Speaker 1 (00:01):
Pixie Dust & Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher and Yasmine Spencer as they explore the Mouse’s 12.6 billion operation and break down exactly how you can apply these big scale concepts to your own business.

Yasmine (00:26):
Holy wow. Okay. I wanna die straight into this episode cuz Nicole and I have just been talking before we started recording about the big Disney news that just happened in like the past 48 hours. Uh, but before I get into that, hi, I’m Yasmin and welcome to Pixie Dust & Profits, and I have my wonderful co-host Nicole here. Hello. And the big news that we are talking about is the fact that Bob Chapek has been ousted by the Disney Board and our, our Brain crush. I’d call him her brain crush, right? Nicole, Bob o is back a CEO of Disney after he had retired, after he had sort of stepped down and, you know, sort of wa you know, was retained on the board for a little bit longer to oversee things. He is back and I think Disney fans are rejoicing everywhere.

Nicole (01:23):
Yeah. Um, so this news broke Sunday evening and it actually was in a communication to cast members, it sounds like, before the media found out. So Bob Iger, who, uh, you know, we’ve talked about many times over the course of this podcast, um, sent a email to cast members letting them know that he was taking over a CEO again. And I, I’ve heard reports from every ounce of the Disney sphere that I’m in on the internet where cast members were just rejoicing and happy. And, you know, that’s, that’s kind of a sign that it was the right decision. Um, I don’t even know where to start with this discussion, but let’s give a little bit of background in case you’re not into the Disney leadership team like we are. Um, so Bob Chopek, I think it’s, I’ve heard both Chap and Chap. So, um, we’re talking about a Bob .

Nicole (02:16):
He was the CEO of Disney for the last 999 days. We’ll get to an inside joke about that later. But he took over from Bob Iger, who had been the CEO for 15 years and he had also worked for Disney for many, many decades before that. Um, so Bob Chopek, along with him came managing during the Pandemic and a lot of changes. And actually if you listen back a couple of episodes, we were talking, I think it was episode 70 where we were just talking about things we’ve been unhappy with as long time Disney consumers and how things just don’t feel as magical as they used to. I actually remember about two weeks ago telling Yasmin like, you know, I kind of feel like I should sell my dvc and that is never a thought that has crossed my mind before. Um, and so anyway, that’s a lot of the sentiment that I think cast members and other, you know, affixes have been feeling cast members, especially, you know, we’ve heard reports about how they were treated not so well during the pandemic.

Nicole (03:17):
They, you know, were laid off in droves and also when they, things started opening back up, they, you know, made them reapply for jobs they already had. And so it was making it difficult for them to even come back to work the magic. And having been to Disney a couple times during the pandemic, it’s still very significantly understaffed. Parks are closing at seven or 8:00 PM Um, there’s just not a presence that I remember there being before, especially when it comes to the cast members. And some of this definitely feels like Disney trying to cut corners on expenses as they’re, you know, raking in profits from nickel and diamond, everyone on things like Genie Plus and Park reservations. And, you know, it’s a lot. And this is just the parks side of the business. Disney’s obviously a much bigger company, it’s a media company, but I think people have also noticed the significant lack of movies coming out, like animated movies in particular.

Nicole (04:16):
Um, Disney plus, I remember last year when my subscription renewed, it was like double what I had initially paid for it. And you know, I don’t watch a lot on Disney Plus because they don’t have as many content releases as Netflix, but I do enjoy the things that I get from there. And so, you know, I justify paying for it because it’s nice to be able to download a couple of movies or watch some of the behind the scenes things, but it is a little bit pricey for a streaming platform that isn’t constantly putting out new content. So anyway, a lot of people associate these ideas and these implementations and rollouts with Bob Chopik who was CEO at the time. And, you know, I’ve, I’ve kind of given him the benefit of the doubt throughout, you know, I, I really thought early on that he was chosen as CEO to do some, implement some of the things that were probably ideas of other leadership teams because these things are never decided in silos.

Nicole (05:12):
Um, and, you know, kind of let him fall on the sword, right? You know, he’s like a sacrificial lamb, let’s get some of these, you know, unpopular things rolled out. Um, and we have, you know, one kind of interim CEO to blame for before we bring in someone new. So that was kind of my theory a few years ago. Um, of course the pandemic hit, so it definitely I think allowed Disney to fast track , intentionally punned, um, some of these changes. And what really was interesting to me, and I know I’m talking a lot here, but Yasmin and I were talking about this this summer, Chex, um, contract was up for a renewal and they renewed him. And I remember seeing the news come out and, you know, sending a, a sad message over to Yassin saying, you know, I really thought that he was just gonna be like the interim CEO and they were gonna get these changes in the door and then change him back to someone who could really make things feel magical again. So I was really sad that day. Um, and now here we are.

Yasmine (06:15):
What, one thing I’ll say, it’s like we’ve noticed a definite shift in how things have been performing at Disney over, I would even say the last couple of weeks. One factor I think that plays into it is, at least with the park side of the business, a lot of these pandemic changes seem like they’re here to stay. Things like park reservations, which kind of makes it difficult to go with the flow and, okay, let me backtrack here. Like, Disney’s never a go with the flow of vacation. You have to like do your meal planning in advance, your dining reservations, you kind of need to know which parks you’re going to in order to do that. But the requirement of Park reservations made it difficult for, you know, families who may have wanted to play it a little bit more loosey goosey maybe like DVC members like us who have annual passes that don’t necessarily, um, need to map out what we’re doing every second. We just kind of wanna go to the parks to relax and, um, play it by ear sometimes that has completely got out the window and the park reservations has made it really difficult for anyone to plan a last minute trip to Disney World. The other thing is, oh my goodness, prices have been insane. Let’s just talk about ticket prices. Oh yeah, I know we voiced this in previous episodes, but they’re going up again as of December 8th and I, which,

Nicole (07:34):
Which you know, is a whole different thing than they, they used to always do price increases around February or March. I remember because I would always be like right after Christmas is when I need to like pull the money together from hopefully if my spouse gets a bonus at work to buy our tickets for our next trip. Like that’s been such a routine of mine for years. And now they go ahead and they announce a price increase for like December 8th or something. Like, they know, they know that we are used to these things happening at a certain time of year and I’m just blaming Eck, it’s probably not him, but, you know, Ecks out here, like, let’s increase the ticket prices just before Christmas. Like, you know, now I’m actually debating not going in April. Like my original plans were because I, I don’t wanna drop the money on tickets right now, not before, right before Christmas when like I’ve got oil bills that are, you know, piling up and everything. So it just, it feels like such a money grab.

Yasmine (08:29):
It definitely does. And I was looking at a post in a Facebook group that I’m in again, as a Canadian in the past, we would occasionally get the offer to get like a slightly discounted multi-day pass in order to incentivize this to come. It was like a 20% savings. So this one woman was comparing the cost of her like discounted six day trip compared to booking a six day ticket. Now, and again, I know the discount factors in, but the price difference was 800 US dollars for the exact same timeframe, exact same ticket, $800. Like that’s, that’s a couple days at the park, you know what I mean? And if you’re extending your, um, trip to like, you know, 10, 15, 14 days, like that was the equivalent of what that ticket would’ve cost if she had stayed for like 12 days versus six. So they are definitely increasing prices across the board and we have heard from many people who want to go to Disney, who used to love going to Disney, that it’s getting harder and harder to afford.

Yasmine (09:36):
And I think they’re seeing the upper limit of what they can charge because we’re getting negative sentiment from customers who just can’t go to Disney and are stating that Disney is no longer a place for like middle class families to go. You kind of have to have a love disposable income to go there. Too. Big attractions like the Star Wars Galactic Cruiser that they have invested hundreds of millions, probably let’s be real millions into building, is closing in March of next year. We have recently learned that they cannot basically fill the ship. I’m using air quotes. You can’t see that, um, sufficiently to justify running this experience. When they at first opened it was like packed full, but they’re seeing an upper limit on how many people are willing to spend about five grand on a two day experience. It’s kind of a one and done these days.

Yasmine (10:30):
The ships are a maximum of 50% full and it’s an expensive experience to run because there are cast members who are actors in there. Um, you know, the building itself was ridiculously expensive and this looks like a negative return experience for Disney. And knowing how popular anything Disney has put out, as of light has been, I think we are starting to see the upper limit on a consumer’s willingness to pay for the Disney experience. And that pushback and that negative sentiment and frankly the hate, um, that has been put towards Bob Eck has been a deciding factor in them deciding to bring back the beloved Bob Iger. But there’s more to it. Nicole, have we talked about the media side of the

Nicole (11:18):
Business? Yeah, so on the media side of the business, um, you know, Disney Plus launched two years ago, three years ago. It was just before the pandemic hit and it was like 6 99 a month. And the entire plan was, you know, get a ton of subscribers, sell them on how good the content is. Cuz I will tell you like you can open up Netflix and you can choose something to watch and you might end up watching something and that’s pretty terrible and you back out of it right? On Disney plus, I don’t have that feeling. I can open up anything, even things I’m not interested in and I know it’s gonna be good quality content and, you know, that was always the intention for the platform and they were gonna slowly raise prices over time. Right. You know, most of us don’t notice when things go up a dollar a

Yasmine (11:59):
Dollar two,

Nicole (12:00):
You know, especially when you get the yearly promotions or the discounts for signing up for a year instead of monthly. We’re used to that. But at earlier this year, I, I can’t remember when exactly they announced there’s gonna be 10 99 a month. That’s, you know, it’s not double, but it’s, it’s a pretty significant increase for something that, you know, doesn’t have constant content coming out. And I’m not as well versed in the media side of the company, however, you know, when Disney Plus came out a 6 99 a month, and we don’t tend to notice when things increase, you know, a dollar a year, especially when we’re choosing pay yearly instead of pay monthly. And I think the intention was always to like slowly increase pricing to get to a point where you break. Even with Netflix, they never went into the Disney Plus, um, model with the intention of it being profitable right away. They knew that this was a gamble, they knew it was an investment, they knew it would be incurring losses. However, what’s happened recently is it went from, I think it was 600 million in losses to 1.5 billion in losses in a quarter. Um, that’s a, it’s

Yasmine (13:13):
A significant

Nicole (13:14):
Difference in, in just one quarter. Um, and, and it came after price increases were announced, right? So they, they changed the price to 10 99 a month, which is not double, but pretty close to double. Um, and it’s also a different platform. You know, there isn’t content coming out every week on Netflix. You can go to the What’s new section and then see six new things you didn’t see like the next from one Friday to the next. And so Disney Plus was kind of built as this platform where content releases come out a lot slower, but it’s very good content, it’s quality level. You could open up Netflix and try to watch a movie and get 10 minutes in and decide, you know, this isn’t for me. But in Disney plus I don’t feel that way. Even if it’s something I’m not completely interested in, I will get sucked in because Disney knows how to tell a story and you get sucked in so easily. So it’s a different type of platform and it can’t be priced the same way as Netflix. I mean, Netflix didn’t raise places prices for how many years. Right. Um,

Yasmine (14:13):
And even when they did, they got a loss of subscribers as well.

Nicole (14:17):
Yeah, yeah, absolutely. There’s definitely a limit to how much you can, um, squeeze out of people, especially, especially, and they know this because they have parks and they know people are traveling right now, this isn’t the time where people are sitting at home watching streaming services because we’re all excited to be back out of our houses and we’re traveling. So definitely an interesting time to try to raise the prices. But, you know, going from a 600 million deficit, which again, Disney knew Disney Plus was going to take years to be profitable, they did not anticipate that this would be an operation that would be, you know, in the black from the beginning. They knew that they would have to wait a while, a few years for it to get profitable. But when you’re going from a 600 million loss on the books to 1.5 billion, um, in a very short timeframe, that’s just showing that something is not working, that was previously working.

Nicole (15:13):
And what has changed in the last quarter for this to have, you know, happened. And I think there’s also reports about the last quarterly earnings call mm-hmm. where earnings were not so great to the point that the stock dropped 11% the next day, which is unheard of with Disney’s stock. An 11% drop is about how much it dropped the day after nine 11 mm-hmm. , which is when people knew no one would be traveling the same way again. And so if that gives you an idea of the magnitude of how bad this earnings call was. But the weird thing was that Bob Chopek was so just, he wasn’t portraying it as if it was bad. He was trying to give it this light that like, you know, this is a really good thing for us. And if you’ve ever sat in a meeting where someone’s trying to deliver bad news by making it sound really positive, you’re just feeling very gaslit and like mm-hmm. ,

Nicole (16:11):
Am I just not understanding like, am I reading things differently than this person is telling it to me? Um, and I think there were probably already cracks in the foundation, but I think this call really spurred the board on to have to figure out what’s going on with their leadership and what they can do. So if you don’t know how, um, a business like this typically runs, there’s usually a board of directors that, um, you know, could be some people who have significant shareholders in the company, also people that are elected. There’s a chairman, you know, I don’t know how many people are on Disney’s board, but typically this is around seven to nine people. And the board is the one that chooses who the CEO is. Basically, if a CEO is getting hired, they report to the board of directors. And so they’re JPEG’s boss.

Nicole (17:02):
So after this quarterly results call, not only did they already have a couple cracks in the foundation, but they started hearing from senior leaders at Disney who were just completely beside themselves and started talking openly, not just like to their best friends behind closed doors, started talking openly about resigning if Jpx stayed a ceo. And that is such a red flag. I, you know, this is a shocking development. Like CEOs don’t tend to just disappear overnight without some big scandal. Um, and, and there’s no indication here that there’s a scandal. This is just Disney making a really effective quick decision based on what they needed to do. And so I I I wanna reiterate, there’s no signs of a scandal or anything, anything, but this is really effective leadership at work because you could hem and haw and sit on decisions for a really long time.

Nicole (17:56):
You can say, oh, let’s give it another quarter. Bob Chap’s contract was actually just renewed in July on unanimous vote. And so what does that say when the board four months later decides, oh, we need to fire him. Like that’s, that also hits your own reputation because you voted four months ago to keep this guy in place. And so I, I just wanna highlight the leadership and the level of in intelligence and, and business acumen that has gone into this decision because, um, from what we’re hearing, they started talking about this seriously on Friday night, came to a decision by Sunday afternoon and, um, somehow convinced Bob Iger to come back. Bob Iger had been in the public eye multiple times over the last year saying he had no intention of returning to Disney. And

Yasmine (18:48):
He’s also 71 years old. So like that man, he, he looks like a

Nicole (18:52):
Younger 71 young, but he is not a spring ticket.

Yasmine (18:56):
It must be all that charisma keeps him young, but he, he’s ready to retire, you know what I mean? Like, you know, do things here and there. But he’s, he’s done his service to Disney. He’s coming back through the end of December, 2024. So this is a limited return while Disney figures out who the next CEO is going to be. Um, but one of the interesting things that Bob had said in, um, an interview is that he thinks it was just talking about the media side of the issue. It was, um, chap x’s lack of like, empathy and just like char kind of, he didn’t say charisma, but basically charisma, um, as his reason of not being able to relate with the creative community at Disney and the Hollywood creatives. And that’s one of the things that caused such a huge rift in the relationships on the media side, the chair of the board, I think it was Susan Arnold had said that Bob Iger was uniquely positioned to help Disney, um, turn things around. And we know that he is responsible for the massive creative boom and the resurgence and revival of Disney animation and Disney’s movies. So, um, that, that big loss was probably a massive factor in them realizing they needed to bring Bob Iger back before they continued to hemorrhage money.

Nicole (20:22):
I think what’s really interesting about this too is that stocks immediately went up 6% the next day. Mm-hmm. on a day that the stock market was going down. Yep. Um, and so that really shows the confidence level that people have in Bob Iger. And, and I’m so glad you mentioned the emotional intelligence part of this because we have both read Bob Agers book. I have actually watched the, I can’t re I think it was on Master Class. Master Class. Yeah. He, he, it was basically just a video retelling of his book. It, it wasn’t, there was nothing there that wasn’t in the book. So if you’ve read one, don’t feel like you need to watch the other. But it was obviously very interesting to see his own face delivering his own words. And I think emotional intelligence is something that is often overlooked in leadership positions.

Nicole (21:11):
Mm-hmm. , and I’ve talked about this before, female business owners tend to perform better to their goals to male business owners. And, and I think so much of that comes down to that emotional intelligence piece when you are a relationship based person or understand how relationships work, even if you’re looking at it from a very like, technical point of view of like, oh, I need to make sure I nurture this because I need to get this output out of it. You know, even if you break it down to something that feels very clinical, it’s such an important piece. And PIC constantly felt like he was at odds with cast members who, you know, are your biggest fans. Mm-hmm. , um, imagineers who, you know, echoed so much of the story before, um, Bob Iger days where imagineers kind of got iced out of things and guess what the creativity suffered and the company suffered mm-hmm.

Nicole (22:06):
Because the entire company’s based on Disney magic. Mm-hmm. . And I just think that emotional intelligence is something that really can’t be taught there. Obviously you can take classes and you can kind of become more aware and work on it, but Chopik was constantly at odds, not only with employees, but also with with fans. You know, um, I, I have played World of Warcraft in my day and there was a developer at one point who people said, we want the old game back. Bring the old game back. And he very famously said, you don’t actually want that. Nobody would play it. And then they launched, um, what they call Warcraft Classic, uh, three, four years ago now. And it had a huge fan base. It’s still running today. And it’s, it’s become this meme in the community of someone telling you like, you don’t actually want that.

Nicole (22:57):
You don’t know what you want. And I felt that way with Eck all the time. He actually said in an interview back in September or something, like, adults don’t watch animated films, they’re just made for kids. Talk about being out of touch with your audience. I mean, just some of these comments, I mean, he flat out said, and I know that we have talked about this on the show, DVC members don’t make them enough money mm-hmm. , and he said that it’s in quotes and no, maybe we don’t pay for our hotel rooms, but I can guarantee you the only reason I have an annual pass or I buy merchandise is because I’m not paying for my hotel room. Mm-hmm. , um, I, the, the years before I was a vacation club member, when I would go to Disney, I would try to get the most budget friendly room, and I would never buy any, any merchandise. It was too expensive.

Yasmine (23:49):
I,

Nicole (23:50):
She just felt totally outta touch with, with every relationship.

Yasmine (23:53):
Yeah. I routinely drop like a hotel reservations worth of cash on merch when I go Disney, Nicole’s witnessed it. She sees my like frantic run-ins into like the emporium where I spent like 15 minutes, like buying all the things that I had my eye on during the day checkout and then go, um, and it’s because I’m a DVC member and I sort of like prepaid for that portion. So I’m Will, I’m able to, you know, allocate budget to, to Disney merch. And I know I’m not the only one. Like Nicole definitely does it. DVC members are amongst the most fanatic about Disney merch that I’ve seen at least. So

Nicole (24:31):
I’m also willing to go to restaurants, um, that I wouldn’t have gone to

Yasmine (24:36):
More expensive, like sit down experiences versus just like having a quick service thing or bring your lunch. Yeah,

Nicole (24:42):
Absolutely. So, you know, emotional intelligence and leadership very important. And I think that it’s the soft side of business that often gets overlooked, but clearly has an impact. The other thing I wanna mention is turning to people for help when you need help. Mm-hmm. , just because you’re the CEO does not mean that you have every answer or know what path forward to take or what to prioritize next. And the advisors that you keep around you are just as important as the decisions that you make. Um, and it was routinely said throughout all of Jpx tenure, there was some ice between him and Bob Iger. And I know, um, Bob Eger had stepped down as ceo, but he was still the chairman of the board for a while. So he was still technically chap’s boss and should still, you know, be reported to or have communications with or, you know, he was there to be available. And so when you stumble into situations like the Scarlet Johansen and the, uh, don’t say gay rules in Florida, like some of these really big things that happened in the last two years in the Disney world, especially politically, PAC never turned to Iger for any insight into how he should respond to these situations. And so I I think it’s like a humbling lesson.

Yasmine (26:04):
Yeah. And that didn’t really sit well with, um, Bob, who basically saw, um, PAC take control away from creatives to, aside from like these decisions and put ’em in the hands of like MBAs, which I know we are, we’re MBAs, but like there ha we also acknowledge the fact that like business decisions are more nuanced than just numbers, right? The human element, the creative element. And I do wanna add that, um, Bob Chek had put, um, someone in re, sorry, let me rephrase that. Bob Chek had put, um, an executive in charge of Disney streaming who didn’t have a ton of experience and is also being blamed as one of the reasons why they had that 1.5 billion loss. And on Monday morning, so we’re recording this on Tuesday, November 22nd, this was yesterday morning, Bob Iger out said that executive and put the p and l and just all the decisions back in the hands of creatives in the company.

Nicole (27:08):
And if you read, uh, Bob Bagger’s book or you look into the movie with him, um, he talks about how creatives are like the backbone of the Disney brand. And if you have good content, you can do so much with it. So I, I think like the couple of lessons here, whether you’re looking at it from the perspective of just like, this is some Disney shocking news, or if you’re actually trying to get some business lessons out of this, and we talk about leadership, have some emotional intelligence surround yourself and utilize the people around you for making decisions and for finding clarity of your path forward. Survey your customers, we talk about this so much, but survey them and actually do something actionable with what they’re saying. I mean, especially the ones that have been around the longest, you know, um, people will always complain and I, Bob Iger didn’t have glowing reviews the entire time he was ceo, and I think he was on the decline as he was leaving. He definitely put Disney in some debt buying Star Wars, you know? Mm-hmm. , it’s not everything wasn’t amazing, but when people start feeling like the essence of who you are is gone, that’s a problem. Um, make quick decisions, that’s another good one. You know, sometimes you can really think about things for a really long time and sometimes you just need to kind of pull off that bandaid and, and get that decision moving. Um, gosh, I can’t even, there are so many lessons I think we can pull

Yasmine (28:42):
From here. I think one big one that I would just wanna add, Nicole, is look back on past successes. You don’t always have to reinvent the wheel If something is not working, go back and see what did work and how you can continue to implement those strategies or incorporate them into your newer strategy. I think we, in our industry as like online business owners are so obsessed with what is new, what like this guru is telling us to do right now. Because it’s like the hot thing that we look away from our uniquely you business or I guess in my case, uniquely me business, um, and lose the essence that of who we are and what basically attracted our audience and brought us to the position that we are right now. So it’s okay to maintain something, look back and repeat things that have worked while trying to grow, but going from one direction, doing complete 180 to another because that’s what you think people expect of you, can basically blow up your business as we’ve, um, saw things might go up for a while, but it’s not sustainable. So I really, really, really wanna encourage any business owner who’s listening, um, that while change is good, changes don’t always need to be big, little subtle changes can grow your business in a sustainable way that maintains that brand sentiment and maintains that unique element of who you are.

Nicole (30:13):
All right. So thanks for joining us for this kind of off the cuff episode because we’re just rolling with the Disney news as it comes in, um, when this errors, I’m sure Bob Iger will have made some more decisions in the meantime. So definitely go take a look at some of the news articles about what happened in the last two weeks because I’m sure that we’re gonna hear more and more and plans for the future. So a couple of things to wrap up this episode. First of all, follow us on Instagram at Pixie Dust & Profits. If you are interested in reading or audio books or anything like that, we highly recommend getting Bob Iger’s book. Even if you’re not a Disney fan, it is such an amazing story of how to be a leader in your company. Mm-hmm. . And so I cannot recommend that book enough.

Nicole (30:59):
And my favorite part is that all of the best takeaways that I remember underlining while reading are actually in the back of the book already ready for you to, um, read through. So, um, go get that book. And then lastly, if you’re looking for some business partners who can advise you about things going on in your business, or you need a sounding board because you feel like you’re a solo CEO doing it alone, check out the profitable and productive party. It’s at pixiedustandprofits.com/party. It’s, you know, coaching with me and Yasmine. Every month you get two sessions where we just get to work and two sessions where we can actually talk through the different things that you, you know, want advice on. And there’s also an online forum where you can leave notes and thoughts and other people can get back to you on super small group. We love, you know, supporting all these business owners and we’d love to see you there too. So thanks so much and we’ll see you real soon.

Yasmine (31:52):
Bye.