Can Avatar Save Disney?
It's always good to have a little Cameron in your corner.
The first foray will take place in Disney's Animal Kingdom in Florida, where $400 million and several acres are being earmarked for the expansion project.
Yes, it's an odd fit in an animal-themed park. However, Animal Kingdom is the least attended of Disney's four Florida theme parks, so it's the one most in need of a spark to turn a half-day destination into a full-day stay.
It's pretty clear that Disney is trying to rip a page out of Comcast's (NAS: CMCSK) majority-owned Universal Studios Islands of Adventure playbook. That theme park -- just a few miles away from Disney World -- saw a 20% spike in attendance last year on the strength of its Harry Potter addition.
Avatar is unlikely to have that kind of impact. It may be the highest-grossing film of all time, but it doesn't have the same kind of connection that J.K. Rowling's seven-book series has with Potterheads. Maybe that will change after Cameron delivers a pair of sequels, but the only third-party companies that have truly cashed in on the popular sci-fi flick so far are IMAX (NYS: IMAX) and 3-D outfitter RealD (NYS: RLD) . It was Cameron's film -- on IMAX's supersized screens and in immersive 3-D -- that put premium cinema on the map.
Disney's lacking park will benefit from the new land. It's incremental, after all, though theme purists will argue otherwise. However, yesterday's deal is still years away from beginning to pay dividends. Construction won't begin until 2013, and it will probably be three more years after that until it's finally open to the public.
Hopefully Disney will have some near-term additions before that. Unlike regional players Six Flags (NYS: SIX) and Cedar Fair (NYS: FUN) that need a marquee addition every year to woo locals, it can take years before Disney invests in e-ticket attractions at its parks. The only material upgrade at Disney's four Florida theme parks that is currently under construction is a Fantasyland expansion at its original Magic Kingdom park.
We can always question why Disney turned to a rival studio's cinematic property instead of tapping its deep Disney, Pixar, and Marvel benches, but it's at least refreshing to see Disney not take its market leadership for granted as the competition closes the gap.
If you want to see what the family entertainment giant does next, addWalt Disneyto My Watchlist.
At the time this article was published Motley Fool newsletter serviceshave recommended buying shares of Walt Disney and IMAX. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributorRick Munarrizhas gone to Disney World hundreds of times, and that's not an exaggeration. He does own shares of Disney. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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