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APRIL 2004
"Pure creativity is one thing," says Norm Elder, chief marketer of Universal Studios' theme parks worldwide. "For me, creativity is where you're taking ideas and molding them into practical applications."

Norm Elder Universal Studios
Creativity That Works
"That kind of creativity -- the kind that actually works -- is a discipline, says Norm. "You study it eight ways 'til Sunday, but hopefully not to the point where you beat the innovation out of it."

It's a kind of creativity that Norm applied initially as one of Disney's fabled "imaginers," and today is working to Universal Studios' advantage as the head of each and every one of its theme parks, including those in Spain, Japan, and a new one planned for Mainland China.

It just might be a kind of creativity that comes more naturally to someone like Norm, who got his start at Disney, part-time as a lowly ride operator, while attending Southern Cal. "Probably the best job I ever had," he says. "Had a great time and when I got ready to graduate, Disney was just embarking on building Walt Disney World."

Good timing. Norm joined up and spent the next eight years as a Disney "imagineer," in creative development for all their theme park development. Imagineers, as Norm explains it, are a mix of writers, filmmakers, architects, engineers, as well as analytical and marketing people. "It's Disney's think tank and development arm for their themed entertainment," he says. "It gave me great exposure to all of the many disciplines that go into entertainment."

Norm segued from imagineering into marketing, planning and development for Walt Disney Attractions. After that, he focused much of his time both on the expansion of Walt Disney World and on developing Tokyo Disneyland, becoming the first head of marketing for that venture.

When his time at Disney was done he spent three years at Warner Communications (prior to the Time Inc. merger) before forming a consulting practice with a former Disney colleague and enjoying an eleven-year run at that. One of his clients happened to be Universal and -- wouldn't you know it -- they recruited him to come on full time, initially to develop a theme park in Japan, subsequently another in Spain, and now a third park in China.

verbatim

What's it like to build a theme park in Mainland China?

Well, I'll tell you, it's a lot of brand new watershed territory. As you know, China is the economic story of this decade anyway. When you get into things like entertainment in an area like China, where so much of the 1.2 or 1.3 billion population still lives far below the poverty level, it's really an interesting moving target to try to gauge what the market can support, economically, in terms of entertainment.

It's a fascinating process and it seems like every day you open a new door and it's a new set of challenges, new set of opportunities, and a new set of questions that have to be addressed as you're taking another step forward.

Is it significantly different from a consumer standpoint?

Yes and no. If you look at the household, the number of children that you can have is controlled by the state and there's a real emphasis on male children. There are differences to how you approach and appeal to individual households. In terms of what appeals to Chinese from an entertainment standpoint, there are surprisingly more parallels than things that diverge from what is popular either in America or in other developed countries.

Norm Elder Universal Studios
Are there any really interesting differences that you've noticed?

The interesting thing is you have to worry less about having a parking lot for thousands and thousands of cars because a lot more people are coming on bikes and through mass transit.

Because of the limitation on the number of children a family can have, the children are really treated as royalty. In addition, usually you have multi-generational households, so you not only have doting parents, but grandparents. So, there's a real focus on the kids.

How about differences between your experiences building parks in Tokyo and Spain as compared to your experiences in the US?

When we went into Tokyo -- this will date me, but it was January of 1975 when we first started doing a feasibility study on doing a Disney park in Tokyo. It took about eight years from that point to the actual opening of the park with all the negotiating and development that had to happen.

At the time, the Japanese press thought it would be a gigantic failure. They didn't see how that type of an investment could economically make sense and be viable. Yet, it's turned out to be the single most successful theme park in the world many times over. So, that's been unique.

Europe is still very much -- from an entertainment standpoint and a themed entertainment standpoint -- in a developmental mode. It's far behind the United States in terms of per capita visitations to theme parks for example. So, in Europe there's still a tremendous amount of untapped potential yet to go.

Where in Japan you've got this small homogenous country, in Europe you've got a lot of countries, in a relatively compact area, but many, many different cultures. It is very heterogeneous, and so there are interesting differences and challenges from a marketing standpoint.

Speaking of Spain, how did 3-11 in Spain -- and 9-11 in America -- affect your planning?

It plays an increasingly important part because of the world we live in today. The biggest challenge is that long-distance travel has gone away. After the 9-11 episode, and every time we have a reoccurrence of this type of tragedy, it brings to the fore just how vulnerable people are around the world. It's very much on everybody's mind.

Where you're going to see it to be a major consideration is how much investment people are going to be willing to put into mega-projects. It certainly has affected Disney's theme parks and it's not helping Michael Eisner too much these days.

It's sad, it's scary. It's a real tragedy. It obviously goes into a lot of the security considerations go into the planning as well for individual theme parks these days.

Universal Studios
Absolutely. What would you say is the essential brand difference between Disney and Universal?

Disney is all about nostalgia. It's all about fantasy. Universal is all about the movies, and a hyper-realism, if you will. Universal is really more focused on high thrill -- high excitement. Instead of bringing out the kid in everybody the way Disney does, Universal really brings out the adult in everybody. The good thing is that they're complimentary products, as opposed to head-to-head competitors.

Is the creative process -- now that you're at Universal -- different than it was when you were at Disney?

The basics really are the same. Interestingly, in our business, it's a pretty small universe of players. A lot of the people go back and forth between companies, so from a process standpoint, it's very parallel at Universal in terms of what Disney does. In terms of the scale at which they do it -- Disney is a bigger operator, so from a body count perspective they certainly have more people.

How do you arrive at the price of admission?

Universal and Disney do comparable pricing because both organizations feel that what they offer is a world-class experience and therefore they are very comparable in terms of the price-value ratio.

That said, it's a new day and age in terms of people and their value consciousness and their ability to pay ever increasing amounts to take a family of three, four, five -- or whatever -- out for a day of entertainment. If you're charging $45-$50 a head just to get in -- for a family of four that can really add up in a heartbeat -- even before you've bought any food or souvenirs, or anything like that.

So it's an on-going sensitivity and you may see, in the future, almost a reversion to things that were done in the past. Today, everything is "pay one price," whereas back in the 60s and 70s you might recall Disney's A, B, C and E ticket books, as well as the general admission.

So you may see some reversion to things like that, or at least tests of things like that, to make the kind of entertainment that Universal, Disney offers and others offer more price competitive, more amenable to families from an economic standpoint.

How is the web and e-commerce integrated into the marketing plan?

Norm Elder Universal Studios
Certainly in the United States, e-commerce has become a huge part of Universal's business. It's really an effort to make buying a ticket and booking a vacation as convenient as possible.

It's not so much a price situation such as it is with Expedia and the like. But from the resort and theme park standpoint, it's really a matter of helping people not only plan their vacation with information, but also make a sale and make it convenient. In Japan, it's becoming an increasingly bigger part of the equation, but Japan certainly lags far behind where we are today in the U.S. with regard to e-commerce.

So, e-commerce is vital from an informational standpoint and helping people plan and providing the most up-to-date, and enticing, and persuasive information. Then it's a matter of culminating with an actual transaction and getting that final commitment to come, to visit, to stay with us.

Will parks change significantly over the next five, ten, fifteen years?

They're going to have to. That's very much top-of-mind right now. We're challenged not only by the negative dynamics in terms of worldwide terrorism and economic problems, but also in terms of the other types of entertainment that are available both in-home and out-of-home. What does that mean in terms of how people want to allocate not only their money but also their time?

So, theme parks are going to have to evolve to maintain a competitive stance vis-a-vis other alternatives. It will be interesting to see how that happens.

Any thoughts at all -- blue sky -- on what might change?

One thing we touched on earlier is pricing. The basics are with entertainment -- whether you go see a movie, any out-of-home entertainment and probably most in-home entertainment -- people want to escape their normal, daily, ordinary life for a little while and come out of that mentally and emotionally refreshed. That'll never change. The basic appeal and motivation will always remain the same.

We will be dealing more with things that make it cost-effective as well as time-effective for people to visit the types of out-of-home entertainment that we offer. We'll also be dealing with -- from a business standpoint on the P & L statement -- how to more cost effectively invest and operate.

So, I don't think it's a matter of coming up with a silver bullet that's going to magically change the format of the entertainment, but it's more some of these other elements that will be the drivers for change.



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