As I read through this piece, I found myself captivated by Bob Chapek’s journey at Disney. His words about adapting to consumer preferences resonate deeply with me, as they echo my own experiences in the ever-evolving world of technology.
On August 10th, I found myself among thousands of fellow Disney enthusiasts at Anaheim’s Honda Center, hearts pounding with anticipation. The grand event was the bi-annual D23 conference, and that evening marked the highlight for Disney’s Experiences division – a glimpse into the company’s future strategies, led by chairman Josh D’Amaro.
Afterward, there was a blend of a concert, a panel discussion, and an Apple product launch event. Musical acts included Meghan Trainor, Shaboozey, Rita Ora, and Plain White T’s. Notable appearances were made by Billy Crystal, Ke Huy Quan, and John Stamos. The event concluded with a dramatic finale reminiscent of Steve Jobs’ presentations, as D’Amaro spoke (some spectators hurriedly left their seats), only to be followed by the appearance of the Magic Mirror from Snow White behind him. This was capped off by a climactic moment when it was announced that Disney is creating a land at Walt Disney World dedicated exclusively to renowned Disney villains.
A little over a month after that incredible night, I found myself standing before a crowd even larger than before, this time at the Inbound Conference in Boston on September 18th. Instead of a live performance, I was introduced by a captivating sizzle reel, showcasing the best moments from that evening to thousands more people.
D’Amaro addressed a gathering of marketing professionals, stating that these fans journey from various parts of the globe to participate in D23 events. Their devotion is unwavering, keeping tabs on each action taken by us. They crave every morsel of information we release, and just last month, we served them an almost overwhelming amount of it.
In the tranquil setting of his verdant dressing room behind the Boston Convention Center, D’Amaro expressed immense pride as he unveiled an array of fresh ventures during D23, describing it as a “deeply, deeply satisfying moment.
D’Amaro stated that the presentation was a result of our substantial efforts to fulfill our fans’ greatest desires. It was an incredible feeling for him to showcase this on stage and witness the powerful response we received in return.
But it was also a long time coming.
About a year ago, the company convened Wall Street analysts at Disney World in Orlando, where they announced substantial news. Specifically, they revealed their intention to invest a whopping $60 billion into expanding their division, effectively boosting their capital expenditure by almost double over a decade.
Disney, on the other hand, was secretive about their plans for the money, hinting at new tales and increased capabilities across all its theme parks and cruise ship operations.
It was at D23 when the strategy burst into the open.
Disney plans to construct numerous innovative lands and attractions globally, such as the Villains land in Florida, a Monsters Inc.-themed area, and an expanded Avengers Campus in California Adventure. The proposed Avatar land will also materialize at California Adventure. Moreover, new rides inspired by Coco, Encanto, The Lion King, Cars, Indiana Jones, and Robert Downey Jr.’s Tony Stark character are set to debut across their parks.
Disney’s park division offers an immersive experience that transports visitors straight from reality into the heart of a story, as shared by D’Amaro with the Inbound audience.
He further mentioned, “These encounters serve as a capital for crafting fresh narratives tailored for upcoming Disney enthusiasts. It’s crucial that we execute this flawlessly, which implies the manner in which we convey these tales holds significant value.
It’s a big, bold bet, with tens of billions of dollars on the line.
Additionally, this transition is happening as Disney works towards its transformation and determining the individual who will guide the company in the coming years. Current CEO Bob Iger’s contract extends till 2026, but both he and the board of directors are reportedly dedicated to identifying a suitable successor for the role.
Among the potential contenders, D’Amaro and Dana Walden from Disney Entertainment are prominently mentioned. However, D’Amaro emphasizes that his primary focus lies in achieving the transformation and growth within his own department.
It’s clear that The Walt Disney Company acknowledges the significant role their parks and experiences play, not only financially on their balance sheet, but also in shaping their future prospects.
Disney’s experience sector, similar to the rest of the corporation, is experiencing both a transformation and a radical change due to the significant shifts occurring across the broader entertainment world. Consequently, it is adjusting its strategies accordingly.
Despite the growth and diversification of the company over time, Walt Disney’s iconic 1957 diagram continues to serve as our guiding beacon. This diagram places creative talent in studio theatrical films at its heart, with everything else branching out from this central core – encompassing television, books, music, and Disneyland. Over the years, our corporate operations have significantly expanded (now including multiple theme parks, cruise ships, TV networks, streaming services, sports, etc.), but the fundamental principle remains unchanged.
D’Amaro displayed the diagram during his Inbound talk, explaining to the audience that “we continue to adhere to the model that Walt designed; stories serve as the core of all our actions, acting as the creative powerhouse for our entire organization.
And so those stories are now at the center of his division’s ambitious expansion plan.
D’Amaro shares with The Hollywood Reporter that our company is uniquely positioned with an abundance of captivating stories waiting to be told, and we’re truly fortunate in this aspect. Moreover, he emphasizes that we pay close attention to the preferences of our fans, as they have valuable insights and desires for what they want to see brought to life on screen. Monsters Inc., for instance, was a testament to this, as the reaction at D23 demonstrated the enthusiasm of our fans for such stories.
And, increasingly, it seems that Disney’s creative talent wants it as well.
At D23, D’Amaro was accompanied on stage by notable figures such as Marvel Studios head Kevin Feige, Lucasfilm executive Dave Filoni, Pixar leader Pete Docter, and the creator of Frozen, Jennifer Lee who was also the Disney Animation COO at that time. They unveiled upcoming projects, and D’Amaro took part in pre-planned segments, one of which was a lively act with Billy Crystal, known for voicing Mike Wazowski in Monsters Inc.
D’Amaro mentions that these individuals are his friends: Jennifer Lee and Kevin Feige. We have mutual acquaintance with them, and we’re investing a significant amount of time together, he adds. He characterizes the discussions about how to allocate resources as a blend of creativity and analytical thinking.
The art, of course, comes from the creatives, who built characters and worlds that resonate with consumers (during his Inbound presentation D’Amaro showed a video of himself and Lee exploring the Frozen land at Hong Kong Disneyland), and the science comes from understanding what each distinct audience wants.
Reflect on the 2016 computer-animated film “Zootopia”. This movie served as the inspiration for a newly established area that debuted towards the end of last year at Shanghai Disneyland. The company had plans to extend this park, and internally, discussions revolved around which franchise would be suitable for a new land. At the time, “Zootopia” was the highest-earning animated movie ever in China, generating over 220 million dollars at the Chinese box office. Although it was successful in the U.S., in China, it was a massive hit, earning blockbuster status.
D’Amaro stated that this franchise property is popular in the market due to its relatable characters. We were certain we would continue to support it, and moreover, the Imagineers felt deeply that they could breathe life into its world. D’Amaro explains that this tale appeals to fans, with many flocking here explicitly to see Zootopia.
Behind each significant investment lies a series of discussions and negotiations taking place internally, as the creative and commercial aspects of the decision-making process work through their ideas.
In simple terms, the creative groups we’re part of, like Imagineering, are constantly brimming with fresh ideas and discussions. To put it another way, Imagineering seems more vibrant and enthusiastic about the future than ever before. This essentially implies that numerous concepts are being proposed and we’re deliberating over which ones will have the most impact on our visitors. We’re trying to determine which of these can be transformed into something that breathes new life into a story or leads it in a different direction. We’re also considering what our fans are requesting.
We discuss these matters intensely, whether it’s with Jen Lee, Kevin Feige, or Kathy Kennedy, ensuring a healthy debate. Inside our studio (WDI), we continue this discussion to ensure we choose the optimal solution for the stories we wish to narrate.
Occasionally, these changes at Disney parks may stir up feelings of anxiety among devoted fans. Following D23, some frequent visitors of Disney parks voiced dissatisfaction when they learned that two new rides based on the movie “Cars” were slated for the Magic Kingdom, potentially replacing Rivers of America and Tom Sawyer Island. Additionally, there was concern that the expansion of the Monsters Inc. area might lead to the removal of a beloved Muppets-themed attraction.
However, Disney has taken this route before. For instance, when Disney closed and reopened California Adventure’s Twilight Zone: Tower of Terror ride as Guardians of the Galaxy – Mission: Breakout! in 2017, they saw a substantial increase in ridership, even though there was some risk involved in altering a much-loved attraction.
In simpler terms, as Ben Swinburne from Morgan Stanley stated on August 13, these investments focused on experiences can yield impressive profits if they utilize well-known and contemporary intellectual properties (IP). As investors in Disney look to accept a growing capital expenditure plan, their faith in the potential returns is based on Disney’s ability to create new brands and franchises while revitalizing existing IP.
Disney’s Imagineers have a history of developing their own intellectual properties, such as the Pirates of the Caribbean and Jungle Cruise rides, which were later adapted into full-length films. At the Inbound conference, D’Amaro showcased two BDX droids – remote-controlled robots that made their debut at Star Wars: Galaxy’s Edge land in Disneyland this year. Unlike any previous appearances in a Star Wars film or TV series, these droids seem to fit seamlessly into the broader Star Wars universe.
Thanks to their sophisticated mechanical capabilities (and human operators), these robots can express emotions and interact with guests. As D’Amaro put it, “They are technological wonders, but it’s not just the technology. It’s how Imagineers utilize that tech that truly makes a difference.
I wouldn’t be shocked if you found these individuals in a future ‘Star Wars’ film,” he continued, mentioning the upcoming ‘Mandalorian’ movie in 2026. “That would truly be a fitting conclusion.
The leader often experiences instances where ideas come full circle, shaping the way the company handles its undertakings.
On stage, D’Amaro recounts a personal tale from his very first Disney encounter. Originating from Medfield, not far from Boston, he had parents who joined the audience at the Boston Convention Center to listen to him talk.
As a child, he remembered a family outing to Disneyland. On that trip, his dad treated him to Peter Pan’s Flight, which was one of the theme park’s earliest attractions.
Before reaching Disney, my dad had told me, ‘Josh, you’ll feel like you’re flying once you’re on that ride, and trust me, it’s something you won’t believe,'” he reminisced. “And guess what? He was absolutely correct.
Thirty years down the line, D’Amaro treated his own children to a modern ride at Disneyland called Soarin’. This thrilling experience lifts riders off the ground, allowing them to soar over some of the world’s breathtaking landscapes.
He shared, “Before our journey with the family began, I mentioned it would seem like flying, something unbelievable. Well, transitioning from Peter Pan to Soarin’ wasn’t an instant transformation; these attractions were about half a century apart. However, they both embody one of Disney’s fundamental principles – innovation.
At the heart of D’Amaro’s mission to grow Disney’s experiences business lies his focus on employing innovation to foster emotional bonds. This approach underscores not only the advancement but also the transformation that Disney as a whole is undergoing.
D’Amaro explains, ‘Bringing in new fans generates the lasting impact I mentioned earlier.’ Our aim is to ensure every story we bring to life – as we unveiled many at D23 – has a lasting impression, something timeless that keeps our visitors engaged and creates those deeply emotional memories I referred to.
In the realm of evolution, this involves creating fresh rides, attractions, and lands that ensure upcoming generations can relish the identical enchantment in Disney’s theme parks as D’Amaro and his kin did (such as Mickey’s Toontown in Disneyland, which employs timeless IP to captivate families with young children). However, it also signifies striving to deliver the Disney experience in new locations.
One aspect of the larger picture is Disney’s cruise line, as D’Amaro unveiled plans for four new vessels at D23. By the end of this decade, these additions will effectively double the number of ships in Disney’s fleet, and interestingly, some of these new ships will set sail from nations without a Disney park. This expansion offers a more accessible chance for families to immerse themselves in the experiences provided by Disney’s division.
By 2031, Swinburne estimates that the cruise industry could generate approximately $10 billion in revenue and a staggering $3 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA). To give you an idea of its potential size, by the end of this decade, the cruise business might surpass ESPN’s EBITDA figure for the year 2024.
The groundbreaking element carries a larger risk. Similar to Disney’s entertainment sector and ESPN, D’Amaro perceives digital as a promising avenue for expansion within his jurisdiction.
However, unlike entertainment and sports which primarily emphasize streaming, D’Amaro aims to revolutionize gaming through an interactive approach.
D’Amaro notes that this will shape our company’s future, and it promises to be a truly remarkable era for us,” (paraphrased)
In the last months of 2022, upon his return as CEO at Disney, Bob Iger convened with D’Amaro and the head of Disney games, Sean Shoptaw.
Earlier this year, Iger shared that the initial information presented to him revolved around demographic patterns. When he looked at generations like Gen Z, Gen Alpha, and Millennials, he found that their overall screen time spent on video games was comparable to the time they spend watching TV and movies – a fact that left me amazed,” is one way of paraphrasing the given sentence in natural and easy-to-read language.
As a dedicated gamer, I realized that we need to show up, and we need to do it fast, making our presence undeniably impactful.
The outcome was a substantial partnership worth $1.5 billion with Epic Games, the studio behind Fortnite. This deal involves Disney investing in the company and collaborating to develop an interactive universe using their beloved characters and assets.
D’Amaro outlines the company’s vision as an interactive platform that encourages gaming, fosters social connections, and empowers users to create their unique content.
We imagine creating an entire universe for our stories to thrive, which could manifest in various ways such as games or interactive experiences. This will offer fans the unique opportunity to engage with their favorite franchises in a personalized manner, even building aspects of it themselves. We believe this platform will serve as a continuous gathering place for fans all year round.
The main wager is that consumers who immerse themselves in this cosmos will craft unique Disney encounters, thereby pioneering a fresh method of connecting with the brand and its figures. Much like streaming has revolutionized the viewing habits of Disney enthusiasts for their beloved tales, the firm is optimistic that the innovative Epic Games universe could reshape how those stories are experienced.
On the stage, D’Amaro presented the Epic Games deal as aligning with the spirit of adventure and risk-taking embodied by Walt Disney. He emphasized that Disney, the company’s founder, was an adventurous and daring individual.
It’s crucial that we don’t become complacent with previous achievements; instead, we should constantly seek out fresh ideas and significant challenges. If we had always stuck to what worked before, Disney might not be here today. With consumer tastes evolving, we must adapt or risk being surpassed.
The digital shift, on the other hand, is happening concurrently with a slowdown in revenue for Disney’s theme parks division. Despite experiencing double-digit growth following the pandemic, its revenue has decreased somewhat in recent times. In Disney’s fiscal Q3, it still showed a 2% increase, but Hugh Johnston, Disney’s Chief Financial Officer, anticipates that this “moderation of demand” will persist for several upcoming quarters.
Despite a 10% decrease in quarterly revenue industry-wide (Universal’s parks, for instance), this situation seems to heighten the importance and pressure of the present moment.
Essentially, Robert Fishman, an analyst from MoffettNathanson, suggested in a note dated August 13th that the current difficulties are probably short-term, especially considering the plans Disney has following D23.
Although investors are primarily watching short-term developments at Parks, we believe these updates along with the recent achievements in content production underscore the extensive and diverse intellectual properties owned by Disney. These valuable assets fuel Disney’s content cycle, contributing significantly to its long-term profitability.” (Fishman penned this down)
The biggest challenge could possibly lie in satisfying the high expectations of Disney’s vast fanbase, as seen by the throngs of fans in Anaheim enthusiastically welcoming announcements about a Greatest Showman musical or a fresh Disneyland parade, not to mention a new theme park attraction or immersive world.
D’Amaro stated that this will require us to think outside the box, as we need to tell our tales in innovative manners. This implies that we will be utilizing all these concepts to make sure this fresh, exciting realm surpasses our audience’s most imaginative dreams.
Those expectations are particularly noticeable at Disneyland, Walt Disney World, Disneyland Paris, Shanghai Disneyland, and every location where the company’s imagination blends seamlessly with reality.
In 2018, when D’Amaro assumed the presidency of Disneyland, he followed in the footsteps of his predecessor Michael Colglazier by stepping into Walt Disney’s former residence within the park, maintaining a longstanding custom among its top executives.
In the apartment, they cooked chili and grilled cheese sandwiches, two of Walt’s favorites.
D’Amaro reminisced about the time we prepared it on Walt’s personal stove, just as he did when he was in the park. We were standing on his patio, watching passersby. In that instant, I have to admit that I felt the heavy burden and immense responsibility I was assuming, for Disney fans are incredibly passionate about their fandom.
As a gamer, I’d say: If Disney’s studios are like the creative engines that drive the stories that shape the company’s future, then their experiences are like the emotional heart that breathes life into those characters and worlds, forging deep connections with fans. It’s just as Walt Disney put it over six decades ago, a flywheel where every part of the company contributes a unique piece to the puzzle, all backed by a mighty $60 billion engine.
According to D’Amaro, Disney shines brightest when all its parts work together as a single unit. This, he believes, sets Disney apart and makes it truly unique.
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2024-10-01 15:56