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Ten Wishes for the New Year: #3

Those of you who are new to Progress City – and there are many! – can catch up with previous entries in this series here.

#3 – Overhaul Resort Transportation

Walt Disney World Monorail and BusGuess which one transfixed me as a child with its awesomeness? Go ahead, guess.

Criticism – even loving, constructive criticism like the kind your friends craft here at Progress City – can be a difficult thing to pull off. One always wants to cover their flank, and hope that there’s no gaping hole in your logic to render your argument easily dismissible. The hardest counter-argument to overcome, and one that comes up most frequently in (loving, constructive) criticism of Disney is the “if it ain’t broke” school of thought. If attendance at the Magic Kingdom is sky-high, why fork out the millions for a new E-ticket? If the kids are lining up for the zoom-zoom at Test Track, why try to aim any higher conceptually?

Thus the critic can relax a bit when the subject matter presents a nice, slow, sloppy pitch right across the center of the plate. When “if it ain’t broke, don’t fix it” doesn’t apply. For Walt Disney World, one of those areas is resort transportation. Long neglected by management, it most definitely is broken. The only solution, if I may venture a suggestion, is to fix it!

Transportation has always been a key element of Disney’s themed attractions; in fact, the entire idea of a Disney-designed park sprang from Walt wanting a place to showcase his scale-model trains. Walt’s locomotive collaborations with animators Ward Kimball and Ollie Johnston led at first to his backyard layout, the Carolwood Pacific, but soon Walt wanted to share his trains with the public. From Walt’s first idea for a “Mickey Mouse Park” in Burbank to the opening of Disneyland in 1955, the only constant in Walt’s vision was the presence of a train.

Each of the Magic Kingdoms built since has had a train route, but Walt didn’t stop there. He debuted the first daily-service monorail route in the Western Hemisphere in 1959 with Disneyland’s ALWEG monorail, and introduced a new concept for intra-city transport in 1967 with the creation of the WEDway Peoplemover. All this was a mere prelude to Walt’s plans for Florida, which would use all the technology that WED Enterprises had pioneered in Disneyland’s themed attractions to build a city of the future.

The EPCOT transportation hub (small)The city of EPCOT’s underground transportation hub

EPCOT – the city – was designed specifically to embrace new concepts in inter and intra-city transportation. Of all the possible changes in the social or technological forces that shape new cities, Walt elected to put a special emphasis on the innovative transportation infrastructure that would determine the layout and structure of EPCOT. EPCOT would be defined by its transportation systems, all designed to mitigate the unfortunate effects that a postwar boom in car ownership had inflicted on the highways and city streets of America. Seeing the blight that traffic had brought to the Southern California freeways, Walt had pushed for a Los Angeles to build its own monorail system. Sadly, the plan was rebuffed by city officials. The Florida project was instigated to give Walt the creative freedom that he could never have in California; no longer handcuffed by short-sighted bureaucrats thanks to the creation of the Reedy Creek Improvement District, Walt could do as he pleased. He could test these new systems in a real-world setting and thus prove their utility to outside skeptics.

The dreams of EPCOT city essentially died along with Walt in 1966, but many of the underlying tenets and philosophies of its design were retained during the creation of Walt Disney World’s Phase One. Key to this was the reliance on mass-transportation and the elimination of auto traffic for transportation within the resort itself. Hubs of activity within the resort would be connected by transportation that would be as entertaining as it was efficient; “getting there” would, for once, actually prove to be half the fun. Most importantly, though, was the idea that guests would no longer have to use their cars after they arrived at the resort. In fact, management originally asked that none of the resort hotels be designed with parking lots; all guests would leave their cars at a central transportation area and reach their hotels via internal transportation. This plan was scuttled due to the obvious objections by hotel managers, but it was clear that cars still weren’t part of the plan for Walt Disney World.

The Osceola-class ship Ports-O-Call (small)An attraction in its own right – the Osceola-class steamships. PS: BRING BACK THE OSCEOLA-CLASS STEAMSHIPS!

In its early years, Walt Disney World was promoted as much more than a collection of theme parks. It was presented as a fully-integrated resort experience, and key to that image was its internal transportation. Much of the space in those original guidebooks or promotional materials was devoted to the fleet of monorails, watercraft, ferries or trains that kept guests moving within the resort. Again, the transportation was presented as not a utility but an attraction unto itself. And who can argue with that? Sleek monorails gliding through the Contemporary’s lobby, sunset launches on the Seven Seas Lagoon, or Fort Wilderness’s steam trains – these were amenities few other vacation destinations could match.

All this came to an end with Michael Eisner’s arrival at Disney. The Walt Disney World resort began an unprecedented period of expansion and growth under Eisner’s leadership, but the transportation infrastructure did not grow accordingly. Buses became the default transportation option for the new resort hotels that were springing up nearly every year, and the monorail line was not extended to the new theme and water parks. A bus depot was added to the Magic Kingdom, bypassing the TTC altogether and removing the element of theatrical reveal provided by the trip across the Seven Seas Lagoon. This was necessitated by the thousands of guests pouring in from the new hotels, with buses as their only means of transportation within the resort.

That is where the situation still stands today. Dozens upon dozens of buses queue up outside the parks, belching diesel exhaust into the air and crowding the roads of the resort. They’re loud and overcrowded; no matter how many times Disney redesigns the buses to allow for more guests to be crammed in each individual vehicle, guests at peak ridership times wind up packed in like sardines. There’s nothing like walking all day in the parks, then standing during a long ride back to your resort while stuffed in with dozens of other sweaty guests while several babies scream all around you. That’s Disney magic ™ at work.

What’s ultimately the most frustrating is not the current situation in and of itself, but that it could have been avoided had any of the many alternative plans developed over the past several decades been enacted. Disney knows that there’s a problem, and has actually created elaborate plans to mitigate the situation, but whenever it comes down to a decision they opt to buy more buses instead. Many times these plans have been stymied by a lack of vision or sheer avarice, while others have been made impractical at key moments by world events.

Lake Buena Vista area with monorail and WEDway routeThe current Downtown Disney area, with the once planned monorail route (blue) and WEDway route (green)

While Walt Disney World was a meticulously planned resort upon its opening in 1971, many of the developments built subsequently were not as well linked into the transportation system. This was not for a lack of planning, however. Materials discussing the development of the Lake Buena Vista Marketplace and Villas during the 1970s always focused on the automobile-free nature of their design. Internal paths through the Villa communities were intended for bicycles, pedestrians, electric carts and even horses – but not cars. By the late 1970s there was a plan to connect the Village to the monorail line, and to provide a convenient WEDway loop through the area that would eventually become Downtown Disney and the Hotel Plaza.

During Eisner’s reign, plans were drawn up but not executed to connect the Disney-MGM Studios to a monorail spur from EPCOT. This line would also connect the EPCOT resort area to the monorail line, an amenity befitting their supposed status as “deluxe” resorts. Even as late as the year 2000, our very own Beacon Joe sat in on a cast member presentation by the then-Senior Vice President of Operations, Lee Cockerell, in which Cockerell outlined a sweeping new program to upgrade the resort’s transportation infrastructure. The plan incorporated light rail and possibly more monorails, and would have had the goal of phasing out bus use across the resort. Following the tourism downturn of 2001, however, these plans were abandoned and Disney began once more to buy more buses.

Proposed monorail spur from EPCOT to the Disney-MGM Studios (small)The proposed monorail route from EPCOT to the Disney-MGM Studios, passing by the Yacht & Beach and Swan & Dolphin resorts (Martin Smith)

One could argue against the bus-centric plan on the old-fashioned grounds of “guest experience” or “immersive theming.” But the fact of the matter is that the system has become so overloaded, unwieldy and downright unpleasant that it demands a solution. Disney could once make an argument for their steep room rates on the grounds of convenience; you would be right on property, after all, and could easily access the parks and resort via Disney’s free transportation. But in recent years it’s become such a headache to use Disney transportation that guests would often reach their destinations more quickly if they stayed off property and drove in themselves. Their off-property room would be a fraction of the price of Disney’s lodging, and one wouldn’t have to deal with the hassle of those packed-in bus rides.

To give Disney some credit, a few improvements have been made in the last couple of years or so. The introduction of GPS technology and centralized tracking software has made the system somewhat more efficient. Five or six years ago, I thought that if I had one more bus driver take me on a ridiculously circuitous route across property to reach a nearby destination, I’d never stay in a Disney hotel again. Another improvement, although purely cosmetic, is the addition of the site-specific soundtracks on the buses. I actually find that incredibly cool, and hope that whoever thought that one up got a bonus.

Despite these improvements, though, the fact remains that the system is broken. Waits are often far too long, and buses are often far too crowded. Again, the transportation system used to be a selling point for Walt Disney World. Now it’s something you have to overlook and deal with if you want to experience the “magic.”

Lake Buena Vista WEDway conceptWouldn’t you rather take the WEDway?

Let me make up a scenario off the top of my head. Let’s say that a guest is staying at Coronado Springs, and they want to go to EPCOT in the morning, do some shopping at the Village for lunch, go back to their hotel to change and wind up at the California Grill for dinner. First, they take a bus to EPCOT – that’s easy, unless there’s a long wait or the bus is crammed in with strollers and ECVs. EPCOT to the Village is a difficult one, since Disney doesn’t run buses from the parks to the Village to stick it to those tiny fraction of guests who would park at the Village to avoid parking fees. So instead guests are either forced to walk through EPCOT to the International Gateway, to take a Downtown Disney bus from Boardwalk or the Yacht Club, or to take a monorail to the TTC and catch a bus there. This trip, being wildly optimistic, would take at least an hour. Downtown Disney to Coronado Springs requires a single bus trip, although you might have to stop at Marketplace, Pleasure Island and Typhoon Lagoon along the way. That eats up quite a bit of your time as well. To get to the California Grill from your hotel, you’d either have to catch a bus to the Magic Kingdom and walk to the Contemporary, or take a bus to the Village and then take another bus to the Contemporary. This route would include all of the internal stops in Coronado Springs, and the Contemporary bus may stop at the TTC or other resorts – I’m not sure on that one. Heaven help you if you want to do something afterwards; a minigolf whim would require a trip from the Contemporary to a theme park or the Village, then a bus to the Swan hotel, then a walk to Fantasia Gardens. When all is said and done, you have to hope that transportation is still operating to get you back to a theme park or the Village to take you to the connecting bus back to Coronado Springs. Don’ t you wish you had your car?

Basically, unless you’re just going from your hotel to a theme park and back, internal transportation is a headache. Fixing the system would require a massive investment, tackling many separate goals simultaneously. It would require an entirely different plan for the resort’s infrastructure, and it’s needed immediately. They won’t do it, but they should.

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Oh, Eisner – 1985 Edition

Michael Eisner and Frank Wells, 1985 (small)

When last we met, a fresh-faced and ambitious young Michael Eisner and his laconic sidekick Frank Wells had rocketed to stardom, taking control of Walt Disney Productions after the ouster of its previous management. 1985 would mark the duo’s first full year in control of the company – how would it go? Would the handover go smoothly? Would the company stay together, and would development continue at the theme parks and in feature animation? And how many films could Bette Midler make in a single year? Let’s find out…

To Our Owners and Fellow Disney Employees,

What a year it’s been! Enormous vitality and enthusiasm at every level of management together with solid accomplishments at the operating level have marked our first year as the senior managers of your company.

Only as we reflect on our first anniversary do we see in clear perspective how fortunate we were in three principal respects:

* The enormous potential of Disney assets developed under the stewardship of prior managements;

* The remarkable capabilities of the managers of the operating units; and

* How vitally important the renowned Disney culture is to the success of the Company.

All of these superb values contributed to the most gratifying accomplishment: the achievement of the highest revenues and net income in Disney’s history.

Revenues surpassed $2 billion for the first time, a 22 percent increase from a year ago, while net income increased 77 percent, earnings per share 89 percent and return on equity increased to nearly 15 percent.

For the fiscal year ended September 30, 1985, revenues climbed to $2 billion from $1.7 billion a year ago. Net income rose to $173 million or $5.15 per share, compared to $98 million, or $2.73 per share a year earlier.

To provide perspective on the company’s pace of growth, Disney first passed $100 million in revenues in 1965, $500 million in 1975, $1 billion in 1981 and $2 billion in 1985.

After our first full year, we are pleased to report that the strategies we set forth for Disney’s long-term growth are rapidly taking shape.

Our overall goals of accelerating Disney further into the mainstream of entertainment and creating greater financial balance between operating units have required a commitment to creativity and innovation, with fresh visions based on historical Disney traditions.

Since each of our major business segments will be discussed subsequently in some detail, we will simply highlight certain steps taken during 1985 toward implementing priorities.

The steps taken include:

* Bringing into the company an exceptionally creative and high-quality staff in motion picture and television production.

* Reducing motion picture risks for stockholders through Silver Screen Partners II, a public offering.

* Re-entering pay cable television distribution and entering for the first time the television syndication business.

* Re-establishing Disney as a major force in network television through creation of a diverse range of programming sold to all three networks.

* Boosting appeal and entertainment value of theme parks through successful, innovating marketing efforts.

* Developing unique and exciting attractions for the theme parks with the best creative talents in the industry.

* Expanding the objectives and potential earnings of the consumer products division.

* Successfully integrating Arvida’s and Disney’s community development resources.

* Assuring the continued success of The Disney Channel with enhanced management vitality.

It became quickly apparent to us that Disney is a complex and sophisticated company. Its success is dependent not on the strength of any one particular business unit, but on the interaction and support of diverse business units on one another.

The key to returning Disney into the entertainment mainstream and providing the initial link in the creative chain reaction among business units is our motion picture and television activity.

Among the corporation’s greatest accomplishments this past year was to attract a remarkable number of the industry’s premier executive talents, starting with Jeffrey Katzenberg, chairman of Motion Pictures and Television, and Rich Frank, its president. They, in turn, have installed a creative, high-quality staff and laid the groundwork critical to revitalization of motion pictures, positioning Disney as a long-term major force in the industry.

During the year, Disney entered into an agreement with Silver Screen Partners II, a public limited partnership, which was seeking to raise $100 million in a public offering for the financing of Disney film production costs. Due to extraordinary public interest, the offering was subsequently re-registered and expanded. When the offering closed, it had raised gross proceeds of $193 million from over 28,000 investors, becoming the largest film limited partnership ever assembled.

To maximize the value of our growing film and television library, pay television and domestic syndication departments were created and staffed during the year. Both achieved early results with the sale of seven pictures to pay cable services and major, headline-noted offerings to independent television stations.

In animation, we are moving quickly under Vice Chairman Roy E. Disney’s leadership to become the state-of-the-art leader in computer-assisted production. Our staff is delving into advanced technologies that will speed up the production cycle to 18 months from the current four to five years required for a feature-length picture, without impinging on the creativity of our animation artists or the quality of their work.

While it will take at least two more years for Disney to emerge with a major studio-size release schedule, we have been fortunate in making great strides toward returning Disney to network prominence in just 12 months.

Our television presence currently includes:

* A return of the Disney anthology series on February 2, 1986, with original one- and two-hour movies in a show called “The Disney Sunday Movie.”

* A prime-time situation comedy called “The Golden Girls,” hailed as the freshest, funniest hit of the season.

* Two regular animated series on Saturday morning children’s television: “The Adventures of the Gummi Bears” on NBC and “The Wuzzles” on CBS.

* A major commitment with NBC for a variety of prime-time specials, featuring new theme park attractions, original animated shows and musical variety programming from our parks.

The Disney Channel, now available in over 2,500 cable systems, ended the fiscal year with 2.3 million subscribers and anticipated growth to 2.5 million by year-end. During the year the number of subscribers increased 930,000, leading the cable industry in growth for the second consecutive year. The Channel turned profitable early in the fiscal second quarter, ahead of projections.

Walt Disney Home Video increased its market share while revenues passed $100 million for the first time, continuing the sustained success it has had since the start of operations five years ago. In the past Christmas season, the company shipped a record one million cassettes, including 21 titles, in the single most successful promotion to date for the company.

In a milestone year, our theme parks demonstrated their resilience with exceptionally strong financial performance. Disneyland greeted its 250 millionth guest during an event-filled, year-long celebration of its 30th anniversary and Walt Disney World passed the 200 million mark. The appeal and entertainment value of both parks benefited from aggressive, creative marketing programs while profitability improved through new operational efficiencies.

Walt Disney World conducted its first major television promotional campaign in more than 50 U.S. markets with excellent results. Promotional tours of Disney characters and entertainers in more than 120 cities reinforced media campaigns.

Disneyland’s 30th year festivities received sustained national television coverage and was beamed by satellite around the world. NBC aired, and repeated, a two-hour entertainment special

To ensure the continuing popularity of Disney theme parks, unique and exciting attractions are planned for 1986 and beyond.

The Living Seas pavilion, opening early in 1986, will be a spectacular addition to Epcot Center. Presented by United Technologies, it will offer exciting travel through an undersea corridor in the largest facility ever dedicated to man’s relationship with the underwater world.

George Lucas, Francis Ford Coppola, and superstar Michael Jackson, in collaboration with Disney’s own legendary WED Imagineers, have created a unique three-dimensional narrative film presentation that will be shown exclusively at the Journey into Imagination pavilion at Epcot Center and a newly-built theater at Disneyland. “Captain EO,” a musical space fantasy, with original songs written, produced and sung by Michael Jackson, will be presented by Kodak. It will premiere in the spring, supported by a network television special.

George Lucas is also working with Disney’s Imagineers on an innovative ride for Disneyland that will involved a journey to the world of “Star Wars,” employing the most advanced simulator technologies. It will open in the fall.

In addition, we announced plans to open the Disney-MGM Studio Tour as a third-gated attraction at Walt Disney World. It will provide an entertaining history of film in association with MGM. It will also include other rides, attractions, merchandising and restaurants.

Most importantly, there will also be a working film studio and animation facilities. Working film and television facilities will accommodate the dual purpose of giving the tour credibility while we meet the production needs of our greatly increased film schedule.

Our consumer products division continued to expand its role and earnings potential by taking the lead in developing new Disney characters, with its involvement in the creation of products tied to our Saturday morning television shows and through its licensing of characters for high-fashion sportswear lines for the whole family.

Mickey Mouse fashions, which began as a trend two years ago in Europe, has become a U.S. merchandising phenomenon.

The acquisition of Arvida Corporation in June 1984 continues to prove to have been a farsighted investment that will pay for itself in a relatively short period of time.

Now called Arvida Disney Corporation, we have successfully integrated Arvida’s excellent community development resources with Disney’s expertise with the result that exceptional planning and management skills are being concentrated on all Disney properties, with particular focus on Walt Disney World and Euro-Disneyland.

As we announced at our last annual meeting, the decision on the site of a Euro-Disneyland has been narrowed to France or Spain. The decision, which will be made soon, will be a difficult one because of the opportunities both countries present.

Because of our growing international interests, Disney became the 12th U.S. company to list its common stock on the Tokyo Stock Exchange. Tokyo Disneyland has become an integral part of the city’s landscape, surpassing 25 million admissions since its start in April 1983.

The depth of financial management of this company was considerably strengthened with the appointment of Gary L. Wilson as the company’s Executive Vice President and Chief Financial Officer. He comes to us from the Marriott Corporation. Under Gary’s stewardship, we are certain his strategic vision will guide our long-term success.

We are also fortunate to have Joe Shapiro as Senior Vice President- General Counsel. He joins us from Donovan Leisure Newton & Irvine, where he became thoroughly familiar with Disney legal affairs.

After a full year in the company we continue to view our role as instilling a sense of direction, motivating constructive change within the framework of continuing traditions and infusing the organization with renewed vitality. That is our pledge.

While taking new directions, it is clear that the single most valuable asset of this company is the name “Disney.” It is critical that the public understands who we are and what the name stands for.

A corporate identity study, conducted over the past two years, indicates the name “Walt Disney Productions” primarily connotes involvement in motion pictures and television. Since 1938, when the company was incorporated, numerous divisions and subsidiaries have become dynamic Disney business entities. Many of these represent activities and products separate from filmed entertainment.

We anticipate our shareholders will adopt a proposal to rename the corporation The Walt Disney Company at the annual meeting.

We believe this change, which maintains the legacy of Walt Disney, will provide an excellent umbrella under which each of our business entities will have a well-defined Disney identity and purpose.

While we are pleased with the company’s progress in our first year, we consider it a beginning. The credit for that progress, in any case, should go to the 30,000 talented and dedicated men and women who make up the cast. We are grateful to them and to our more than 58,000 stockholders for their continued support in our efforts to improve that value of their investment.

Michael D. Eisner – Chairman and Chief Executive Officer

Frank G. Wells – President and Chief Operating Officer

 

So that’s 1985, Michael Eisner’s first full year at the helm of the soon-to-be-named Walt Disney Company. The tone is still fairly dry, though enthusiastic, and statistic-heavy; we’ve yet to reach the era of Eisner family hockey games and school plays. It’s easy to see his priorities even at this early stage; of his list of stated goals, the theme parks aren’t even mentioned until #5 – and that just talks about how they’re marketed. Only on the sixth bullet point are new attractions mentioned. Feature animation doesn’t even make the list.

This emphasis on marketing is heavy throughout; from some of the first conventional marketing campaigns for the parks, to using their new Saturday morning programs to create merchandising opportunities. Note that the development of these new characters was driven by the consumer products division; this began the corporate shift from the old Disney model of the Studio’s creations driving the merchandise to the company’s output being determined by the marketing executives. This was the model that had been exploited so successfully in the early 1980s by Hasbro and others, in which programming was specifically created to promote new product lines. I’m amused by the idea of using these characters in “high-fashion sportswear lines for the whole family.”

Eisner’s most obvious goal, however, is a massive increase in film and television production. It’s clear that live-action film takes priority in his mind over theme parks or animation; remember that he got his start in television, and later headed film production at Paramount. He wanted to be a big-time media mogul and key to this, in his mind, was bringing in outside talent to make Disney “mainstream.” The Disney studio had long been an insular institution that was resistant to new entertainment trends and talent. This had started to change in Ron Miller’s brief tenure as CEO, which resulted in the creation of Touchstone Pictures and The Disney Channel, but Eisner threw everything into high gear with a complete overhaul of studio personnel.

He also continued the process of using the “Silver Screen” limited partnerships to help fund Disney’s film slate. These partnerships essentially sold off ownership stakes in the films themselves in order to raise production capital. The first of these issues occurred in 1983, and there would be three more Silver Screen ventures to follow. They would help fund many live-action and animated releases throughout the late 1980s and early 1990s.

Some of the moves Eisner made during this period were sorely needed and it’s often surprising that previous management had neglected these opportunities in the past. The fact that Disney had never before entered the syndicated television market is astounding, as was their lack of a presence on Saturday morning children’s programming. Syndicating the studio’s massive back-catalogue, and expanding Disney’s presence on home video, was like printing free money. Unless Disney was planning on re-releasing Toby Tyler into theaters again (and I doubt they were), why not let someone pay to show it on local television on Saturday afternoons?

It’s interesting to see the immediate change in the theme parks under Eisner. In previous years, the parks had been the news in these annual reports, but in 1985 they almost seem an afterthought. Most of the Phase II plans for EPCOT had already been abandoned; The Living Seas marked the last of the original pavilion concepts to see the light of day, although “Life & Health” would morph into “Wonders of Life” and open in 1989.

With the abandonment of the old expansion plans, which had been written off in our previous report, we see the shape of things to come. The George Lucas team-up seems to have happened almost immediately, with Captain EO and Star Tours already well on their way to reality. It’s also remarkable how quickly development began on the Disney-MGM Studios, but it’s possible that this was an early priority of Eisner’s in order to compete with the Universal park that he knew was soon coming to Orlando. Eisner’s optimism about using the Florida studios to help with the expanded Disney production slate is charming and, we would eventually find, ill-founded. Previous management had been well on their way to an agreement for the “Euro-Disneyland” project, and the report mentions the impending decision on the resort’s site; the contest would soon be thrown by Eisner, basing his choice on nostalgic reminisces of childhood trips to Paris.

So, 1985. It was still a time of transition for Disney, but by 1986 Eisner’s team would be fully in place and at work on his new agenda. To be continued…

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Close To A Deal On Hong Kong?

John Tsang and Jay Rasulo (small)Hong Kong Finance Secretary John Tsang, left, and Walt Disney Parks & Resorts chairman Jay Rasulo pal it up for the cameras

Word emerged late last week that officials from the Hong Kong government would be visiting the Disney lot in Burbank on Friday for more negotiations concerning Hong Kong Disneyland’s long-delayed expansion plans. Apparently the meeting went well – well enough for the Hong Kong goverment to post an announcement on their website trumpeting the “substantial progress” made during negotiations. They also issued a press release to that effect. Rita Lau, the Secretary for Commerce & Economic Development, chimed in as well; Lau said, “As far as I know, there were breakthroughs on a number of important issues. I am sure there will be solid plans very soon.”

After recent rumors that the design concepts for the expansion had been approved, all that remained was the slight sticking point of who would pay for them. At issue was control of the park; Disney, realizing how under-built the park is, has long sought to inject capital into the resort to fund expansion. The Hong Kong government, however, is the majority shareholder in the park and did not want to surrender that controlling interest.

Negotiations have dragged on for years, stalemating recently when Disney laid off the Imagineering staff they had assigned to design the expansion. The situation seems near a resolution, however, according to the Hong Kong Financial Secretary, John Tsang. After Friday’s meeting in Burbank, Tsang released a statement saying, “I am happy to note that substantial progress has been made in the negotiations. Whilst a number of issues remain to be sorted out, both sides are committed to bringing the discussions to a successful conclusion in the near future.”

Dow Jones has also reported that a deal is at hand; the current proposal calls for Disney to finance the expansion, while the Hong Kong government will keep their controlling stake in the venture by converting earlier loans to the project into equity. The Hong Kong Economic Times has reported that a likely option would see Disney investing HK$7 billion (roughly $900 million) in the park, reducing the government’s stake from 54% to 51%. Construction would begin as soon as the agreement was signed.

So, yay.

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Have We Found Our X-Band?

RFID wristbandsRobin Barber, Vice President of RFID wristband manufacturer Precision Dynamics, displays wristbands that the company has produced for various theme parks (Los Angeles Times)

Hoping for more information to emerge about the rumored NextGen / Personal Experience Portal project, I was fascinated to see an article in the Los Angeles Times today about Precision Dynamics Corp. The California company was founded fifty years ago to manufacture wristbands for hospital patients, but has found success in recent years creating RFID bands for amusement parks and attractions.

Using the new technology, the article says, the wristbands can be used as “high-security admission passes, cashless debit cards, hotel room keys and a form of identification to reunite lost children with parents.” These are all possible uses that have been mentioned for Disney’s “X-Band” program as well. The Precision Dynamics wristbands broadcast a unique 16-character code when triggered by a reader, which then uses the code to serve as an access key for debit accounts or electronic door locks. In Disney’s plan, it could also be used to access pre-recorded guest information to enable interactive features within the parks themselves.

It’s unknown whether Disney is working with Precision Dynamics or developing a technology of their own, but as Precision Dynamics holds a patent on their design it’s unsure how much leeway Disney would have in duplicating the idea. Disney’s interest in the technology is understandable; the Times article points out that guests using wristbands tend to spend up to 25% more at parks and resorts due to the ease (and, one assumes, the “Monopoly money” factor) of cashless transactions. The RFID chips are programmable, allowing guests to add amounts to their families’ wristbands at kiosks throughout the park.

The article underlines a few concerns about the technology as it stands now. The first is cost; RFID wristbands sell for $1 apiece, while the computerized readers cost $450. While this would obviously be small change for Disney, it would require a substantial initial outlay if they were to roll out the technology across all the resorts. One suspects that the cost of the wristband would be passed along to the consumer, which would only add to already-steep admission fees.

Privacy concerns are also a critical issue when this technology is discussed. The general public might not yet be aware of RFID, but the privacy and tech-savvy communities have had their eye on it for years. Precision Dynamics says that the wristbands must pass within inches of a reader to be activated, and that they’re programmed to expire after a single day’s use. RFID advocates say the technology is secure, but no doubt Disney would want to rigorously test this rather than risk turning Walt Disney World into a global magnet for “haxors” and scam artists.

Disney isn’t mentioned in the article, so it’s mere speculation to connect the Precision Dynamics wristbands with Disney’s own plans. Still, it gives a glimpse into what this technology is being used for now, and what direction Disney might go in the future.

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My Birthday Wish For Hollywood Studios

Hollywood Studios hatSTOP THE MADNESS!!

It’s no secret that I think that the Hollywood Studios (née the Disney-MGM Studios) is in pretty dire straits – that it needs far more money and attention than the other Florida parks to get it up to code. Large swaths of the park need to be completely demolished and rebuilt along a different plan if they’re to meet the current needs of the park and escape the outmoded infrastructure of its working-studio past.

Most of all, the Hat has got to go.

Good news on this front – the Orlando Attractions Magazine has reported on the Imagineering presentation at today’s 20th anniversary celebration, and it seems that certain key Imagineers are just as fond of the Hat as many – if not most – Disney fans. That is to say, they hate it too. Bob Weis in particular seems to have ragged on the accursed Hat a couple of times, with an assist from Eric Jacobson. Tom Fitzgerald was there too, but was probably keeping the lid on his secret plan to replace the Hat and all of Hollywood Boulevard with a giant projection screen and some visible HVAC ductwork.

My proposal: have a hard-ticketed event, with tickets at $250 a pop. Keep the park open all night. Guests get a Disney-branded hardhat and crowbar, and get to tear the abomination down. They could auction off the first whack on eBay. Just sayin.

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