50 years later, Disneyland faces a challenge

updated 7:07 a.m. ET July 15, 2005

LOS ANGELES - Hey Disneyland, you’ve just celebrated your 50th anniversary. What are you going to do next?

As its prototype theme park hits the half-century mark Sunday, The Walt Disney Co. is facing some critical challenges.

One is geographic. The company is set to open its 11th park in Hong Kong in September and could soon announce plans for another in mainland China. How many more places in the world can support a massive new multi-day theme park?

Disney’s biggest challenge, however, could be keeping the attention and dollars of a generation raised on video games that demands more control over their entertainment than most Disney attractions provide.

“Almost everything Disney does today is passive while kids today expect everything to be interactive,” said Martin Lindstrom, a brand expert and author who has consulted for Disney and other companies such as Mattel Inc.

Disney is counting on the Internet, cell phones, digital projectors and other technology to make its parks more appealing to Gen-Y while maintaining the nostalgia that appeals to baby boomers.

“The problem is that they’re not doing it the full way, they’re doing it a little bit,” Lindstrom said. “If they don’t do it, five or six years from now they will have a major problem.”

Disneyland was wildly innovative when it opened on July 17, 1955. Founder Walt Disney used robotic figures, holographs and panoramic movies in circular theaters to spin stories for children. With virtually no competition, he had little trouble capturing the imagination of the world.

Over the years, Disney has pioneered new technology in rides such as “Mission Space” at Epcot in Orlando, Fla., and the revamped “Space Mountain” in Anaheim. But these days, the company finds itself competing against parks that feature taller, faster and scarier thrill rides.

“Disney is always going to address the competition, and the competition isn’t just other theme parks,” said Bill Coan, a former Disney employee who is now with Itec Entertainment, which designs theme park attractions.

“It’s video games, 120 channels of TV and shopping malls,” he said.

Disney’s parks and resorts division earned $193 million in operating profit during the second fiscal quarter, up 3 percent from the same quarter last year. Attendance at Disney’s domestic parks is beginning to approach pre-Sept. 11 levels, the company said when it released quarterly earnings in May.

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