Disney’s Last Six Months AKA Mr. Disney’s Wild Ride
Life can come at you fast. Disney fans understand this as well as anybody right now.
You’ve kept up with MickeyBlog over the past few months, right? You know that The Walt Disney Company has ridden a real-life roller coaster, starting from the top of the hill and then falling straight down.
Let’s summarize five historic months for the company. I’m calling it Mr. Disney’s Wild Ride.
Disney+ Shatters Records
Disney’s historic half-year started last November. After years of discussion, the company finally launched its own streaming service, Disney+.
The point of this strategy was to overcome the erosion of cable television ratings and lost advertising revenue. Disney had watched Netflix’s ascension into a media powerhouse even though that corporation owned little content of its own.
With an entire back catalog of classic movies and television series at its disposal, Disney believed that its streaming service could excel, too. And boy, did it ever!
Within its first 24 hours, Disney+ already claimed 10 million subscribers. That number represented Disney’s 14-month goal for the service.
Over the next few days, every piece of intel about Disney+ suggested that it was a massive success. By November 29th, stock in The Walt Disney Company opened over $150 for the first time ever.
The company was flying higher than it ever had before. And the news was great at the movies, too…
Frozen II Also Shatters Records
On November 22nd, Disney’s hot streak continued with the release of Frozen II. The highly anticipated sequel brought Elsa and Anna back to movie theaters for the first time in six years.
Audiences went crazy for a second visit to Arendelle. The film opened to $130.3 million in North America, one of the top five debuts ever for an animated movie. Internationally, it was even more popular with revenue of $228.2 million.
In combination, Frozen II earned $358.5 million globally during its first three days. That’s the best performance ever by an animated movie. And I’m about to say that again.
Frozen II eventually finished with global box office of $1.45 billion. That, too, is the most that an animated movie has ever earned. It was the cherry on top of a remarkable box office year for Disney, as the studio finished with seven billion-dollar blockbusters, a first in the movie industry.
By the end of November, Disney towered over the corporate media world, with dominant films in theaters and a stunningly successful streaming service launch.
Analysts projected that 2020 would become the greatest year in the history of Disney. Alas, we all know that hasn’t happened.
Shanghai Disneyland and Hong Kong Disneyland Close
In early January, Asian journalists covered the outbreak of Coronavirus. On January 11th, the Chinese government confirmed the first death from the illness, although we now know it happened much earlier.
Within two weeks, Chinese officials advised Disney to close its theme parks in the country. On January 23rd, the company announced that Shanghai Disneyland would temporarily shut down on January 25th, while Hong Kong Disneyland would follow suit the next day.
At the time, the prevailing belief was that this shutdown wouldn’t last long. China had only reported 26 deaths at the time. Sadly, the body count is currently at 4,632 deaths, and most observers believe this number is significantly lower than the actual total.
While some feared that Disney would feel additional impact from Coronavirus, nobody in late January believed that the outbreak could derail an expected year of dominance for the company.
In hindsight, that was naïve of all of us. After all, no Disney park had ever closed for several days in a row, much less weeks. Once Shanghai Disneyland and Hong Kong Disneyland had to shut down, the writing was on the wall.
Chapek Suddenly Ascends
One month to the day after Shanghai Disneyland became the first Disney park ever to close for an extended period, a bit of palace intrigue took place.
After literally years of speculation about who would replace Bob Iger as CEO at Disney, a successor suddenly arrived. Bob Chapek, formerly Chairman of Disney Parks, Experiences and Products, went from potential contender to CEO seemingly overnight.
The entire situation seemed sketchy, although Disney officials swear that there was nothing nefarious involved. One afternoon, Disney published a press release that Chapek was now in charge, and that was the end of it.
Both men appeared on CNBC in a hastily prepared interview. It seemed awkward and hinted at a lack of preparation from all parties.
However, Iger and Chapek have since stated that this process began in November, a time when Disney was on top of the world. So, the timeline makes sense. Nobody could have predicted how much the company’s fortunes could change in a few months.
Tokyo Disneyland closes on Leap Day
The tipping point for Disney came on Leap Day. Perhaps it’s fitting that a day that’s not even on the calendar 75 percent of the time is the worst one for Disney in many years.
On February 29th, Tokyo Disneyland did the unthinkable. One of the most popular theme parks in the world announced it would close for two weeks. Spoiler: it wouldn’t just close for two weeks.
For nearly two months now, Tokyo Disneyland and Tokyo DisneySea have remained out of business. These are, respectively, the third and fourth most trafficked theme parks on the planet.
From Disney’s perspective, they’re also pure profit, as the Oriental Land Company (OLC) technically owns and operates them.
OLC sends Disney massive checks as licensing fees, something that always has bemused Imagineers. As discussed in The Imagineering Story, Disney shot the moon with impossible demands of OLC. To everyone’s shock, the Japanese company readily agreed.
Tokyo Disneyland is quietly one of the most profitable branches of the Disney empire even though OLC owns and operates it. So, losing this one really hurt. It was a drop in the bucket compared to what came next, though.
All Other Disney Parks Close
American health officials had warned government officials to move proactively on Coronavirus. They knew that the convenience of global travel all but guaranteed that COVID-19 would reach the United States soon.
Alas, the nature of our country, which grants rights to state and federal officials, caused a challenge in controlling the potential outbreak. America reacted too slowly to Coronavirus, which had since upgraded to a pandemic.
During one fateful week in mid-March, Disney executives had to do the unthinkable. With three parks already shuttered, the new CEO, Bob Chapek, announced that the other three would close, too.
On March 14th, Disneyland would close for the longest period in its history. And I’m speaking of a park that debuted in 1955. On March 16th, Walt Disney World and Disneyland Paris would become the last dominoes to fall.
Somehow, Coronavirus did something that nothing in 65 years had ever done. It stopped Disney theme parks around the world from entertaining guests. Earthquakes, hurricanes, and terrorist attacks couldn’t stop the Happiest Place on Earth…but a pandemic could.
Disney has experienced so much turmoil during 2020 that its stock has bounced like a tennis ball. At various points this year, the stock has fallen as low as $85.
As I write this article, the stock sits at $102. As a reminder, it traded in the $150s in late-November. And it was in the $140s as recently as two months ago.
Yes, most stocks have suffered in the wake of Coronavirus. However, the virus has profoundly impacted Disney. The company’s lost live sports and the advertising dollars that come with them. And movie theaters have closed, too.
Then, there’s the bread and butter of Disney’s core business, the theme parks. Short of world war, no one could have imagined a scenario where all six are closed. After all, the sun never sets on the Disney empire.
Alas, a pandemic has disrupted Disney in a rare and profound way. It’s truly remarkable how much has happened in less than six months.