Disney: Both Embracing Digital and Being Disrupted

Disney is both profiting from the digital revolution and being disrupted. Will the company be able to continue to capitalize on data and combat the challenges it poses?

“Here you leave today and enter the world of yesterday, tomorrow and fantasy.”

When you arrive in Disney World, these words greet you as you pass through the entryway arch. You leave behind reality and step into fantastic lands of adventure and, arguably, magic. Disney has long delighted theme park guests wishing to engage personally with its characters. Apart from the wondrous rides and worlds, the attention to detail and level of service provided by “cast members,” as employees are known, create a customer experience that evokes a feeling of pure magic. Sure, attraction lines can be long and it is frustrating to wait in the entrance queue, but who cares when you’re at the ‘happiest place on earth?’

But what if you didn’t have to wait in line? What if with a bracelet, you could enter your hotel room and the parks seamlessly, ride Space Mountain whenever you want, eat at your favorite restaurant, greet Cinderella and still nab the perfect spot in time for fireworks… all without your wallet or waiting in line?1 That would have to be real magic, right? Nope, just Disney gone digital.

“Big data” has transformed what companies can know about their customers and, in turn, how they can better engage with them. Disney has invested $1 billion in an initiative called ‘MyMagic+’ to capitalize on data and personalize the park experience.2 Gone are resort keycards and paper FastPass tickets. Everything a guest needs is accessible via wristbands, or ‘MagicBands,’ as they have been dubbed. Equipped with RFID chips that interact with scanners throughout the park, MagicBands function as a guest’s room key, theme park ticket, and credit card, and have all reservations loaded so all guests need do is scan their band for anything they desire.3

This has enabled vast improvements in an already magical experience. Prior to arriving at Disney World, guests can plan meal reservations, book FastPass tickets for their favorite rides, snag the best spots for viewing fireworks and skip lines to greet characters either online or from the ‘MyMagic’ app.4 Gone are the bottlenecks when entering the park – instead, guests simply tap their MagicBand at a kiosk and proceed in for a day of fun. The ability to reserve FastPasses in advance has also vastly alleviated ride queues, aided by real-time attraction wait times available via the MyMagic app.5 If the app says Space Mountain has a 90-minute line, consumers will instead head to Splash Mountain that only has a five-minute wait.

Disney has also been able to use this data to enhance the “magic” for the consumer. Since they have your purchasing history, Disney knows that today is your daughter’s birthday and that she is an Ariel fan.6 Your MagicBand sends a signal directly to cast members around the corner and at the Little Mermaid show, Ariel greets your daughter by name and with a “Happy Birthday!”7 Disney has even begun to personalize attraction experiences. For example, as your cart leaves “It’s a Small World,” your band signals the digital screen which then bids you adieu by name.8 Through data and the ease of purchasing with the MagicBand, Disney is adding extra magic for the consumer and is making extra money.

But in addition to benefiting from the digital revolution, Disney has also been disrupted. Nearly 50% of TWDC’s profit comes from its cable television networks.9 With digital streaming services like Netflix transforming the television landscape, many consumers no longer see the value of paying for cable, dramatically reducing subscriber fees and advertising revenue for some of Disney’s properties like ESPN.10 Furthermore, consumers now expect to be able to consume content at any time on any device – it is far more seamless to open your Hulu app and watch the latest episode of Scandal rather than be in front of your TV at 9pm every Thursday.

But all is not lost. Those same consumers that Disney has data on from visiting the park are the same individuals consuming Grey’s Anatomy on ABC, watching Monday Night Football on ESPN and tuning in to Doc McStuffins on Disney Channel. Instead of one consumer having separate accounts for planning their Disney World vacation and consuming their favorite content, Disney should incentivize customers to merge their accounts into one comprehensive “Disney ID.” In doing so, Disney will be able to capitalize on the vast amount of stored data and continue personalizing the experience for its consumers across all properties. Furthermore, as the cable ecosystem deteriorates and more networks go direct-to-consumer, Disney will be primed to create the most curated, highly targeted and seamless experience for its consumers should it decide to purse a DTC option. Both consumers and advertisers will benefit greatly, and Disney will be better armed to tackle the most alarming challenge facing the industry currently – with a little magic.

(800 words, excluding citations)


[1] USA Today, “Disney Gets Personal with New MyMagic+ System.” http://www.usatoday.com/story/dispatches/2014/01/27/disney-mymagic-vacation-planning/4582957/. Accessed November 16, 2016.

[2] Wired, “Disney’s $1 Billion Bet On a Magical Wristband.” https://www.wired.com/2015/03/disney-magicband/. Accessed November 17, 2016.

[3] The New York Times, “A Billion Dollar Bracelet is the Key to a Disney Park.” http://www.nytimes.com/2014/04/02/business/billion-dollar-bracelet-is-key-to-magical-kingdom.html?_r=0. Accessed November 16, 2016.

[4] The New York Times, “A Billion Dollar Bracelet is the Key to a Disney Park.”

[5] Fox News Travel, “Disney Unveils Line-Reducing MyMagic+ Technology.” http://www.foxnews.com/travel/2013/01/08/disney-unveils-line-reducing-mymagic-technology.html. Accessed November 18, 2016.

[6] Wired, “Disney’s $1 Billion Bet On a Magical Wristband.”

[7] Wired, “Disney’s $1 Billion Bet On a Magical Wristband.”

[8] Fox35, “Thanks to MagicBand, Disney’s “Small World” Ride Has Personalized Goodbye.” http://www.fox35orlando.com/news/local-news/107410373-story. Accessed November 17, 2016.

[9] The Walt Disney Company, 10-K. https://www.sec.gov/Archives/edgar/data/1001039/000100103915000255/fy2015_q4x10k.htm. Accessed November 16, 2016.

[10] Business Insider, “ESPN Made 2 Critical Mistakes, and Now It’s Paying the Price.” http://www.businessinsider.com/espn-mistakes-led-to-layoffs-2015-10. Accessed November 17, 2016.


IoT in Shipping: Getting Cargo to Move with the Speed of Information


Disrupting the Construction Industry Through the Use of Digitization

Student comments on Disney: Both Embracing Digital and Being Disrupted

  1. I encountered the MyMagic+ wristbands on my last WDW trip. I must admit; it was a little disconcerting to know that “Big Disney” was carefully tracking every footstep, every purchase, and every activity – every second that I was at the resort. I wasn’t exactly happy about being micro-chipped like someone’s dog, but it was almost impossible to take advantage of the park’s many amenities without dutifully donning my wristband. Disney touts the bands as a way to improve the customer experience, and although I can’t deny the company’s commitment to creating a stress free (and perhaps even “magical”) vacation, the MyMagic+ benefits to Disney are hard to miss. The ability to track the exact movements and consumption of every customer certainly provides a treasure trove of data that can be used to improve the efficiency and profitability of the parks. Disney certainly isn’t the only company willing to sacrifice its customer’s privacy to make a dollar, but this felt like a new level of intrusion.

  2. I love the efficiency and convenience that the MagicBands bring to the Disney theme parks. I haven’t had a chance to use them, but they sound amazing, and sound like they give Disney the opportunity to really make a kid’s already very special day visiting Disney World, with personalized interactions with the characters. Your idea of using one account for gathering data from all of a customers interactions with anything related to Disney brands is a very good, novel idea, and seems very reasonable to implement. Do you think that the existing product offerings for Disney (i.e., theme parks and TV entertainment) are sufficient to maximize the use of this aggregated customer data? I think it could be a challenge to gain much more revenue/profit from customers from theme park and TV entertainment sources alone, because I don’t think there’s a whole lot more for customers to spend money on in these areas. What would be great is for Disney to create new product offerings (revenue-earning opportunities) to use this aggregated data. I don’t have too many ideas for what those offerings could be, but maybe something like live community-oriented events (bring Disney parks to the people), or party planning, etc.

  3. I haven’t had the chance to use the MagicBands yet as they haven’t quite expanded the roll out to their Disneyland property, however I am very excited and eagerly anticipate it to come in the near future. I think the integration of the band and the overall MyMagic+ initiative is amazing. It really works to address some of the pain points your casual visitor encounters as well as your more frequent annual pass holders.

    One of the biggest pain points is finding a nice restaurant to eat at only to discover that the wait is over an hour long. It sounds like the MyMagic+ program helps alleviate this by pushing more guests to use reservations. Another pain point are the long waits in line coupled with potentially losing that FastPass ticket – not to mention rushing the park entrance early in the morning to get that FastPass ticket for Radiator Springs Racers or Space Mountain. It’s so exciting to hear about the ability to reserve FastPass tickets in advance.

    What I’m interested in seeing and hearing more about is how Disney is using and capturing additional data from these bands. I see these bands as essentially low-tech version of trackers that we see in the Hunger Games movie series. I can picture some park director sitting behind a screen watching a sea of dots move around the park in real time. It’d be interesting to see if Disney is able to capture crowd movement data in addition to ride usage data and use it to adjust overall park operations. I’m also interested in seeing if these work as virtual tethers for parents with small kids. Inevitably, at a park like Disneyland kids get lost and it takes time to track them down. It would be interesting to see if there’s any work being done in this space with the MagicBands.

  4. I am a huge fan of the MagicBands! I’ve used them twice in recent WDW trips.

    While Nate does raise valid privacy concerns, the potential safety benefits of MagicBands should not be overlooked. For parents with young children, losing a child in a sprawling theme park with 50,000 guests is a huge concern. If a child goes missing, security personnel can locate him via the MagicBand signal. This greatly reduces the time the child is lost and the anxiety of his family. Additionally, if a guest with a gun or bomb managed to sneak into the park, security staff could send notification to guests in the vicinity of the safety threat through the Disney World app linked to MagicBands. The Disney World app could be expanded to include basic medical information, such as risk of seizure, anaphylactic shock, or other conditions. If a guest needed immediate medical treatment and was separated from her family, emergency personnel could view the basic medical information stored on the MagicBand app to respond quickly and appropriately.

  5. I have experienced the ‘magic’ of magic bands first hand last year and was incredibly impressed by their operational flexibility and efficiency. Losing a hotel key at the pool or forgetting your credit card at dinner are simply no longer concerns. I’m curious, does Disney see any opportunity for these bands to be used outside the magic kingdom? Perhaps, children can use these as their own version of paying via phone or being tracked by their parents. Also, what do you think has stopped Disney in the past from providing 1 comprehensive Disney ID? One risk I see is that an ESPN sports fan may not like being branded as a Disney fan in the same way a family leaving Disney world would.

  6. This was super interesting, although I haven’t been to a Disney theme park since I was quite young, I remember the frustration for the whole family created each time we arrived at our next destination an encountered an hour long line, with little alternative than to wait realizing that the next attraction could be equally as crowded. As we have seen in class and through the development of the technology industry, data is one of the most valuable assets a company can have.

    Do you see a scenario were Disney is able to create theme parks based on some of the customer data they collect during their peoples’ visits? In other words analyze most popular rides to figure out common traits and how they can build these into future rides? The applications of this data seems endless, but to some extent I wonder if over reliance on this could kill innovation and the “imagination” that attracts people to Disney?

    Do you knw if universal studios and other theme park operators have rolled out similar systems?

  7. I love seeing Disney being so innovative through the use of digital technology! I haven’t experienced the park via MyMagic+ yet, but have historically been the type of person trying to optimize my ride completion with Fast Passes, so the additional transparency would make this even easier. My concern, though, is around privacy for the users. Did any of the articles you read address any concerns of privacy with Disney having all of this purchase data, location data, and so much more?

    Given Disney has been at the forefront of digital transformation and came out with MyMagic+ a few years ago, what do you think is next for Disney?

  8. Love the post, Kelly! Some of my best memories from childhood were times spent at Disneyworld and Disneyland. My family took annual trips to the theme park so learning about the new technological advances is particularly interesting to me! One of the most interesting points of your article was the point about the Disney cable network being disrupted by Netflix and Hulu. The cable network is arguably one of the biggest ways that Disney acquires its customers/fan base. With the decline of the cable network, will foot traffic to the theme parks also decline?

  9. Great post! I have never been to Disney (shame on me) but have experienced some competitors’ parks and I definitely agree with your analysis of opportunities to enhance the experience. Long lines are a big deterrent to enjoyment and the idea that Disney can use the bracelet also to smooth out demand for its ride is quite brilliant. Some classmates mentioned concerns about the “tracking” implications, I think that the improved level of service greatly offsets the drawbacks of the park knowing where you are.

    At the same time I agree with your concerns, last year parks were 30% of the revenue for Disney and should definitely be an area of focus however, I am not sure how much the wristband can improve revenue stream. Media Network on the other end is the biggest revenue stream $21B (43%) and it’s the one facing the biggest competitive threat due to market dynamics. With a market growing more and more fragmented I am really curious about Disney’s next move, going directly to consumer seems a stretch since out of the company core competency. Could reaching agreement with streaming companies and aimed at customer data sharing agreement be a good short-term solution?


  10. Thanks, Kelly. This issue of changing distribution, whether its for video content or physical goods, is really interesting, and I think it will be a huge theme of the media landscape for years to come. While I think the ‘unbundling’ of cable is more near term, I also wondered how Disney thinks about AR/VR and the potential for an immersive AR/VR experience to have a negative impact on park visits. Will as many people travel to a physical Disney World / Land location if they can have a similar experience via their Oculus Rift?

  11. I found MagicBands a pretty amazing idea as it can function as a guest’s room key, theme park ticket, and credit card, and have all reservations loaded so all guests need do is scan their band for anything they desire. However, I am not sure whether it can help solve long waiting queue issue in most of Disneyland parks. Even if you reserve online in advance, you still need to wait in queue for your desired activity, as the “capacity” is quite limited given high demand. Sometimes you have to wait for even three hours for the most popular activity, which really harms customer satisfaction. Besides, in most cases, people have pretty strong preference on which activity to go. Even if they are told there is short waiting line in “Splash Mountain”, they would probably still stay with “Space Mountain”. I would love to understand how this new technology impacts operation of Disney in the real world.

  12. Really great post. I haven’t been to Disneyworld since they rolled out MagicBands or a smartphone app, but I used to visit frequently when I was younger. It all sounds pretty genius given my past experiences there with missing child announcements and long lines for just about everything. The think the benefits outweigh any concerns here. Safety is a priority for families. With Magicbands, Disney security is now able to track down a missing child. Furthermore, Disney has long lines for everything from rides and greeting characters and huge crowds for getting a good spot for a parade or the fireworks show. I remember this problem being the source of many headaches on Disney trips, so anything they can implement to minimize crowds and lines can only be a win-win for Disney and customers.

  13. Very interesting post! Although I haven’t had chance to use Magic Bands (I guess it’s not introduced to Tokyo Disney Land,) the idea of making visitors’ experience more efficient and customized is fascinating! However, is there any risk that older and loyal customers perceive Disney is now targeting only Millennials? Is it a potential concern for Disney that older customers don’t install “My Magic” app or can’t use it effectively, thereby having to wait long for a popular ride, without experiencing customized “magic,” while Millennials benefit the most from Disney’s digitization? I’m curious how Disney will communicate with and educate customers to maintain its image of “magic for everyone.”

  14. Great post. I love the idea of Disney creating some sort of ID to track their consumers across all properties. I would be interested to see how they use the data beyond the theme parks to engage with consumers and drive sales.

  15. Thanks for sharing Kelly– It was interesting to learn how the MagicBand works within the theme parks and the impact big data has on driving increased value for the Disney guests. I am curious to understand how Disney can leverage this data in the broader media distribution channel. Outside of creating a unique Disney ID, could there be value in expanding the functionality of the MagicBand? I wonder if there would ever be consideration to integrate the band or myMagic app to drive DTC purchases for TV shows or enhanced game-day experiences on ESPN

  16. Growing up in CA, Disneyland has played a huge part in my life! I’ve loved their ability to use data to improve the Disney experience. Using magic bands isn’t too intrusive (or Big Brother-like) because it’s essentially like using a smartphone application that activates when you enter the park. Would love to see how they incorporate more advanced technology – maybe instead of humans in costumes we’play be able to use AI robots!

Leave a comment