Disney's $1 billion dollar bet on magical wristband - Wired

Are you kidding!? You really honestly think ease of use doesn't get people to spend more!? You couldn't be more wrong. People don't spend totally logically and according to plan at theme parks. Make it easy when they are having fun and distracted and the will spend more. I do it. Many I've talked to and many on here talk about how easy it is to spend more than intended when you are having fun and it is so easy.

I give up. It simply cannot be true because Disney said it. No matter how obvious, logical, and statistically supportable. Colored glasses all around.

I didn't say it always happens. And if you think people don't spend logically you're wrong. Many guests show up with a budget and stick to it. Just because you spend more doesn't automatically translate into the whole world doing it. I and others have stated numerous times that corporations, while not exactly lying, will certainly paint a rosy picture after they spend two-plus billion on a system implementation.

My glasses are quite the opposite - very clear.
 
Come now Wallrock, it's easy to crunch those numbers by looking at frequency of gift card spending. If Gift Cards plummeted then you can assume that it was canablized. The best comparison would be looking at Key To the World Usage and Magic Band usage year over year to determine the trend.

Ease of use doesn't immediately translate to increased usage. Just the majority of the time.

Then why don't you crunch those numbers? Show me the metrics that point increased guest spending is directly related to the magic band implementation. As LockedOut stated - it's not quantifiable at present and may never be. An earlier post indicated that there was increased spending at Disneyland yet there are no Magic Bands present. Cost increases too will result in an overall increase in guest spending. Many factors attribute to the increase, but to give a victory sign to the Magic Band without considering the other factors is the blind leading the blind.
 
Then why don't you crunch those numbers? Show me the metrics that point increased guest spending is directly related to the magic band implementation. As LockedOut stated - it's not quantifiable at present and may never be. An earlier post indicated that there was increased spending at Disneyland yet there are no Magic Bands present. Cost increases too will result in an overall increase in guest spending. Many factors attribute to the increase, but to give a victory sign to the Magic Band without considering the other factors is the blind leading the blind.
I can't because I don't have the data. Though I'd imagine Disney's professional team of accountants do. I think they'd have an easy enough time figuring out whether gift card usage had fallen dramitically in the same time period.

" I'm not going to go into the details of what that will be in fiscal 2015, but following on what Bob just said about MyMagic+ becoming accretive this quarter, I will tell you that the increase in contribution from MyMagic+ this year will outweigh the preopening spending on Shanghai Disneyland in our total numbers for fiscal 2015. So that might give you some sense at least that Shanghai will not be a drag on our earnings in fiscal 2015."

That's from the earnings call. If they lie they can be sued.

I have yet to see anyone come forwards with those Disneyland numbers.
 
Actually that's all I was pointing out on those examples-what was available "IN THE PARK AT THE KIOSKS" in the AM, some not even at RD.

But thanks for confirming that.
I should have mentioned that I found that to be true at MK. I have little faith in the other parks except at rope drop but I would need to visit two of them more before I decide. Epcot was useless.

Tap your band..... swipe your room key.

I just don't get it. Just doesn't seem that different to me.
It isn't. I noticed that many of those without wristbands wear lanyards and it's just as easy to swipe those as bands.
 


I should have mentioned that I found that to be true at MK. I have little faith in the other parks except at rope drop but I would need to visit two of them more before I decide. Epcot was useless.

That is all I am showing-availability "day of", the same thing you witnessed at MK and have faith at rope drop for AK/DHS (and I showed at all 4 parks everything was available).

Just showing certain weeks you do not have to reserve at midnight 60 days out, or 30, or 1 week, or the day before even. You can be spontaneous and go last minute if you want and be highly successful those weeks.


.
 
Only if it turns out long term that people are happy with being herded to the C and D attractions. The jury is still out.



For some reason this reminds me about a post I saw last Christmas where someone noted that they have so many magic bands they were going to make a chain to decorate their tree.
guilty.
 
Tap your band..... swipe your room key.

I just don't get it. Just doesn't seem that different to me.

I understand your confusion, but after much thought I think it boils down to something similar to Cash vs. debit card. Any financial adviser will tell you when trying to save money buy everything with cash, not your debit card, even though they both directly came from your bank account. That is because psychologically when seeing the actual cash leave your hand, you think twice about spending it. Here, the band is brand new and has no physiological imprint in your head, where the card reminds you of your debit/credit card. So in the second case you brain sees the band as something "magical" and associates the room key with credit card debt or deduction from your bank account. It is purely psychological
 


I understand your confusion, but after much thought I think it boils down to something similar to Cash vs. debit card. Any financial adviser will tell you when trying to save money buy everything with cash, not your debit card, even though they both directly came from your bank account. That is because psychologically when seeing the actual cash leave your hand, you think twice about spending it. Here, the band is brand new and has no physiological imprint in your head, where the card reminds you of your debit/credit card. So in the second case you brain sees the band as something "magical" and associates the room key with credit card debt or deduction from your bank account. It is purely psychological
So like all companies, Disney is pandering to the morons who don't realize they are going to be responsible for the they debts incur. So now you have apple pay and MB's, I wonder what's next?
 
So like all companies, Disney is pandering to the morons who don't realize they are going to be responsible for the they debts incur. So now you have apple pay and MB's, I wonder what's next?

Retna scanners.
 
You are looking at general numbers that have no bearing on what I am talking about. I was describing a much narrower specific examination: An examination of a specific demographic set within the reasonably exact same set of circumstances both with and without bands. It is a valid correlation within a specific error rate. And Disney knows how to gather this information comparing credit card spending before and after bands. They can do it to my account and then crunch the differences between my trips. There are variables, but with enough cases the variable accounted for and the numbers can be validated.

Also it is OBVIOUS that they increase spending. Ask people who use them. Many will tell you. Its just so easy!

Where'd you get this data, or are you speculating again?
 
I can't because I don't have the data. Though I'd imagine Disney's professional team of accountants do. I think they'd have an easy enough time figuring out whether gift card usage had fallen dramitically in the same time period.

" I'm not going to go into the details of what that will be in fiscal 2015...."

That told you all you needed to know, there are no details and it's puffery.

That's from the earnings call. If they lie they can be sued.

Not so much, puffery is not the same as lying, and an earnings call is not the same as a prospectus or financial report.
 
That told you all you needed to know, there are no details and it's puffery.
No, not at all. What they're saying is they can't make specific predictions on exact contributions. Also they don't want to make predictions of exact performance that could lead to disappointment.

Not so much, puffery is not the same as lying, and an earnings call is not the same as a prospectus or financial report.

If you lie, you can be sued. Company CEOs are known for being incredibly careful in everything they say. If you misspeak, and don't make corrections there can be major legal consequences.
 
I can't because I don't have the data. Though I'd imagine Disney's professional team of accountants do. I think they'd have an easy enough time figuring out whether gift card usage had fallen dramitically in the same time period.

" I'm not going to go into the details of what that will be in fiscal 2015, but following on what Bob just said about MyMagic+ becoming accretive this quarter, I will tell you that the increase in contribution from MyMagic+ this year will outweigh the preopening spending on Shanghai Disneyland in our total numbers for fiscal 2015. So that might give you some sense at least that Shanghai will not be a drag on our earnings in fiscal 2015."

That's from the earnings call. If they lie they can be sued.

I have yet to see anyone come forwards with those Disneyland numbers.

How exactly can they lie about projections for the upcoming fiscal year? Projections are speculations and not facts. And since we're quoting the earnings call here's a response from the CEO himself from a question around the benefits of My Magic Plus. Take note of the underlined at the end:

"And what this all adds up to is our ability to manage more people at a time without in any way diminishing guest experience. We did see in the quarter a positive impact to the bottom line from My Magic Plus, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending."

I and others have made the statement that comments coming from the CEO are almost always intentionally void of all the details, especially around something that cost them two billion. Whether their comments are a result of well-rehearsed presentation (such as a quarterly investors call) or impromptu appearance on MSNBC they're not going to give you everything until it's time to do so. To constantly refer to whether they are lying or not is going to absolutes, as if the only choice is to come all the way out with the details or say nothing at all. To claim that increased guest spending is related to the Magic Band when the CEO himself says there's no data to share is reaching a bit in my book.

We've seen a very similar thing happen in the past. Last year Iger made a statement around a 'significant presence' of Star Wars was coming to the parks. The ever-hopeful on this site and others immediately jumped to the conclusion that Star Wars Land was around the corner, even though nothing of the sort was indicated. That vague statement can mean anything from tearing down Epcot and replacing it with a Star Wars universe to simply expanding the gift shop outside of Star Tours. Either way it can't be denied that Iger was speaking the truth.
 
I didn't say it always happens. And if you think people don't spend logically you're wrong. Many guests show up with a budget and stick to it. Just because you spend more doesn't automatically translate into the whole world doing it. I and others have stated numerous times that corporations, while not exactly lying, will certainly paint a rosy picture after they spend two-plus billion on a system implementation.

My glasses are quite the opposite - very clear.

So you think most guests spend wisely? For the last 20 years you must not have been involved in business or read a great deal about how business, advertising, and credit are affecting the average US consumer. Your average American doesn't save properly, are impulse buyers, and overspend on vacation.

Businesses place a cardboard stand with junk on it in the middle of an aisle people walk down and the item increases sales by a huge margin just because it is there. Look at your local grocery store checkout lines. Notice all the absolute junk you are surrounded by? That is because those products sell like hotcakes there because people and their children see them and buy them. Why because it is there and easy to get. Amazon added and promotes "One click shopping". Why, because people WILL buy more if it is easier to do so! This is a pretty basic principle of business. Make it visible, make it easy. Sure, some people don't buy that junk, and some people resist easy. But not your average consumer. And especially not on vacation.

And there has been much written on vacation spending habits. Vacationers are notorious for loosening the purse strings, being less controlled, and doing more impulse buying. Yes, "many" people arrive at Disney with a budget and stick to it. But most do not. Most relax and worry about the tab later. This is well known. There have been many articles about trying to help people resist overspending while on vacation. Why? Most do it. There really isn't any question about this in business and marketing. It is why every vacation destination fills itself with souvenir stores that sell junk. Why? Because on vacation people will buy junk and lots of it that they normally wouldn't.

It boggles my mind that anyone is even doubting this absolute marketing truth that is well know. Just Google "Vacation overspending" and you will get 293,000 hits, the leading ones all about how to help you avoid the COMMON PROBLEM OF VACATION OVERSPENDING. And Disney is the expert at both making you feel fantastic and relaxed, making it easy, and giving you lots of opportunities to spend.

A little side point: It is easier (And kind of cool and fun) to use a band rather than the card. Also more people are attaching credit cards to the bands.

Where'd you get this data, or are you speculating again?

I don't have the data. As a person who crunches information for a living, I am pointing out that it is relatively easy to figure out how to get the necessary information and figure out the effects MB have had on spending. Including adjusting for all the variables. It isn't that hard. Disney has done this. They have said they have done this. For those who do this kind of thing it is pretty obvious they have done this. It is also pretty obvious that MB will increase spending. The only question is how much. That I do not know. I am not even saying Disney is making public their true information, but their is no doubt that MB have increased spending and Disney has a pretty good idea how much. Do they want to sell this fact, and exaggerate? I wouldn't doubt it, but they are not lying.

Of course it all doesn't matter. MB and MM+ will get people to spend some amount more, but the real value that Disney is not saying publically is the information gleaned is were the value is. It its impossible to underestimate the value of this absolutely amazing amount of detailed specific information on visitors Disney will have and study. It is going to change theme park world and every major theme park will be licensing Disney's product. There are already completely different industries (hospitals) looking at the tech.
 
How exactly can they lie about projections for the upcoming fiscal year? Projections are speculations and not facts. And since we're quoting the earnings call here's a response from the CEO himself from a question around the benefits of My Magic Plus. Take note of the underlined at the end:

"And what this all adds up to is our ability to manage more people at a time without in any way diminishing guest experience. We did see in the quarter a positive impact to the bottom line from My Magic Plus, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending."

I and others have made the statement that comments coming from the CEO are almost always intentionally void of all the details, especially around something that cost them two billion. Whether their comments are a result of well-rehearsed presentation (such as a quarterly investors call) or impromptu appearance on MSNBC they're not going to give you everything until it's time to do so. To constantly refer to whether they are lying or not is going to absolutes, as if the only choice is to come all the way out with the details or say nothing at all. To claim that increased guest spending is related to the Magic Band when the CEO himself says there's no data to share is reaching a bit in my book.

We've seen a very similar thing happen in the past. Last year Iger made a statement around a 'significant presence' of Star Wars was coming to the parks. The ever-hopeful on this site and others immediately jumped to the conclusion that Star Wars Land was around the corner, even though nothing of the sort was indicated. That vague statement can mean anything from tearing down Epcot and replacing it with a Star Wars universe to simply expanding the gift shop outside of Star Tours. Either way it can't be denied that Iger was speaking the truth.

You are completely incorrect about his first statement. Note he didn't say they don't have the information. Just that they don't have data THAT WE CAN SHARE WITH YOU RIGHT NOW. They know. They have the data. They can't share it with you now. Why? Because they don't want to, it isn't good business. BTW, I think you read his statement how he hoped you would read it. He misled you to a certain degree, but he didn't lie. :)

Where does it say anywhere that it cost $2 Billion? I think it has been confirmed to be over a Billion. Not that I care. If it cost $5 Billion it would be a worthwhile investment.

I think we all know something big is coming with Star Wars, but you are absolutely right about his statement on Star Wars. What he said is true. It is his job to speak of such things in general but not clearly definable terms. Businesses couch announcements this way all the time for desired effect.
 
It is going to change theme park world and every major theme park will be licensing Disney's product. There are already completely different industries (hospitals) looking at the tech.

What product? Disney didn't invent RFID, or wrist bands, or guest-concentric databases.
 
The band itself is very simple and I am not sure if Disney has an interest in Frog (The company that developed them) or any patents about the band themselves. But knowing Disney, who doesn't miss a trick, I am sure they control the design and have legal agreements with Frog on its use. No. Cars have been around forever, but new patents are filed all the time for new parts to a car. Disney has, for the Billion plus, developed some new software and hardware. Guest-concentric databases have been around, but not quite what Disney has done. There are a number of new elements. They figured out the entire package. Kind of like SAP. SAP isn't a totally new software concept, but they do what they do bigger and better than anyone else. (PA and many large companies and states us SAP) Disney is the SAP of theme park management software.
 
I can't because I don't have the data. Though I'd imagine Disney's professional team of accountants do. I think they'd have an easy enough time figuring out whether gift card usage had fallen dramitically in the same time period.
.

My point is - unless I missed something BIG - there is absolutely NO way to tie any spending to the band.

They are selling existing product on/ with them. Any "numbers" are purely supposition...until they have some kind of interactive feedback system that you can make the case wouldn't have been successful in selling the product without the band and the chips...

As far as "going to jail for lying"...

Lol...everything ever said by CMB and his posse about the bands has been 100% ambiguous and without substance. It's all PR/spin.

You can't go to jail for lying about something that has no shape/ form. You're right/wrong 100% of the time!
 
I’ve never disputed Disney’s benefits from getting this information. What I’ve said and will continue to say is that that benefit for the guest is subjective. What you call a frustrating vacation – presumably meaning that waiting to see what the day brings is a frustrating proposition – has been touted by many as their preferred way to visit.

Jeremy Irons will be very disappointed in me if that is actually what I really seem to be suggesting is a frustrating vacation. Apparently he has taught me nothing about human communication.

What I mean to be saying is that the more things that are typically annoyances of planning a vacation that Disney can eliminate, the more I can just enjoy my vacation. Being able to access dining reservations, the fastpass system, and ride waiting times all from my app gives me much more flexibility to "see what the day brings" then when those things didn't exist. Magical express is much more relaxing than worrying about renting a car, and now I don't even need to track paperwork and vouchers for that: it is all on my wrist. Why should I have to wait in line to check in at a hotel desk and take all that time to go through the whole check in process when that can all be handled ahead of time, allowing me to go straight to vacationing? The human interaction seems improved to me with cast members waiting outside the hotel front doors with tablets that can read my band when I first get off the magic express bus and provide a welcome and assistance based on my exact situation and needs.

Their central mission statement with this project is to determine “What are the barriers to getting into the experience faster?” and figure out how to eliminate those for the most guests. I see that as being supportive of casual, spontaneous touring, not antithetical to it.

I hear stories of people getting up in the middle of the night just so they can be ‘first in line’ to reserve the attractions they want. To me that sounds like a frustrating experience. How exactly does that benefit the guest? Sorry, but if the tradeoff for going through that exercise is that Mickey will know me by my first name it’s not worth it.

I hear stories of people getting up at 7am while on vacation just so they can be physically first in line at rope drop and not miss the attraction they promised their kid. How exactly does that benefit the guest?

And those so-called ‘friction points’ that are being smoothed out are more for Disney’s benefit to help streamline their operating costs and maximize profitability.

One of my biggest fears about Nextgen is that Disney is going to figure out new efficiencies and then simply use them to save money rather than improving the guest experience. However, the strong counter force is that the pressure to offer a satisfying guest experience to convince people to keep coming back every 3.5 years (or more). In an era in which the Magic Kingdom sees over 50,000 guests a day, they need to find ways to do things more efficiently if they are going to make sure each guest gets sufficient attractions and experiences a day to go home happy.

Google really only wants to learn about me so they can make money showing me targeted advertising. But in order to get me and millions of others to give them info and keep visiting their sites they need to continue to be really good as a search engine and provide other useful and stable services like Gmail.

That standardized service to the guests has worked just fine for half a century and made WDW the premiere theme park in the world. Personalizing each attraction wasn’t necessary to get people into the parks. Disney got them in by allowing their imagineers to do what they do best – design attractions that wowed the senses. Disney's efforts behind number crunching and data mining isn't needed to determine that X situation can be made better by Y input. We can do that with the computer between our ears. Again it's worked fine for over 50 years. Let imagineers put things out there as before and the guests will spend their money and create unique experiences themselves. The only problem is that accountants make the decisions now on what constitutes a good guest experience.

I don't think personalization is necessary to make compelling attractions. I do think that it is an exciting tool that was not available before and can be used to make entirely new and compelling experiences. Think of how much little kids love autopia/speedway because it gives them the illusion that they are driving the car. Or the fun of knowing you were the Rebel Spy. I am excited by the prospect that the imagineers can now not only design attractions to wow the senses, but also now have more tools to make me feel like I am having my own personal adventure.

I don't want imagineering to keep doing the exact same thing they've done for the last 50 years because it worked fine in the past. I want them to push the envelope on things like immersion, so I'm excited that the nextgen tech and ecosystem could give them ways to do this.

And there hasn’t been a need to aggressively plan at Disney until this system came up.

The Unofficial Guide was first published in 1984. Priority seating calculators came out when they were still called priority seatings, and let you figure out when the earliest you could possible call for certain reservations. There were all sorts of articles and guides published and posted on how to best game the fastpass- system.The theme park attractions and strategies forum here did not spring to life in 2014. Aggressive planning is such as part of the WDW experience that it has birthed a whole side industry.

WDW was not a wonderland of free-flowing spontaneity for the average guest before mymagic+. You either aggressively planned and knew which rides you needed to sprint to get fastpasses for earlier and where you could get the best parade spots (or simply were enough of a WDW vet that you no longer needed to plan much), or you had a bitter experience where you didn't get to do the things you wanted to do. Part of the design for mymagic+ and MDE is to help those guests, and make it so you can have a relaxing vacation and still get in your key experiences and attractions.

No one is forcing you to do anything. Again if this is the approach you wish to use at Disney then go forth and enjoy, but don’t assume that the world can come in and have this spontaneous and care-free vacation by being tethered to an app.

I got the impression that if you were in charge you would like to get rid of the app and force everyone to wait in line at guest relations. I just don't understand how having an app that makes it very easy to do thing like make dining reservations from wherever you happen to be on top of the existing systems of using guest relations and the dining hotline isn't a better situation for everyone than having just those former systems. Having a simple app and internet interface that can handle the majority of straightforward reservations helps keep those human cast members available for situations with which they will actually be the most help. I get the sense you don't have any interest in using the app for dining reservations. Yet isn't it much better for both of us if I can use the app I usually find much more convenient (and spontaneous!) and you don't have me waiting in front of you where I don't want to be in line for guest relations?

True, far out reservations have been around for a spell, but the need to jump out there and book as soon as the window opens is a recent development, and has cascaded into everyone jumping out there to do the same. I believe recently Disney closed a loophole where people were making multiple reservations across various restaurants at or around the same time. The fix was charging people a reservation fee up front to dissuade people from that practice. Granted I'm sure some folks tried that in the past, but not to the extent that it happened enough for Disney to act. If it was chronic before they why didn't they close the loophole then? Wonder what caused such a change in behavior? If I were a betting man I certainly wouldn't exclude this wonderful new system from my list of suspects.

The credit card hold policy was first introduced to the character and signature restaurants in 2011. It expanded to all restaurants in 2013, while mymagic+ was still being testing at selected resorts and had not been fully rolled out yet. I'm even more excited about nextgen if it also involves time travel.
 
How exactly can they lie about projections for the upcoming fiscal year? Projections are speculations and not facts. And since we're quoting the earnings call here's a response from the CEO himself from a question around the benefits of My Magic Plus. Take note of the underlined at the end:
It has to be based upon credible data, and be strong enough to make these assertions. If it does not have that backing then they can still be sued. If a company said during an earnings call that they were projecting record earnings even as their fundamentals showed worrying signs, that is still against protocol.

"And what this all adds up to is our ability to manage more people at a time without in any way diminishing guest experience. We did see in the quarter a positive impact to the bottom line from My Magic Plus, just the beginnings of it. We will continue to see more of that. But we do not have data that we can share with you right now about specific guest spending."
That passage is specifically during the earnings call. They don't have that data to share during the call. It's actually fairly common to hear that or "I don't have that data in front of me" as a response when analysts make big requests. They're also not allowed to make stuff on the spot or guess. They've got only what's in their heads or on the paper in front of them.

I and others have made the statement that comments coming from the CEO are almost always intentionally void of all the details, especially around something that cost them two billion. Whether their comments are a result of well-rehearsed presentation (such as a quarterly investors call) or impromptu appearance on MSNBC they're not going to give you everything until it's time to do so. To constantly refer to whether they are lying or not is going to absolutes, as if the only choice is to come all the way out with the details or say nothing at all. To claim that increased guest spending is related to the Magic Band when the CEO himself says there's no data to share is reaching a bit in my book.
Your entire premise is wrong. No where did Robert Iger say that the company didn't have that data. Also Rasulo's comments make it clear they do have that data to make predictions. Though being "void of all the details" is another way of saying protecting company secrets. It's common operating practice for all major companies.

We've seen a very similar thing happen in the past. Last year Iger made a statement around a 'significant presence' of Star Wars was coming to the parks. The ever-hopeful on this site and others immediately jumped to the conclusion that Star Wars Land was around the corner, even though nothing of the sort was indicated. That vague statement can mean anything from tearing down Epcot and replacing it with a Star Wars universe to simply expanding the gift shop outside of Star Tours. Either way it can't be denied that Iger was speaking the truth.
Yeah, and if Iger had said by x date we'll have Star Wars open without redacting or clarifying those comments he'd be in deep water. Making specific predictions based on hard data is different from your above example. That's what Rasulo did.
 
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