So Disney's to blame for pricing out the middle class, right?
Not so fast.
When a reporter from the Washington Post asked me this question last week, my first response was to ask back: What middle class?
Time for some uncomfortable truth: In its first few decades, Disneyland was a middle-class destination because, from Disneyland's opening in 1955 through the 1970s, America was a middle-class country. In 1979, nearly 57 percent of American households earned within 50 percent on either side of the nation's median household income. By 2012, just 45 percent did. And that median income has been falling since the Great Recession started in early 2008.
Not that we were doing all that great before then, either. Median household income, adjusted for inflation, has barely increased since the 1970s, despite massive gains in worker productivity since then. What income growth we have had in the United States over the past 40 years has gone almost exclusively to wealthy households, and the wealthier you are, the more your income has gone up.
In short, American workers are increasingly more productive than ever, but for the past four decades, it's been their bosses who are reaping the reward.
And that is why Disney raises its ticket prices, introduces the Disney Vacation Club, adds after-hours hard-ticket events, and upsells dessert parties and character meals. Disney is marketing to where the money is — families that earn $100,000+ a year and are seeing their incomes rise while everyone else is watching their income stagnant or fall.
With income inequality rising in America, Disney — like every other long-time business — faced a choice: discount to chase market share among the declining middle class and growing population of poor households, or re-position as a premium brand to attract the wealthy?
Disney chose the second option, and the company is doing spectacularly well by it, making $7.5 billion in profit on $48.8 billion in revenue last year.
So don't blame Disney for its rising ticket prices, "charge now and think about the price later" MagicBands, or even replacing Epcot's Norway ride with a Frozen-themed overlay. Disney is doing what will make it more money, because what Disney is now doing appeals to those Americans who can afford to pay for what Disney is selling.
I bring Epcot into this because Disney's changing approach to that park further reflects Disney's response to a changing America. When it opened in 1982, Epcot reflected an optimistic view of future and of the world around us — an optimism consistent with a society in which incomes were rising with productivity and each generation enjoyed more prosperity than the last.
Today, that's no longer the case. As I mentioned before, for most Americans, household income stopped rising with productivity back in the 1970s. Generation X, those born between 1965 and 1984, will face retirement with less wealth than the Baby Boomers who preceded them. The situation looks even more grim for the Millennials who followed Generation X. It's tough to get excited for a future than seems to be bringing harder and harder times for most of us.
Which leads us to more uncomfortable truth: Disney stopping investing in the "old" Epcot because too few Americans believe in that optimistic vision anymore. And who can blame them? The reality of our economy and our environment today tells us that believing in the future and in the good of the world around us is about as logical as, well, believing in a fairy tale.
No... scratch that. Believing in a fairy tale allows us a few moments of escape into a world where good overcomes evil, hard work triumphs over adversity, and everyone lives happily ever after. So believing in the future today is demonstrably worse than believing in fairy tales.
And that is why we are getting Frozen in Epcot.
So if you're angry with Disney for not appealing to a large, prosperous, and optimistic middle class, well, might I suggest that the problem really is not with Disney... the problem is that there is no longer a large, prosperous, and optimistic middle class in America for Disney to appeal to any longer.
This is a problem 40 years in the making. What's the solution? This is a theme park community, and not one for political activism, so you'll have to go elsewhere to find your path toward that. But know this: Trying to shame Disney into not raising its ticket prices won't bring back America's middle class. The way to do that lies elsewhere.
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Y'know, almost every day, I hear constant complaining about how this world and country are so screwed up. Yet no one really does anything about it. Anyone can open their mouths, but I want someone to finally put their money where there mouth is. Someone who'll go beyond talking on TV, typing on a keyboard or preaching to a group of friends. Someone who'll just shut up and try to fix the problems they claim to be plaguing our country. Now, some people have already done this. Some of them push for ideals that I agree with (the legalization of same-sex marriage) and some of them I don't (the idea that all cops hate black people.) But I feel like, if so many people truly want society to change for the better, that they should actually do it rather than wait for someone else to do it.
I'm sorry to get all political on a theme park forum, but I really needed to get that off my shoulders.
Disney had a hand in reducing the middle class with its layoff of its IT staff. It is harder to make it into the middle class and staying in it. No one truly has job security.
"The way to do that lies elsewhere."
Disney appears to be winning business from a larger percentage of the upper middle class. The way to do that is the upper middle class declines along with the middle class. The law profession has crashed. STEM careers are in jeopardy. This is just the beginning. Maybe Disneyland Paris is the example. One place that just doesn't get respect.
I am 54 and growing up, my middle class family never went to Disney. One reason was that we lived in New Jersey and traveling across the country for a vacation made no sense for us. It had nothing to do with the price of a ticket. It was just inconvenient. By the time WDW was built most of my siblings were out of the house and had their own families so it was too late. Again it had nothing to do with the price of a ticket.
However my own middle class family has been going to Disney 3-4 times a year since 2001. We are not anywhere near the 1% yet we save and find a way to go to Orlando as often as we can. People want to complain about $100/day ticket? Please! Try going to an island or a resort or even a boardwalk for anything less than that. Yet according to your logic, only the wealthy can afford to go to these "pricey" venues. I don't know about you but whether it's Orlando or the Jersey Shore, I don't see any shortage of crowds. And when I walk around the parks I sure don't see this vast majority of "wealthy" people you cite. I mostly see working class families like my own having the time of their lives. The pricing? Supply and demand. Simple as that.
I am a small business owner and we are a middle class family who live in a middle class town. We ARE the middle class. This is your site and you do a hell of a job with it. But please, don't turn it into another political platform for either side to endlessly debate. IMO, in this friendly place, Disney versus Universal should be the only debate that matters...
Every desision Disney makes now is feeded with magic band data mining and if the end result isn't more money it's not going to happen.
There was a time Disney was also a company and made proffit but not in this extend. Their focus was giving the best customer support, making the best rides and the most stunning theme's they could. If they did it right their gusests would love it and they would make more money. Today only the end results count and Disney nikkels and dimes the rest.
In the end this will hurt the brand. A movie like Fantasia would never been made because they only want hit movies. No artistic growth. The same for the parks, make a princess entrance for the meet and great of put a big tiara on too if a mediocer entrance to send the message you have to buy something for your daughter.
My Disney left the building about 15 years ago and like the boiling frog experiance where they boil a frog alive by slowley higher the themperature their guests hardly noticed the steady decline and changes and their brand loyalty makes them blind. As an ingrequent visiter I saw huge changes after 4 your and about 15 years ago it reached a point I didn't enjoy the abuse anymore.
It makes me sad. I loved Disney. He was an innovator and made beautiful things but above all the was an artist not a banker and although his company made him rich he Always gave back to his guests. Until that Disney spirit returns at the house of the mouse I moved over to the new Disney that builds for the fans, takes risks and has the guest experiance on number one and I'm glad to pull my wallet for that, it's ofcourse Universal Studios.
I think some of the responders above have missed the point. Disney isn't assuming EVERYONE who visits their parks is a high-earner but look at where so much of the investment in recent years has gone and it's obvious they are chasing the serious money. The Bora-Bora DVC villas at the Polynesian resort, indeed the whole expansion of the DVC with luxury additions at the top-end Disney resort hotels, is one example. The development of Disney Springs which will be full of high-end retail and expensive dining opportunities and the chance to take a 20 minute boat ride in a car for $125 is another. And add onto that all the 'premium' experiences that are marketed so aggressively. I've just been looking at prices for a two week stay in November 2016, travelling from the UK, and we want to stay in one of higher-end places but I'm looking at over £3,000 room-only, (That's about $4,500!). I can get a luxury 2-week cruise for that, including flights!!! It's not a secret that Disney is a costly experience these days. Sure you can do it for a moderate outlay if you are careful, but the majority of offerings - from resort hotels to food outlets to premium experiences - are pitched firmly at those with above-average disposable income. And as long as people are queuing up to pay those prices and fill the parks, (and as long as numbers keep growing, irrespective of theme-park-fan reaction), then Disney will keep charging and adding more opportunities to charge even more. They're not a charity - they are a profit-seeking company - and they will chase the money. To expect otherwise is totally unrealistic.
If they drop the price, then the parks become even more ridiculously crowded. They could add another gate in Florida,but that's, probably another billion dollars. this adds substantial risk during the next downturn (or complete theme park market crash like 2001-2002).
But I disagree that Disney is willfully trying to become some kind of upscale luxury brand. Unless throwaway t-shirts with iron-on decals, Starbucks, and heated food served in a box is now upscale. I don't think Disney is trying to ignore the middle class. I think they are exploiting a nostalgic middle class that has few other family vacation options.
I have no problem with Disney raising prices, but just because something is suddenly more expensive doesn't mean it is suddenly a better product.
If you want to buy 1 day at MK for 4 people it will cost about $450 which is including tax.... But if you want 4 days at Disney, the cost per day is greatly reduced. It is competition in Florida that is driving up the prices.
Universal is the same way, buy 2 days, get 3rd day free. buy just one day and you are going to pay top dollar.. Then the average day is like $60.00 on the multi day passes.
They are almost forcing you (The average wage earner) to make a choice, pick a property and stick with that one...
Frankly, I think this a really good strategy. I'm so unbelievably sick and tired of waiting in long lines that pricing people out of a visit to the parks is exactly what I think they should be doing.
I'm a huge proponent of the rides-to-cost equation - which is why I buy a front of the line pass at nearly every park I go to - if it is twice as expensive and I get on three times more rides, then economically it makes sense to me. If Disney charged $20 admission and as a result it was so busy that I could only get on one ride, then that doesn't make any economic sense at all.
You are spot on when you said,
“So don't blame Disney for its rising ticket prices, "charge now and think about the price later" MagicBands, or even replacing Epcot's Norway ride with a Frozen-themed overlay. Disney is doing what will make it more money, because what Disney is now doing appeals to those Americans who can afford to pay for what Disney is selling.”
That’s absolutely right. Over the decades, Disney has created an amazing entertainment conglomerate, and has established an almost unrivaled amount of goodwill with their customer base. Disney has every right to cash in on the industry that it built and dominates.
Just about everything else you said is way off base.
Herwig Delvaux and Thomas tskogg were absolutely right when they took you to task for applying flawed reasoning and using a thinly veiled political rant.
When you claimed that the middle class is gone – you’re wrong. The population of the United States grew 40% in the period between 1979 and 2012. Even though the percentage of middle class households has declined from 57% to 45% during that same period, the actual number of middle class households has grown by over 10%. Contrary to what the “income inequality” folks want you to believe, the middle class is still alive and healthy, and a lot of them are showing up at Disney parks and spending their “middle class” money.
I’m also very disappointed that you brought “Income Inequality” into the rant. Why should I care a whit what somebody else is making? What is important to me is what I am making as well as what I am able to do with the hard-earned proceeds of my endeavors. Whining that “It’s not fair!” that somebody is making more money than me is totally contrary to the American spirit. If it were not for the insidious end goal of the crowd pushing the “Income Inequality” concept (socialism and perhaps even communism) most of us would consider it a harmless diversion for the lunatic fringe left.
And then there’s this little nugget of optimism you laid on us:
"Which leads us to more uncomfortable truth: Disney stopping investing in the "old" Epcot because too few Americans believe in that optimistic vision anymore. And who can blame them? The reality of our economy and our environment today tells us that believing in the future and in the good of the world around us is about as logical as, well, believing in a fairy tale."
Ouch! I was under the mistaken assumption that Disney was being cheap and now I find out that improving and updating Epcot is kind of like how Santa’s sleigh is powered in the movie Elf. The real reason that Disney can’t update Epcot is because not enough of us believe in the American Dream anymore? I guess somebody needs to pass the word to the umpteen million illegal immigrants in this country that the American Dream is dead and they need to go home, and while they’re at it maybe they can tell the 500 IT workers from India that Disney just hired to replace American workers that Disney sold them a false bill of goods.
Cheer up, Robert! The Fourth of July is coming up. Put out your flag! Listen to some Lee Greenwood! Eat some barbeque! Heck, you can even load up the tribe in the Prius and head over to Disneyland to watch the fireworks. I can’t think of a better place to remember that the American Dream is alive and well.
Two points: Disney makes a lot of money off people in the middle and working classes who buy Annual Passes to Disneyland, especially since Disney encourages people to be able to afford the passes using monthly payments. You can buy a monthly pass for as little as the cost of one day at the park ($99), plus $17 a month for the cheapest So Cal Select pass, or about $55 for the premium non-blackout pass. I know a handful of people who have some level of Disneyland pass, but are just barely paying it off each month.
The following aren't my observations, but once someone is committed to paying for an annual pass, they are LESS likely to go to some other park for which they have to pay out of pocket to visit, thus ensuring that they will spend their money at a Disney park instead of someplace else. I think most people would agree that the huge number of Disneyland annual passholders helps lead to chronic overcrowding in the parks which diminishes the park experience for most visitors, but Disney management prefers this situation to having uncrowded parks, even for what used to be non-peak periods.
If the loss of faith in America's future is tied up with the decline of the country's middle class, it's probably both symptomatic of Tomorrowland's weak box office that moviegoers don't want to see this kind of vision of the future (although a lot of bad reviews probably didn't help either), and also a little bit ironic that Disney greenlighted this movie which ties into nostalgia for the 1960s and the vision for the future at that time, when at the same time they no longer support the optimistic vision of the original EPCOT similar to that of the 1964 World's Fair depicted in the movie.
Being a long-time visitor to TPI, I do know when the day comes I wish to visit a Disney Park, there are ways to deal with cost, like sharing the trip expenses with several friends, buying 5-day passes, and doing a little homework ahead of time. It does not really matter where on the socioeconomic spectrum one sits, with a little thought and planning, anyone can enjoy a Cadillac vacation on a Chevy budget.
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