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Al Lutz
Archived D-I-G Update
9/20 UPDATE - Buh-Bye WDI R&D | DCA in EPCOT | Tower of Terror construction photo | Speaking of plummeting - DCA numbers continue to fall | Buzz off | More Disneyland Paint & Rehabs | Adios Y Arriba


Buh-Bye WDI R&D

Disney essentially got rid of its Imagineering (WDI) Research & Development (R&D) group this week - the layoff involved about a hundred people. From a kind source:

I'm still in shock! A number were working on current revenue-generating products, and didn't expect to be included in a layoff. There *were* a lot of folks who were working on pure research though.

Here's the story: A few months ago, the head of R&D, Eric Haseltine, left Disney to join the National Security Agency. (This is public info, here's the press release.)

He gave everyone a pep talk about how Disney still values R&D, etc, but I think they all saw (or should have seen) the writing on the wall--Disney wanted to get rid of its R&D group. Last week, they announced the plan to merge Imagineering R&D into the regular Imagineering team, but they didn't announce any reduction in staff.

Today (the 18th), a large percentage of R&D was notified that they were fired. This includes many individuals who were currently working on viable products sold in the parks, etc. Another large group was shoved into the "DIG" (Disney Internet Group) division, and I can't imagine how anyone who took a job in Imagineering would be happy working in the "dotcom" division!

Eisner has to cut hundreds of millions of dollars to satisfy the investors. (He certainly doesn't have time to execute a new business plan in his one-year deadline!) I expect many, senior long-time engineers and creative staff will simply be let go as the company tries to "reninvent" itself. (Frankly, WDW Florida is turning into TimeShareLand, which I think will eventually backfire, no matter how profitable it is in the short term.)

Today, people with 15+ years with Disney, and many successful products and patents behind them, were shown the door.

What does this mean for Disney customers and stockholders? You have to keep in mind that WDI does a LOT more for the company than just design theme park attractions. They are involved in all sorts of innovations throughout the company from e-commerce to product creation and design.

Essentially this means the company will take an off the shelf approach to everything they do. In theme parks for example in the recent past that has meant buying rides from catalogs - dressing up stock space shots and mad mouses as new attractions. In other areas in essence they now will buy technology from outside firms or competitors instead of creating things in house.

Imagineering on Flower Street in Glendale
Imagineering on Flower Street in Glendale

If you want a record company analogy (which I'll give you since I used to do that for a living) it would be the equivalent of no longer signing new acts, and only contracting performers that are already on the charts. 

What this does is drive up your costs since established acts cost so much more. And you lose out on the breaking of a new band, which is the most profitable thing in the business, since you sign them at a lower price for an initial series of projects, then (ideally) renegotiate the contracts up steadily as the group continues to deliver.

Sure, you reduce the immediate (and usually quite substantial investments) in new products right off the bat - but in essence you cut off the nose to spite the face. The music business at its heart depends and grows on a constant flow of new acts. In baseball terms this would mean always getting walked, instead of trying for a home run.

This pretty much applies to any large dynamic consumer products company - whether it is Coca Cola who has to continually refresh its product line with new drinks and brand extensions (their R&D develops new flavors and market segments), or Proctor & Gamble who increases their detergent variations and looks to possible new markets such as home dry cleaning.

While many folks like to think of the Disney company as just a media concern - their entertainment product in essence fuels a huge consumer products division, and a resort arm. Not to mention a licensing group. No other show business concern is quite like them in size and past growth, and the reason for that was that Disney always developed new technology for its own use, whether they were working on new park rides, merchandise extensions or cost saving ways of making animated movies.

It really is rule number one for most businesses, you never eliminate in-house R&D, because if you do your competition will do that job instead and benefit from it. And everyone knows the real money is made when you are first and own the process that others are barred from using, or must license from you on your terms. Almost always it is the market leaders which are the most successful at this.

Basically Eisner and his "crack management team" has said they no longer are in the market to lead anymore, and they are content to pretty much sit still and live off the brands they've already built. It's like McDonalds saying, "Hey the Big Mac is just fine. Why bother with coming up with new things (like Chicken McNuggets, Happy Meals or a breakfast menu)?" (Come to think of it, isn't it funny that both companies are suffering now from stale management?)

We'll have more on this soon. This is a really sad turn in the Disney story, and some light needs to be shed on it.



A bigwig from Walt Disney World recently came out to visit DCA; the top attraction manager for Epcot. He didn't come to DCA to see how tortillas are made or to see Whoopi Goldberg though. Rather, he was here to inspect four specific areas and attractions at DCA. He spent a busy day touring the Hyperion Theater, California Screamin' (the big coaster), Soarin' Over California (the big screen flight simulator) and Flik's Fun Fair (a toddler's playground). Believe it or not, all four of those DCA attraction concepts are being seriously considered as additions to Epcot in the not too distant future.

The most obvious choice for Epcot is the Soarin' Over California concept, which many have thought would be a nice update on the aging CircleVision travelogues that are featured in two World Showcase pavilions. But the Soarin' attraction won't be going in to a World Showcase national pavilion. Amazingly, this ride system is being considered for The Land pavilion. It would replace the current Lion King film about ecology, and would require a major remodeling of that pavilion's structure.

The Hyperion Theater would likely slot nicely near the World Showcase lagoon, and provide a state of the art facility for the same types of big performances currently put on in the amphitheater across from the American Adventure pavilion. But with Epcot's version of the Hyperion Theater, audiences and performers alike would finally come in out of the often brutal Florida heat, humidity and rain.

And a Flik's Fun Fair type area would go nicely along with the Kodak pavilions Imagination Institute theme of being "shrunk" to the size of a bug.


The wild card in these Epcot expansion plans though has to be a large coaster like California Screamin'. How do you theme that to anything currently in Epcot, or anything that could conceivably be added to Epcot's restrained and tasteful themes in the future? How do you make it look like anything but a huge steel Six Flags roller coaster?

That's the problem now, since California Screamin' has emerged from its initial growing pains and proved itself to be a dependable thrill ride that can easily move over 2,000 people an hour at full capacity. And WDW execs want to add another major thrill ride to Epcot's offerings, without going through the awful Test Track experience all over again.

Burbank of course just wants to add something cheaper than the new Space Pavilion that has a final price tag of over $150 million. A new version of California Screamin' could be plopped into Epcot for less than a fourth of that cost, and have little future costs needed on pesky old-fashioned Disney things like animatronics and elaborate show effects.

Isn't it amazing that at the same time some well placed folks are proposing large Epcot style pavilions to help DCA's attendance funk, there are other Disney folks in Florida who are proposing DCA style amusement park rides to help Epcot's attendance slide?


Tower of Terror construction photo


Looks like they topped off the metal skeleton last week. I was able to confirm they will only have one shaft in this version of the ride, and that an inexpensive video effect of the riders being able to see themselves (sounding like a variation of a ride photo camera) will be the only special effect when you reach the top before the drop.

Why do I get the feeling this is going to be a big disappointment? (Like so much of what they have done for this park in the past.) We'll see what they have wrought when they open it.

Meanwhile they were painting out the Bountiful Valley Farm logo from the side of the Bug theater in the new Bugs Land (shown below - this photo was also run in the recent Flik's Fun Fair photo tour).


I guess the farm concept can't be gotten rid of fast enough eh?


Speaking of plummeting - DCA numbers continue to fall

The paid attendance numbers continue to fall to new lows at DCA, so of course they are basically throwing anything and everything against the wall to try and make it stick.

A memo was sent out to everyone this past week announcing "Howard Pickett, Senior Vice President, Marketing & Sales, Disneyland. Resort Paris, has been named Senior Vice President, Marketing, Disneyland Resort. Howard will report directly to [Disneyland Resort President Cynthia Harriss], and his appointment is effective Monday, September 16."

From a kind source:

They are bringing the guy over from Paris to take the job of the two VP's they canned last month. What it quite interesting is the language used (in the memo) that indicates Cynthia realizes that the DLR is not really achieved it's goal of becoming a "Resort destination" quite yet. There is still some work to do before length of stay statistics at local hotels grow by a day or two. Plus, the obvious thud DCA made in the marketplace is implied in those statements as well.

At least we'll have new commercials and ticket strategies to look forward to.

I send my best to Howard, he has his work cut out for him. I hope he also doesn't get blamed for what is in essence Paul Pressler and Michael Eisner's total failure of a theme park.

Ever notice how much bigger the signs on the esplanade are getting with each new and increasingly less successful promotion for DCA?
Ever notice how much bigger the signs on the esplanade are getting with each new and increasingly less successful promotion for DCA?

Meanwhile the big Fiesta Latina they are currently promoting on the weekends has been a major disappointment. Seems they do pull in the Latin market with no problem, but when the Spanish speaking customers hit the esplanade and find out DCA costs the same as Disneyland, they make the better value choice.  i.e. Disneyland's numbers continue to do well, and people don't want to buy tickets to DCA.

From a kind source:

Numbers have been low at DCA, but from those actually paying to get into the Park. Recent numbers were inflated by the Cast Member (employee) previews of Flik's Fun Fair.

With 20,000 Resort CM's now, and all of them are allowed to get themselves into DCA plus at least three friends or family members without using a stamp on their Comp pass. If someone has dependents or immediate family greater than three people, then they get in to.

So that's at least 80,000 free admissions to DCA that were offered to Resort CM's to use over a 10 day period, and that bumped the attendance at DCA up a bit.


Fiesta Latina (the smaller stage for it is shown above) didn't do much of anything, as the crowds in the amphitheater for the big acts proved. There were just 100 to 250 people watching the big "name" acts during last weekend's sets.


Buzz off

It's a big hit in Walt Disney World's Tomorrowland. (We got the disastrous Rocket Rods instead.) But a new Buzz Lightyear attraction for Disneyland's Tomorrowland has been shelved until at least after Hong Kong opens in early '06.

Rumors continue to swirl that we shouldn't expect much of anything, expect maybe new paint, for Disneyland's 50th. Things are just that bad right now thanks to the many upper management blunders.

By the way, the "Fall '05" opening date for Hong Kong isn't used anymore. 2006 is now the opening date, and most likely in the winter/early spring.


More Disneyland Paint & Rehabs

small world looks great now that it is finished...


...and it looks like Minnie's House in ToonTown got a coat of paint on the roof and inside (the giveaway appears to be an unfinished chimney...


...meanwhile the Disneyland Railroad was down last weekend, for what appears to be platform work on all the stations, Main St. is shown below...


All of the new photos for this update were taken last Sunday the 15th.


Adios Y Arriba

Kevin Yee was kind enough to write the following for this update:

Well, it happened. Back in March we chronicled for you that Y Arriba was in Chapter 11 bankruptcy, where they were given ninety days to shape up financially or face closure. Yesterday, September 19th, they closed all right, and they won’t be back.

Y Arriba’s lingering death took no one by surprise – anyone who walked through Downtown Disney on frequently could see for themselves how empty the place was on a regular basis (with the exception of the dress-to-impress weekend dance nights, but these ironically went to the other extreme and led to other problems, such as the tackling of one unruly guest by Security right there on the spot).


The big question, of course, is what will replace Y Arriba. Already there are various suitors sniffing around, trying to decide if the place is a fit for them (translation: is it worthwhile to pay the fees required by Disney for this prime location)? For Arriba the fees weren’t worthwhile, and now they are gone. No word yet on the status of EstrellaMundo, the parent company of Y Arriba.

Meanwhile, we can all hope and plead for our favorite eateries to replace it. I have been saying for a while now that Downtown Disney desperately needs lower or even mid-range dining options. As long as they don’t duplicate other food options elsewhere in Downtown Disney, I don’t really care who moves in. But let’s hope that whoever does come in has already internalized the lesson created by long lines at Wetzel’s Pretzels (inexpensive food) compared to the empty and echoing rooms at Y Arriba (expensive food). There must be room for other price points besides “gouge” in the Downtown Disney universe.

Thanks Kev. While I agree a lower price point would be ideal, what I would like is something unique to Downtown Disney - and not just another chain restaurant like Rainforest Cafe. Both the successful Catal and Ralph Brennan's Jazz Kitchen have proven there is a market for something other than the Planet Hollywoods of the world. I'd really like a Disney dining innovation - but with their letting go of all their R&D folks this week it would be dreaming.

At least the Downtown Disney mall complex is succeeding, even if the new park next door continues to flounder.


We'll have another D-I-G update for you soon. See you at Disneyland!

Al Lutz may be e-mailed at - Keep in mind the volume of e-mail he receives may not allow for a personal response.

9/9 UPDATE - Buh-Bye Bistro | Ch- ch- ch- changes | Tower of Terror construction photo | Hemmed in | Morale down | Fantasyland Box Set | Sleeping in | All quiet on the western front

Last week I said: As always with anything having to do with Disneyland, remember they change their minds at the drop of a hat.  :)

Well, a LOT has changed since my last update, in particular with California Adventure, so pull on up to this screen and find out what can happen in the space of a week.

People at the park are stunned, and I sense you will be too... ;)


Buh-Bye Bistro

From California Adventure, the script (a work in progress):

Page one, scene... um... ...well we've lost track of which one it is, there's just been so much drama going on in the old Disneyland parking lot.

(Cue much too dramatic background music)

Erica: Why Paul, how can you throw me out of my house and home, the Soap Opera Bistro? How can you, especially after saying all the things you did - like how I was going to make your little theme park the best there was? (Erica tosses around a head full of exquisitely coiffured hair to emphasize her shock and dismay.)

Paul: I never promised you anything Erica. (An old executive trick of mine you know.) And can you blame me? With this park the question "What if you opened a new Disney park and nobody came?" finally got answered, and I'm still reeling from the plain as day fact that it seems no one on the planet wants to pay any kind of admission (even lowball) to get in.

Erica: What will I do, where will I go? (Tosses a head full of exquisitely coiffured hair yet again to reemphasize shock and dismay.)

Paul: Well, I hear Kelly & Regis hate each other's guts - ever think about daytime talk? By the way, you need to vacate the premises pronto babe. Like NOW.

Erica: Our relationship isn't even cold yet, and you already are moving me out?

Paul: We're going to turn the place into an indoor kids playground - I guess we couldn't blow off the kiddies like we thought we could with this park. Something about putting the name Disney on things, people seem to expect that kids will need to have something to do in the place. I never figured on that one... (Cue more dramatic music, end scene)

First Paradise Pier is discussed for the trash heap, and now the ABC Soap Opera Bistro is history. It will be turned into a "Playhouse Disney" location, and may not even serve food (not even chicken tenders and macaroni & cheese for the kiddies). The concept being tossed around has it as just a children's playland thing, kind of like the old shuttered Club Disney concept, all themed to the Playhouse Disney properties.

(In case you're wondering what those properties are, this is Disney's pre-school programming block. The characters / shows currently assembled in this group include: The Bear in the Big Blue House, Rolie Polie Olie, The Book of Pooh Show, Stanley, The Wiggles, Disney's PB&J Otter, Madeline and something called Out of the Box.)

With the upcoming Aladdin show going into the Hyperion Theater, Millionaire, the possible retention of the current Goofy show, the 3-D Muppet movie, the animation building and the still under discussion character overlay (or just plain elimination of the disastrous SuperStar Limo ride) it sure makes the Tower of Terror fit into the Hollywood area like a sore thumb doesn't it? Not to mention the fact the area is chock full of cheap to produce movies/shows, and has no real family rides.

Sounds like another mess to me - and how it fits into the California Adventure (DCA) theme is yours and mine's best guess too. All I can think of myself is the millions upon millions of dollars that were wasted in this park - and the fact that the guys who blew it are still employed by the company.

Maybe they should just rename the place Dilbert's Adventure?


Tower of Terror construction photo

As you can see in the photo taken on Sunday, the tower continues to grow. The view is from the farm area at DCA.

Meanwhile they took off the wraps from the new bug show stage in the farm area (below).

By the way, Flik's Fun Fair has an opening date of October 7th announced.


Ch- ch- ch- changes

An email went out amongst the executives outlining changes that were made just this past week to the DCA plans for the next year or two. As I was passing on to you the decisions that had been made in late August in the last update, the Disney suits were reworking those plans yet again by slashing budgets and reining spending in.

It must be depressing to play to crowds such as this...

Why the sudden changes? Thank the incredible, jawdropping plunge in attendance at DCA. It has been dead at DCA since summer started winding down. They had a projection for attendance of 11K the Friday of Labor Day weekend, and they actually got 7,800. Disneyland got 23,200, with an original estimate of 22,000.

Then after the holiday weekend attendance collapsed once the discounts and free kids tickets (and the shows and promotions) ended. A 4,000 per day number (inflated by annual passholders no doubt) has held steady during the past week at DCA, while Disneyland gets around 20,000 per day (or more) to meet or exceed its projections.

As it now stands because of all this, now DCA won't be getting the lagoon show we were discussing last time until 2006, so all work on the originally planned Little Mermaid extravaganza will be stopped. They won't be attempting another LuminAria in the lagoon next Christmas either. The ugly tarp island will finally be taken out, likely before the media days for Flik's grand opening.

This was all very sudden, and the Entertainment folks are both saddened and yet relieved that they won't be doing a lagoon show for next Spring. They are saddened because some of the effects that they were talking about were said to be impressive. But they are relieved because the budget didn't allow for any human actors to be included in the presentation, and it would pale in that regard to Fantasmic.

Since the lagoon show has been scrapped, the suits at the Team Disney Anaheim building (TDA) have committed themselves to bringing back the Rockin' The Bay concert, um, er, music series for next summer. Hopefully with nine months to plan and book bands, the lineup will turn out better than this summer's almost embarrassing roster that was slapped together in eight weeks with what seems an online shopping cart.

No word on bleachers for next summer though, or any extra shade for the viewing area. But since those subjects were a huge complaint generator at Guest Relations for that park, I would bet on some kind of solution for '03.

And I do think they'll skip on booking David Clayton Thomas again. ;)


Hemmed in

A group of WDI guys were at DCA this past week looking at the perimeters of the park. Their stated goal, in ultra-hushed tones to the managers that spoke with them, was to "scout out expansion entry points for DCA." This set of folks said they were looking at turning the rest of the Timon lot into a "mini Epcot" with World's Fair pavilion type attractions that the whole family can ride.

What was also funny is that the expansion areas are actually going to be quite difficult to add on, since the entry areas from the existing Park are basically non-existent or extremely inadequate. They mentioned that DCA's expansion was not really planned for, and that the Tower of Terror and Flik's were about the easiest things to add. Anything else in the Timon lot from here on out will take a lot more tearing down and rebuilding of the DCA perimeter buildings. They simply didn't plan for this type of expansion.

They also mentioned that proposing tweaks both big and small is all the rage at WDI now. It seems many Imagineers are eager to impress their bosses with ways to fix DCA, using budgets both big and small. It's widely accepted now both in Glendale and Burbank that DCA has utterly failed in the marketplace, and the Park will be a source of much work for WDI for at least the better part of a decade.


Morale down

Morale among salaried CM's at the Disneyland Resort is really going into the toilet. The buzz is that the raises that had been hoped for this year are going to be cut again, making for the second year in a row that raises didn't happen. Not even a cost of living increase, let alone merit raises.

And now there are murmurs of more layoffs, if Flik's and Aladdin doesn't really take off and pack DCA this fall/winter. Hourly CM's, who are mostly union, get their agreed upon wage increase. But even the 3% cost of living increase that was hoped for from salaried CM's may have gone out the window when the bond ratings were lowered recently.


Fantasyland Box Set

What happens when you blow off upkeep and maintenance for over seven years in a half century old theme park? You find that you have to pay the piper at some point - and have to shutter large areas of the park to get things finally rehabbed and fixed.

Here's a photo gallery (thanks to MousePlaneteer David Lane) of just how much is now shuttered at Disneyland - in particular in Fantasyland:

Above and below, the entire Storybookland area - from Casey Jr. (above) to the Storybookland canal boats (below). Dumbo is still open.

Of course the Carrousel is also still down in Fantasyland too (below). Note the all new foundation slab that was poured for the ride.

Meanwhile nearby small world, while open, is still covered with scaffolding. Keep in mind too that this attraction will be closing yet again for its holiday makeover. (Following shots taken by yours truly.)

The new white paint does look terrific though - what a difference it makes.

The Matterhorn is also down nearby - note the spray paint markings on the rockwork in David's photo below (the colors have been enhanced a bit to show up better). Looks like a LOT of work is planned.

But it's not just Fantasyland that is getting worked on, below in a photo by yours truly you can see a tree being replaced near the Stage Door Canteen.

While just down the walkway in New Orleans Square David's photo below shows the Mansion is now down for its holiday makeover.

David also has two photos taken in the past two weeks of the new Tom Sawyer Island rafts to show you - the first shot shows the one new raft stowed at the Island now...

...while a backstage photo shows a companion to it under construction.

Finally David shares a shot of the newly redone porch on Main St., still missing its chairs. Personally I was happy to still see it there - knowing current management's mind set, they were probably dying to turn it into a glow sword shop. ;)

While I am delighted they are finally rehabbing everything that needed it so badly, I would think all this going on at once would make any visitor reconsider a full price visit at this time.

Especially if you are a yearly or less frequent visitor, if you can hold off until after the holiday makeovers are in place, you may get a better value for your dollar. Your mileage may vary of course.


Sleeping in

Disneyland will begin opening at 10 am on weekdays instead of 9 am, starting with the new fiscal year in October. That means Disneyland and DCA will open at the same time, and it's hoped that will increase attendance for DCA while cutting costs at Disneyland. Expect to see an hour or two shaved off of the weekend operating hours for Disneyland as well.

The new Pooh ride in Critter Country begins testing in October. The show inside the building is almost completed, and vehicles will be cycling inside within a few weeks. They are still shooting for an April '03 grand opening, assuming the court case goes well in March.

And before I forget, Walt Disney World announced price hikes yesterday, bringing single ticket / one day prices to $50 even before taxes. More details, including a hopper price increase, at the above included link.


All quiet on the western front

I guess both sides at Disney thought better of the very public war they were fighting, so Stanley Gold (representing the board) and Eisner decided to play the third act of their very public drama off stage.

Here's the latest set of rumors: Eisner's last five year plan didn't meet with much enthusiasm or approval from Roy Disney or Stanley Gold, so he is supposed to present a new one at the next meeting. Many of the delays he is seeking in expenditures all over the company (until 2006) is to fund some new projects he has in mind from what I was told.

Some on the board would like to push Eisner on up to a ceremonial position to get him out of the way. Dick Cook (who used to work in parks, and now runs the studios) would replace him, with Iger kept on to deal with the network.

The pin they were giving away at the park yesterday may have inadvertently said it all about what is going on at Disney lately, don't you think?

The deal with the producer of Shrek (John Williams) announced by Disney late last week was supposed to let Pixar know who is boss by locking in another CGI animation house. Unfortunately it not only angered a lot of people, but probably pretty much shut off any progress in discussions between the two companies - and it ticked off Lucas also. It may have finally pushed Jobs to join up with Lucas.

Lucas is apparently also asking around about partnering with someone other than Disney for future theme park projects. Rumors abound about some kind of super partnership with DreamWorks, Lucas and Pixar involving the Universal parks, which may be available for acquisition by some or all of the above.

Keep in mind all the dynamics could change yet again if Eisner is moved on up and/or out.

Interesting, no?  ;)


We'll have another D-I-G update for you soon. See you at Disneyland!

Al Lutz may be e-mailed at - Keep in mind the volume of e-mail he receives may not allow for a personal response.


Buh-Bye WDI R&D

9/20 UPDATE - Buh-Bye WDI R&D | DCA in EPCOT | Tower of Terror construction photo | Speaking of plummeting - DCA numbers continue to fall | Buzz off | More Disneyland Paint & Rehabs | Adios Y Arriba

9/9 UPDATE - Buh-Bye Bistro | Ch- ch- ch- changes | Tower of Terror construction photo | Hemmed in | Morale down | Fantasyland Box Set | Sleeping in | All quiet on the western front

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