We’re back for another Walt Disney World news round-up! This one begins with a handful of smaller topics, including the delayed reopening of Coronado Springs Resort, an AP pop-up shop, and restaurant closure. From there, we turn to the ‘main event’ which is Disney’s corporate reorganization and CEO Bob Chapek’s ensuing television interviews that touched upon Walt Disney World park capacity.
First up, Disney’s Coronado Springs Resort has had its reopening delayed from today until Friday (October 16, 2020). We assume this is either a matter of removing the NBA infrastructure or low weekday occupancy the first few days the hotel is open. In any case, we’d expect it to open for the weekend, when Walt Disney World hotels tend to be busier. The few dozen guests with check-ins today or tomorrow will probably be relocated to Caribbean Beach or upgraded to Deluxe Resorts if they push for it.
Next, a new Annual Passholder pop-up shop has opened at Der Teddybar in the Germany pavilion of EPCOT’s World Showcase. The AP pop-up shop will be open Mondays to Fridays from 11:30 a.m. to park close through November 17, 2020. It opened today to long lines and a virtual queue, but we’d expect some of that to die down over time…
This pop-up shop is exclusively for Annual Passholders and you will need to show your annual pass card and government-issued photo ID to enter. Once inside, Passholders will discover exclusive merchandise, new World Showcase products, and more. (There are already reports that a lot of this merchandise is 50% off.)
Annual Passholders should check the Walt Disney World AP Specials page for additional info. Walt Disney World also extended the 30% discount until October 29, so that should make for some good deals. (It seems likely that discount will be extended again into the holiday shopping season.)
As one thing pops up, another long run comes to an end. Wolfgang Puck Express has permanently closed at Disney Springs, after a long run that saw the location go from one of the few operating restaurants at Downtown Disney to one of dozens at Disney Springs.
We’ve praised Wolfgang Puck Express as a great value-for-money (or Disney Dining Plan credits) option, and also called it a hidden gem due to its tucked away location. Unfortunately, it would seem that proved a bit too literal; as development shifted away from the Marketplace side, the district’s dining scene was largely congregated on the exact opposite side of Disney Springs.
Next, the Walt Disney Company announced a broad structural reorganization of its media and entertainment businesses, in a move to ramp up and streamline its direct-to-consumer strategy. This involves the creation of the new Media and Entertainment Distribution group, which will oversee content monetization and streaming operations. It will also have sole profit & loss accountability for Disney’s media and entertainment businesses.
In addition to the new Media & Entertainment Distribution group, there will also be three creative groups responsible for producing content for film, television, and streaming services: studios, general entertainment, and sports. Under the reorganization, the top leadership at studios, general entertainment, and sports still remains the same.
Also remaining the same is Disney Parks, Experiences and Products, which is the theme parks division. It will continue to operate under its existing structure, led by Josh D’Amaro, who continues to report to CEO Bob Chapek. The broader implications for theme parks is potentially being deemphasized, but that wasn’t an explicit statement in the announcement.
“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” said Disney CEO Bob Chapek in a statement announcing the reorganization.
“Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it. Our creative teams will concentrate on what they do best–making world-class, franchise-based content–while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.”
The impact seems to be more in separating monetization from creative responsibilities, consolidation, and emphasis than anything else. It’s essentially Disney signaling the importance of its streaming and other media businesses, and indicating further efforts will be taken by the new group in terms of distribution, sales, advertising, data, and technology functions for all of Disney’s content engines.
Thus far, Disney+ has been exceptional in terms of growth, but there are still questions about long-term profitability in the evolving media landscape. This has been underscored by the PVOD release of Mulan and upcoming regular Disney+ release of Soul. There are also lingering concerns about consumer retention; activist investor Dan Loebs called for Disney to divert the company’s annual $3 billion dividend to new Disney+ content creation.
I find the so-called streaming wars fascinating. I also really don’t think there’s much of a war at this point. There’s Netflix in a league of its own, Amazon buoyed by its Prime subscribers, and Hulu rounding out the big three. Pretty much everything else is niche. People reading this niche blog may disagree that Disney+ is a niche streaming service, but it is. At least, for now.
I worry about Disney focusing too much on streaming. I say this not just as a theme park fan who does not want those forgotten, but also as a long-time Disney fan who has witnessed spectacular boondoggles when the company emphasizes technology. From Go.com to Disney Interactive Studios to My Disney Experience, it’s been one costly failure after another. Disney+ obviously will not be a boondoggle, but it’s still concerning that a legacy media company with many successful divisions is putting so many of its eggs in the basket of a nascent streaming service.
Like the vast majority of American households, we watch more hours of Netflix than anything else. HBO Max would be next, although their stubborn refusal to release an app on the Fire Stick means we only watch that upstairs on the Playstation 4. Prime and Hulu follow that. After forgetting we even had it for approximately 7 months, Apple TV+ recently reemerged in the #5 slot for us thanks to Ted Lasso (highly recommended). We haven’t even opened Disney+ in over two months.
Ironically, pretty much the only content we watch on Disney+ is the stuff that literally could not be made right now without movie theaters: blockbuster action movies. There will undoubtedly be attrition in the movie theater industry, some of which was always inevitable and some of which is being accelerated by current events, but the simple truth is that Disney’s tentpole strategy is only viable with theaters plus streaming.
So either Disney will need to revisit its current approach and focus more on “singles and doubles” like during the Eisner-Katzenberg regime, find a way to coexist with theaters, or create more Disney+ original series. Literally all of these approaches are fine by us. We enjoy blockbusters but not to their current outsized extent, we prefer budget-friendly story-driven films, and like binge-watching shows on streaming services.
Speaking of which, we are looking forward to the Mandalorian and WandaVision, but otherwise the Disney+ original programming slate is significantly lacking. Keep in mind that those are only two (potentially) good shows in the span of a year–or half of what Netflix offers any given week. Perhaps that helps explain the restructuring?
Shortly after this announcement, Disney CEO Bob Chapek appeared on CNBC to discuss the reorganization. During that segment, he was asked about theme park attendance and capacity at Walt Disney World.
Chapek stated that Disney has kept attendance at Walt Disney World capped at 25% of total capacity in lieu of physical distancing requirements. He went on to indicate that this number has not and would not be increased, and these limitations will exist until the CDC and other health experts indicated that they were no longer necessary.
This is a bit disingenuous, but not surprising. Outside of CNBC interviews, Walt Disney World has denied that park capacity has been increased over the course of the last several months. Claiming that instead capacity had been reallocated from resort and theme park guests to Annual Passholders and Cast Members. Early on, this was definitely true.
In July and August, there was a ton of surplus capacity for theme park ticket holders and resort guests that went unused because capacity was not reallocated to APs. If Walt Disney World is at 25% of capacity now, it was probably at 10-15% most weekdays back then.
However, there have been dates in September and October when some parks were previously unavailable across all three categories of guests, and then became widely available. That couldn’t have been a reallocation–it was a refill. We crunched the numbers and, come to find out, if you have zero apples in your bucket, you cannot give any apples to someone else!
It’s unclear what kind of semantics shenanigans Walt Disney World is pulling to deny that park capacity limits have been increased. One thing is undeniable: a higher number of guests are entering all four parks this month than in July, August, or even September.
As is emphasized in our 40% Crowd Increase at Walt Disney World analysis or September, wait times and attendance were up across the board. While there is a disparity between posted and actual wait times, both are up. One way or another, attendance is up and has only further increased in October.
Even if you take Chapek at his word for some reason, it’s also worth pointing out that the statement about a 25% cap on attendance is pretty meaningless without additional information.
We don’t know if that 25% is of the pre-closure theoretical park capacity, or based upon post-reopening operational realities. It’s entirely possible that attendance is limited to 25% of pre-closure number, using the same attendance levels to determine phased closures that sometimes occur between Christmas and New Year’s Eve.
There are some significant differences between a normal New Year’s Eve and right now. For one, a lot of things are not operating. Countless shows, restaurants, stores, play areas, meet & greets, and more all remain closed. Those would be a factor in determining a park’s normal capacity, but should be excluded now.
For another thing, attractions are operating at a fraction of their normal hourly throughput. Same goes for restaurants, stores, and more. This means that even what’s open has a lower capacity than normal. In short, EPCOT’s normal ‘full’ capacity might be 100,000 guests, but its current ‘full’ capacity might be 50,000 guests. Is the 25% limit of the former or the latter?
We don’t know the answer to that and never will, but my guess is that the math is fuzzy. Walt Disney World has reopened more restaurants and shops in recent weeks to help soak up the crowds, and each time that or a park hours extension occurs, more Disney Park Pass availability it released.
The bottom line is that the number of guests entering the parks has gone up each month since reopening. How Walt Disney World is justifying that while claiming capacity caps are the same is somewhat immaterial; they’re never going to pull back the curtain on those calculations. What’s important is that you know crowd levels and wait times have not remained static. They’ve gone up and will likely continue increasing until we reach a point where there is truly no ‘available space’ left to accommodate physical distancing. If you’ve visited recently on a busy weekend, you might argue that point has already been reached.
Thoughts on the closure of Wolfgang Puck Express, delay of Coronado Springs Resort’s reopening, or the pop-up AP store? What about the organizational changes to the Walt Disney Company? Concerned that this could mean stagnation for the theme parks, or think it’s a non-factor? Happy with Disney+ or wish more would be invested in content growth? Thoughts on the 25% capacity cap on attendance at Walt Disney World? Do you anticipate Walt Disney World will further ‘fine tune’ park capacity as appropriate? Will you be visiting Walt Disney World in late 2020? Do you agree or disagree with our advice and commentary? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!