Disney's Latest Innovation Is, Quite Literally, Bringing Characters to Life
For nearly a century, Disney (NYSE: DIS) has filled our minds with wonder. The media empire has mastered the use of art and technology to create lifelike characters that tell a story.
Innovation has always been a core part of Disney's movies. Animated films in the 1920s like Steamboat Willy were the first to synchronize sound and pictures. A decade later, Snow White was the first full-length animated film to utilize multiple frames to show scenes with depth perception.
Walt Disney took things a step further in 1955 when he opened the doors of Disneyland to the public. For the first time, kids and parents could experience the magic of Disney's characters in-person at a theme park, which made them even more real than watching on the movie screen.
Disney hired actors to play the characters' roles. But they also deployed animatronics, which were moving and talking robots that made things even more realistic. Their Pirates of the Caribbean ride became a legend of its time, where eager park-goers travel directly into the caves of mischievous pirates.
The company's Imagineering group has always pushed the limits of technology, and Walt Disney could justifiably be considered "The Father of Robotics" in the entertainment industry. He'd be proud to have seen his company's latest evolution of robotics, which are taking Disney's parks to a whole new level.
"You've Gotta See This!"
Words won't do justice in capturing how lifelike Disney's latest robots look, so I'll share a video instead. The following is actual footage of the Avatar shaman, who resides in Walt Disney World (Disney licensed the rights from Fox to use Avatar characters in its parks):
Incredible, right? Disney's newest robots incorporate advanced actuation to give them improved dexterity and additional degrees of freedom, making them more lifelike than the awkward chunks of metal that appeared in the original Pirates ride. Several of them also are powered by artificial intelligence, giving them perception and the ability to react to facial expressions! As seen by its recent patent applications, the robots of Disney World might soon resemble those of WestWorld. But, of course, in a lovable and cheerful way.
Disney's engineers are looking to improve the "emotional quotient" of their robots in order to improve guest satisfaction. They're not afraid to use AI and advanced sensors as technological ways to accomplish that.
What this means
OK, great. So Disney is deploying robots across their parks that are more lifelike and intelligent than ever. Why should we care as investors?
For one, Disney has had a tough month. Both it and Universal Studios parent Comcast (NASDAQ: CMCSA) lost several guest park operating days following the devastation from Hurricane Irma. Between that and its attempts to correct falling ESPN subscribers, it's hungry to boost revenues and operating profits in any way that it can right now.
Additionally, we already know that the animated movie stars bring in the money. When kids remember how awesome the Avatar shaman looked, they'll inevitably want to buy T-shirts and lunchboxes from the nearby gift shop.
Putting those two points together, Disney is looking to find ways to get more out of its existing parks. The company's newest Shanghai park opened last year and cost more than $5 billion. Disney doesn't have a ton of capital available for big-ticket purchases at the existing locations, but lower-cost upgrades with short payback periods could be exactly the magic investors have been looking for.
Last year, 1% fewer people attended Disney's parks than they did in 2015. But counteracting that somewhat, per capita spending per guest (largely from food, drink, and merchandise) increased 7%. We'll look for lifelike robots to bring in more cash, as Disney finds new ways to bring its characters to life.
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Simon Erickson owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.