Disney CEO Bob Chapek is out there claiming Disney Parks can’t keep up with demand so they’re going virtual instead. Is it the nuttiest future planning in Disney’s history?
We have a real high-class problem: We have much more demand than there is supply. What we will not bend on is giving somebody a less than stellar experience in the parks because we jammed too many people in there. If we’re going to have that foundational rule, you have to start balancing who you let in. … Our ticket prices and constraints we put on how often people can come and when they come is a direct reflection of demand. When is it too much? Demand will tell us when it’s too much.
— Bob Chapek, The Walt Disney Company CEO to The Hollywood Reporter
Before we ever made it to the abysmal Disney Parks presentation at D23 this year, I already knew we had a very serious problem on our hands. Although it had been a roller coaster ride behind the scenes as to what Disney was willing to reveal, the quote above from The Hollywood Reporter had really shaken my confidence. Earlier in the year, there had been discussion that Disney would scale expectations far back due to economic uncertainty. But two phenomenal quarters later out of park revenue and it seemed Disney might go all in for the one segment of their company that is just unstoppable. It was the interview with THR that revealed to me that Chapek and company have chosen a different route… one that I and many other Disney Parks fans are not going to enjoy.
The issue in the above quote is simple. If you have far more demand than there is supply, one of the ways you can dramatically increase revenues is simply to increase supply. But there is another option: you can just hike prices on the current supply, pricing out consumers from repeated purchases and pricing out some consumers altogether. The latter option is the antithesis of Walt’s vision for his parks to be accessible to the middle class. Yet it is profoundly what Chapek and his team want to go for.
We’ve seen this issue play out in the past. With Disney’s Hollywood Studios, the company had a once-in-a-generation opportunity to transform the area into a far greater capacity, major theme park. By adding Star Wars Galaxy’s Edge in an easily accessible area, while also keeping Streets of America, the park could have grown by a third, increasing capacity right along with it. Yet budget constraints and a hard directive to clone the Disneyland and Disney World versions would ultimately mean that Hollywood Studios’ attractions and pedestrian space would hardly change even after more than a billion dollars was spent on the theme park. After that much money was down the drain, did Hollywood Studios resolve its biggest problems? No, absolutely not. The park is still small, cramped, crowded and has the fewest attractions of any Disney Park on the planet.
Time and time again, current Disney management has been given the opportunity to solve the capacity problem by increasing the throughput of the parks. At Epcot, there’s plenty of space but not enough to do. The place turns into a walk-a-thon will often little reward for all those steps. Yet we’re looking at another once-in-a-generation revamp that will finish up with the same, or less, attractions than when we began. One could argue that this is just a series of bad decisions and unlucky world events… yet the pattern keeps happening.
It’s time to admit that Disney wants sky high prices and scarcity rather than accessibility to all.
And why are they pushing in this direction that I consider absurd?
Well, it’s based on a false hypothesis that I believe will be egg on the faces of a great many executives.
DEADLINE: That sounds like a very big swing, but how does it work on a practical level?
CHAPEK: Here’s how. So, we wish every person would have the opportunity to come to our parks, but we realize that’s not a reality for some people. In order to reach the 90% of people that will never ever be able to get to a Disney park, we have before us an opportunity to turn what was a movie-service platform to an experiential platform and give them the ability to ride Haunted Mansion from a virtual standpoint. The utility isn’t just to have the same experience. Maybe we’ll give them the opportunity what every single person in the park wants to do, and unfortunately too many of them do it, just to get off the attraction. See how it works, see how those ghost dancers move…
DEADLINE: Are we talking about something with goggles, like Oculus?
CHAPEK: Short term, yes. Long term maybe not, maybe something more.
DEADLINE: How?
CHAPEK: We want to give people the ability to experience digitally, something that’s akin to a physical experience that they necessarily can’t be at that place in that time. But it’s even more important than that. So, when a family comes to our parks, we know exactly what you did. Let’s say you stay a week. We got seven days, 24 hours a day. We know everything that you do in the park. And if you give us the permission and ability through the membership app, we’ll program your Disney+ experience, not according to what you watched last or what other people who watch this show, but to what you did, what you experienced.
— Chapek to Deadline
This has to be one of the most bone-headed ideas ever put forth by a major CEO of a very successful company. The idea that you can stop increasing capacity for your most successful company component and then you can replace it with virtual reality is just idiotic. I’m saying that as someone who has worked as a 3D animator, loves virtual reality and thinks the future of that space is nearly limitless. Understanding all of that, one of those limits is the idea that you can offload your theme park experience into virtual reality and it be analogous. It’s not — it won’t be.
Just from a technical standpoint, you can’t replicate the smells, you can’t replicate the build-up, you can’t replicate the embodied experience. You’re more than a brain in a vat. Sure, you might be able to pull off something like The Haunted Mansion fairly well, but that’s nothing compared to the bigger picture that is a full theme park. So the idea that you would stop adding capacity because you’re going to offer a virtual similarity for the 90% of people who won’t come otherwise is ludicrous. It’s just ludicrous. Virtual reality can be one heck of a complimentary system to the parks, but they’re not parallels and they’re not going to be parallels within the decade, if ever.
The thought process that some of these corporations are buying into, that we’re going to switch to a society that is largely virtual and not based in the real world, it’s dystopian in my view.
I understand that Disneyland Resort is getting very close to having maximized the space it has. Magic Kingdom, Epcot, Animal Kingdom, Hollywood Studios though… there’s a ridiculous amount of space to move into. Add another Main Street route to increase flow and capacity. Add the expansion southwest of Adventureland. If you want to add a new area north of Big Thunder Mountain Railroad, fine, but don’t bulldoze the river and Tom Sawyer Island for it. That’s stupid in so many ways I would have to write an entirely new article to cover all of the blunders there. Epcot desperately needs new rides. Where’s the Mary Poppins attraction you worked so hard to acquire additional rights to build? Where is the Play Pavilion that would provide a kinetic space for families? Why are the Hollywood Studios infrastructure plans to add pedestrian space for Fantasmic crowd-levels not moving forward? Why is the discussion about Animal Kingdom all centered around replacing rides instead of adding rides to the existing slate?
I’m on board for all sorts of technology endeavors. I’m happy to chat about the Age of Abundance, 3D printing all sorts of items, virtual reality and all it can do (not to mention augmented reality)…
But virtual reality as a solution for theme park capacity issues? C’mon.
C’mon.
I’m going to hope that the real answer behind the scenes is that Chapek is clearing out projects from before his takeover so that he can oversee new projects that he directed. I’m going to hope that they couldn’t admit that since people were paying money to hear about all the new stuff on the way.
Because if the actual answer is that they’re going to solve demand for a physical vacation by offering a discounted virtual reality experience, then they’ve out of their gourds.
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