Disney World is now an experiment
What happens when you're open, but people don't come?
There are two truths about Disney’s current economic situation that exist, even if they directly oppose each other: Disney needs its theme park business to start rebounding immediately, and people in the United States do not want to go to Disney World.
This is understandably a conundrum for new Disney CEO Bob Chapek, who spent the last several years of his career at the House of Mouse overseeing the parks division. How do you get people into Disney World in Florida (and other Disney parks around the world) when the reality of a pandemic looms over their heads? And, if people don’t want to go to the parks that are costly to run even at a reduced capacity, how feasible is it to keep going and hoping for a turnaround?
These are questions well above my pay grade, but we did get some insight this week into how Disney is examining what happens next, especially in the United States. Effectively, cut back on expenses but as little as possible, wait, hope, and then try again.
Disney is cutting back operation hours for its Disney World park in Florida beginning in a couple weeks – a move that will run through the end of October. “Magic Kingdom and Disney's Hollywood Studios will close an hour earlier than usual,” according to The Hollywood Reporter, “while Epcot at Walt Disney World Resort and Disney's Animal Kingdom will be open for two less hours each day.”
An hour or two doesn’t outwardly appear as much, but from a business standpoint, that’s a loss of merchandise being sold, alongside decrease in food sales, parking, and other items that people may buy once inside the gates. Choosing to reduce hours may not seem like an obvious cost saving measure then, but what it signals is that losing those few hours won’t severely impact how much Disney is currently earning inside. That’s the big point: it would cost Disney less to close up show a few hours early than the company is currently making from people inside the park now.
This also potentially means Disney can cut hours from employees schedules to save some money. Disney World has 77,000 employees. Even if half of that number is working, that’s 38,500 employees that might see reduced schedules as Disney cuts back to reel in costs. It’s a cost saving measure that’s going into place as COVID-19 cases in Florida continue to rise, attendance at the parks remains low, and new batches of studies insinuate things are unlikely to improve soon in the United States.
A new report from Morning Consult in partnership with The Hollywood Reporter found that “78% of American parents don’t feel comfortable bringing their families to the theme parks in the states in 2020,” according to Inside The Magic. Disneyland in Anaheim remains closed in accordance with state orders as cases grow. Florida isn’t much better, with cases in the high thousands over the last several weeks. Even if executives believe that Disney World is a safe place to be right now, public perception is that it’s an unnecessary risk.
It’s not just the fear of contracting coronavirus keeping people at home either. Disney is facing ongoing issues inside the park. Certain shows were made unable for park goers to attend because of disputes between the company and the Actors Equity Association (the union that represents about 750 cast members). Other attractions aren’t running because it could be unsafe for visitors amid other logistical issues. One frequently cited example on Disney forum boards: the experience for kids isn’t the same. Hugging cast members is out of the question. Even with discounted ticket prices, if Disney can’t offer the quintessential Disney World experience, why would a majority of people venture out, especially in a pandemic, to visit the park?
At this point it’s a simple A + B = C equation. If there aren’t enough people coming into the parks (A) and Disney isn’t making enough per day to justify the number of hours employees are working and the cost of daily maintenance (B) then cutting back hours slightly to reduce costs while also welcoming people in is the obvious answer (C).
But Disney can’t just close the parks. While it’s unclear how much Disney is potentially losing, what is clear is just how much not having Parks open is hurting. Disney reported an 85 percent drop in Parks revenue this most recent quarter, taking in less than $1 billion ($983 million). Segment operating income for the quarter also decreased $3.7 billion for a loss of $2 billion. The company estimated that “the total net adverse impact of COVID-19 on segment operating income in the quarter was approximately $3.5 billion,” according to the report.
Parks have faced their highs and lows before, but the division is usually seen as a safe source of revenue for the company. Its resorts business saw $20 billion in revenue in 2018 — a figure executives hoped to increase with new Galaxy’s Edge attractions (including Rise of the Resistance) and an incoming Avengers Campus. Disney’s individual parks dominate the top 10 theme attractions in the United States alone, with six of the top 10 most visited parks all under the House of Mouse banner. Four of the top five parks are at Disney World in Florida; the other is at Disneyland in California. Even if movies flopped, Disney could rely on its Parks.
That was in the before times. Things are different. But it’s not people’s affinity for Disney or even Disney World that has changed. Around the world, people still love and will continue to love Disney. What’s changed is something the company pointed to in public documents sent to investors and filed to the SEC in March; back when the coronavirus’ financial impact was just starting to become a little clearer.
The impact will depend on “the currently unknowable duration of the COVID-19 pandemic,” the documents read, adding that government restrictions also have to be taken into consideration. This includes Disneyland in California and Hong Kong Disneyland, which was recently shut down again by government mandate after a second wave of coronavirus cases kicked off. These are important distinctions, but the crux of Disney’s warning is also the heart of what’s happening with its current parks situation.
“Our businesses could also be impacted should the disruptions from COVID-19 lead to changes in consumer behavior,” the filing reads.
Disney executives were being as open as they could at the time: we don’t know how this pandemic will affect how people do things in the future. We can’t predict they will show up simply because we say “we’re open.” Clearly, they were right. The biggest issue Disney faces is the constant sea of uncertainty; parks may reopen, but as we saw with Hong Kong, new waves can shut it down again. State governments could decide to keep parks close, like we’re seeing in California. Even when Disney’s parks reopen, they may not see the number of guests they need. Are you willing to risk your life if your kid can’t even hug Mickey, stage plays aren’t being performed, and a bunch of the coolest rides are closed? Probably not.
All Disney can do is exactly what we’re seeing them do — small incremental changes that may not seem like much on the outside (again, what is an hour or two here or there to average park goers) that do, however, keep operation costs as low as possible. Experimentation with new models is everything. And then repeat. Repeat. Repeat.
Studios
Mulan will get its theatrical release in China
Mulan will be a Disney+ exclusive title in many countries, but considering Disney+ does not operate in China, the only way to release the film is theatrically. Disney got approval last week to release the film in theaters.
It’s an important move for Disney. Mulan was always expected to perform better overseas. Although theater capacity will likely be limited due to COVID-19 restrictions, being able to bring the film out in China at roughly the same time it premieres on Disney+ in other countries is crucial.
Whether Mulan does well enough within restricted conditions to meet Disney’s new predictions for the movie, well. We’ll just have to wait and see.
Disney sells R.L. Stine’s Fear Street trilogy to Netflix
Disney is still sifting through the various properties it amassed after acquiring 21st Century Fox. That includes a trilogy based on R.L. Stine’s Fear Street, which were written for a slightly older audience than Stine’s Goosebumps fanbase.
The films were originally supposed to be released in theaters beginning this year, but the pandemic made that impossible. Instead, Disney sold the trilogy to Netflix.
Netflix has become one of the most aggressive buyers during the pandemic, buying projects from Paramount and Sony as the studios look to try and find some ROI for films they can no longer release. More from Variety:
“The three completed films were produced at Fox by Chernin Entertainment with the goal of releasing each movie a month apart,” Variety’s report reads. “Filming began last year in Georgia and they were scheduled for a release in June 2020, but the movies were pulled from their schedule after the COVID-19 pandemic closed theaters.”
Polygon’s Pirates of the Caribbean week is one hell of a package
The good folks at Polygon have an amazing package of stories dedicated to the Pirates of the Caribbean franchise. There are smart, colorful, funny, unique stories that I devoured. If you’re a Pirates fan (and whomst amongst us is not, really), this is worth your time.
Streaming
Disney+ is doing well, but it’s not top dog yet
A new Nielsen report shows just how much of an indent Disney+ is putting on consumer streaming habits, according to The Hollywood Reporter.
Disney+ makes up about four percent of all viewing. That’s nowhere close to Netflix’s 34 percent of all streaming time, or YouTube’s 20 percent. It is much closer to Amazon Prime Video’s eight percent, however, and not far from Hulu’s 11 percent.
Four percent is on the lower end, but it’s nothing to scoff at. Disney+ already has 60 million subscribers worldwide (Nielsen only tracks US usage), and is still growing domestically.
As a whole, streaming made up about 25 percent of all TV watching — six percent higher than last year. I think it’s safe to say this streaming era is going to be just fine.
A new Star Wars Holiday special is happening, but it’s from Lego and for Disney+
I don’t know who’s asking for this exactly, but Lego and Star Wars are partnering for a new Christmas Special starring Rey and other characters from the various trilogies. Here’s a brief description from Disney:
“Directly following the events of “Star Wars: The Rise of Skywalker,” Rey leaves her friends to prepare for Life Day as she sets off on a new adventure with BB-8 to gain a deeper knowledge of the Force. At a mysterious Jedi Temple, she is hurled into a cross-timeline adventure through beloved moments in Star Wars cinematic history, coming into contact with Luke Skywalker, Darth Vader, Yoda, Obi-Wan and other iconic heroes and villains from all nine Skywalker saga films. But will she make it back in time for the Life Day feast and learn the true meaning of holiday spirit?”
For those who may not know about the Christmas Special, it was the first Star Wars spinoff that not only starred Han and Chewie trying to get back to the Wookie planet to celebrate “Life Day” but also introduced Boba Fett.
The Christmas Special is uniquely awful, which in a way makes it great, and now exists as a piece of iconic Star Wars history. You can watch a version of it on YouTube.
National Geographic’s eight-part series on Disney’s Magic Kingdom heads to Disney+
I’ve always wondered if these eight-part docuseries (Frozen 2, The Mandalorian, etc) do well for Disney or are easier to make, edit, and produce right now. Either way, this one sounds pretty grand.
Described by Disney as the “ultimate tribute to the parks’ magnificent array of more than 300 species and 5,000-plus animals and the herculean tasks their animal care experts undertake to keep things running day and night,” the series will be narrated by Josh Gad. The show should provide an inside look into the popular Disney World Park.
It will debut on September 25th.
Zac Efron joins Three Men and a Baby Disney+ remake
Troy Bolton himself is returning to Disney with a starring role in the company’s Three Men and a Baby remake, set to land exclusively on Disney+.
The movie doesn’t have a director yet, but the more exciting news for Disney fans is that Efron is returning to the House of Mouse for the first time in 12 years. Efron’s last Disney project was High School Musical 3, which came out in 2008.
Hulu nabs Sarah Paulson’s Run
Remember Netflix buying Fear Street? Well, Hulu bought the domestic rights to Sarah Paulson’s Run in the same kind of studio-to-streamer move.
Here’s a brief description courtesy of Variety :
“Paulson portrays the mother of a teenage girl — played by newcomer Kiera Allen — who has been raised in total isolation. The girl’s life begins to unravel as she discovers her mother’s sinister secret.”
ESPN+ price hike goes into effect
I reported a while back that ESPN+ was raising its monthly prices from $4.99 to $5.99. Now, the company has confirmed those reports and price changes are going into effect. The annual $49.99 fee is not changing.
Parks
Cast members return to Disney World
After two months of negotiations between Disney and the Actors Equity Association, a number of cast members will return to Disney World with new COVID-19 testing precautions in place.
Although Disney is contesting that it implemented more testing in Florida to meet union demands, the result is that people will be able to get more testing done frequently.
Until now, some of the shows including the popular Beauty and the Beast show, were unable to be performed. It was considered a big hit for Disney, which replaced the show temporarily with a different orchestral performance that ended “with non-Equity Disney employees dressed as Belle, the Beast, Mrs. Potts, Lumiere, Cogsworth and Chip taking the stage to silently wave goodbye to the audience,” according to Deadline.
Testing used by NBA in the bubble gets FDA clearance
Who could have predicted that the NBA would be the leaders in getting a new form of testing out to the American public?
The saliva-based COVID-19 test that the NBA uses to test its players daily just got FDA approval. That means labs could use it to test people for as little as $10 a test. More from Nicole Wetsman over at The Verge:
“This is the fifth saliva-based testing method authorized by the FDA. People can collect a saliva sample themselves by spitting into a tube, rather than have a healthcare provider insert a swab deep into their nasal cavity. Many labs have struggled to get enough swabs for COVID-19 tests, and using saliva sidesteps that bottleneck. The SalivaDirect test also does not use an extra step to pull the coronavirus genetic material out of the saliva sample, so labs don’t need specialized extraction kits — which have also been in short supply. That makes the test slightly less sensitive than other tests, but faster and cheaper.”
As of right now, the NBA doesn’t have any positive coronavirus cases inside the Bubble, where they’re holed up playing at Disney World.
Disneyland and Disney World cast members get new face masks
Disneyland and Disney World employees are getting pixie dust face masks to distinguish them from other park goers, according to the Orange County Register. That’s more than 100,000 employees.
There are two different types of designs for employees to choose from. And because it’s Disney, there’s a hidden Mickey Mouse within both designs. More from the Register:
“Over the past several months, we’ve spent significant time and brainpower to provide our cast members with face coverings that are both functional and comfortable, and I’m proud of the incredible results,” Disney chief medical officer Pamela Hymel said in a statement to the Register. “They fit well, feel great and can last for more than 50 washes.”
Media Networks
The Owl House marks the first ever Disney Channel show with an openly bi character
With a preface that it’s absurd it took this long to get here, the Disney Channel finally has its first openly bisexual character.
Main character Luz Nocedagh (a 14-year-old girl) explores a romantic interest in another recurring character, Amity in recent episodes. It’s the first time that Luz shoes interest in a girl, although she’s expressed interest in male characters on the show before.
Creator Dana Terrace tweeted about her experience as a bisexual woman, and wanting to bring a bisexual character onto the show. Some in leadership positions at Disney weren’t always on the same page, and Terrace didn’t want to have to sneak a queer character in. But she didn’t give up.
“Luckily my stubbornness paid off and now I am very supported by current Disney leadership,” she tweeted.
Look: the idea that Disney shouldn’t showcase queer characters or relationships because it’s a “family brand” is an antiquated belief. Disney is making a move in the right direction. I just hope they continue to allow creators to explore characters' sexualities because there are millions of people at home doing the same thing and watching various Disney networks.
Kenya Barris talks shelved Black-ish episode and Bob Iger on Trevor Noah
In 2018, ABC shelved an episode of Black-ish reportedly out of concerns that it was too partisan. The episode looked at racism in America, and dealt with everything from Trump’s presidency to kneeling during the anthem in the NFL. The move ultimately played a factor in creator Kenya Barris moving to Netflix (a move that netted him $100 million). Last week, Barris announced that the episode is available to watch on Hulu.
Following his announcement, Barris went on Trevor Noah and spoke about his phone call with then CEO Bob Iger about ABC’s decision to shelve the episode. It’s an enlightening call that touches on previously reported deals, including that Iger was overseeing a $71 billion acquisition of 21st Century Fox, and didn’t want to run into potential antitrust problems from a Republican-controlled Department of Justice.
The full interview is on YouTube, and it’s well worth a watch. As is the episode now playing on Hulu!
Disney Television rebrands!
A while back Disney rebranded 20th Century Fox to 20th Century Studios, and Fox Spotlight to Spotlight Pictures. Getting rid of the Fox branding was key to Disney’s Studios rebrand post-acquisition. Now, the television studios are getting the same treatment.
20th Century Fox Television is now 20th Television, ABC Studios and its ABC Signature subsidiary will become ABC Signature, and Fox 21 Television will become Touchstone Television.
Do any of these names make sense? Not really. Does anyone care? No one outside the media and entertainment industries. These are what play before and after a show ends. Most people skip through that these days. Plus, Disney is keeping the iconic 20th Century Fox Television logo, so people will still incorporate it with the shows they love most (like The Simpsons)
All this accomplishes is finally getting rid of the Fox name on its brands. Or, as my brilliant colleague over at The Verge, Chaim Gartenberg wrote, “Disney has no Fox left to give.”
