Friday, November 18, 2016

How Wanda CEO Wang Jianlin Prepares His Counterattack Against Shanghaî Disneyland

As you know Wanda's CEO Wang Jianlin - real estate tycoon and richest man in China - is self declared Disney's biggest foe and determined to make Shanghaî Disneyland a financial failure. His famous quote "One tiger is no match for a pack of wolves - Shanghaî has one Disney while Wanda, across the nation, will open 15 or 20 theme parks" is now famous and two theme parks built at the speed of light have already open in Hefei and Nanchang.

Now, Wang Jianlin did a series of announcements recently which shows that he's ready to spend an enourmous amount of money to win the battle, but this time things has changed a bit as he's apparently also learning from his mistakes - the park which opened in Wuhan in 2014 has closed just 19 months after its opening for "upgrades".  So, let's see what were Wang Jianlin different moves during the last weeks as it might give an idea of what he prepares for the future.

First, on October 15 we learned that Wanda hired Andrew Kam, previously at the head of Hong Kong Disneyland. Andrew Kam will serve as "vice president of Wanda’s Cultural Tourism Group, which is planning to build and operate a series of large-scale theme parks across China". Well, this first move is not necessarily a bad one as not only he hired someone who was at the head of a major theme park, but also a Disney one, which basically gives Wang Jianlin the knowledge of how his biggest competitor create theme parks, not to mention to learn what will be Disney's future projects in advance as Andrew Kam probably kept some connections inside the Mouse.

Then, a few days after, on October 26, Wang Jianlin and "his delegation" went to visit Shanghaî Disneyland. I suppose that Andrew Kam probably told him something like "well, you know, it might be a good idea that you'll go at Shanghaî Disneyland to see by your own eyes how Disney do it..." No surprise, Wang Jianlin declared during his visit: “The visit to Shanghai Disneyland is both an observation and study”. And there is a lot to study at SDL for Wang Jianlin if he wants to understand the secrets of what makes a Disney park unique.

Then, and for sure impressed by the quality of Shanghaî Disneyland rides Wang went back to his headquarter, probably gather his "war council", and a few days ago an official press release from Premier Rides announced that Wanda has signed a contract with them "to build one of the most cutting-edge attractions ever to be introduced to the theme park industry".

Here is the full press release in case you missed it: The Wanda Group has awarded Premier Rides a major contract to design and build one of the most cutting-edge attractions ever to be introduced to the theme park industry. The first-of-its-kind attraction will set a new standard for technical innovation and will reinforce Wanda’s stated goal to be the leader in China’s themed entertainment industry. The project will represent the most significant investment to date by Wanda on a single attraction and will introduce stunning new technologies that are sure to impress Wanda’s millions of fans.

Jim Seay, President of Premier Rides commented on the award stating “Premier Rides is incredibly respectful of Wanda’s commitment to build the best, world-class attractions and world-class theme parks throughout China and beyond. Their dedication to providing high-end thrilling immersive experiences is very impressive and we are honored to be a part of their vision for success. The Wanda team is very focused and works hard to ensure the best possible product. Premier has great synergy with Wanda.”

Premier Rides is known for focusing on large, technically complex projects that incorporate the newest technologies and has provided the ride equipment for award-winning attractions like The Revenge of the Mummy™ at Universal Studios and Full Throttle at Six Flags Magic Mountain. The project with Wanda takes ride technology to the next level and will raise the bar on expectations throughout the industry. Cloaked in a high level of secrecy, details of the project are being kept very quiet.

Seay added “We are honored to be part of Wanda’s team which is absolutely focused on providing the newest and most exciting rides to the entertainment industry. The contract with Wanda is one of the largest ever for Premier Rides and we are very grateful for the trust placed in us. The themed entertainment business is very strong right now and Premier is in a growth phase to meet the industry needs. We are highly focused on the Asian market as its expansion continues to lead the industry and it has become the focus for the best the industry can imagine.”

So, so far, Wanda has hired Andrew Kam former head of HKDL, signed a contract with the folks of Premier Rides who know what a good ride mean, and tour Shanghaî Disneyland for inspiration... And then, came the BIG announcement ten days ago: the Wanda Group will invest $15 Billion to compete with Disney in China. Yes, you've read it well: 15 BILLION Dollars, i.e THREE times the cost of Shanghaî Disneyland. Actually, to be fair, Wanda signed an agreement with the municipal government of Changsha in China’s Hunan province to spend more than $7,3 billion on a Wanda City theme park in that city, plus another $7 billion on 15 shopping plazas throughout the province. It still makes $7,3B for one theme park only, 50% more than what Disney has spent on the whole Shanghaî Disney Resort, including SDL Hotels.

But wait, there is more as two days ago Wanda unveiled its second $15 billion development project in one week, pledging to build a major theme park in China's historic Xi'an Province for 50 billion yuan ( always $7.3 billion ). The rest of the investment will go into various developments across the region, including 19 commercial plazas. When someone announces in less than ten days two $15 billion projects including two theme parks for a cost of $7,3 billion each either you consider it's pure madness or that the guy is serious and you start to have a closer look at "what the hell is happening". And i don't mention that Wang Jianlin also bought two weeks ago Dick Clark Productions - who organize the Golden Globes, the American Music Awards, and more, for about one billion dollars, adding to Wanda's portfolio that includes the AMC theater chain and film-production company Legendary Entertainment ( more about that one in a moment ). Wanda's empire is also expanding on the movie production front as a huge "Movie Metropolis" is under completion in the Chinese coastal city of Qingdao, where Wanda hopes to lure foreign productions to its massive soundstages. And Wanda also announced the creation of a multi-billion dollars investment fund to invest in all six Hollywood Studios. At first Wang Jianlin wanted to buy one of Hollywood "majors" studios and until recently he had some views on Paramount Pictures but, there, it started to raise an alert and 16 U.S Congressmen urged that Hollywood Studios should be consider among "national security" saying that "any Chinese company that benefits from “illegal subsidies” could pose a strategic, if not overt, national security threat as there have been “growing concerns about China’s efforts to censor topics and exert propaganda controls on American media”. Apparently Wang Jianlin got the message and decided instead to create this investment fund. Last but not least, let's not forget the $3.3 billion investment in the Europa City project near Paris announced last February, which will include a theme park.

From any angle you look at all this, you know that Wanda prepares something big and that Wang Jianlin is decided to spend billions and up to his last yuan to win the battle with Disney. Yes, BUT sometime billions are not enough. Sure, with $7,3B spent on each park you can create truly amazing theme parks IF you have the right creative people - he might hire plenty of SDL Imagineers that Disney fired recently after the park opened - the right rides manufacturers - Premier Rides is a good start and a deal with Dynamic Attractions could be a good move, too - and also a serious budget for rides and parks maintenance over the years, generally the weak point in China. But here is the problem: even with all this, if there is no emotional connection for the guests it won't "work" as well as when there is one. Think about Disneyland Indiana Jones adventure, for instance. IJA is undoubtedly one of the best rides ever created but would you enjoy the attraction as much if it was not linked to Indiana Jones but to an unknown hero that you've never heard about? It still will remain a great ride, but as much enjoyable emotionally speaking? Probably not. And that's what Wanda is missing, characters beloved by millions and characters to whom people can identify. Someone once said that each Disney's animated classics were trailers for the Disney theme parks, and it's not totally wrong, even if it was not the primary intention. And that's where the purchase of Legendary Entertainment can be of some help for Wanda. Legendary Pictures produce among dozens of others Pacific Rim, the latest Godzilla, the upcoming Kong : Skull Island, and many more, and all these are characters that Chinese know and with which you can design great rides. Godzilla is still the property of TOHO Studios in Japan and Universal has a deal on King Kong ( a swell as on Godzilla in Japan ), but this can be resolved probably, specially with a man who's spending billion of dollars each week. And i wouldn't be surprised if the lack of characters IP was also the reason why Wanda tried to buy one of Hollywood major studios. Though with the upcoming Wanda investmend fund in Hollywood movies they might be in good position to ask for the use of IP in their Chinese parks in exchange of millions of dollars that will help a movie to get into production...

Now, to find and hire the right creatives and the ride companies will be the easy part for Wanda, specially when you are a billionaire like Wang Jianlin. But to make sure that Wanda's future theme parks will be as good as Disney, Wang Jianlin will need another victory over his biggest enemy and it's one that no money can buy as it is: himself. From what i've been told Wang Jianlin has no understanding of the industry in which he is trying to compete. May be his visit to Shanghaî Disneyland opened his eyes but so far he didn't realize that all he was doing was taking western concepts and throwing a Chinese robe over it and calling it Chinese. The Wanda guys also have a reputation for hiring western experts, bring them out for the press and then ignored everything they said because they think they know better. Until recently all they were doing was buying rides and ideas from the west, paying for it once and then copying without understanding what makes them special.

So, it seems that Wang Jianlin has still a long road to go before being a true competitor with the same quality than Disney and may be his "pack of wolves" won't hurt Disney "tiger", finally...

Related articles to learn more about Wanda projects and Wang Jianlin: Wall Street Journal, Shanghaist, Hollywood Reporter HERE and HERE, New York Times.

Pictures: copyright Getty, Wanda, Hollywood Reporter


SWW said...

If he wants to build a park that bests Disney, the guy Wang should be hiring to lead his $15 billion effort is Tony Baxter (or Eddie Sotto, John Horny, or any number of the greats who are still active and not currently with a competitor), not a HKDL suit.

There is a comprehensive artform to theme parks, which is not well understood, even among today's design pros and executives, and this is why there exist only a tiny handful of truly top tier parks on the planet.

Chinese (or any other) businessmen typically see parks as a place where movies come to life, or as a leisure addendum to a real-estate development, where a checklist of attractions can be placed. Their approach almost always fails to see the forest for the trees and what made the best Disney parks so appealing and successful. There needs to be a creative Visionary as the primary driving force behind the effort. Otherwise, you're going to see $15billion worth of more mediocre parks in China.

SWW said...

And Alain, I disagree with your thought that it is IP that makes Disney parks the best and most popular. What are your five favourite attractions in Disneyland Parc Paris? I think most lists would contain a majority of Park-Originated Attractions (PotC, Big Thunder, Phantom Manor, Space Mountain, Small World).

If Indiana Jones were exactly the same attraction, but the Indiana Jones movies never existed, I think people would find it even more impressive and a movie franchise would be created based on it (a la Pirates). IP is not a requisite for a great park. Greatness, in the micro and macro, is the only requisite. That is where the Visionary part comes in (A businessman safely sells people the things they crave, a visionary boldly shows them things they didn't yet know they wanted).

Anonymous said...

I feel much better now that you've shown me that Wang has zero chance of beating Disney. It's better to try to develop a mutually beneficial relationship than be hostile. Look what happened to Disney under Michael Eisner. Disney and Universal were friendly and had a complimentary relationship, but Eisner soured the relationship, and now Universal is beating Disney at it's own game.

Wang is making the classic mistake of believing that throwing money at something will make it succeed. Disneyland was brewing in Walt's head for years, and he went to great lengths to understand how amusement parks work before he finally went ahead.

The Chinese are good at copying U.S. technology, but they don't understand American creativity. Look up the creepy Chinese ripoff of It's a Small World on youtube, they obviously spent some money on it, but they totally botched it when trying to match the charm of the original. It's like Zombie Small World.

You could also say that, in the U.S. Disney is the tiger and Six Flags is the pack of wolves, but there is no comparison.

Alain Littaye said...

SWW, i agree with you that most of our favorites Disney attractions are not coming from a Disney IP, but right now, what Disney and even Universal try to do is to create rides based on IP ( Frozen, Ratatouille at DLP, Little Mermaid ride, or King Kong, Jurassic Park, Harry Potter rides at Universal, not to mention the upcoming Guardians of Galaxy ride at DCA TOT, etc... ). There is a reason why they do it and we all know which one, which basically is: how to make money using synergy.
Now, i'd rather have them built rides not based on IPs but i'm not the one who decide. The Chinese folks at Wanda try to copy the most famous rides ( Star Tours, Soaring, TSM, etc ) without any relation with an IP. They did a copy of Toy Story Mania for instance but would TSM would be as much enjoyable if it was not linked to Toy Story characters? Same for Star Tours, anyone can create a simulator ride with a ride movie happening in space, but do you think that Star Tours would be as fun if it was not linked to the Star Wars stories and characters? The times are to adapt movie success or super-heroes IP in rides. Again, i would prefer not but that' what all of them do right now ( except Wanda )... That 's what i mean in the article.

SWW said...

Alain, your statement is correct: Movie-based rides and parks are popular (in the short term) and are making some Companies like Disney and Uni money right. Why should a prudent business executive do things differently?

A great attraction is a great attraction, IP or no. The thing the Chinese (and others) miss is that putting a bunch of good-to-great individual attractions in a park only gets you half-way there. There is an element that is equally (or more) important than the individual attractions: I don't know if it has a proper name, but it is the micro and macro Place/Environment/Theme/Force - the sinew that connects the elements into a compelling whole, the attention to every minute detail that 90% of people might not overtly notice (they do, even if subconsciously), the attention to sightlines so as to complete the illusion, quality of materials, the provision of deep escapism & immersion, the wow factor, etc.

If Wanda is to beat Disney & Uni at their own game, it will require boldness, creative genius, and a willingness to buck the trend ("come and enter the worlds of ______, the Popular Movie Franchise") to create something incredible. Just my opinion.

SWW said...

Another thought on your Star Tours example. Is it not true that Star Tours had become state and was not drawing crowds at DLP before it closed for the upcoming 2.0 version, despite the ongoing popularity of the Star Wars universe.

This is another risk in movie-dominated parks: shorter shelf-life. While it is true, a great attraction can be based on older or unknown properties (Splash Mountain), a non-movie-tied attraction can more easily have a much longer shelf life (especially, if set in the past).

Phantom Manor will never feel dated, whereas if it were a mystery house ride based on 1980s Clue the Movie, using those actors in the pre-show vids or for animatronics, it would, most likely.

I'm a big advocate of theme parks being used as the artistic medium they are to generate original content, just as the medium of film is used to generate original (or adapted) content. I enjoy adaption (movie-basing) in parks in moderation, but, as you note, the pendulum has swung way too far in the IP direction and needs to come back to the center.

Enjoying to the discussion.

Anonymous said...

The thing about using popular IPs is that people already have an emotional connection to them. When you see the boulder coming at you in Indy, you are excited because you've already experienced it in the movie. If someone else tries to do a ride based on an adventurer archaeologist, then it will appear to be a ripoff.

Rides like Pirates, Haunted Mansion or Space Mountain were original because no definitive experience or movie existed yet. But once a definitive version is established, all others will be judged according to it. The Dinosaur ride at Animal Kingdom is a pale comparison to Jurassic Park, the definitive dinosaur movie.

Wang builds his parks with Chinese themes, which may attract the locals. They may complement Disney, but will never replace the Disney experience.

Anonymous said...

Having completed - barely - a large project with Wanda less than two years ago, I can tell you from experience that the Wanda culture values speed and reverence for your superiors only. No craft, no desire to understand, no consideration for consequences outside their limited ability to grasp, no kidding. It was a travesty to watch them ruin incredible designs with inferior engineering and construction practices. No respect for Wanda, little respect for what I saw as the culture of modern China in my 18 months in a central province on the mainland. Wanda corp has a very strict set of rules that govern every aspect of the employee's work life and these trump all aspects of common sense and good practice. They'll never succeed in the west and can't possibly sustain the monstrous waste they generate in the China. Sorry for the rant.

Anonymous said...

likely having worked the same Wanda project as 'my other brother Anonymous' above, I can echo the same understanding of how the company works... extremely flat management structure without form or function of decision delegation. as a result there is minimum trust of outsiders - this is core to PRC culture anyway, not only in business. as expressed above it is very common for expat experts to be hired in for hefty sums (weighted towards longevity bonuses) as lipstick on the pig, only to be window-seated and unheard.

it is clear that within modern Chinese culture, risk and/or the perception thereof is to be avoided, entirely. this includes anything possibly viewed as not following a path thought to be blessed by Wang. being creative carries inherent risk and the very source of some of the world's most wonderful Attractions is the creative and technical tension (risk) that comes with project development of experiences that are bold and first of a kind. Ai Weiwei is a perfect example of a very talented Chinese artist (by non-Chinese standards) and his rebellious efforts of expression continually have him under the authoritarian thumb.

both Wanda's internal culture and the PRC vibe-at-large will hobble Wanda headway against Disney in terms of immersive guest connections. the new Six Flags parks may fare better as there's no story telling going on there. short of hiring-in creative, technical and operational visionaries, granting them reasonably unfettered license to chart wonderful new experiential horizons for the PRC market with experienced teams providing execution, Wang has a very steep hill to climb regardless of his cubic dollar spend.