A new roller coaster opens at SeaWorld Orlando this morning, and with that comes the hope that SeaWorld Entertainment (NYSE:SEAS) can reshape its image in the eyes of Blackfish-streaming millennials turned social activists. Mako will be the area's tallest, fastest, and longest roller coaster, and the bet here is that the white-knuckled thrill ride along with recent activist-appeasing moves will make it desirable and socially acceptable to brag about going to a SeaWorld Entertainment theme park this summer.
It's a big bet on a big coaster, but it's just one part of the meandering theme park operator's turnaround strategy.
SeaWorld initially underestimated the impact that Blackfish -- a skewering 2013 documentary that singles out the marine life park operator for its practice of keeping killer whales in captivity -- would have on its potential customers. Blackfish details the psychological risks to the orcas and physical dangers to the park's trainers. It had an uneventful run at the corner multiplex during its theatrical run. It took in a mere $2.1 million in domestic box office receipts during the summer of 2013, which means that roughly 300,000 people -- or 0.1% of the U.S. population -- saw Blackfish at the movie theater that summer.
Then it started to go viral. Time Warner (NYSE:TWX) aired Blackfish on CNN in the fall -- twice. Time Warner was a distributor of the film, so it only made sense for it to lean on its cable news juggernaut to promote the flick. It also added legitimacy to the project. Like most documentaries it only presented one side of a complex story, but served up on a trusted news platform proved convincing to many viewers. SeaWorld Entertainment was too slow to tell its side of the story, and by the time it began streaming on the popular video platforms it was too late. SeaWorld Entertainment had counterclaims to most of the documentary's allegations, but they went unheard as a documentary initially viewed by hundreds of thousands at the multiplex was being streamed by millions if not tens of millions now concerned viewers.
You Mako me crazy
SeaWorld didn't realize that it had become the theme park that millennials started to hate until it was too late. The Cove -- a scathing 2009 documentary that chronicles the slaughter of dolphins by poachers that can't be sold to marine attractions -- focused more on the traders than the operators. Four years between the two films also awakened an appetite for social media and streaming services, making a targeted documentary that was much more effective in hitting its mark.
SeaWorld Entertainment has responded. It initially moved to expand its killer whale tanks and end performances at its original SeaWorld park in San Diego. When that failed to win over the haters it made the bold move to end its orca breeding program. That was enough to win over the Humane Society of the United States and end its legal battle with the California Coastal Commission. Some organizations including PETA still aren't satisfied, but at least it's taken enough steps to quiet some of its critics.
Mako is the latest investment in rides and attractions, positioning SeaWorld Entertainment to rely more on coasters and family friendly rides to woo visitors than the flagship sea life performances.
Attendance is starting to turn the corner. It was marginally positive in 2015 after back-to-back years of 4% declines. Turnstile clicks also edged higher across most of its parks during this year's first quarter. There was weakness only in Florida, but that was credited to the notable drop in international tourists to the region, something validated when even Disney World suffered a surprising year-over-year dip in attendance during the same period as Brazilian and European visitors stayed away as a result of the strengthening dollar and Brazilian unrest.
That brings us to Mako's debut this morning, opening just as the peak summer travel season is getting under way. Millennials may or may not have forgiven SeaWorld, but a world class coaster is often too juicy to ignore as a public apology on behalf of the transforming theme park operator.