Bob Iger and the Publishing Industry?

I read with interest the announcement earlier this week that Condé Nast, Hearst, Meredith, News Corporation and Time Inc. jointly announced an independent venture to develop open standards for a new digital storefront and related technology that will allow consumers to enjoy their favorite media content on portable digital devices.  That story made me think almost immediately of the ideas of consumer consumption habits of media that Bob Iger has been talking about lately, the most recent being the discussion of the technology called ‘keychest’.

What made me think of Disney?  Probably the quote statement in the press release:

“For the consumer, this digital initiative will provide access to an extraordinary selection of engaging content products, all customized for easy download on the device of their choice, including smartphones, e-readers and laptops,” explained John Squires, the venture’s interim managing director. “Once purchased, this content will be ‘unlocked’ for consumers to enjoy anywhere, anytime, on any platform.”

And here is how The Financial Times described Keychest:

Next month Disney plans to unveil Keychest, a new technology that will allow digital copies of films to be stored remotely and then viewed and moved across platforms, such as smartphones, or games consoles such as Microsoft's Xbox.

I’m not suggesting that they are in collusion in any way of course, just that in many ways two very different forms of media (print and movie entertainment) are converging to a very similar set of realizations it seems.

In the print case people are increasingly turning to digital media vice that traditional printed versions and socking it too newspaper and print magazines left and right.  In the movie case people are ‘waiting for it on video’ and then in many cases are weary to forklift upgrade video collections from ‘good enough’ DVD to hi-rez formats like Blu-Ray (after all, how many portable devices can output Blu-Ray quality pics?  Certainly nothing that the fruit company makes, among many many others). 

It’s the whole CD to MP3 collection fatigue all over again.  I switched to AAC because it had better quality than MP3 for the same file size, but even after over half of a decade of Apple dominance, the number of portable playback devices that work with AAC despite very competitive licensing rates can be counted on your fingers.  I’m stuck, and it stinks.

And people, as Bob Iger has noted, think it stinks when they have to pay to watch a movie they bought on every device they own that’s different.  And so you know what they do?  Nothing.  They buy the DVD, and they do nothing frankly beyond that in general.  Us tech savy guys can buy software to rip it and remove the copy protection for a variety of devices (legally I might add), but my Dad nor my in-laws are interested in the least. 

So it will be interesting to see if anybody else in the movie industry signs on to a deal like the publishing guys just did.  It probably won’t be Keychest (I view that as more of a downpayment on Bob’s ideas that a technology they truly believe will be the standard at this point). but change is coming…

Lengthy Interview with Roy E. Disney

Didier Ghez pointed over at his Disney History blog today to a very lengthy (and high quality) interview with Roy E. Disney, son of Roy O. and nephew of Walt.  The link from his blog takes you to the Archive of American Television, which has a very nice layout with background information, a 6 part taped interview along with notes and an outline. 

The actual videos themselves are on YouTube in HD and all 6 parts run about 3 hours and 45 minutes.  The AAT website says, ‘The interview was conducted by Jennifer Howard on November 5, 2007’.

I recommend you check out the AAT website, but here are the videos if you want to watch them back to back without a lot of fuss.  :)

Sorry for the right edge bleedover, but I didn’t want to mess with the aspect ratio.  You can actually see these on the YouTube website in HD directly.

Mickey in Florida still lagging on booking window?

Of course it’s no surprise that Disney’s theme park’s continue to under-perform due to the economy.  What I didn’t expect was that they’d be sending out incentives for what is normally their busiest week of the year:  Christmas to New Years.

Back in the 80’s when it was just the Magic Kingdom and EPCOT, that week was dead.  We used to go all of the time and the parks were pretty quiet.  As long as you were out by the 31st, which was when central Florida college bowls games kicked in, you were golden.  Now it’s the busiest time of the year; garnering holiday room rates, higher meal prices via surcharges, and a variety of extra money making deals for Mickey and crew.  

But it looks like that won’t be the case this year.  Mickey is sending out offers this late 30% off at select Deluxe hotels.   I’m sure that the value and moderates are probably packed to the gills however.  I’ve seen quiet a few offers this year for the Deluxe resorts, which isn’t a large surprise.  It does make me wonder how all of the other luxury offerings that are doing up around WDW are doing? 

The other downside of course is that people who spend $300+ a night for a hotel tend to spend MORE money both in the hotel and in the parks, whereas people in moderates and values probably tend to spend less.  That’s not looking good for increasing those ‘per cap’ park and room spending numbers that were off 10% and 7% respectively.  

Regardless of room occupancy and deals, given our experience at the last holiday week we went we won’t be going back this year for it either.

Here is the offer I got in my inbox earlier this week:

Last-Minute Magic!

Get 30% off Disney Deluxe Resorts for stays most nights Dec. 25, 2009 through Jan. 2, 2010.

Imagine spending one of the most festive weeks of the year in grand style at a Disney Deluxe Resort—at 30% off! Make this holiday season your family's most magical ever. Call now, the number of rooms available at this special rate is limited.

Minimum length-of-stay requirements may apply for Friday or Saturday arrivals. Savings based on non-discounted price for the same room. Additional per-adult charges apply if more than two adults per room. No group rates or other discounts apply. Offer is nontransferable. Call 407 939-5696 or your Travel Agent today! Be sure to mention your PIN: XXXXX XXXXX XXXX Ask about other Disney Resort categories that may be available when you call!

End of Year Telcon for Disney

Sorry it’s been a bit since I posted anything.  No, I’m not dead.  LoL.  Just been very busy (and a little TOO addicted lately to this).

So here is the blow by blow of this quarter’s conference call.

Of course, the lead off story was about the early morning announcement of the unusual swap of Tom Staggs and Jay Rasulo.  (Ed: It’s also possibly a shrewd move on Bob Iger’s part to keep two high profile executives inside the Disney fold, since with the slowly improving economy either would be natural targets to lure away.  It also gives both of them a chance to broaden their base for a CEO shot sometime in the future).

Bob Iger opening comments:

• Chinese last week gave permission for park in Shanghai.  Looking forward to building a ‘world class resort’ experience.
• Working toward closing of Marvel deal. 
• Studio had a BAD year due to performance of live action slate (Ed: 5 quarters of losses, which is probably the main reason why they let Dick Cook go).  Also see challenges to overall motion picture model.  Expect a tighter focus on costs of production, marketing and distribution.  Expect more challenges from Disney to the status quo as the distribution mediums for content expand.
• See Disney, PIXAR and Marvel now as covering a wider array of family entertainment.
• Will continue to invest in franchise properties in each of these studios such as Princess and The Frog, Cars 2, and Pirates 4. 
• Parks and Resorts continues to expand at DCA, HK Disneyland, Cruise Line, etc.
• ABC off to a good start with the fall lineup.
• ABC Family continues to grow and gain viewership.
• Disney Channel at all time high in ratings, and XD channel has been very successful in US.  Overseas expansion also continues to drive Disney Channel subscriptions.
• ESPN, in its 30th year, posted its largest ever audience numbers in the 4th quarter.

Tom Staggs financial highlights:

• ESPN operating income up, much of it because of an extra week in the quarter and a 1 time recognition of additional deferred revenue. 
• ESPN add sales were flat, but because of the extra week were likely down about 3%.
• Broadcasting improved on higher sale of shows, but relied on the extra week to overcome weaker ratings demands.
• Q4 add revenue, excluding extra week, at affiliates was off about 15% but seems to be firming.
• Q1 upfront pricing for advertising is running higher and Q2 option pickups are the highest in 10 years.
• Studio had another bad quarter forcing movie right downs as well as some losses in the music side.
• 2010 studio slate is full however.
• Consumer Products had a 20% decline in licensing due to the lag in how long it takes a downturn in the economy to ripple through the production of licensed products.
• Parks and Resorts domestic attendance were up 10% due to extra week and solid response to promotional offers.
• Combined attendance without the extra week was up about 3% with a 15% increase at DL offsetting a 3% decline at WDW.
• WDW occupancy for the quarter was 84%, 5% under the prior year, Disneyland was also at 84% occupancy (4% lower).
• Per cap spending at parks off 10% and per room spending was off 7%.
• Q1 bookings are running about 5% behind last year.
• New offers have increased the booking rate in recent weeks.
• Pension and health care expenses will increase dramatically this year. 
• Strong cash flow and tight control on cash expenses have allowed the company to weather the year.
• First priority for new spending is on increasing the slate of available opportunities that have attractive returns.
• This includes investment in programming, movies, and video games.
• Purchased only a modest number of shares in Q4, expecting to increase that throughout the year as they believe the current stock price is still at an attractive price.

Question highlights:

• No further information is forthcoming in the short term from Disney or the Chinese on the Shanghai park until the deal is formally done.
• Bob sees the largest opportunity for revenue growth in FY’10 in advertising.  Continue to perform for the next year as if the economy will not improve.
• Tom also mentioned that almost everybody in company got no salary increase in FY’09.
• Current discount is a slightly less costly (and therefore slightly less advantageous) than the previous offers this year.
• Bob sees the ‘Keychest’ initiative as a consumer focused technology that will allow the consumer to essentially ‘buy once, consume in many places without having to repay’.  Of course, expect that ‘keychest’ enabled content will be able to garner a higher price than a use on only one device type of purchase.
• On the Dreamworks distribution deal, probably will be very little impact in 2010.  Possibly one film in 2010, but probably more likely in 2011.

The question session was longer than this of course, but not a lot of other unique discussion there.

Affiliated Computer Services to be bought by Xerox

You many wonder what in the heck that title has to do with Disney and a blog named ‘All Things Disney’…  but then again, if you’ve found my little blog on the internet then you are, my friend, not your NORMAL Disneyana fan.  No?!

And given that premise you’d know then that I wouldn’t suggest something unless it was related, and of course you’d be correct…

Far strung throughout the Disney empire is a highly technical shop.  They make all kinds of things happen that bring people together, work tirelessly behind the scenes to make sure things are running smoothly and that everybody has a good time (or is being productive).  Who might that be you say?  Imagineering?  Parks and Resorts folks?  Neh, I say…  it’s really none other than Disney IT!

See not all that long ago, or so the story I’ve been told goes, Disney let each of the BU’s (that’s business units in management speak) run their own IT operations.  Each BU was like it’s own little ‘kingdom’ shall we say, to abuse a metaphor given the subject. 

But for a company the size of Disney that’s not always the most efficient or effective way to manage your resources.  So they began to coordinate the IT centers inside each of the BU’s.  Michael Eisner also named Michael Tasooji the first Disney CIO in 2000.  Michael stayed on until leaving Disney in 2003 for The Gap Inc., and just recently left there according to LinkedIn to start his own company Digital Innovation Technology.

Frankly it’s not exactly clear what happened next from the outside, but given the turmoil in the company at the time, it’s probably safe to assume that the official CIO job went empty until Disney hired Tony Scott from GM (yes, THAT GM) in early 2005. 

A lot of stuff was made out of Tony’s GM days, but the REAL answer was in his previous years at the drug maker Bristol-Meyers Squibb.  A speaking profile says this is where he ‘led the transformation of their technology infrastructure organization to a shared services model and the development of a corporate infrastructure to support implementation of SAP and web-based technologies.’ 

And that’s where ACS comes in.  Yep, you knew we’d get there eventually no? 

In June of 2005 Disney announced that they were outsourcing almost all of their IT services.  And guess you’ve figured out by now who won?  ACS of course.  At the time the contract was for 7 years and approx. $610 million. 

Tony (and probably some others as well) also brought with them from those drug industry days a passion for IT services management.  Today the most widely known standard here is the Information Technology Infrastructure Library (or ITIL) which was published in 2006 under v2 and more recently in v3.  Which of course is how Disney now operates most of their outsourced IT services as well (ITIL that is), including the contract under which ACS operates. 

Disney also has other outsourced IT services contracts covering other parts of their infrastructure requirements.  Where ACS does the ‘services’ side of the offering for instance, HP does all the print services.  Cell phone, land lines, etc. etc. etc… all come under the umbrella at some point of Disney IT.

Tony left Disney in 2008 to go work for Bill as his CIO.  And in May of 2008 Bob Iger and crew appointed Susan O’Day, the current CIO of Disney to her current position.  It’s probably little wonder by the way, that Susan also came from the drug industry, where she also spent 12 years at a little drug company named:  Bristol-Meyers Squibb. 

So there is how today’s $5.7 billion offer for Dallas based ACS by the Norwalk, CT based Xerox affects the world of ‘all things Disney’.

Disney Cruise Line goes on media blitz!

Starting on September 11, 2009, Disney seems to have quietly updated their cruise line loyalty program that goes by the name of Castaway Club. 

On that day they program split into 3 tiers:  silver, gold and platinum.  I’m surprised that they didn’t talk about this at the D23 presentation I went to last week, but here are the facts about the tiers:

	Silver Castaway Begins after your 1st completed cruise.	Gold Castaway Begins after your 5th completed cruise.	Platinum Castaway Begins after your 10th completed cruise.
Castaway Club Benefits at a Glance
AT-HOME BENEFITS
Insider Exclusives Just for members—Webcasts, info, tips and news.	•	•	•
Early Access to Online Activity Planning Advance booking for onboard amenities and shore excursions.	90 days prior to sailing	105 days prior to sailing	120 days prior to sailing
Dedicated Phone Number (800) 449-3380—your direct line for info and assistance.	•	•	•
Early Booking Opportunities Be among the first to book our newest itineraries and ships 7 days before the general public.		•	•
ONBOARD BENEFITS
Exclusive Cruise Terminal Check-In Sail through the boarding process in a separate, members-only line.	•	•	•
Welcome Back Stateroom Gift* Be welcomed back with a gift unique to your membership level.	•	•	•
Special Onboard Booking Offer While on board, enjoy special savings on future cruises.	•	•	•
Castaway Club Onboard Reception Meet and mingle with the ship's officers at a private party on voyages 4-nights and longer.		•	•
Special Merchandise Offering Take advantage of special onboard shopping opportunities.		•	•
Priority Check-In at Cruise Terminal Enjoy concierge priority boarding check-in at the cruise terminal.			•
Exclusive Platinum Experiences** Unforgettable Disney fun created just for Platinum members.			•
Complimentary Dinner at Palo*** Savor an elegant dinner at Palo, on us.			•

• * One gift per stateroom based on highest level Castaway Club member in stateroom.
• ** Exclusive Platinum experiences are subject to change without notice.
• *** Offer includes dining service fee ($15) for one dinner. Available to Platinum Castaway member and Guests staying in member's stateroom. Must be 18 years of age or older.

Additionally there will be a live broadcast online from New York City on October 29, at 4:15 PM with more details about the new Disney Dream ship currently under construction at Meyer Werft in Papenburg, Germany.  Appears that it will be broadcast through the Disney Cruise website.

And lastly, Disney will unveil a new 6 story tall Sailor Mickey balloon at this years Macy’s Thanksgiving Day parade. 

I’ll try to have some more D23 stuff up soon!

Disney Cruise Line announcements at D23

We were on hand to see the Disney Cruise Line presentation on Friday morning.  Of course the big announcement was that when the Disney Wonder moves permanently to the west coast in 2011, that DCL WILL be making cruises to Alaska despite previous rumor to the contrary. 

                      

They just won’t be making any of them to Glacier Bay.  Instead the Wonder will leave from the port of Vancouver, BC and sail the waters of the southern Alaskan including Juneau, Ketchikan and Skagway.  The full press release in case you missed it is here.

The interesting thing about the press release is that is has MORE data than was actually given in the presentation!  The Wonder is going into drydock in October for an undisclosed period, but the press release DOES mention that they will be adding a new dining option on Deck 10 called Outlook Café, which will connect to the Cove Café immediately below, which is the coffee/cigar/whiskey bar in the adults only area.  No pictures were given, but I take this to mean that they’ll be adding a new glassed in area on the upper deck (Deck 10) that will either take the place of the teen hang out in ‘the stack’ or wrap around the stack in some fashion to provide the vista views promised.

Only two real disappointments in this presentation I thought.

The first was that we waited in line almost an hour for what was support to be a 60 minute discussion.  We thought we’d get a few announcements and maybe some discussion about the cruise line, the new ships, how the cruise line business works, etc. etc.  What we got instead was a 30 minute very nicely put together marketing blitz that while intimate in size (only 198 people were let in the room that the day before had held over twice that many for the Imagineering discussion), wasn’t so intimate in presentation. 

The second was that almost NOTHING was said about what was going to be going on with the new Disney Dream.  It’s suppose to report on duty in 2011 so that the Wonder can leave for the west coast and presumably so that the Magic can leave again for Europe.  The only announcement really was what the statue would be (that of Admiral Donald).

Not much else to share with you on that front, though they did have a model in the Imagineering area.  Here are a couple of shots showing the front and back of the new ship (they didn’t stitch together very well of the overall length). 

So we’ll have to wait until later to hear more…

All pictures in this post are copyright The Walt Disney Company.