Comcast's reversal on theme park business leads to billions in investment

Because they've seen the handwriting on the wall, the cable TV business is doomed

While that is true about cable, I think the handwriting they've seen is that people are flooding into Orlando and they have some amazing IP to show. That those parks kind of stagnated for years blows my mind.

I first visited Islands of Adventure in November, 2001 (IAAPA social event), and I was completely blown away. I went back and stayed on-property a bunch of times after that, always shocked that so little changed and was invested at UO as a whole. By 2008 I started to get a little bored. I think the ownership changes were probably the biggest problem overall.

I'll disagree with Tek. I think the handwriting on the wall was about cable: that business is changing, quickly. Taking a point from the article... ten years from now, I think many people will be consuming shows at their convenience on smartphones, tablets etc. But the appeal of shared experiences -- riding Harry Potter, Transformers, what have you -- will still be strong.

I don't disagree about cable. But I still don't think that's the big motivator here. Comcast can't rely on theme parks to save them. Saying that they see the writing on the wall that cable is dying, and implying that they're switching to a theme park focused company is a ridiculous idea.

They simply saw a section of their business that wasn't being grown that totally could have been (obviously). If they want to survive the death of cable, theme parks are not the answer.

Does Comcast really need saving at this point? My assumption is that cable companies will be relegated to dumb pipe providers over the long run, as the TV business slowly declines, but it's still likely they'll be a monopoly in most markets even for that.

The point of this story was more that no one expected them to even keep the theme park business when they bought NBCUniversal. Now they love it.

I think Comcast's investment in Theme parks have more to do with the return on investment the first Harry Potter Addition showed .That said will the current Comcast spending keep up if Disney decides to green light massive investment in Star Wars and other IP's in their stable.That will flatten the growth of turnstile clicks and may slow down the investment in New rides,hotels,restaurants, and shopping . So far it looks like Disney Exec's are to afraid to make a decision to spend to expand at the rate Comcast is. Disney fires Exec's who make bad decisions .So far Disney Exec's feel no decision is better than a bad decision that may get them fired.

The cable business at this point comes with quite a bit of uncertainty....in finance terms, risk.

...and as much as the theme park business also brings considerable risk...Potter is a virtual guarantee - for at least the next 5-10 years.

Harry Potter, under the watchful eye of J.K. Rowling, was pretty much a no-brainer. It would have almost impossible to fail by adding Harry Potter to a park. I've read that Disney ultimately decided not to go ahead with Ms Rowling as the company wasn't willing to cede the level of control she wanted.

kevin38 said:

So far it looks like Disney Exec's are to afraid to make a decision to spend to expand at the rate Comcast is.

I don't think that's even remotely true. New Fantasyland cost just as much as the Hogwarts expansion. The spending for Disney Springs is nothing short of epic. The Avatar stuff is easily going to cost into the hundreds of millions of dollars. They've spent insane amounts on new Vacation Club properties and renovations to existing hotels. And just because you can't see Star Wars doesn't mean it isn't already happening. Hollywood Studios closed half of its attractions... there's a reason for that. Seriously, if there's a spending contest, Disney is winning by a lot.

There is a spending contest. And Disney is spending more.

But are they spending more WISELY? On that, I'm not so sure...I think for now, Universal is getting more bang for their investment dollar. But Disney's time-horizon has always been notoriously long...

I'm not sure it's a contest. Universal and Disney, in Florida and California, are laying down mountains of money in pursuit of different goals. Uni seems to be aggressively seeking parity with Disney in terms of attractions and hotel rooms. Disney seems to be playing a longer game, strengthening existing infrastructure (Disney Springs, DVC, hotels) and adding attractions that will strengthen WDW (Avatar, Star Wars, New Fantasyland).

That's my two cents, anyhow.

Here's another reason why Comcast might want to get out of the cable, phone and internet business. Could it be that they have the worst customer service ratings. In the Chattanooga, TN area they are losing customers due to the poor customer service and higher increases every 6 months. The amusement park industry is a much safer bet since the prices are much higher than what one pays for a month of the triple package.