> 00:14:30.759
don't have to pay giant IP licensing
fees and they don't have to, you

200
00:14:30.759 --> 00:14:35.279
know, do any of that stuff. I don't know, because again in

201
00:14:35.320 --> 00:14:39.519
California, yes, it's up against
a bunch of stuff, but it's also

202
00:14:39.639 --> 00:14:48.000
Disneyland. It's also the the original
it is it's the must see because again

203
00:14:48.519 --> 00:14:52.240
it was the first, it was
the first real theme park. It you

204
00:14:52.279 --> 00:14:58.960
know, so many different things.
Well, well, yeah, I think

205
00:14:58.000 --> 00:15:01.440
you hit it right at the in
there too. Yeah, it's it becomes

206
00:15:03.080 --> 00:15:07.519
harder, you know, to say
it's a mussy And there's increase competition in

207
00:15:07.559 --> 00:15:11.799
the area. And I think that
the wage stuff, you know, I'm

208
00:15:11.799 --> 00:15:15.320
sure they brought it up as a
part of it, but the wage stuff

209
00:15:15.360 --> 00:15:22.679
is not going to really impact the
attendance levels. So I think, you

210
00:15:22.720 --> 00:15:24.840
know, I think these are still
you know, separate problems and the waye

211
00:15:24.840 --> 00:15:28.240
stuff is necessary, like the competition
you just stated, I mean, there's

212
00:15:28.279 --> 00:15:33.879
so the cost of living in Orlando
has been going up, and meanwhile we

213
00:15:33.919 --> 00:15:39.679
still need a lot of people to
make all of these things function well.

214
00:15:39.720 --> 00:15:43.799
And the couple things are not saying
with that we're talking about the wage stuff

215
00:15:43.120 --> 00:15:48.120
is Staffing has been difficult in general
around the industry. We've talked about that

216
00:15:48.200 --> 00:15:54.879
way too much, but just around
the corner is something of epic proportion,

217
00:15:54.080 --> 00:15:58.879
one might say. So they need
to get their staff locked in as quickly

218
00:15:58.919 --> 00:16:03.600
as possible, because that's going to
pull from this area, you know.

219
00:16:03.639 --> 00:16:06.840
And I've and I've talked to some
of my Universal friends completely off the record,

220
00:16:06.879 --> 00:16:11.240
but they have voiced without any data, but just in their opinion,

221
00:16:11.240 --> 00:16:14.120
they have voiced concerns that, you
know, are we going to be able

222
00:16:14.159 --> 00:16:18.120
to to staff the whole thing?
And I was wondering the same thing.

223
00:16:18.519 --> 00:16:23.240
It's so yeah, I just think
that I think Florida's I think Disney Florida

224
00:16:23.320 --> 00:16:26.440
has its its work cut out for
it, but I don't think it's insurmountable.

225
00:16:26.480 --> 00:16:32.519
And I do think that it is
going to continue to be the sort

226
00:16:32.559 --> 00:16:41.120
of jewel in the crown, but
it's right now a little tarnished. Well,

227
00:16:40.919 --> 00:16:44.399
we'll finish up the Arnians call here. Basically, the last section was

228
00:16:44.440 --> 00:16:48.799
just saying that they plan to keep
on their target to aggressively manage costs and

229
00:16:48.879 --> 00:16:53.120
hit its efficiency target of the two
billion dollar cost cut, which they talked

230
00:16:53.120 --> 00:16:56.759
about last time. Again, I
think most of that, as they have

231
00:16:56.799 --> 00:16:57.840
said, it's not going to come
from the theme park division. That's going

232
00:16:57.919 --> 00:17:02.639
to come from the createive and you
know, kind of remeshing departments together and

233
00:17:02.639 --> 00:17:07.240
blah, blah blah, and less
investment in original content for streaming all that

234
00:17:07.279 --> 00:17:11.160
kind of stuff. I think in
many ways the Hollywood strike helped them in

235
00:17:11.559 --> 00:17:15.160
some of those areas because they don't
really you know, they have a catalog

236
00:17:15.200 --> 00:17:21.480
they can lean on, you know, unlike other studios. And then you

237
00:17:21.519 --> 00:17:26.720
know, there's there's some interesting commentary
on this out here. There was one

238
00:17:26.720 --> 00:17:30.759
that I want to highlight a section
from this is from a senior analyst at

239
00:17:30.759 --> 00:17:34.440
the Motley Fool, and I just
think this is a good recap. He

240
00:17:34.480 --> 00:17:37.279
says, because of the strength of
the theme parks and the success of Disney

241
00:17:37.279 --> 00:17:41.039
Plus and it's other streaming services,
Disney is able to get to a point

242
00:17:41.039 --> 00:17:47.599
where next year we back to pre
pandemic levels, which is very interesting because

243
00:17:47.599 --> 00:17:49.920
this is a stock that hit a
nine year low just a couple of weeks

244
00:17:49.960 --> 00:17:59.480
ago. So I just think that's
to me, that almost encapsulates the larger

245
00:17:59.519 --> 00:18:03.640
theme park the whole struggle that we've
all been having. Right even up until

246
00:18:03.720 --> 00:18:07.599
recently it was a nine year low, but it's finally going to be back

247
00:18:07.640 --> 00:18:11.799
to pre pandemic levels, but pre
pandemic right at the end of this year,

248
00:18:11.920 --> 00:18:15.720
which is exactly what We've tried to
talk about how next year is still

249
00:18:15.720 --> 00:18:19.480
going to be a pretty bad year
because sentiment, election difficulty, bub blah.

250
00:18:19.480 --> 00:18:22.599
And then twenty five we're going to
be launching Epic and they're going to

251
00:18:22.680 --> 00:18:25.880
need to compete again. So you
know, at some point they're going to

252
00:18:25.920 --> 00:18:33.160
need to be competitive again, and
hopefully they'll be realigned in time to be

253
00:18:33.200 --> 00:18:34.240
able to do that well. And
at least in Florida. You know,

254
00:18:36.599 --> 00:18:41.039
everyone's like, from an attendance standpoint, I don't I don't know how much

255
00:18:41.079 --> 00:18:45.200
Epic is going to impact the Disney
parks. Usually what happens is when a

256
00:18:45.200 --> 00:18:48.000
new park opens in the Orlando area, all the parks see a bump because

257
00:18:48.039 --> 00:18:52.440
it just draws in more tourism to
the area, and there are people say,

258
00:18:52.480 --> 00:18:53.960
well, we're here, we mss
well go over and see Disney,

259
00:18:55.039 --> 00:18:56.920
or we're here, we muss will
go over and see Orlando, or we

260
00:18:56.000 --> 00:19:00.559
might as well go over and see
Universal or whatever where where they happened to

261
00:19:00.599 --> 00:19:04.400
go first. But I think the
staffing is going to be the biggest challenge

262
00:19:04.480 --> 00:19:12.200
in regards to the new park,
the new big boy in town. Yeah,

263
00:19:12.240 --> 00:19:19.680
so I wanted to also talk a
little bit about some other factors and

264
00:19:21.000 --> 00:19:25.759
mainly mainly just we already talked about
most of these points that I had on

265
00:19:25.839 --> 00:19:30.079
here, but really the Jollywood Knights, I think it's a good uh maybe

266
00:19:30.119 --> 00:19:33.000
good, maybe not, but just
an interesting thing to think about at this

267
00:19:33.079 --> 00:19:37.079
time where they're showing record earnings and
all this is happening. It's also the

268
00:19:37.119 --> 00:19:42.519
same time, just this week,
that they are premiering their new holiday event,

269
00:19:42.559 --> 00:19:45.160
which they have not had a new
holiday event in a long while,

270
00:19:45.240 --> 00:19:48.440
so it kind of hits on that
point of, you know, finally reaching

271
00:19:48.519 --> 00:19:55.400
pre pandemic levels where they're launching new
live entertainment. So we talked about Jollywood

272
00:19:55.480 --> 00:19:59.240
Nights when it was announced, and
the disclaimer here is I didn't go.

273
00:19:59.640 --> 00:20:03.799
One of our partners did go and
kind of gave a report of the opening

274
00:20:03.880 --> 00:20:07.519
night, and I have taken his
report and kind of correlated it with other

275
00:20:08.000 --> 00:20:12.359
reporters that were there, and it
sounds like it did not go well at

276
00:20:12.359 --> 00:20:18.720
all, like not even a tiny
bit well. And it sounds like it's

277
00:20:18.759 --> 00:20:23.960
basically just exactly what we just said. There's nothing there that is a must

278
00:20:25.000 --> 00:20:29.920
see, like like they've created no
content that is exclusive enough for it to

279
00:20:29.920 --> 00:20:34.400
be worth the price point instead,
it really is more on the theme that

280
00:20:34.480 --> 00:20:38.640
has been growing the last several years
with Disney, which is that they're trying

281
00:20:38.640 --> 00:20:42.960
to charge you for everything that they
used to be included. Now they're charging

282
00:20:44.000 --> 00:20:47.240
for Christmas. You know, we
just talked about how it's a weird anomaly,

283
00:20:47.359 --> 00:20:51.880
right that people pay for Halloween where
normally, you know, it's included,

284
00:20:52.039 --> 00:20:56.519
like in Japan, and Christmas is
included everywhere else. And to Scott's

285
00:20:56.519 --> 00:21:00.640
point about competition on the seven,
you know, Universe is about to open

286
00:21:00.680 --> 00:21:04.880
Christmas and everything will be included for
annual pass holders and for any day tickets

287
00:21:04.880 --> 00:21:08.480
they can just do all the Christmas
stuff as extra, and that's pretty much

288
00:21:08.519 --> 00:21:12.400
the norm. And in the middle
of this competitive mix, Disney is trying

289
00:21:12.440 --> 00:21:18.079
to launch Jollywood Knights, which is
one hundred and seventy nine dollars per person

290
00:21:18.440 --> 00:21:22.640
plus parking, bringing you up to
over two hundred dollars for a four hour

291
00:21:22.799 --> 00:21:30.640
event. And during this four hour
event, really it's just the same overlays,

292
00:21:32.319 --> 00:21:34.440
the same fireworks show that they used
to have the same stuff, blah

293
00:21:34.480 --> 00:21:41.519
blah, And there's a few decorations
in the brown Derby and whatnot, but

294
00:21:41.640 --> 00:21:45.200
otherwise it's really just pre mixed strinths. I mean really looking at at the

295
00:21:45.240 --> 00:21:48.319
coverage, it really the main thing
is the new Muppet Christmas Show. So

296
00:21:48.359 --> 00:21:52.279
it's really the one offering that is
exclusive to that, which is a mupp

297
00:21:52.319 --> 00:21:56.480
at Christmas show. And I think
it's it's what we just said, it's

298
00:21:56.519 --> 00:22:00.440
not enough. And then and then
something that that Scott had mentioned previously for

299
00:22:00.519 --> 00:22:07.759
other new events this year is like
there aren't enough crowd sucks really to distribute

300
00:22:07.759 --> 00:22:11.039
the amount of tickets sold, so
you get stuff like, for example,

301
00:22:11.079 --> 00:22:15.000
forty five minutes in line to buy
a cookie, which is an actual,

302
00:22:15.680 --> 00:22:21.599
actual thing that was reported to me
from our partner Kevin there went out there.

303
00:22:21.640 --> 00:22:26.160
So you know, when you have
an hour to get into a lounge

304
00:22:26.240 --> 00:22:29.960
to buy a pre mixed drink and
forty five minutes to get a cookie and

305
00:22:30.079 --> 00:22:33.400
one new show, that's not that's
your night. Yeah, but it just

306
00:22:33.440 --> 00:22:36.519
seems to me, now we've had
this yeah, yeah, and it just

307
00:22:36.519 --> 00:22:38.839
seems to me that we've had this
discussion. It's the same thing. It's

308
00:22:38.839 --> 00:22:44.119
the same thing of nothing as a
like a must see at a new event

309
00:22:44.359 --> 00:22:47.559
and they're trying to roll it out
to another park. I mean, I'm

310
00:22:47.559 --> 00:22:51.599
sure they were. Somebody is thinking
if we could get all four parks to

311
00:22:51.680 --> 00:22:56.039
sell a Christmas event, and we
could get a second gate for all four

312
00:22:56.079 --> 00:22:59.759
parks for Christmas, that would be
great. Yeah, but I'm not sure

313
00:23:00.480 --> 00:23:02.880
that it's going to stretch that far. Well, and quite honestly, I

314
00:23:02.920 --> 00:23:07.480
think I think you could. I
think you could do an upsell separate ticket

315
00:23:07.519 --> 00:23:15.440
at Christmas event for all four parks
if you do two very simple things.

316
00:23:15.519 --> 00:23:18.839
And I say simple, they're not
simple. One is, excuse me,

317
00:23:19.079 --> 00:23:26.359
have a have enough content again?
Execution execution, execution execution? How many

318
00:23:26.359 --> 00:23:29.000
times are we going to say it? Have enough content to make it worthwhile?

319
00:23:29.039 --> 00:23:32.680
And two, one of the reasons
that the Disney ticket, you know

320
00:23:32.720 --> 00:23:36.960
after hours ticket at events were so
popular in the beginning was limited crowds.

321
00:23:37.079 --> 00:23:40.960
They would, you know, used
to be back in the day, they

322
00:23:40.960 --> 00:23:44.440
would they would limit the number of
tickets they sold. So not only when

323
00:23:44.440 --> 00:23:48.880
you went to Mickey's Very Merry did
you did you get the whole holiday experience,

324
00:23:48.920 --> 00:23:53.000
but you got the holiday experience with
much shorter cues, much shorter lines.

325
00:23:53.240 --> 00:23:57.640
I know people who would buy the
ticket just for that that went away.

326
00:23:57.680 --> 00:24:00.400
I mean, I'm going back quite
a few years now. But uh,

327
00:24:02.160 --> 00:24:06.720
it's it's one of those when you
get when you get too greedy or

328
00:24:06.720 --> 00:24:08.240
you look at it going. We
just need to look at volume volume,

329
00:24:08.319 --> 00:24:18.960
volume as opposed to quality of experience. That's when things start to go awry.

330
00:24:19.599 --> 00:24:26.160
Yeah, there we go, and
and I just can't help but thinking

331
00:24:26.680 --> 00:24:27.759
of all this in terms of the
Ernians call, you know, and of

332
00:24:29.160 --> 00:24:32.839
them being like the theme parks are
carrying the division and we need you know,

333
00:24:32.839 --> 00:24:37.359
they need to keep on that.
Yeah, so well, so well

334
00:24:38.039 --> 00:24:41.799
being local in Florida. And I
don't know what the marketing has been outside

335
00:24:41.839 --> 00:24:45.119
of of this market. I've seen
nothing when I've been traveling. But in

336
00:24:45.480 --> 00:24:51.119
this market, I have seen that
Jollywood exists, and that's about it.

337
00:24:51.559 --> 00:24:55.400
I haven't seen anything about what it
is, what it entails, what it

338
00:24:55.440 --> 00:25:00.000
includes. It's just, hey,
we're celebrating Jollywood. And that's not enough

339
00:25:00.039 --> 00:25:03.160
anymore. I will to be completely
transparent. I think. I think at

340
00:25:03.160 --> 00:25:06.920
one point in time that was enough. Disney just said. Disney would just

341
00:25:07.000 --> 00:25:10.880
have to say we're introducing a new
holiday event. You got to come,

342
00:25:11.319 --> 00:25:15.039
and that would be enough to get
everybody there and happy and thrilled and you

343
00:25:15.039 --> 00:25:17.279
know, honestly, if it's that
crowded, you know, if it is

344
00:25:17.359 --> 00:25:21.480
forty five minutes to get a cookie, maybe it is enough, but it's

345
00:25:21.480 --> 00:25:26.839
not enough to get me there.
Yeah, yeah, yeah, I agree,

346
00:25:27.880 --> 00:25:30.839
all right. I wanted to give
a little bit of context. We

347
00:25:30.880 --> 00:25:36.799
did get to Earninge's numbers also from
SeaWorld, and I want to give those

348
00:25:36.839 --> 00:25:40.960
and then say one thing about his
gardens. But so SeaWorld, I don't

349
00:25:40.960 --> 00:25:42.400
know, no surprise or it should
be no surprise to the listeners of the

350
00:25:42.440 --> 00:25:48.680
show that SeaWorld revealed its earnings report
and revenue fell three percent. Attendance also

351
00:25:48.759 --> 00:25:52.000
fell two point eight percent during the
third quarter or twenty twenty three compared with

352
00:25:52.039 --> 00:25:56.359
the same period in twenty twenty two. And this was an interesting call because

353
00:25:56.640 --> 00:26:03.799
they basically they talked about the adverse
weather across markets really as what the main

354
00:26:03.839 --> 00:26:07.920
thing was, and they kind of
gave some vague plans to address it,

355
00:26:07.960 --> 00:26:12.720
including adding indoor experiences and shade structures
and whatnot, but nothing was I would

356
00:26:12.759 --> 00:26:17.680
say, very concrete. And they
did touch briefly on the hotels, but

357
00:26:17.839 --> 00:26:21.400
didn't really so I don't know,
to me, it kind of sounded like

358
00:26:22.160 --> 00:26:26.000
much less of an actual plan as
to how do we really address the weather

359
00:26:26.079 --> 00:26:30.319
stuff. And I'm not sure if
if that's because those things are not cheap.

360
00:26:30.680 --> 00:26:37.400
You know, you can't cheaply do
any of that stuff. But yeah,

361
00:26:37.519 --> 00:26:40.200
it should be no surprise, and
I'm sure to me also, I'm

362
00:26:40.240 --> 00:26:45.240
sure they're also kind of still reeling
from the merger and from all that how

363
00:26:45.279 --> 00:26:47.920
that has impacted the landscape, because
as we talked about last time, the

364
00:26:47.960 --> 00:26:51.319
people that lose most is really SeaWorld
when it comes to the Bush Gardens and

365
00:26:51.319 --> 00:26:55.839
Six Flags merger and the last thing
I'll say other contexts on that note,

366
00:26:55.960 --> 00:27:00.920
Cedar Fair and six Legs Bush Gardens
did Sorry sorry Sear and six like,

367
00:27:00.920 --> 00:27:03.799
wait a minute, bush Gardens verge
with six FLG Sorry sorry you heard it

368
00:27:03.839 --> 00:27:07.880
here first, pote no no added
that got my got my words, Thank

369
00:27:07.880 --> 00:27:11.200
you, Scott, I got clarifying. I don't what because that I don't

370
00:27:11.200 --> 00:27:15.480
want somebody contacting us later because yes, no, just I'm and Iappa now

371
00:27:15.480 --> 00:27:18.680
and a lot of our listeners are
here and I have a expos so I'm

372
00:27:18.680 --> 00:27:21.119
sure they're going to come up and
go. Would you just let Philip know

373
00:27:21.119 --> 00:27:26.440
that Bush Gardens merge with six flags. Just clarifying. Yeah, So the

374
00:27:26.720 --> 00:27:30.880
the reason that that's stuck in because
I was looking at our notes, so

375
00:27:30.039 --> 00:27:37.559
I also wanted to mention that.
Meanwhile, Bush Gardens has also announced I

376
00:27:37.640 --> 00:27:41.720
think I forget the term they're using, but I think basically they're trying to

377
00:27:41.720 --> 00:27:47.160
say that their their annual passes the
kind of the best pass deal anywhere,

378
00:27:47.480 --> 00:27:52.440
and essentially Bush Gardens is upgrading their
annual pass benefits. They're not changing the

379
00:27:52.519 --> 00:27:59.440
cost, they're upgrading the benefits across
all of their properties to add, you

380
00:27:59.480 --> 00:28:03.480
know, just frankly, it's a
little confusing because I looked at what they

381
00:28:03.480 --> 00:28:06.000
were adding, I was like,
this seems like a lot, and I'm

382
00:28:06.000 --> 00:28:08.839
not sure exactly what it means,
but it seems like you get like quick

383
00:28:08.880 --> 00:28:12.519
cues on a regular basis, You
get free gifts that could be like food

384
00:28:12.559 --> 00:28:17.880
samples and tasting. You get you
know, a dedicated entryway, you get

385
00:28:17.880 --> 00:28:22.200
priority access, you get priority seating
to things. You also get like I

386
00:28:22.200 --> 00:28:25.799
think one encounter. I'm not sure
if that's one per month or one per

387
00:28:25.880 --> 00:28:27.640
year when out, but you get
like a free animal encounter and whatnot.

388
00:28:27.640 --> 00:28:33.880
So it seems to me like they're
really again we're kind of seeing the committed

389
00:28:33.000 --> 00:28:37.359
landscape shift around, while while SeaWorld
is like, our stuff is down,

390
00:28:37.400 --> 00:28:41.920
but we might build some shade.
Then you see Bush Gardens, who is

391
00:28:41.960 --> 00:28:45.359
like, you know, we have
this whole new annual past program that we

392
00:28:45.400 --> 00:28:51.160
are, we're that they're kind of
touting. And I think all these are

393
00:28:51.279 --> 00:28:56.400
our responses to the merger, honestly
in some way or another. And I'm

394
00:28:56.640 --> 00:28:59.960
I also think this is all going
to come to a head in twenty five

395
00:29:00.079 --> 00:29:02.880
when when you know people are going
to have to be competitive again, you

396
00:29:02.920 --> 00:29:07.599
have epic opening. And I think
at least we see Bush trying to lean

397
00:29:07.640 --> 00:29:11.440
into the annual pass holders and really
trying to give them a lot of value

398
00:29:11.480 --> 00:29:15.759
or make them feel special for what
they're paying. Well, and in recent

399
00:29:15.839 --> 00:29:19.079
years it's unique that that Bush would
do something that SeaWorld is not. In

400
00:29:19.119 --> 00:29:23.400
recent years, it's been very much
as one so so does the other,

401
00:29:25.200 --> 00:29:27.720
and so I think it's I think
it's interesting. Well, we'll see how

402
00:29:27.759 --> 00:29:33.440
this lasts and how it because I
have a feeling in the not too distant

403
00:29:33.480 --> 00:29:38.880
future you will start seeing that with
with SeaWorld as well. I don't know,

404
00:29:40.200 --> 00:29:44.400
but we'll see. Yeah, we'll
see your annual pass will get you

405
00:29:44.440 --> 00:29:52.079
an umbrella for the Shade for the
Shade. Yeah. Yeah, anyway,

406
00:29:52.160 --> 00:29:55.480
so that's almost the another show.
But we want to talk about the fact

407
00:29:55.519 --> 00:29:59.960
that we're both in Orlando because we're
at Ayapa. So very briefly, Scott,

408
00:30:00.119 --> 00:30:02.519
do you want to tell us where
you are? What's going on?

409
00:30:03.160 --> 00:30:07.599
So I'm I'm at I'm at a
APPA expo. I've already taught my first

410
00:30:07.640 --> 00:30:12.279
session, my first of four.
I'm part of the Yeah, the the

411
00:30:12.319 --> 00:30:18.680
industry industry for attractions professionals. I
was lucky enough to beta test the entertainment

412
00:30:18.720 --> 00:30:21.559
module for that a few months ago, and then I got to do it

413
00:30:21.599 --> 00:30:26.680
live here at expo and it went
incredibly well. Uh, the mood here

414
00:30:26.759 --> 00:30:33.200
is very excited. The education seminars
are going great guns because the trades of

415
00:30:33.200 --> 00:30:37.799
floor isn't open yet. It will
open tomorrow, and so everyone is out

416
00:30:37.839 --> 00:30:41.559
and about for education. If you
are a listener, I've talked to a

417
00:30:41.599 --> 00:30:45.079
bunch of people who are becoming listeners, who are very eager to become listeners.

418
00:30:45.079 --> 00:30:48.000
I've talked to a few people who
are already our listeners. I was

419
00:30:48.039 --> 00:30:52.160
at dinner last night and someone said, you know, I really agree with

420
00:30:52.200 --> 00:30:55.400
what you said. A couple of
weeks ago, I couldn't remember what the

421
00:30:55.400 --> 00:30:57.359
heck, but I god, I'm
glad you did. But you know,

422
00:30:57.440 --> 00:31:00.880
so we are our listener is expanding
and is expanding in the right place.

423
00:31:02.759 --> 00:31:07.200
I am so excited about Expo this
year simply because I'm very active during it.

424
00:31:07.200 --> 00:31:11.920
There's a lot of meetings going on, there's a lot of sessions going

425
00:31:11.960 --> 00:31:15.119
on. I peeked into the show
floor. I got an opportunity from the

426
00:31:15.240 --> 00:31:19.160
from the show offices, I got
a chance to peek into the floor itself.

427
00:31:19.400 --> 00:31:23.920
It is very active and very large
this year, and I'm curious to

428
00:31:23.920 --> 00:31:26.319
see. You know, we always
talk about trends on this show, and

429
00:31:26.359 --> 00:31:30.480
what we're going to try to talk
about next weekend is next week is the

430
00:31:30.519 --> 00:31:34.160
trends for the show, the trends
for Expo, and how that is either

431
00:31:34.920 --> 00:31:37.680
and we'll see, I don't know, but how that is either parallel or

432
00:31:38.000 --> 00:31:42.880
or incongruous to the trends that we've
been talking about already. I'm really excited

433
00:31:42.920 --> 00:31:48.039
to do that, And hopefully if
you are listeners and you are attending IAPPA

434
00:31:48.119 --> 00:31:51.519
Expo, please come up and say
hello to either one of us. We

435
00:31:51.519 --> 00:31:56.720
would love to see you and you
know we'll we'll shake hands and you know,

436
00:31:56.559 --> 00:32:00.720
say thank you and that kind of
stuff. Anyway, that's our time

437
00:32:00.799 --> 00:32:02.759
for now because I've got to go. I have another session to teach this

438
00:32:02.799 --> 00:32:07.119
afternoon. And Philip, I know
you've got work to do at your Orlando

439
00:32:07.160 --> 00:32:10.559
office, so on behalf of Philip
Bernandez with yet Blinding in on Are Network

440
00:32:10.559 --> 00:32:15.880
and myself Scott Swinson with Scott Swenson
Creative Development. This is Green Tag Theme

441
00:32:15.920 --> 00:32:20.359
Park in thirty coming to you from
the IAPPA Expo and we will see you

442
00:32:20.400 --> 00:32:25.400
next week. If you're at Ayappa, come visit me at Blue sixteen fifty

443
00:32:25.440 --> 00:32:28.680
eight. Okay, thank you bye,