Seven Things We Just Learned About Disney

During a wide-ranging Q&A session this week, Disney CEO Bob Iger provided insights on how his company is doing.

Here are seven things we just learned about Disney.

Disneyland Could Grow by 50 Percent

You can chalk up this conversation to Iger quietly pushing for the DisneylandForward project to proceed.

The plan is simple, assuming that Anaheim officials agree to update some zoning ordinances and sell some roads to Disney.

Iger wants to build out Disneyland Resort in a way that dramatically expands the campus.

Currently, Disney data suggests that consumer demand at Disneyland isn’t anywhere near close to being met by supply.

The only way to achieve that goal is via park expansion.

The perception is that this type of growth isn’t possible at the campus, a notion Iger flatly refutes.

“(Disney has) the ability to increase the size of Disneyland in California, which everybody thinks is kind of landlocked, by 50%.”

Even if Disney settled for 25 percent growth, it’ll easily produce the previously mentioned 16 new rides and possibly even more.

And some of those rides come from a specific brand…

Avatar Is Coming Soon!

MickeyBlog was all over this story when the news broke. It’s part of a continuing game that Disney is playing with its loyal fans.

For whatever reason, Disney prefers to hint and tease rather than confirm and detail.

Even when executives reveal something, the wording often proves inscrutable. Here’s what Iger said about Avatar:

“We have one Avatar-based land, Pandora, in Florida. We’re going to put a second one in California.

“It doesn’t mean we can’t put one in — somewhere in Asia and somewhere in Europe as if for instance.”

Our staff agonized over the phrasing that Iger employed, as it seems to confirm an entire themed land coming to Disneyland.

In the past, Disney has described this offering as an “Avatar experience” instead.

Since the Morgan Stanley event, Disney has muddied the waters here about a themed land versus experience, but something is coming.

Disney has elevated the Avatar brand since it purchased the franchise from Fox.

At the parks, strategists love to recreate themed lands and attractions in multiple locales because it offsets R&D costs.

So, adding a new and probably better Avatar-themed land at Disneyland makes sense if Disney goes that route.

That’s doubly true if other international Disney parks add their versions of Pandora as well.

Avatar news appears to be among the most likely topics at the 2024 D23 Expo’s Parks Panel.

Disney Could Develop “Thousands of Acres”

The headline here is that Iger indicated that Disney could build seven themed lands.

On its face, that statement counts as salespersonship rather than something I take seriously.

In reality, the number is much larger. All of Disney’s international theme parks possess ample room for new themed lands.

I could argue that Shanghai Disneyland alone could add seven themed lands.

That’s missing the point of Iger’s comments, though. They’re actually rather pointed.

Without explicitly promising anything, Iger has stated what’s currently on the table in terms of mid-term expansion.

Disney owns thousands of acres of land that it hasn’t even touched yet, including plenty at Walt Disney World.

That’s in addition to the possible development at Disneyland Resort.

To me, the key phrase is, “We could actually build seven new full lands if we wanted…”

There’s zero indication Disney wants to expend that many resources. Instead, it’s theoretical.

I expect Disney to confirm new themed lands at Walt Disney World and Disneyland at D23 (or before then).

Some of the international parks will likely expand as well, but that’s less interesting to American fans.

Iger clearly references existing plans on the table and sounds ready to implement them.

Disney Loves the Charter Deal

Last year, Charter cut the cord on Disney, picking a fight it shouldn’t have.

Ultimately, Disney whipped Charter so badly that the latter company admitted as much during the impacted quarterly earnings report.

However, the two corporations worked together to find a tenable medium-term solution for both.

Ultimately, everyone subscribing to a specific Charter package (or higher) gained Disney+ for free.

Well, the results have started rolling in, and Disney loves them.

Iger states, “There’s really no con” to the deal…

“It’s a win-win proposition for Charter and for Disney. We obviously get the Charter subscribers, and all will get Disney+.”

Iger describes these subscribers as paying “wholesale” prices, but he doesn’t mind that.

“We need to have access to consumers, we need to know when they might be potentially a consumer that’s about to lapse.”

That’s part of a discussion I recently mentioned.

From now on, Iger’s primary focus is total eyeballs, potential consumers to whom he can market Disney products.

ESPN Commits to a Multi-Pronged Approach      

Iger detailed the current plans for taking ESPN over-the-top. That’s industry jargon for converting to a digital service.

Everyone realizes by now that linear television, in its current form, is dying. It won’t vanish, as people still buy newspapers and subscribe to AOL.

Instead, we’ll perceive linear television as a different form of legacy media.

That’s a problem for ESPN, one of the key revenue generators for Disney and an essential product for sports fans.

Iger suggests that the so-called Sports Hulu product will target an entire generation of adults who never subscribed to cable.

A partner in the joint venture recently suggested this service could gain five million subscribers in five years.

Iger focused on the big picture, stating that Disney simply wants people to watch sports.

Disney’s new products will be technology-agnostic in that it’ll market ESPN Flagship and Sports Hulu to all consumers.

Whether you watched the linear version of ESPN on cable, or you’ve subscribed to Disney+, Iger views you as a potential customer.

ESPN’s Non-Sports Ratings Have Increased

I used to track television Nielsen ratings, but I find the process depressing now due to the sheer volume of viewership drops.

For example, Dancing with the Stars claimed 22 million viewers for its first season’s finale in 2006.

The most recent season finale drew only 5.5 million viewers…and this show is what qualifies as a hit on network television today.

Any show that holds its ratings year-over-year has done something remarkable because the entire industry is in freefall.

That’s why Iger’s ESPN comments staggered me.

“Sports Center is a good example. And the ratings for these programs continue to grow, which is very interesting in light of the fact that there’s erosion of the basic business model that forms the underpinning of the service.”

As someone who watches Elle Duncan and Kevin Neghandi at 6 p.m. on most weeknights, I’m pleased …but also shocked.

If Sports Center’s ratings were only down 15 percent from last year, it’d be doing well.

Increased ratings on linear television are nearly impossible to achieve today.

That’s part of why ESPN is vital to Iger’s vision for Disney over the next five years.

He even discusses that Disney will have a Super Bowl…in 2027. That’s how far ahead Iger is planning.

Disney Will Build Its Own Epic Universe…Digitally

Universal Studios will go epic next year with its upcoming theme park, Universal Epic Universe.

Disney will go epic in an entirely different way thanks to the confirmed collaboration with Epic Games, the creators of Fortnite.

Iger describes the underlying thought process for this deal as follows:

“I always talk about how you need a foot in the present to operate your company well.

“You need a foot in the future to see where the business is going.”

As mentioned, an entire generation of fans just grew up without cable television. They’re more likely to play video games instead.

Iger correctly describes Disney as “underrepresented in games.”

There was a chance to get a foothold with Disney Infinity. That’s a conversation for another day, but here’s the gist.

Disney faced overproduction issues with its 2.0 release due to wildly inaccurate sales forecasts. That caused a financial hit.

We’ve seen with Disney+ how much investors can overreact to something like that. Meanwhile, Disney faced licensing issues.

Some of the brands couldn’t interact at the time since Disney had only recently purchased them and faced existing outside contracts.

Fast forward to today. Disney has cleaned up its licensing for the most part, although I’d admit I have lingering concerns on this front.

Iger describes the plan as building “a universe, a Disney universe.

“[This game] essentially will enable consumers to engage with all of our IP, Marvel and Pixar and Star Wars and Disney, both in terms of creating their own games from the IP, playing games that we create, watching, particularly short form, buying digital goods.”

That massive promise may prove challenging to fulfill, but it sure is enticing.

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