Disney's theme parks showed a 7 percent increase in revenue during the quarter, helped by higher guest spending. But operating profit at the unit fell 4 percent due to higher labor costs at Walt Disney World and increased fuel costs at the Disney Cruise Line.
CEO Bob Iger tells us, “At our theme parks our attendance has been relatively fine. We’re down about 1% year over year. And our bookings for the Holidays are down only 1%.. But if you look at our long term bookings they’re off appreciably from a year ago.”
However they company is implementing new marketing strategies to attract more visitors and Iger tells us, “We’re offering consumers a value proposition. Buy 4 days of theme park tickets and and get 3 free.” It's a similar initiative to what Disney did in late 2001 which Iger says was "very successful."
“We’re seeing softness across numerous sectors notably automotive manufacturing and that hurts us at the network, at ESPN and at our TV stations,” Iger tells us.
He feels the only advertising strategy in a marketplace as weak as this is to put out a great product and then the viewers will come. Once they do, advertisers will follow.
And when we asked Iger how long he thought the downturn might be he told us, “I have no prediction about how long the downturn will be. But the downturn seemed faster to me than any falloff in advertising that I remember."
"It happened first at the local stations and then at cable and then network. In the last 4 weeks we saw a significant change in the marketplace and I don’t ever remember that happening before so quickly.”
But like many Disney movies, Iger is counting on a happy ending. He tells us if any company can weather a storm it's Disney. And he's very excited about the prospects of their next film, "Bolt".
Clearly Iger is a strong believe in the power of the Disney brand. And maybe there really is some magic going on in Cinderella's Castle.