Mickey Mouse on the march in Asia
In five years time, half of Disney's theme parks will be in Asia, with resorts in Hong Kong, Tokyo and now Shanghai. But the House of Mouse has far wider ambitions in the region.
Photo: AFP/GETTY
By Malcolm Moore, Shanghai 11:23AM BST 08 Apr 2011
Ever since Robert Iger took the reins as Disney's chief executive in 2005, Asia has been a priority for the Californian company, with mixed success.
In China, one of Mr Iger's first coups was to persuade China Central Television, the state-run national broadcaster, to air Disney's Desperate Housewives series, but the show flopped and was quickly withdrawn. "The show did not have a demographic fit in the Chinese market," the China Daily newspaper said.
The television market has been a long-standing goal, but unlike in the United States, where Disney runs its own 24-hour channel, China has remained resolutely closed.
The ability to broadcast Disney programming on Chinese airwaves was initially sought as part of the "package" of opening a Disneyland in Shanghai. But Mr Iger admitted that negotiations for a wider deal had been "complicated and probably impractical". Disney's film business is also hampered by strict rules on the number of foreign-language movies each year. However, a cinema-building rush is under way in China, with thousands of screens planned for the next few years, and analysts are predicting that revenues may rise significantly for the films that are allowed in.
Meanwhile, the opening of Disney English in September 2008, the company's first foray into the education market, has been a huge success. In two-and-a-half years, Disney has boosted the number of Disney English schools in China to 20 across five cities.
The schools, which are filled with Disney characters, from Mickey Mouse to Buzz Lightyear, cater for ages two to 10 and teach them English after-school using a range of Disney-branded material. McKinsey, the management consultancy, believes the foreign-language tuition business in China is worth more than £1.3 billion a year.
Altogether, Disney now employs more than 600 staff in China and markets its products in 25 cities. The company also plans to open its first self-owned Disney Store in China by the middle of next year, and that it hoped to expand its way through China's glittering new array of shopping centres.
In Hong Kong, Disneyland continues to make a loss, however, and there are fears that since 40 per cent of its customers are from the mainland, the new Shanghai park could cannibalise its southern sister.
Disney insists the two parks are viable side-by-side.
Tokyo, however, continues to be one of the most popular theme parks in the world, with 25.3 million visitors in the year leading up to March.
By comparison, Disney is only expecting just over 7 million visitors in Shanghai when it opens. However, Tokyo Disneyland, which opened in 1983, is owned and operated by Oriental Land, a Japanese company, under license from Disney. Oriental Land has declined to sell the park to the US company.
The theme parks accounted for less than a third of Disney's overall revenues last year, but Asia is a fast-growing market. Legoland is planning to open in Malaysia, and Singapore has opened a Universal Studios resort. Eight out of the world's most popular 20 theme parks are now in Asia. And while only five per cent of Disney's revenues currently come from the region, the company is betting on Asia for future growth.
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