Wednesday, July 16, 2014

Disney Park profits and Euro Disney has this article about how Disney Parks make their substantial profits.  The eleven parks worldwide contributed about $2 billion to Disney profits in 2013. The article cites Walt Disney's original theme park vision in the 1950's as the underlying reason for the success of the parks.  One of the ideas Walt had was to build a story into the attractions.  Even the fireworks are done in the context of a story. By developing and refining the theme park model, and finding ways to make people spend money, Disney has become the financial giant we see today.
The driving force behind Disney’s theme park profits is its scale. Saying that Disney runs the world’s busiest theme parks doesn’t do justice to its status. In total they attracted 132.5 million guests last year...
...all but one of the ten most-visited parks worldwide are run by Disney with the exception being Universal Studios Japan which had 10.1 million guests last year.
The article reports that DisneyLand Paris is one of the "top performers" among the parks, despite once being seen as a lackluster enterprise.

The article devotes a lot of space to discussing DLP stating that its attendance is higher than the 3 closest rivals combined and higher than all other theme parks except for Magic Kingdom, DLR and Tokyo Disneyland.

Disney has only a partial ownership in DLP...
Although Disney wholly-owns its theme parks in Florida and California it only has a 39.8% stake in Euro Disney, the parent company of Disneyland Paris. Saudi investor Prince Alwaleed has a 10% stake whilst 5% is in the hands of  American money manager Invesco and the remainder is floated on the Paris Euronext exchange.
 One of the not-so-secret ways Disney makes money is on merchandise...
The real money is made on merchandise and food and beverage which have low fixed costs and can be sold for a huge premium as the guests are a captive audience.
This idea has had some success at WDW but the situation at Anaheim is not so supportive of this plan due to the close proximity of DLR to the "real world".  And one of the effects of competitors such as Universal Studios is to make the guests at Disney Parks less captive.  Will Disney's size continue to guarantee success, or could it become a liability in the face of more innovative competition?

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