The Great Orlando IP War

November 29, 2016, 2:23 PM · With the impending addition of at least one Nintendo land at the Universal Orlando Resort, Universal will offer its guests three of the most beloved and appealing entertainment intellectual properties in the world: Nintendo, Harry Potter, and Marvel. Universal won't actually own any of these IPs — all will be included in the Universal parks under license from their owners — but no one but theme park geeks like us cares about those legalities. To visitors, Universal soon will be the theme park home of Mario, Hogwarts, and Spider-Man. The Battle for Orlando is on, and it might just end up reshaping the entire entertainment industry.

The addition of Harry Potter disrupted the Orlando theme park market, consigning SeaWorld to third-tier status in the market and providing Universal with the cash flow to take full control of its Orlando resort from its former partner, Blackstone Group. Potter allowed Universal to break the bank and build it at the same time — following its initial Hogsmeade-themed Wizarding World with a faithful reproduction of Diagon Alley, complete with Gringotts Bank, further enriching Universal's bottom line. That's helped launch Universal Orlando as a credible alternative to a Walt Disney World vacation — not just a supplement to a Disney visit — a goal that Universal is pursuing with new on-site hotels, a greatly enhanced theme water park, and plans for a third gate.

Of course, market leader Disney is not just sitting around, content to watch Universal move. Walt Disney World next summer will open its most immersive themed land to date — Pandora: The World of Avatar. And Disney will follow that with its largest-ever themed land, Star Wars Land, at some point in the next few years. Disney continues to offer a stunning collection of its own IP, including all of the Pixar catalogue, Pirates of the Caribbean, existing Star Wars attractions, and Disney's many, many princesses.

Ultimately, Disney and Universal share a common goal of drawing more tourists to visit the Orlando area and to spend more money while they are there. But most families who have the ability to get to Orlando have a finite amount of money and vacation time. At some point, they make choices about their vacations. And the kitchen tables around which those families make those decisions is the front line in the Great Orlando IP War.

For years, Disney has profited from consumers around the world treating "Disney" as a generic term for family entertainment. During the Legends panel at this year's IAAPA Attractions Expo, Walt Disney Imagineering President Bob Weis quoted a Chinese official's words about Disney's brand presence in China: "Of course we know the Disney characters. We love Bugs Bunny. We love Shrek."

Of course, those are not Disney IP. But the conflation of Disney with family entertainment is widespread. When I covered the opening of The Wizarding World of Harry Potter at Universal Orlando in 2010, it became a running joke in the press room whenever a publication would post a story about the new Harry Potter land "at Disney World." The fact that some other company could be running a theme park with a wildly popular, family-friendly IP apparently was inconceivable to some reporters and editors, even ones whose freakin' job is to know this stuff!

Disney has poured vast resources into establishing itself as a lifestyle brand, pushing the conflation of "Disney" not just with all family entertainment but with the concept of "family" itself. (Show us your Disney side, everyone!) Establishing that level of brand loyalty among consumers helps stop the Great Orlando IP War before any potential opponent can fire a shot. You want to visit a family theme park on vacation? You've got to go to "Disney."

But Harry Potter allowed Universal to break through. As The Wizarding World of Harry Potter became a "must see" for millions of families around the world, many of them had to recognize for the first time that Universal Orlando actually existed and that Disney wasn't the home to every family-friendly franchise they wished to spend time with on their theme park vacation. (Marvel was not an elite, global IP franchise when Islands of Adventure opened in 1999.)

Universal's strategy in this business war must be to break the public's default association of the Disney brand with all forms of family entertainment. Universal does not need to establish its own brand name the way that Disney has its brand; Universal just has to get people to stop assuming all high-quality family movie and theme park entertainment as "Disney."

Why? Because if "Disney" is no longer a catch-all generic brand for top-quality family entertainment, it simply becomes a brand representing its own collection of unique IP — just like Universal now is.

Of course, Disney's actual IP line-up is formidable. Its IP line-up matches up with or beats just about anyone else's out there. That's why it became the generic in so many consumers' minds. But once "Disney" is just a collection of its own IPs to most consumers, and not something greater than that — the Great Orlando IP War is back on. The battle over which resort to visit then would be fought over which resort offers the most attractive collection of IP and experiences. Disney no longer would have the head start of being the default destination for family vacations because of its brand status.

That's when Universal's triple play of Harry Potter, Marvel, and Nintendo becomes compelling. Potter might be the most powerful IP in the world right now for cross-generational appeal and appeal to both genders. Nintendo is right there, too, earning billions of dollars in revenue from game enthusiasts around the world each year. Marvel traditionally skewed male, but the success of the Marvel Cinematic Universe has broadened the franchise's appeal among females, helping raise it to — or even maybe beyond — the level of Nintendo and Potter.

What else is left for Disney? Well, what might be the most popular IP franchise in the world, overall — Star Wars. While Star Wars might offer stronger cross-generational appeal than Potter, it (at least up until now) hasn't had as strong an appeal among females as Potter has. (Perhaps Daisy Ridley's Rey can fix this. I'd bet "yes" on that, actually.) Beyond Star Wars, though, each of Disney's IP franchises is somewhat limited in demographic appeal. All those princesses skew heavily toward girls. Pirates skews to boys. Pixar skews young, mostly due to its relatively recent emergence. Parents love watching Pixar films along with their kids, but people over 40 don't show the same level of cosplaying, merchandise-buying fandom toward Pixar than they do toward Potter, Star Wars, Marvel, and Nintendo. (Or that younger consumers do toward Pixar.)

And as far as franchises go, Avatar was a cool movie to watch. Beyond that, no one cares. (At least, not yet.)

Together, Disney's IP has strong cross-demographic appeal. But, speaking as a parent, I would much rather visit a destination that my children will want to enjoy together than one where they each would have something to enjoy that the other child might not. My son might love Pirates and Star Wars, and my daughter might love Disney princesses, but if they both love Harry Potter and Mario, Universal is where we are going, not Disney.

That's the importance of cross-demographic appeal. And that's why even the deepest collection of IP with limited demographic appeal won't beat an acceptable collection of IP with strong cross-demo appeal.

Now let's not forget that Disney has a huge lead over Universal Orlando in the central Florida theme park market, attracting an average of 13.5 million visitors to each of its four Walt Disney World theme parks last year, compared with an average of 9.2 million visitors to each of the two Universal Orlando parks in 2015. Disney welcomed early 138 million people to its theme parks worldwide last year, according to the TEA/AECOM Theme Index report, compared to nearly 45 million visiting the Universal parks. But Universal is killing Disney on growth, with an 11.8% increase in visitors last year, beating Disney's 2.7% growth and the industry's 7.2%.

Yes, Disney is beating Universal on overall visits and income and, having talked with countless industry insiders, I know that it wants to continue beating Universal. Disney will fight to protect its status as a lifestyle brand that people generically associate with family entertainment. And if it can't sustain that, it will fight by offering a compelling collection of IP to its current and potential fans.

But, to borrow an analogy from sports, it's not enough to win with a collection of role players. A championship team needs all-stars. Universal will have three in Orlando: Potter, Nintendo, and Marvel. Disney has one: Star Wars, with a second, Pixar, growing with time into that status. The irony, of course, is that Disney is the licensor of Marvel to the Universal theme parks, thanks to a deal in perpetuity that Universal's former owner signed with Marvel more than a decade before Disney bought it. That deal prevents Disney from ever featuring the Avengers family and other Marvel characters used at IOA in the Walt Disney World theme parks.

Disney can feature non-IOA Marvel characters at WDW, and Disney will try its best to do what it can to feature those Marvel characters in its parks. So perhaps that makes Marvel a half-point to both sides, making the score 2.5 all-stars for Universal Orlando and 1.5 (on its way to 2.5) at Disney World. But Marvel split across the two competitors reduces its value to both, as it limits both sides' ability to market themselves as the home of the brand. While that's to Disney's benefit in neutralizing Universal's advantage in holding the rights to Marvel's top property, the Avengers, it doesn't help Disney fully leverage the power of theme park placement in building the Marvel brand overall.

How much would it be worth to Disney to have Marvel for itself in Orlando? And how much would Universal need to make itself whole in surrendering Marvel to Disney? Given the value of winning the Great Orlando IP War, I can't imagine how large a check that would have to be. A billion dollars? More?

Perhaps allies would need to be enlisted, as is so often the case in conflicts such as this. What if Universal could get the rights to Warner Bros. DC characters from Six Flags, to replace Marvel? A win in the Great Orlando IP War might be worth more than the value of the entire Six Flags chain. What would IP presence in the Orlando parks, which attract many millions of high-spending families every year, mean to the value of the DC franchise? Warner Bros. and Universal have seen what it's done for Potter.

Heck, everyone in the entertainment industry saw that. What other IP are out there that Disney or Universal might try to license, to give them an advantage in Orlando? On the flip side, what other IP holders are looking to entice Disney or Universal to bring their IP into the Orlando market?

What deals might be made, not just for individual IP, but for entire companies, as Disney and Universal chase the billions of dollars available not just directly in Central Florida tourism but also indirectly from brand building among Orlando-area visitors? Disney bought Marvel and Star Wars' Lucasfilm to increase its cross-demo appeal. Universal has been buying, too, having acquired DreamWorks Animation. Could it make a play for Warner Bros.? Could Disney?

The Great Orlando IP War is on. And the stakes are not just who makes the most money on theme park tickets and hotel rooms in Central Florida. This is about brand building. And because of that, ultimately, this is a battle for supremacy across the entire entertainment industry.

Replies (25)

November 29, 2016 at 3:04 PM · Disney has plenty of IP to draw upon. Moana and Dr. Strange are two recent hits and the Guardians of the Galaxy sequel will appear next year. Avatar sequels will soon follow in 2018. How will Universal compete with these developments? Obviously, Universal needs to develop its own IPs that has theme park appeal, but it can continue to coast with IP licensing. Fantastic Beasts has opened well. This IP is rumored to be placed in USH instead of USO. The rumor is they might develop the lower lot to have a New York theme to go with Fantastic Beasts, Transformers, and Secret Life of Pets.

As for the emphasis on girl appeal with Star Wars, maybe they are overcompensating. Star Wars Rogue will feature another female lead. I'm sure toys will just fly off the shelves with the latest development. My daughter doesn't care about Star Wars and female leads make no difference to her. Oh well. I'll just wait for the DVD.

November 29, 2016 at 3:01 PM · This is one of my favorite TPI articles. Incredibly insightful.
November 29, 2016 at 3:29 PM · Universal also seems to have found some animation based IP's with it's illumination Entertainment hits. While all major studios release animated films, it finally seems like Universal has found their formula & can actually claim the #2 spot for mainstream critically acclaimed & mainstream popular characters.

The popularity of the minions & the success of Secret Life of Pets & (based on predictions) the upcoming Sing, finally gives them some original animated characters. Despicable Me already has an attraction & there will be an upcoming "Pet" attraction, could Sing be following in their footsteps?

November 29, 2016 at 3:36 PM · What does Universal have that competes with the demographic that has made the Disney princesses a multi-billion dollar franchise?

Mr. Niles writes: "Disney has poured vast resources into establishing itself as a lifestyle brand, pushing the conflation of 'Disney' not just with all family entertainment but with the concept of 'family' itself."

I Respond: Yep, and as long as the company keeps producing films like 'Moana' and collects the spoils from re-imagined live-action versions of films like 'Beauty and the Beast' (exploiting the Potter induced fame of the lovely Ms. Emma Watson) the princess army will ensure continued conflation.

November 29, 2016 at 5:07 PM · I don't know about the rest of the world but I only care about an ip if the ride is amazing, even if I don't have any affinity with that particular ip.
I was disappointed with the Star Wars ip Disney owned the theme park rights for for decades (1987). That huge of an ip with such a lame ride didn't spent me a dime nor was I interested to see the update. All that although I love Star Wars (but not episode 1, 2 and 3). Now they are going to build a non descriptive, non cinematic, non canon Star Wars land and I have a hard time to get excited by that. I want to visit locations from the movies.

On the other hand I couldn't give less for Nintendo nor Avatar, but if the rides are amazing I'm a happy park goer and will eat and spend.
In the end it's about time there are 2 players in the field, we all win.

November 29, 2016 at 5:09 PM · What about the Dreamworks Animation and Jurassic Park IPs? My 12 year old daughter is just as excited about those IPs as she is for Disney Princesses.
November 29, 2016 at 5:23 PM · Universal's acquisition of DreamWorks animation does give them another piece of valuable IP along with the proposed Monster Universe that is being rolled out with the reboot of The Mummy this Summer, along with Jurassic World, Transformers & Fast and the Furious franchises active still in the Box Office.

An interesting question is GOTG and how it is handled by Disney & Disney can use non associated characters as I understand it, that begs the question when Disney makes Infinity Wars with Avengers & GOTG together and their Disney XD Spider-Man show has regular appearances from GOTG how Disney could then argue they are not associated.

DC Comics may already being coming to Orlando as the rumors are of two domestic theme park companies are looking at the 200 acres of the Artegon Mall complex on North International Drive.

November 29, 2016 at 6:16 PM · 2 years and no Universal... heading back in 2017. Can't wait. My in-laws are planning to take their 3 year old to Disney next Summer. I have never seen two people more stressed out and unable to grasp all of the planning that has to go into a Disney vacation.

They want to do meals and everything... LOL. He is an angry elf to begin with and she gets rattled if he looks at her the wrong way. Looking forward to this fiasco.... ahhh Disney.

November 29, 2016 at 6:26 PM · Problem with Disney is for the past 10-12 years they have invested nothing in their Orlando parks. It's only now they are playing catch up - and even at that very slowly.
November 29, 2016 at 11:19 PM · While I agree that Harry Potter has greater female appeal than Star Wars, I can't say I see too many males prefer the former as opposed to the latter.
November 29, 2016 at 11:53 PM · DC and Lord of the Rings. I cannot wait for Nintendo that is going to be huge.
November 30, 2016 at 12:11 AM · Interesting article, but it's not all about IPs. As some have pointed out, it was the execution of the Potter lands that led to their success, as much as the IP itself. And if it was ALL about IPs, then Universal would have passed Disney's attendance by now.

Also, in Orlando, the competition between Disney and Universal is also a synergistic relationship. In other words, anything that brings people to Orlando will benefit both companies. I'm sure that Disney was the second biggest beneficiary of Wizarding World.

November 30, 2016 at 12:16 AM · Honestly, at this point I don't think there is much benefit for Disney or Universal to purchase additional IP. Both have an extensive and diverse library of properties that have theme park potential yet haven't been seen in the parks yet. I'm betting that the next 10-15 years is likely to be about not who has the most appealing IP, but who does the best job of translating that IP into a theme park environment. Despite the popularity difference, a highly immersive and detailed themed are for something like Star Trek would be likely to prove more successful than a flashy but cheaply made Marvel Land.
November 30, 2016 at 1:06 AM · Im not sure why the article is insuating that Universal was pretty much non-existent until Harry Potter debuted?

Sure, one could argue it made Universal Orlando relevant again and reversed years and years of declines in attendance at Universal's parks that they experienced after September 11th... Though Universal Studios did just fine in the 1990's, and Islands of Adventure has always been considered a great park.

I agree that competition is great for Orlando as it pushes all the major players in town to invest; though the pecking order is something that will always be set in stone.

Disney will always be king while rest will be forced to fight for what's remaining... Harry Potter hasn't and will not change that, and that includes any other IP this article over exaggerates and over inflates on importance.

To also attempt to boil down Disney's total dominance in the Theme Park business for the past 60 years to just a mash up of who has the best IP available is beyond ridiculously simplistic; Why Disney holds and will continue to retain the crown requires its own insightful article.

November 30, 2016 at 4:43 AM · SeaWorld may be "third-tier" ... but they have the best collection of coasters hands-down in Orlando. And the best park atmosphere, IMO.
November 30, 2016 at 8:15 AM · I have been trying to get Universal to open up a Jason Bourne attraction... Let's see the Disney princess's compete with the worlds best Agent!!!

Great article Robert, I believe we 'The Theme Park fans' are the winners here.. Let them compete and let us enjoy all of it...

November 30, 2016 at 8:24 AM · Do you think Universal Orlando might also fight Star Wars Land with a Star Trek area of their own?
November 30, 2016 at 9:31 AM · While IPs are important, immersion is more so. Wizarding World is not amazing simply because it is Harry Potter. It is amazing because you are freaking IN the wizarding world.

November 30, 2016 at 9:58 AM · I had a kid in my high school class come back from an Orlando vacation to tell me "Disney was awesome!" To which I always ask "what attraction did you like best?" "Oh! Harry Potter!" After a deep sigh and eye roll, I asked "no, I asked what you enjoyed most at Disney..." "Harry Potter! I just told you!"

The kid never touched a Disney park the whole trip but still thinks he was there! ^_^

November 30, 2016 at 11:50 AM · Great article!

I'd like to see Universal acquire the rights to some other IP with a large fan base. The DC Comics suggestion is great.

Why has no one acquired Star Trek? That would be a huge draw for a new and historical fanbase, particularly with new new movies -- no Paramount parks currently exist (except the one in development in London).

November 30, 2016 at 12:26 PM · When Comcast made a bid for Disney years ago, I thought if would be horrible for a cable company to take over Disney, but they've done great things for Universal. Steve Burke, who was passed over by Paul Pressler while at Disney, has been key to Universal's success. Universal made all the right moves while Disney sat on it's laurels for 15+ years.

While Disney has to add some great screen based attractions to out do Spiderman and Potter, they still have the best mix of attractions, Universal has too many screen based rides. Nintendo will also probably be screen based, but if they could make a world where all the walls, ceilings are totally enveloped in screens, that would be something. Not sure about radiation exposure, but it would be something.

November 30, 2016 at 2:00 PM · As some people have said, it isn't just about the IP but the quality of the ride. But an IP counts massively. On my last US trip (5 years ago) I had to decide which Universal to go to. Orlando won because it had the Jaws ride.
Admittedly that was a choice between two universal parks, but having an IP can get people into the door. They might not return if the experience isn't what they want or expect.

I think Universal should do a deal with WB. Imagine the power of sending Bugs up against Mickey.... mouse season?

December 1, 2016 at 8:51 AM · Excellent article! Thank you! Don't get me wrong, I love the use of IPs in the parks, especially from evergreen franchises that keep getting recycled over the years. However, I really do wish we would hear about more original stuff coming out of, at the very least, Disney. Expedition Everest, for example, is just amazing. Pirates of the Caribbean is a classic. The list goes on. I'd love to see Disney balance out their IP plans with more than occasional original idea. That seems to be the aspect that really sets them apart from the rest.
December 1, 2016 at 9:48 PM · I'd say the IP doesn't matter as much as the quality of the attraction and the land that it's in. I agree with many posters that Harry Potter was the success it is, because of the attention to detail and the build quality. Keep in mind, everything had to basically be approved, and was overseen by Ms (Mrs?...I don't know) Rowling, herself. I cringe to think what could have happened, had she not demanded the level of control that she wielded.

I don't know how much power James Cameron has over Pandora, but I know he's working with Disney, and has been to the site. I think this is the way to go, when the IP's creator is willing and able to contribute in such a capacity. It's their creation. Nobody loves it as much as the person who spent years getting it out of their head, and onto paper or film.

If someone finally gets around to making a Lord of the Rings land + attraction, obviously they can't get JRR Tolkien's input, but most people associate the movies with one man - Peter Jackson. And he's the one who should be in the Rowling/Cameron role. In my opinion.

With that said, I think the IP does matter. If Cars Land was based on, say...M.A.S.K (anyone remember them?), I don't think a lot of people would flock to it and crash the gates. Sure, if it were done really well, people would enjoy the heck out of it, and it'd be successful. But nobody would really care beyond that.

If it came down to what's more important, I say the quality and attention to detail within the land and attraction. Ideally, we'll have synergy, and the IP will be joined together with great craftsmanship and creativity to make something like...Diagon Alley or Pandora.

I think Scooby Doo would be a great IP for Haunted Mansion, by the way.

December 2, 2016 at 12:23 AM · Scooby Doo?

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