Bob Chapek’s Gloating. Here’s Why.
As we’ll discuss in this week’s Disney Headlines, some shareholders want to vote CEO Bob Chapek out at The Walt Disney Company.
Why, then, is Chapek beaming right now? Disney just scored a touchdown with its latest revenue report and then spiked the football in the end zone during the earnings call.


Photo: Getty Images
Here’s everything we just about Disney in early 2022!
Chapek on Offense
If you think some Disney fans seem angry with Chapek, you should see the faces of film exhibitors right now.


Source: abcnews.go.com
The people who own movie theaters took shot after shot during Disney’s earnings call, as The Mouse drove home the point that it’s in control.
Disney committed to a novel multi-platform strategy for several of its theatrical releases during the pandemic.


Source: @theblackwidow
At the time, critics lamented the company’s decision to de-emphasize the movie-going experience. They also noted Disney would regret it with the bottom line.
In other words, the negative nellies felt confident Disney would lose money by building up Disney+ at the expense of the box office.


Photo: Chesnot/Getty Images
Those people…were dead wrong. Comically wrong. LOUD wrong.
During this call, Chapek and his staff made that point clear and aggressively drove it home repeatedly.
During his opening comments, Chapek hyped Disney’s 23 Academy Awards nominations, including its shocking dominance in one category.


Photo Credit: ABC.com
Three of the five nominees for Best Animated Feature come from Disney and Pixar.
The CEO also casually mentioned that West Side Story, a seven-time nominee, will debut on Disney+ on March 2nd.


Photo:westsidestory.com
After talking up several upcoming theatrical releases, Chapek doubled down on his film philosophy:
“That said, audiences will be our North Star as we determine how our content is distributed. And we do not subscribe to the belief that theatrical distribution is the only way to build a Disney franchise.”


Photo: Shuttershock
The Disney executives on the call emphasized this point several times during the call to the point that it kinda got mean.
If you work in the movie theater industry, Disney stomped your junk a lot during this call.


Image Credit: Disney
About the Parks
MickeyBlog knows that you read this site primarily for park information. And Chapek dropped a bombshell here as well.
For starters, park revenue surged during the most recent quarter. Disney trumpeted the second-best quarter ever for the Parks division.
We can safely say that Disney has overcome the pandemic and entered a new phase, one where guests are flocking to the parks.
After all, we were all cooped up for the body of two years and want to go back to the Happiest Places on Earth again!


Credit: Disney
None of this would have been surprising on its own. However, Chapek dropped a data point that legitimately caused me to do a double-take.
Here’s the quote:
“In the quarter, more than 1/3 of domestic park guests purchased either Genie+, Lightning Lane or both. That number rose to more than 50% during the holiday period.”
In the weeks leading up to Disney Genie’s debut, I suggested that Disney executives would love for one out of three guests to purchase upgrades.
We knew from previous MaxPass data at Disneyland Resort that roughly 40 percent of guests happily paid for shorter lines.
So, an average of 33-35 percent struck me as a fair baseline. Chapek’s suggesting that the parks started at this level.
Then, by the holidays, MOST park guests were paying for either Disney Genie+ or Lightning Lane services. Some were even purchasing both!
Friends, that’s a staggering achievement that reinforces the fact that Disney won’t go back to free FastPass-style services ever again.
The company would be lighting money on fire by taking that approach. Disney has proven the demand for paid short-line access in just three short months.

More about the Parks
Not coincidentally, park revenue surged even though attendance wasn’t on a par with 2019.
That’s what Disney wants: more money from less crowded parks! The plan has worked.
Park officials know from experience that guest survey scores increase when crowds are smaller.
So, the Disney Genie+/Lightning Lane strategy has paid immediate dividends as a means of boosting revenue AND increasing customer satisfaction simultaneously.
You may personally despise the idea, but these numbers prove it’s a viable business strategy.
Disney’s theme parks performed so well this past quarter that one of the questions centered on whether earning potential had peaked!
An analyst asked whether Disney could feasibly do much better than its current 34 percent operating income margin.
The person added the insightful point that the people who stay longest at Disney spend the most, yet international travelers haven’t returned yet.


Photo: Fortune
So, how is Disney doing so well, and has it reached the realistic limits for growth?
Interestingly, Disney’s CFO replied that innocuous enhancements like Mobile Ordering and digital hotel check-in have increased growth.
When guests have more time at the parks, they also spend more money. So that’s Disney’s focus moving forward: getting guests in the parks and keeping them there!
Disney Discusses Its Future
The analysts understandably wondered about Disney’s future. After all, we’ve discussed several impending changes coming soon.
The various streaming services will spend $33 billion (!) on new content over the next year.
Also, Disney has hinted that it will start earning gambling and NFT revenue. In addition, outgoing executive Bob Iger has stated that Disney’s metaverse is coming soon as well.


Photo: AFP
Several parts of the back-and-forth involved these topics, at least indirectly.
In fact, in a later interview, Chapek told CNBC that Disney is bidding on NFL Sunday Ticket, a current DirecTV product, one that’s dear to my heart.


Credit: Mark J. Rebilas-USA TODAY Sports
If Disney acquires that service, ESPN+ will surge in popularity in North America.
The Big Question
A Citi analyst earned my eternal admiration for asking Chapek the hard question. He questioned whether Disney tech is good enough for the metaverse and other emerging techs.


Photo: sciencenews.org
Let me blunt. It isn’t. Disney theme park tech is a disgrace and the worst part of the company right now.
Other parts of the organization aren’t much better. Disney’s streaming services work so well because it bought BAMTech Media.
To his credit, Chapek offered an honest reply. Here is the transcript:
“It is top of mind. It is absolutely top of mind because we realize that in the future, you can call it what you want.
You want to call it metaverse, you want to call it the blending of the physical and digital experiences, which I think Disney should excel at for all the reasons that you said in your opening.
We realize that it’s going to be less of a passive-type experience where you just have playback, whether it’s a sporting event or whether it’s an entertainment offering and more of an interactive lean forward, actively engaged type experience.
And this is a very top-of-mind thing for us because we are continuing over time to augment our skills and the types of people that we attract into The Walt Disney Company to reflect the aggressive and ambitious technology agenda that we have.
You probably noticed that one of my 3 pillars is innovation and specifically technological innovation because we realize that this is going to be an important part of telling story in that third dimension that lean forward Interactive dimension. So it is absolutely top of mind.”
So, Disney knows its tech is atrocious and not good enough for NFTs and the metaverse. However, it’s currently working on the problem.
Feature Image: Matt Stroshane/Courtesy Disney Parks