There I was at the gates on Disneyland Resort in Anaheim on the 21st of April 2023. Disneyland is a magical place but even more exciting is the Parks & Recreation business. Uncle Scrooge would be a happy owner.

https://www.sec.gov/Archives/edgar/data/1744489/000174448923000097/fy2023_q2xprxex991.htm

Since the end of the pandemic the Parks division of Disney (DIS) has seen tremendous growth, 17% YOY in Revenue and 23 % YOY in Operating income. I was right there during this period and it feels about right.

The operating margin is an eye popping 25%, excluding the consumer products.

Financials aside, these are some observations I made.

1. Captive Audience -Disney has a captive audience when people visit their resorts. People who are already persuaded to locate themselves in a real estate utopia owned by Disney. People who can be sold expensive food, drinks & souvenirs.
2. The Power of Attention – In the park the attention is on all things Disney. IP that has been created by Disney over the past 100 years is front and center.
3. Time is money – Disney will sell you the right to skip lines on rides with Genie+ and individual lightning lanes to save time. They are implementing the time is money maxim. Here’s a tidbit from their 10-K filing. This is literally money for nothing.

4. Product Placement – Stores right when the rides end, perfect persuasion for families to buy Disney Merchandise. Being aware of this, Me & my wife were successful in dodging this with the only souvenir being a 8$ driving license from Autopia.

5. Content is King– The fuel for Disney’s empire is the content they have. From Mickey Mouse to Lightning McQueen, the catalog of characters that Disney has is unmatched and they come to life in the park, giving users the Joy of interacting with their favorite characters. Here’s a photo of Woody!

5. Reinforcement – What Disney does well is reinforce its content via its rides and shows. So any character that you are familiar with be it Woody or Mickey or Lightning McQueen you would see the character and story being reinforced in a ride. For me the two favorites were Mickey’s Runaway Railroad & Runaway Racers. The Rides are reliving their content.

6. Immersion is Persuasion

You are in an environment that immerses you in the Disney, Pixar, Marvel and Starwars world. It’s easy to get caught up in the moment and make purchases. My favorite immersions were in Radiator Springs & The starwars world where I bought a special edition Coca-Cola. It was a lot of fun to meet Lightning McQueen in Radiator Springs.

7. The Power of Branding

Disney IP is front and center, be it on a ride, the name of a street or even a bakery item. I loved the Mickey Pretzels and cookies 🙂

8. Creating a Spectacle

No one does this better than Disney. That is some cool projection technology, projecting their content on their castle & waterworks. Their Parades are legendary too. A spectacle creates a feel good effect which gives people happy memories associated with Disney IP. This also serves as a reminder to check out content on Disney+ once you are out of the park.

9. Here is Walt Disney’s strategy chart from 1957 and it still rings true.(source). What a delight to see it in action.

I hope you find this educational and are amazed by the corporate machine which Walt Disney Created. Thanks for reading.