Universal vs. Disney: The Battle for Orlando | An IP for an IP | 3

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0:21June 18, 2010. The sun hasn't risen yet, but thousands of Harry Potter fans are already gathered outside the gates of Islands of Adventure, one of the two theme parks that, together, are known as Universal Orlando Resort. Florida in June is humid and heavy, even before the day has properly begun. It's a long way from the cool stone corridors of Hogwarts Castle, or the snow-capped roofs of Hogsmeade. But nobody here seems to care. They've come for the grand opening of a theme park that promises to transport them from the muggle world into the wizarding world. Many are dressed for the occasion, too, wearing Hogwarts robes, round glasses, stripes, scarves, and house ties.

1:08Some have drawn lightning bolt scars on their foreheads. Others grip wands. Teenagers who grew up with a book stand beside younger children who know Harry primarily from the films. They haven't come here just to ride a roller coaster. They've come to experience the wizarding world of Harry Potter. When the gates open, a crowd surges forward. Thousands hurry across islands of adventure, passing through Seuss Landing and the Lost Continent, past the bright colors and cartoon curbs of Universal's earlier attempts to reach Disney's family audience. Now, all of that is a sideshow to something more powerful.

1:51Soon, it's a six-hour wait just to get inside the new attraction. Those who make it discover that Hogsmeade, the wizarding village, is narrow and compact, forcing visitors to slow down and take it all in. Crooked shop fronts lean inward. Fake sculpted snow sits on rooftops. Owls perch overhead. Shop windows glitter as quills right by themselves. Portraits move and magical objects stir behind glass. The Hogwarts Express train breathes steam nearby. The Weasley's flying car lies crashed into a tree. Wand boxes stack from floor to rafters inside Ollivander's shop. The three broomsticks is dark and tall like the tavern from the films.

2:40The concessions sell pumpkin juice in pumpkin-shaped bottles and butter beer that tastes like cream soda beneath a thick butterscotch foam, the result of weeks of recipe testing and a tasting session in Scotland with J.K. Rowling herself. That level of scrutiny has been applied across the entire world, from the look of Hogwarts Castle to the fond on restaurant menus. At the opening ceremony, the film stars arrive like visiting royalty. Daniel Radcliffe, the actor who plays Potter himself, praises Universal for carrying the book's legacy forward. For the fans, it's confirmation that this place doesn't just honor the story.

3:24It belongs to it. But for Universal, this morning is about more than magic. It's about survival. The company bet more than$250 million on the wizarding world. And that's layered on top of years of debt and corporate doubt. When GE took control of Universal six years earlier, its theme parks were in trouble. The Orlando Resort had just lost more than$50 million in a single year and was carrying more than a billion dollars in debt. Cuts followed. Universal Creative, the company's equivalent of Disney's Imagineering, was gutted. And many new attractions were put on hold. Universal hopes Harry Potter can do what Jaws, Back to the Future, Jurassic Park, and Dr.

4:17Seuss couldn't manage on their own. Make Universal Orlando more than just a day trip for visitors already going to Disney World. Potter needs to lift attendance, revive food and merchandise sales, and create the kind of must-buy souvenirs Disney specializes in, while proving to GE that theme parks don't have to be expensive, low-margin businesses. Disney is still 10 miles down the road with four parks, decades of family loyalty, and an entire vacation machine built to keep guests inside its gates. But as the queues trail for hours back from Hogsmeade, Universal sees the possibility that it's been chasing for 20 years, a world that people will choose to enter instead of Disney World.

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7:05On the last episode, Universal stepped up its ambition by opening Islands of Adventure, a second Orlando theme park filled with comic book heroes, dinosaurs, cartoons, fantasy, and children's literature. But it still couldn't match Disney World's appeal as a vacation destination. So, it went after the one property powerful enough to change that. Harry Potter. Company executives flew to Edinburgh, sat across from J.K. Rowling, and promised her something Disney wouldn't. Total creative control. Now, the wizarding world of Harry Potter is finally open. Attendance is surging. And for the first time, there's a real chance families might make Universal the center of their Orlando vacations.

7:57This is Episode 3, An IP for an IP.

8:06In 2010, the year that the Wizarding World of Harry Potter opened, Islands of Adventure draws almost 6 million visitors. One year later, attendance jumps to nearly 8 million, a 36 % increase. Harry Potter drives roughly half of all new theme park visitors in North America that year. Universal's new success arrives at an awkward moment for Disney. The 2008 financial crisis forced Disney to subsidize hotel rooms and food to keep families coming to Orlando. The strategy protected attendance but hammered profits. In the 12 months leading up to October 2009, operating income at Disney's resorts unit fell 25 % to$1.4 billion.

8:55Now, Disney's trying to restore its profits by pulling back those discounts, just as Universal launches the biggest new draw in central Florida. Mickey and Minnie aren't running scared, yet. Disney World still dominates the region. plus Universal's blockbuster promotional campaign for the Wizarding World, which includes a Super Bowl commercial, might even help Disney by attracting more tourists to Orlando overall. But to others, that sounds like wishful thinking. Around Orlando, it's rumored that Harry Potter is pulling guests away from Disney World. And shortly after Potter opens, Disney abruptly stops disclosing attendance for its individual parks, a move some analysts see as a way to avoid awkward head-to-head comparisons.

9:48Disney insists the change has nothing to do with Universal, claiming it's merely part of company-wide changes on how it reports performance. Publicly, Disney's executives stay serene. Disney World president Meg Crofton even sends a congratulatory note to her counterpart at Universal. But beneath this graciousness, the message is clear. Universal has finally found a story powerful enough to pull families away from Disney's property. Harry Potter changes the fortunes of Universal's theme parks. Food and merchandise sales rise. Wands become Universal's answer to mouse ears, a souvenir that feels necessary because it belongs to the story.

10:35But Universal's parent company, GE, isn't sticking around to enjoy the upside. The industrial giant has been looking to get out of the media business for years. In 2011, GE sells a majority stake in NBCUniversal to cable TV giant Comcast for more than$13 billion. For Comcast, the chance to control NBCUniversal and its movie, television, cable, and theme park interests is too tempting to pass up. And Universal's theme parks, freshly supercharged by Harry Potter, are an important part of the appeal. Cable television is getting disrupted, but no one can stream the physical experience offered by theme parks.

11:21Soon after striking its deal with GE, Comcast spends another billion dollars buying out investment firm Blackstone's stake in Universal, Orlando. With Comcast now fully in charge, a new day dawns. Universal no longer needs to plead for capital for its theme parks. Comcast is ready to invest. It knows that if the parks keep giving families new reasons to visit, those trips could become one of the company's most reliable revenue generators. Universal's parks now have real momentum, investment, and the hottest property in books and film on their side. Inside Disney, the threat is getting harder to dismiss, so the company fortifies.

12:11In 2011, Disney announces a long-term deal to bring Avatar to Animal Kingdom. Disney doesn't own the Avatar franchise yet. That won't happen until its Fox acquisition closes in 2019. But Avatar is the biggest film of all time, a global 3D spectacle with an entire alien planet fans might want to enter. The expansion is expected to cost roughly$500 million. The arms race is growing increasingly urgent. For both Disney and Comcast, theme parks now look unusually valuable because so much of the entertainment industry is becoming unstable. DVD sales are falling. Blu-ray is not enough to make up the difference.

12:59And streaming platforms are beginning to pull audiences away from discs altogether. Movie studios can live or die by the next flop. Each film is a costly wager. But parks still produce reliable cash. People can pirate a film. They can't pirate a visit to Hogwarts Castle. Disney used to be the only Hollywood player with this rare advantage. But now, armed with a Harry Potter license and Comcast's heft, Universal is no longer the underdog trying to survive on cleverness and nerve. It's a challenger, with a proven model and real capital behind it.

13:46It's May 2011, and in Orlando, Disney CEO Bob Iger is standing beside George Lucas, the creator of Star Wars, holding a toy lightsaber. Around them, Disney's Hollywood Studios is in celebration mode. Cameras are raised, fans are cheering. the revamped Star Tours ride is about to reopen. It's the same Star Wars galaxy, but now with new planets to visit and the added immersion of 3D. This is the early 2010s, and 3D is being sold as the future of movies. Studios are scrambling to boost the wow factor of their blockbusters with the help of 3D glasses, and Disney is giving Star Tours the same treatment.

14:32Lucas looks relaxed and slightly amused, Iger looks like the polished Disney chief executive he is. Calm, diplomatic, always thinking three moves ahead. But right now, Iger has a problem. He's not entirely sure how to wield a lightsaber. Lucas glances over. Bob, why are you holding it like a golf club? Iger looks down at the toy in his hands and tries to laugh it off. I was hoping no one would notice. Lucas adjusts his own grip, demonstrating. Not too tight. It's not a sword. It's a lightsaber. Iger copies him, raising the blade for the photographers. The crowd cheers. Cameras flash. On the surface, it's a theme park photo op.

15:19Two executives, two toys, one beloved franchise already living inside a Disney attraction. For Iger, though, this moment crystallizes a problem. Disney has Star Wars in its parts, but only on borrowed terms. It can operate Star Tours, but the mythology belongs to Lucas. Iger knows Lucas is thinking of retiring to focus on smaller films, and that could create an opportunity to bring Star Wars under Disney's wing. Iger smiles for the cameras, lightsaber raised, and feels the force of the myth in his grasp. In October 2012, Disney seizes the opportunity and acquires Lucasfilm for$4 billion. The deal gives Disney control over Star Wars, one of the most valuable intellectual properties in the world.

16:16And it wants to use it to strengthen its parts. The deal gives Disney Star Wars, Indiana Jones, and an entire universe of characters and planets. Lucas will stay on as a creative consultant. Disney's plan is immediate and aggressive. A new Star Wars film in 2015, then another film every two or three years. For Iger, this follows the same playbook that brought Pixar and Marvel into the company. Disney is no longer waiting for beloved worlds to emerge from inside its own studio. It's buying them, then feeding them along the Disney conveyor belt. from movies to television, from toys to theme parks.

17:01There are already Star Wars and Indiana Jones attractions at Disney's parks in California, Orlando, Paris, and Tokyo. But now that Disney owns the source material, Star Wars becomes a weapon it can build, extend, and control at will. In the post-Potter world, this distinction is crucial. Universal has proved that fans don't just want to ride through a story. They want to inhabit it and feel that fiction has become physically real. Disney has watched Potter succeed. So, it bought the only pop culture universe big enough to counter it. Universal may have Hogwarts, but Disney has the Death Star. Here's the crucial difference.

17:53Disney owns Star Wars outright, while Universal is licensing Harry Potter from Warner Brothers and J.K. Rowling. That means Universal faces endless royalties, layers of approval, and the long-term risk that comes with building an entire resort strategy around someone else's creation. For now, Universal has no choice. Potter has worked too well to abandon, and there's simply no other franchise of that magnitude available to buy outright. So Universal does the only thing it can. It doubles down on a world it doesn't own. And with the announcement that Disney now owns Star Wars, Universal needs to scale up quickly.

18:41In July 2014, Universal expands the wizarding world, and it does something clever. It reconfigures Universal Orlando's physical layout to become part of the experience. Instead of placing Diagon Alley beside Hogsmeade and Islands of Adventure, Universal builds it across the resort, inside the original Universal Studios Florida Park. And this decision changes the business model. To experience the full Potter world of Hogsmeade, Diagon Alley, and the train between them, guests now need a park-to-park ticket, a meaningful upgrade in price. To make way for Diagon Alley, Universal shuts down Jaws. The symbolism is hard to miss.

19:30Jaws is the ride most associated with the park's disastrous 1990 opening, the attraction that once stranded a top company executive in the lagoon until he could be rescued by rowboat. Now, Universal is demolishing an attraction tainted by its most embarrassing failure to make room for the franchise that has finally given the company Disney-level drawing power. The plan is ingenious. Diagon Alley at Universal Studios Florida connects to Hogsmeade at Islands of Adventure via the Hogwarts Express. In this way, park hopping becomes its own piece of theater. For Universal Creative Executive Thierry Kuhn, the challenge is fidelity.

20:17Diagon Alley must feel denser and more urban than Hogsmeade. London facades, King's Cross Railway Station, platform nine and three quarters, hidden wizarding streets and layers of detail that make the guests feel like they've crossed from the muggle world into Rowlings. Guests board the train at King's Cross Station, pass through the illusion of Platform 9 3 quarters, and ride a train whose windows and corridor doors show a different magical journey in each direction. Potter is now a resort-wide system. Universal has proven that a story world can become an entire geography of shops, transports, souvenirs, and rituals.

21:03Disney still draws more visitors worldwide But Universal's parks are growing faster And with Universal on the rise Disney must ready its empire to strike back

21:23Hey, Dan Taberski here I'm a podcast host, a journalist And now, with my newest project The author of my own manifesto Well, it's a manifesto about manifestos. My search for inspiration in a world that feels more infuriating, more out of its freaking mind with each passing hour. Manifestos are a call to action, an artful scream. They capture our anger and they try to do something with it. This is my attempt to take the manifesto back from mass shooters and nihilists and return it to its rightful place with the warriors, the visionaries, the regular folks with just the right amount of crazy. I compare notes with radicals, secessionists, internet trolls out for a laugh, and punk singers screaming their guts out, all trying to turn their anger into the world they want to see.

22:11Listen to Manifesto wherever you get your podcasts. Audible subscribers can binge all episodes of Manifesto early and ad-free right now. Join Audible in the Audible app or by subscribing on Apple Podcasts. I'm Alice Levine. And I'm Matt Ford, and we're the hosts of British Scandal. Yes, indeed. In this series, a Derbyshire couple are bored of their curtain-twitching, lawn-mowing suburban life. So they sell their house, build a yacht and sail off around the world. Which sort of sounds idyllic until a sperm whale sinks their boat and they begin to starve. Oh yes, and they didn't bring a radio because real sailors don't use radios.

22:49Right? This is the story of Marilyn and Maurice Bailey. And the 117 days they spent lost at sea. Follow British Scandal wherever you get your podcasts or listen early and ad-free on Audible.

23:17It's 2014 and Disney has a new high-tech trick for keeping families cocooned within its Orlando ecosystem. A family arrives at Walt Disney World, but rather than pull out a ticket at the gates, the first thing they do is lift their wrists. At the hotel room door, a child presses a rubber bracelet against the lock, and the light turns green. Inside the Magic Kingdom, that same band gets them through the gate. At lunch, the girl's dad taps the band against her reader and pays for food without opening his wallet. Later, the family walks past a long standby line and into a shorter Fast Pass Plus lane because they booked their ride window weeks earlier at home.

24:10And when they show up for dinner at the Be Our Guest restaurant, their reservation is already in Disney's system. While Universal is turning Harry Potter into a two-part ticketing machine, Disney is pouring money into something less eye-catching, but just as strategic. Control. The company's new system is called MyMagic Plus. Its most visible piece is the Magic Band, an RFID-enabled wristband that lets guests unlock hotel rooms, buy food, make reservations, and book ride times. It raises an obvious question. Why not just build a phone app? But a phone has to be charged and carried, while a wristband turns the guest into the interface.

24:58The promise for consumers is convenience. No tickets to lose, no room keys to carry, less fumbling and less waiting. For Disney, the prize is data and commitment. Disney can now track every step visitors make, alerts staff to guests' birthdays and even manage crowd flow in real time, throwing spontaneous parades and other diversions to funnel people away from overcrowded areas. The earlier family books its meals and ride windows, the more their vacation locks into Disney property. And the more completely Disney manages the day, the harder it becomes for Universal to steal one of those days for Harry Potter.

25:45This is something that's often missed. Convenience is actually a product. We tend to think of businesses as selling a ride, a meal, or a hotel room, but sometimes the thing people value most is removing little annoyances and shrinking the space between I want it and I got it. Remember the first time you placed an order online and saw that buy now button? Yeah, that's the ticket, all right. Companies that quietly remove friction often win before customers and competitors even realize what's happening. If guests at Disney World spend less time standing in line, searching their handbag for tickets or deciding what to do next, well, they spend more time buying drinks, mouse ears, princess dresses, and churros.

26:33But the cost of Disney's new system is staggering. between$1 and$1.5 billion. That's more than many theme park projects cost to build, and around six times more than Universal spent bringing the wizarding world of Harry Potter to Orlando. Critics wonder whether Disney would have been better off just building new rides. Because while Disney now has a way to lock families further into its Florida ecosystem, it's still missing a true answer to Potter. A world powerful enough to make fans plan an entire trip around it. For that, Disney needs a new mythology of its own.

27:21It's 2015. Five years since Universal's Wizarding World set a new standard for immersive lands. Now, Disney is finally ready to strike back. And at the D23 Expo at the Anaheim Convention Center, it's about to unveil its answer in front of its own faithful. Thousands of Disney fans are packed into the hall. There are annual pass holders, collectors, families, cosplayers, and adults who've built whole parts of their lives around Disney's openings, anniversaries, parades, and merchandise drops. These super fans are the advance guard in the theme park wars. Customers who buy early, post first, debate every detail online, and come back time after time to see what's changed.

28:11And today, Disney boss Bob Iger has something big in store for them. Well, we're bringing Star Wars to life in a big way, and I mean really big. We're creating a jaw-dropping new world that represents our largest single-themed land expansion ever. Star Wars is coming to the parks on a massive scale, with two 14-acre lands, one at Disneyland in California and one at Disney's Hollywood Studios in Florida. The superfans erupt into applause. Analysts estimate the bi-coastal expansion, including park and infrastructure, will cost more than$2 billion. But as Universal's Wizarding World show, scale alone isn't enough.

29:03The land has to feel inhabitable and stay true to the world it's based on. Every store and restaurant will be operated by local inhabitants, making each experience deeply immersive. Nothing in the land, nothing will be out of character or stray from mythology. The new Star Wars edition at Disney's Hollywood Studios carries special symbolism. This is the Park former CEO Michael Eisner rushed into existence to beat Universal back in 1989. By 2015, much of its original movie studio tour identity has been dismantled. The Backlock tour is gone. The Animation Pavilion is closing. The park that once tried to show guests how movies are made is being rebuilt to deliver what modern theme park guests actually want.