by Ray Keating
Analysis
July 23, 2024
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Yes, Comcast and Disney are rivals in the theme park, resorts, and movie businesses. But sometimes bad news for your competitor is bad news for you as well.
by Beth Keating
News
DisneyBizJournal.com
July 9, 2024
Disney Cruise Line has been a very busy arm of the Disney company of late, between launching new ships and opening a new private island - Lookout Cay at Lighthouse Point - for cruisers to the Bahamas. Today (July 9), Disney Cruise Line announced a partnership with Japan’s Oriental Land Co., Ltd. for a new Japan-based ship that will offer year-round service from Tokyo.
This ship will be in addition to the Disney Adventure, the Singapore-based ship which is expected to set sail in 2025.
Oriental Land Company (OLC) is also the owner/operator of Tokyo Disney Resort, so they, too, have had a busy run, with the new Fantasy Springs port opening at Tokyo DisneySea in the past few weeks, with new Frozen, Tangled and Peter Pan areas for guests. In Disney fan circles, Tokyo Disney is often considered the dream trip, because of the high quality and state-of-the-art inventiveness of the Tokyo rides and attractions. (Plus, we really are jealous of their much-coveted merchandise…)
The yet-to-be-named ship will be the ninth vessel in the Disney Cruise Line fleet, and is anticipating its maiden voyage in early 2029. OLC will be responsible for the construction of the ship, and will operate the vessel under a licensing agreement with Disney. (The Tokyo Disneyland park agreement works much the same way, with OLC maintaining ownership of the resort.) Tokyo Disneyland opened in 1983, and its sister park, Tokyo DisneySea, opened in 2001.
“I am sincerely proud that Disney and Oriental Land will be able to work together to create a world-class cruise business in Japan,” said Yumiko Takano, representative director, chairperson and CEO, Oriental Land, in a press release today. “Oriental Land will use their knowhow from the theme park business to continue pushing boundaries and provide family entertainment cruise experiences filled with inspiration and surprise.”
The new Japan-based ship will be the fourth DCL ship in the “Wish Class”, with about 1,250 staterooms; a 4,000-guest capacity; and 1,500 crew members. It will be constructed at the Meyer Werft shipyard in Germany (where other recent Disney ships have also been born). The 140,000 gross tons ship will be powered by liquified natural gas.
Disney Cruise Line is currently sailing the Disney Magic; the Disney Wonder; the Disney Dream; the Disney Fantasy; and the Disney Wish; with the Disney Treasure hitting the high seas in December 2024. The Disney Destiny is still to launch, with expected delivery in 2025.
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Beth Keating is a theme parks, restaurant and entertainment reporter for DisneyBizJournal.
Get The Disney Planner: The TO DO List Solution by Ray Keating. More information at
https://raykeatingbooksandmore.com/shop/ols/products/disneyplanner. A PDF version is available here. And please listen to the Daily Dose of Disney with Ray Keating podcast.
by Ray Keating
Analysis
DisneyBizJournal.com
June 24, 2024
It feels like the good old days, which weren’t that long ago. What do I mean? Disney/Pixar has a big hit on its hands.
Critics and audiences love Inside Out 2, and people are shelling out dollars (as well as foreign currencies) to watch in theaters.
Over at RottenTomatoes.com, critics love the movie (91% fresh), while audiences love it even more (96% fresh).
And then there’s the box office gross. Over at BoxOfficeMojo.com (on June 24), the worldwide gross for Inside Out 2, which was released on June 14, registered $724.4 million. That included $355.2 million domestic and $369.2 international.
Nice.
But what about those pesky runaway costs plaguing Disney? Well, it’s widely reported that Inside Out 2 carried a whopping production budget of $200 million. Yikes.
Once more, we need to do a little more digging. First, marketing/promotion costs have to be factored in, which can run anywhere from 50 percent to 100 percent of a production budget. Assuming a midpoint, then marketing/promotion costs would come in at roughly $150 million. That puts the total cost of Inside Out 2 at $350 million. Gulp.
Next, we need to isolate the studio’s take of both the domestic and international box office. As DisneyBizJournal has noted before, various industry reports point to studios taking in about 55 percent of the domestic box office, and anywhere from 20 percent to 40 percent of foreign ticket sales. As always let’s assume the best case. Therefore, 55 percent of the domestic $355.2 million and 40 percent of the international take of $369.2 million indicate a Disney share of the gross box office for Inside Out 2 at $343.1 million ($195.4 million domestically plus $147.7 million international).
Amazingly, that puts Inside Out 2, with a current gross box office of just about $725 million at a breakeven point right now for Disney. Now, this is a movie that apparently will have legs, so Inside Out 2 will prove to be profitable for Disney during its theatrical run.
At the same time, however, the numbers on this movie, once again, speak to Disney’s inability to control costs on its movies (and streaming shows). Inside Out 2 is a clear hit, so the cost issue hurts less. But it hurts, nonetheless. The notion that Disney, and much of Hollywood, must spend extravagantly to produce quality movies is absurd. The industry’s history shows otherwise, and the leaps forward in technology in the movie-making business should eventually reduce costs.
You can’t keep betting on hits the size of Inside Out 2 to deal with costs. It’s just not realistic – especially during creative lulls like the one Disney has been struggling through of late.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• The Alliance of Saint Michael novels – Cathedral and Subversion – are at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
by Ray Keating
Analysis
DisneyBizJournal.com
June 6, 2024
Disney’s Kingdom of the Planet of the Apes, from its 20th Century Studios division, has scored pretty well with critics and audiences who have come out for the film. On RottenTomatoes.com as of June 5, for example, it scored 80 percent with critics and 78 percent with moviegoers.
The question, however, is: Have enough people gone to theaters to watch the movie?
The latest tally on BoxOfficeMojo.com points to a global box office of $340.4 million as of June 4. Kingdom opened on May 10, by the way.
The production budget reportedly came in at $160 million. Marketing/promotion costs have to be considered, which can run anywhere from 50 percent to 100 percent of a production budget. If we assume a midpoint, then marketing/promotion costs would come in at roughly $120 million. That would equate to total costs of $280 million for Kingdom.
For good measure, the box office take has to get divvied up with theaters. As DisneyBizJournal has noted before, various industry reports note that studios take in about 55 percent of the domestic box office, and anywhere from 20 percent to 40 percent of foreign ticket sales. If we assume the best case scenario – that is, 55 percent of $142.5 million and 40 percent of the international take of $197.9 million, that tallies up to Disney's share of Kingdom’s box office at $157.6 million ($78.4 million domestically plus $79.2 million international).
Yikes. That would mean that Kingdom of the Planet of the Apes, at this late point in its theater run, ranks as a serious money loser for Disney – in the range of a theatrical loss of $122 million. Even if marketing/promotion costs came in at the low end, we’re still talking an estimated loss of somewhere around $82 million. The consequences of Disney’s inability to control costs rears its ugly head, once again, with Kingdom of the Planet of the Apes.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
by Ray Keating
News/Commentary
DisneyBizJournal.com
June 5, 2024
A unanimous vote on June 5 by the Central Florida Tourism Oversight District board gave an initial thumbs-up to a proposed $17-billion Walt Disney World expansion plan. Disney fans want to believe that this will mean the opening of a fifth park – or fifth gate – in Disney World, though Disney has made no such declaration.
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Final approval for the development plan requires a second vote on June 12, according to a report from the Orlando Sentinel.
Disney hasn’t served up any real details on their spending plans, with Woody Rodriguez, director of external affairs for Disney Parks, Experiences and Products, being quoted, “The development agreement will enable us to continue to invest significantly in the district.” In Disney’s most recent earnings call, CEO Bob Iger danced around the question.
Speculation about a fifth park lies with the fact that Universal Orlando’s Epic Universe opens in 2025, and many assume that Disney will need to respond in some way. According to the Sentinel report, the agreement covers 17,300 acres owned by Disney, and “allows a maximum of five minor theme parks, such as a water park, nearly 1.3 million square feet of office space, 1.7 million square feet of restaurant/retail space and 53,467 hotel rooms.”
This deal, of course, represents quite a shift in the relationship between Florida Governor Ron DeSantis and Disney – from one featuring politics, confrontation, a state takeover of the Reedy Creek Improvement District, and lawsuits, to one of economic cooperation. According to a Business Insider article published at Yahoo News, Stephanie Kopelousos, administrator for the Central Florida Tourism Oversight District, said, “With Walt Disney World's substantial investments, we anticipate economic growth, job creation, and support for local businesses, alongside environmental stewardship and workforce housing initiatives, benefiting Central Florida's community.”
Dennis Speigel, CEO and founder of International Theme Park Services, was quoted in another report, “What you’ve seen is a huge kiss and make up between Florida and Disney.” Indeed, about Disney’s expansion plans, DeSantis said, “It’s going to be a huge game changer for this region. I got to think Disney would have an interest in maybe offering another one. The district will be ready to negotiate something to be able to be good for the state of Florida, be good for jobs, be good for all those things.”
Golly, it’s amazing how things can change after a governor drops out of the race for president.
Speigel is one of the industry people who sees a fifth gate coming, declaring, “The fifth gate will be the most highly technologically driven attraction park in the world. And it has to be because it has to eclipse Universal Epic Universe.” He predicts a tab of $5 billion to $6 billion for such an endeavor. Other watchers, however, see Disney expanding current parks rather than opening a new one.
At this point, only Disney knows if a fifth gate will be opened at Disney World, and it’s not even clear that they have settled on anything just yet.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
by Ray Keating
Commentary
DisneyBizJournal.com
June 2, 2024
A couple of unfortunate, regular occurrences seem to be emerging from Disney when it comes to their major franchises. One has been that budgets for movies and shows are running wildly out of control. Second, the quality of the final product has been, to be generous, under-whelming, with excellence (or at least being pretty good) too often now ranking as the exception.
Of course, a key question is: How do those calling the shots react?
Let’s look at the latest controversy emerging in the Star Wars universe.
The Acolyte eight-episode Star Wars show premieres on June 4 on Disney+. The trailer wasn’t exactly gripping, which is problematic as trailers should be the best foot forward. But as a fan, I always try to hope for the best. We’ll see.
But in terms of the budget, The Acolyte follows on recent Disney efforts, as this eight-episode series cost a whopping $180 million. Yikes.
Second, the person heading up Lucasfilm, Kathleen Kennedy, has served up self-indulgent comments in the face of criticisms. The latest such case comes courtesy of a New York Times report. Kennedy was interviewed, and declared, “Operating within these giant franchises now, with social media and the level of expectation — it’s terrifying… I think a lot of the women who step into ‘Star Wars’ struggle with this a bit more. Because of the fan base being so male dominated, they sometimes get attacked in ways that can be quite personal.”
Hmmm. Is it the best strategy for a studio head to effectively attack its fanbase? Seems like a bad idea. Also, while there always are plenty of idiots spouting off on social media, given that there are widely beloved female characters in Star Wars, such as Princess Leia and Ahsoka Tano, are all failures in Star Wars now about a toxic fanbase? Shouldn’t the head of Lucasfilm be taking a closer look at how to produce big-budget entertainment with wide appeal?
The idea of “blaming the audience” is appealing – and it might help the individual creator to cope on occasion, and it might even be correct at times – but it isn’t a luxury afforded to a person leading a studio. Disney needs to take a hard, close look at what’s going on at Lucasfilm.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
by Ray Keating
Commentary/Analysis
DisneyBizJournal.com
May 10, 2024
It’s always fascinating to see a market, or a service or technological development in the marketplace, change in unanticipated ways. One minute, everyone is an expert on what’s going to happen not just tomorrow, but years down the road – and then: BAM! Entrepreneurs, consumers and/or just unanticipated developments dispense some market humility.
As an economist, this is what I expect, i.e., expect the unexpected.
So, seeing the streaming field change in unexpected ways is fascinating. And Disney is at the center of much of this. Remember, streaming was supposed to be about content or intellectual property (IP) camps or silos. Disney has a formidable library of content, so it can take on Netflix, et al. And while that’s still part of the story, things have changed rather notably in terms of streamers being willing to work together when they think it makes sense, including licensing content to each other. Indeed, free enterprise isn’t just about competition, but it’s also about cooperation within a competitive framework.
So, we saw a proposed sports streaming venture between Disney, Warner Bros. Discovery and Fox announced in February of this year.
And now Disney and Warner have announced a streaming bundle that includes Disney+, Hulu and Max. The companies say it will be available this summer in the U.S.
As described in the Disney release, this streaming bundle will provide “subscribers with the best value in entertainment and an unprecedented selection of content from the biggest and most beloved brands in entertainment including ABC, CNN, DC, Discovery, Disney, Food Network, FX, HBO, HGTV, Hulu, Marvel, Pixar, Searchlight, Warner Bros., and many more.” This triple bundle will be available for purchase on any of the three streaming services websites, and with or without ads.
Like the sports offering, which reportedly is due in the fall, this will be a fascinating test in two ways. First, how will consumers react? Will this add subscribers, or will it be more a case of existing customers rearranging their subscriptions to get the best deals possible? Exactly how nice will Disney and Warner play together?
Second, how will regulators react? During this time antitrust activism – i.e., government officials’ assuming bigger is automatically bad – on both sides of the political aisle, it can’t be assumed that these joint ventures will easily pass regulatory muster. And that scrutiny will start with the likes of hyper-activist Lina Khan, the head of the Federal Trade Commission, as well as competitors in the marketplace bringing antitrust lawsuits to gum matters up for the likes of Disney and Warner. Heck, that’s already happening with the sports streaming joint venture proposal, as noted by DisneyBizJournal.
Yes, free enterprise will surprise you. Self-proclaimed experts would be wise to keep that in mind, as would, by the way, those government regulators who make decisions about joint ventures and mergers thinking that they, too, know the future. Trust me, if the people that work in, follow, and invest in these industries can be surprised, politicians and their appointees don’t have a clue.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
by Ray Keating
News/Analysis
DisneyBizJournal.com
May 7, 2024
The Walt Disney Company had a solid earnings report for its second quarter ending March 30, 2024.
Total revenues were up by 1 percent in the quarter versus the same quarter in the previous year, i.e., $22.8 billion compared to $21.8 billion. And diluted earnings per share excluding certain items beat expectation, rising by 30 percent, i.e., $1.21 versus $0.93.
A goodwill impairment issue having to do with Star India operations did hit earnings. As The Wall Street Journal reported: “The company took a roughly $2 billion charge in the March quarter related to the India deal and to its linear television networks and swung to a loss of $20 million, from net income of $1.27 billion a year earlier.”
The company’s earnings per share growth target for the full year stands at 25 percent.
On the streaming front, losses shrank notably in the quarter, and Disney+ core subscribers increased by 6 million to 117.6 million. Total Hulu subscribers increased from 49.7 million to 50.2 million. Meanwhile, ESPN+ subscriptions were down slightly (from 25.2 million to 24.8 million), though average monthly revenue per paid subscriber increased due to “retail pricing and higher advertising revenue.” The ESPN+ subs decline was attributed to “seasonality,” by Disney CFO Hugh Johnston.
Disney CEO Bob Iger was quoted in the company’s statement: “Our results were driven in large part by our Experiences segment as well as our streaming business. Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4.” The company acknowledged that the forthcoming third quarter will return to streaming losses, including a decline in Disney+ subscribers, but again, followed by a fourth quarter bounce back.
Iger also remained bullish on sports and ESPN, asserting that ESPN programming is solid for the coming decade.
The Experiences division – parks and resorts, cruise line and consumer products – stood out as a growth driver, “with revenue growth of 10%, segment operating income growth of 12%, and margin expansion of 60 basis points versus the prior year,” and the company continues “to expect robust operating income growth at Experiences for the full year.” Iger noted that “we are turbocharging growth in our Experiences business with a number of near- and long-term strategic investments.”
Revenue growth at domestic parks grew by 29 percent in the second quarter versus the same period last year, and operating income rose by 87 percent.
CFO Johnston noted that the Experiences division will face some challenges in the coming quarter, namely, higher wages, increased costs due to cruise line expansions, and some demand moderation due to a return to pre-COVID levels. Healthy, strong growth is expected, but there is some demand normalization, along with near-term one-time expenses.
Finally, it's also worth noting that Iger’s emphasis regarding Marvel looking ahead was on reining in content, that is, to two, perhaps three, movies per year, as well as a couple of streaming shows per year.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
