Parks and resorts are the second largest revenue drivers for Disney, representing $16B (30%) of Disney’s total $56B in revenue this year. Disney World is by far the largest of these parks, comprising six parks and 31 resorts on 47 square miles – a land area twice the size of Manhattan. And though Disney World is known as the “happiest place on earth,” in many ways, it is a logistical nightmare.
Given its sheer size and number of attractions, making the most of Disney World can be confusing for families. Disney studies showed families would cross the center of the park as often as 20 times a day. Additionally, the swarms of people traversing the park – on average, 8,000 to 10,000 guests flow through the park’s main entrance every hour – were creating congestion and long lines. About ten years ago, Disney executives grew concerned that these challenges were diminishing the value of the park. Satisfaction measures, such as guests’ “intent to return,” were dropping, mostly due to long lines, high ticket costs, and other park pain points. At the same time Disney grew concerned that the growing number of entertainment alternatives, including social media and mobile games, would make the park less popular with younger, tech savvy generations.
In response, Disney launched a billion dollar digital initiative called MyMagic+. MyMagic+ combines a website, a mobile application, and a wristband to transform the customer experience at Disney World. Before a guest ever steps foot in Disney World, they are shipped a MagicBand to use at the park. The MagicBand is an “all in one” wristband device. Guests can use their Magic Band to unlock their Disney Resort hotel rooms, enter the parks, enter FastPass+ lines, get their PhotoPass pictures, charge food and merchandise purchases to their hotel room, and more. Guests can use the MagicBand shipped to them, or buy limited edition MagicBands with special features. The app integrates with all of these features, and also allows guests to reserve rides and meals.
MagicBands also allow Disney to provide a streamlined and customized experience to each guest. Inside each band are an RFID chip and long range radio sensors, which allow Disney to track guests throughout the park. Guests input personal information about themselves that are embedded in the bands, so park staff can greet guests by name and even wish children a happy birthday as they pass by.
But while MyMagic+ provides numerous benefits to the customer, it may provide even more benefits to Disney. First, by allowing guests to reserve rides ahead of time, Disney can better estimate and plan for peak use. Once guests arrive, tracking guests allows Disney to monitor where crowds are forming, thus allowing the park to better optimize guest traffic. For example, if the sensors note a section of the park is becoming overwhelmed with guests, Disney might start a character parade nearby to disperse some of the crowd. Or Disney might alert guests to the long lines directly via an app alert, and encourage them to come back for a reserved spot in an hour or buy a FastPass ticket (which can be purchased through the app, of course).3
The other huge benefit to Disney is in the customer data. Now, Disney can nearly track every step and action a customer takes in Disney World. This data allows Disney to better manage its operations, such as scheduling its 240,000 worker shifts each week. Following the implementation of an analytics based technology for scheduling, Disney’s accuracy in managing its labor force improved by 20%. Disney even uses analytics to forecast its laundry needs (Disney operates one of the largest laundry facilities in the world, cleaning 280,000 pounds of linen each day3).
So far, MyMagic+ has been a resounding success for Disney. In two years, Disney has shipped over 18 million bands to guests, reduced turnstile time by 30%, and is now able to move 5,000 more people through the Magic Kingdom each day.3
The question now for Disney is how they can expand the success of the MyMagic+ initiative beyond just Disney World. There is the obvious approach to the other Disney parks, such as Disneyland. But MyMagic+ might be a great tool to improve some of Disney’s other business units. For example, Disney stock was down 3% last week on lower than expected earnings, largely due to operating income decreases at ESPN. Perhaps Disney could partner with sports teams to bring its technology into stadiums, allowing fans a more interactive game experience driven by mobile ESPN content. Disney seems to have just scratched the surface on its digital transformation journey, and could soon be bringing “magic” to many more aspects of its business.
The Walt Disney Company, 2016 Fourth Quarter Earnings Report, p. 2, https://ditm-twdc-us.storage.googleapis.com/q4-fy16-earnings.pdf, accessed November 2016.
 Kirsten Sandberg, “The Magic of Digital: A platform for enhancing everyone’s vacation,” UCI Paul Merage School of Business, http://www.centerfordigitaltransformation.org/the-magic-of-digital/, accessed November 2016.
 Austin Carr, “The Messy Business of Reinventing Happiness,” Fast Company, https://www.fastcompany.com/3044283/the-messy-business-of-reinventing-happiness, accessed November 2016.
 Walt Disney Company, “Unlock the Magic with Your MagicBand or Card,” https://disneyworld.disney.go.com/plan/my-disney-experience/bands-cards/, accessed November 2016.
 Jerome Buvat et al., “Disney: Making Magic Through Digital Innovation,” Capgemini Consulting, https://www.capgemini-consulting.com/resource-file-access/resource/pdf/disney_0.pdf, accessed November 2016.
 Jeremy C. Owens, “Disney earnings disappoint as ESPN suffers,” MarketWatch, http://www.marketwatch.com/story/disney-earnings-disappoint-as-espn-suffers-2016-11-10, accessed November 2016.