Media companies sell theme parks

Posted Tuesday, February 7, 2006 9:06 AM | Contributed by coasterguts

CBS's decision last month to sell Paramount Parks is the latest example of how media-entertainment conglomerates are recognizing the limits of what synergy can deliver. But go to Orlando or Anaheim, Calif., where Disney announced yesterday that first-quarter profit at its parks rose 51 percent vs. the comparable period a year earlier. Regional theme parks, however, are not considered the essential media-empire building block they were during the '90s.

Read more from The Washington Post.

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Tuesday, February 7, 2006 9:59 AM
Good article. The failure of the Paramount Parks is squarely at the feet of the cheapness of Viacom. If they wanted to be like Disney, they did everything in their power to make sure that was never attainable. The lack of themed hotels, barely themed rides with extremely loose connections to their film/tv franchise, and unable to properly exploit the major properties of CBS/Paramount/Viacom studios doomed the parks from the start. They are so concerned with quarterly results that they don't see the value in building major additions that last decades, like for example POTC.

Also noticed in the article that Universal is mentioned as their parks might be sold as well. Again, amazing short-sightedness. The Orlando properties made a massive mistake in selling off their own land forever land-locking IOA. Couple that with some pretty meager investments since then in there and in their Hollywood parks as well, and the management seems to be on a course of self-destruction.

They have to spend money to make money. But they are only concerned with quarterly results over creating the quality experience that lasts decades. On the surface, spending 100 million to create rides like POTC looks like a mistake, but how long has that ride been operating? Why is Disney (well, parts of Disney) the only park that gets it?

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Tuesday, February 7, 2006 10:28 AM
Jeff's avatar Failure of Paramount Parks? How is that chain a failure?
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Tuesday, February 7, 2006 11:01 AM
I think there have been some questionable decisions by management of Paramount but I wouldn't call them failure.
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Tuesday, February 7, 2006 11:04 AM
Jeff's avatar I hope you've got something more than them moving the PKI flyers.
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Tuesday, February 7, 2006 11:19 AM
Mamoosh's avatar Of course they do, Jeff! Management decided to rename Beastie...the chain is dooooooooooooomed ;)
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Tuesday, February 7, 2006 11:33 AM
The top two seasonal parks in North America are owned/operated by Paramount Parks. And, for the last several years the chain has reported increasing overall attendance (and, one would assume--revenue). That sure sounds like a "failure" that most park companies would love to have...

With all the discussion about the sale of Paramount Parks looming, I've been thinking a lot about the complaints of poor synergy between the parks and other Viacom properties. I think I finally understand the problem. Viacom has tried to achieve synergy using the parks, but it's been asymetric. Whereas Disney uses the parks to promote media properties, which in turn promote the parks, Paramount has only used the parks to promote the media franchises--there's been no cross promotion back to the parks. It's like one whole side of the synergy concept has been missing. (Practically every sitcom family on ABC has visited Disney World during sweeps...but yet the Paramount Parks were never even mentioned on Viacom-produced shows...let alone special episodes filmed at a park.)

However, I thought the most amazing missed opportunity was last Summer when "Survivor" auditions were held at an Ohio theme park--Geauga Lake!!*** This post was edited by JZarley 2/7/2006 12:00:53 PM ***

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Tuesday, February 7, 2006 1:31 PM
Survivor was for real. Accountants are hired every 30 days, and they try to stretch a buck and generate the revenue Sea World did. So far, no Survivors.
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Tuesday, February 7, 2006 2:10 PM
The parks are obviously a failure if the parent company is looking to sell them.

To normal people, of course they are not, but clearly the suits of Viacom thinks otherwise, even though it's the suits who have prevented the parks from achieving the Disney standard of success.

It's ironic that the most elaborate themed attraction tied to a Paramount IP is Star Trek in the Las Vegas Hilton! Why wasn't this attraction done at the actual Paramount Parks?

Whoever winds up with the parks will have some pretty good regional parks. I only hope they are not as short sighted as Viacom.

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Tuesday, February 7, 2006 2:35 PM
I wouldn't call them financial failures, but they're being sold off for a reason as stated in the article. Viacom sees the growth of this division as flat, but as DBJ said, you have to spend money to make money.

If they would have tried to make the parks more of a destination park experience like the Universal movie parks with heavily themed areas and submersive ride experiences instead of just a SF knock off, they would have seen the growth they were hoping for. For any regional park, attendance can only grow so much, to attract and build on that, you have to offer something more than just a regional park experience. As Disney has shown, build a quality product and they will come from all corners of the earth. But Viacom chose the cheap route of off the shelf stripped down or barely themed SF type rides, with the hope that just the Paramount name alone would be enough clout to carry them. Were they honestly expecting attendance to continually increase and people to travel from all around for just that?*** This post was edited by jomo 2/7/2006 5:24:01 PM ***

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Tuesday, February 7, 2006 2:39 PM
DawgByte II's avatar If there's one chain that seems to be a cash-cow vs. a money-pit, it would be Paramount. Each year they seem to be showing a marginal increase in attendance... and one seasonal Paramount in particular (Canada's Wonderland) seems to be passing year-round parks in attendance and has seen growth in double-digits for the past few years straight.

Yeah, you can't expect attendance to keep jumping 10 to 20% every year... you've gotta be living in la-la land if you think that's possible. If they did that, parks would eventually fill to capacity... every park has a plateau, unless given the opportunity for expansion (except land-locked parks, of course). I don't see why CBS would want out when the Paramount Parks [as a whole] seems to be more successful than Six Flags, Kennywood, and even Cedar Fair in overall attendance. Profit wise? I don't know... depends on who has the best in-park spending which... in the end, is the bottom line for profit, is it not? I hardly think even the least performing Paramount Park is doing as poor as the best Six Flags performing park (profit, not attendance).

But then again, I didn't do my homework, so I'm probably wrong somewhere.

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Tuesday, February 7, 2006 2:42 PM
While I certainly agree with your points, I think the best rationale for CBS selling the parks can be found in the Post article:

"With their slow growth and high capital costs, regional theme-park chains did little to boost the stock prices of parent media companies such as Time Warner and Viacom.

Wall Street analysts "don't give credit to assets buried in the balance sheet. If you don't get credit, you look at assets as sources of cash that can be deployed to other core businesses," said Robert Routh, an analyst for Jefferies & Co."

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Tuesday, February 7, 2006 3:14 PM
Jeff's avatar

The parks are obviously a failure if the parent company is looking to sell them.
There's nothing "obvious" about it at all. We've been over this time and time again. The park biz is not a growth biz, and short-sighted public companies don't want anything that doesn't grow fast.
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Tuesday, February 7, 2006 3:44 PM
What is particularly interesting about this is that with Paramount Parks we're talking about parks that actually *began* in media conglomerate synergies. Kings Island and Kings Dominion began as outgrowths of Taft Broadcasting, and Taft actually used the broadcasting and production companies to promote the parks, while their Hanna-Barbera characters inhabited the parks.

There is something else going on that the WaPo article touches on and a few people here have mentioned, but that nobody seems to "get". It has to do with the short-sightedness of the media conglomerates who decide to get into the amusement park business, and can't remember that the amusement park business is not the movie and television business, and that the corporate synergies go beyond connecting amusement park attractions to box office blunders.

Take a look around Disney's World, for instance. Consider the attractions that are in that park. Yes, there are Disney characters inhabiting the place. Yes, the attractions bring to mind the settings used in various movies. But with very few exceptions, the park attractions are NOT connected to the movies. The attractions are stories unto themselves, which may or may not have anything to do with the on-screen properties. The very best attractions that Disney has to offer have no connection at all with the big screen (or began as amusement park rides and were later turned into movies!). Instead, the media synergy is one of using the storytelling, design, and effects talents of the filmmakers to create something entirely different.

Universal gets it, as well, and you can see it with Islands of Adventure. They created a new world, and where it could tie into the movie properties, that was great. But the attractions are designed to tell their own stories, whether or not they are connected with the stories in the theaters. The important thing is that Disney and Universal have decided that they are in the amusement park business, and they develop their amusement parks accordingly. That works. Viacom, on the other hand, decided that they would use Taft's parks (Taft also got it straight...) to promote Paramount movies, leading to exactly the "veneer theming" described in the article. They never understood that they were in the business of creating an experience, whether or not that experience has anything to do with a hit movie. In fact, the truth of the matter is, it's very difficult to give people the kind of experience they see on the silver screen; rather than try to reproduce an actor's experience, it's far easier, and I suggest far more satisfying, to put the park customer into the world of that movie, and go at it from there.

--Dave Althoff, Jr.

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Tuesday, February 7, 2006 8:10 PM
If they only would have increased the Klingon count roaming the park, we would not be having this discussion... :-)
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Tuesday, February 7, 2006 9:09 PM

Viacom, on the other hand, decided that they would use Taft's parks (Taft also got it straight...) to promote Paramount movies, leading to exactly the "veneer theming" described in the article. They never understood that they were in the business of creating an experience, whether or not that experience has anything to do with a hit movie.

Good point, they could have easily gone the route of the Busch parks too, another chain that "gets it". The Busch/SW parks are so well know and popular, I would almost consider them destination parks moreso than regional. And like Disney, their best and most popular attractions have absolutely nothing to do with Busch products, but rather well told stories unto themselves a you put it. Toss in a quality well themed and maintained park experience and you have your recipe for a continuously successful world class desitination park.

Think what Viacom could have done at their parks with the $50-100 million per flick they blow on dozens of flops every year. A $70 million (what they spent on ST:TE) well done Indian Jones-like knock off at one of their parks would still be pulling people in by the masses 15-20 years from now (but only if Paramount also knew anything about maintaining their ride efx).

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Wednesday, February 8, 2006 8:31 AM
Another thing in the Paramount vs Disney discussion. The rides that Disney DOES theme to movies are tied to movies that have an almost historic aura. They are classics that generations and generations of people grow up with. The same can't be said for Paramount. Top Gun was a good movie but I'm in my mid-30's and have a strong memory of it. Todays teens to early 20's may not have ever seen Top Gun...or maybe did once on tv. The Disney movies are watched and rewatched and then watched again. They are a part of childhood.

Top Gun, Italian Job or Pinocchio and Winnie the Pooh. It isn't much of a comparison.

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Wednesday, February 8, 2006 1:15 PM
Face it, Disney is all about familys and pretty much always has been.

I said from the start that Paramount would probably have been better off starting from scratch (In associating the parks with it's movies and other brands) Than the way they did it trying to convert existing parks that had basically nothing to do with it's branding.

Two areas I think they succeeded in, Nick and the waterpark.

The rest is a few themed attractions, thrown into bascially rivertowns, coney malls ect. Paramount Action zone really don't reflect holiwood as much as it could or should, Gone after the first year were stunt shows and Action film music. Gone fifth year were actual Viacom/Paramount movies and shows for sale in the park. Gone recently were star trek memorabilia ect.

In order to do it right, Starting from scratch and doing it beyond or equal to Disney is probably the only way for them to go and make it work.

No, Paramount parks weren't a failure as far as the buisness goes. The improved, made a profit and succeeded in that much. However, Marketing it towards holiwood and making the connection, Increasing the companies bottom line through wider marketing of it's brandings was a failure.

They can and probably will continue (Depending on who's buying) to have loose affiliations and licenseing and it will probably continue to work FOR THE PARKS but expect Viacom/CBS to benifit from it very little other than guaranteed licensing fees.

Chuck, who also wants his flyers back, but thats beside the point.

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