The latest test of MyMagic+ (and its FASTPASS cousin, FP+) will start next week, involving guests at Bay Lake Tower–in other words, the DVC crowd. Disney may well get different feedback from this population than it got from the last test, which stressed visitors who come a little less frequently.

More and more rides now sport FP+ entrances (and they say “Disney FASTPASS+” rather than “Disney’s FASTPASS+”, which matches the moves by the company mostly on the West Coast so far to brand slightly differently than the past decade has done, by removing the possessive format).

IMG_7845

FP+ is not the same thing as MyMagic+ even though they are used interchangeably by some fans. FASTPASS+ alone is not costing all that money. But let’s assume for the sake of argument that it is. Can they still recoup their investment?

A backlash about FP+ is growing in some corners of the online communities. For many, they resist the idea of having to plan out STILL MORE of the vacation that far in advance. Restaurant reservations may have started this trend, but now it’s gone even further. I can completely see this complaint and line of thought. After all, as a local visitor, I seldom plan even a day in advance. That said, there really are folks in the world who prefer a vacation that is planned out. Consider the very highly-rated Disney Cruise Line experience. A DCL vacation is pretty planned out in advance. All you do during the vacation is show up and experience what you pre-selected, AND MANY PEOPLE REPORT THIS IS AMAZINGLY RELAXING. All the guesswork is gone, there is no stress, and they simply show up. It’s pretty clear that WDW wants to harness that same sense of all-encompassing, pre-planned, all-inclusive vacation for the “land” as well as for the “sea.”

All the moves in recent years have gone in this direction. Resort mugs, if you buy them, gives you length-of-vacation free soda (just like on DCL). Your room was paid for before you arrived. Your food is included in the cost of your vacation (if you bought the DDP). Really, the only part DIFFERENT in WDW versus DCL was the fact that on DCL, your shore excursions were decided and scheduled long before you got there, and at WDW you had to employ strategy while on your vacation. The move to FP+ will erase that last remaining difference. Now WDW really will be just like DCL in tone and feeling for those who stay on Disney property the whole time and buy the pre-planned everything. All-inclusive, here we come!

IMG_8174

A key component of the criticism has been to focus on the price tag. $3 billion, many people grumble, to fix a system that currently isn’t broken. Well, I do think it’s at least SLIGHTLY broken. There are many families who don’t know how to fully exploit the FP system, which means the tickets stay available longer in the day for the families who do know the tricks. There is an imbalance here; the FP system “works” because there are lots of families who don’t know they should be using it. In other words, the super-benefits of the past 14 years have largely come at the expense of those who don’t use it–and some of THEM aren’t coming back. Disney, as a company, can’t afford to lose this segment. They have to keep the once-a-year visitor (and once-per-decade visitor) happy just as much. So the current FP system had to morph into something else.

The new FP+ system will “flatten” the playing field somewhat. There will be less advantage to knowing the system well or to being a frequent visitor. I’m always something of a long-term thinker, and even though this means my advanced-knowledge advantage will go away, I’m in favor of things that keep the infrequent visitor happy, because this encourages Disney to build more rides for said infrequent folks, and I benefit as a result.

IMG_8109

But there is a crucial shift underway here, and I’ve not seen it discussed online before. Disney is moving AWAY from a certain business model and indeed an entire mindset. In all the years of being in the amusement park industry, Disney has pursued a model that rests on a single assumption: building new stuff drives new attendance, which will drive additional profits. Think of it as “build it and they will come.” That model is now being updated. The new model essentially aims to maximize profits from those who do come, almost as if to assume that people are coming anyway, and we can therefore focus on squeezing every last dollar out of those who come. This is obviously dangerous. What if people sense the attitude shift and stop coming in droves?

But I think they won’t sense it. FASTPASS+ is a riddle wrapped in a mystery to most of them. They will see the smoke and mirrors but not the magician behind it all. In other words, they will see the “DCL benefit” (all-inclusiveness) without seeing the “profit motive” behind the move. At its core, the entire NextGen initiative is about changing the way the company creates money. In the past, the point was to build more rides and attract new audiences to pay admission. Now, the paradigm has shifted. The point now is to squeeze profit out of those who are already coming. And the method by which it will happen will be completely invisible to most users.

IMG_7919

The focal point is almost certainly going to be the concept of upselling. Sure, you can buy a basic ticket to WDW. You don’t HAVE to buy the RFID pass and reveal your information. But if you *do* want to personalize and customize, the world is without borders! You can make ride reservations two months in advance (presently four rides, up from the test previously which allowed three rides). You can have Talking Mickey Mouse offer personalized birthday greetings to your young child. You can have the Small World dolls say something to YOUR daughter, singling her out on the boat full of strangers. You have to pay for the signature experiences in the parks (and some people will). As for those ride reservations, we don’t know full details yet but it seems obvious they are going to be differentiated by package. If you’re an annual passholder, perhaps you get twenty of them per quarter. Maybe you’ll get four per day if you stay at an All-Stars Resort. Will you get six per day if you stay at the more-expensive Polynesian? (Probably). Disney has long been in the hotel business rather than the theme park business, and FP+ promises to VAULT the company priorities further in that direction. The focus will be on “heads in beds” and with the lure of additional ride reservations, the full-price deluxe resorts will be hard to pass up for some infrequent visitors.

Let’s circle around now, finally, to the issue of finances. Disney hasn’t disclosed precisely how much this effort will cost, though a New York Times article in January estimated $800 million to $1 billion. We’ve heard from articles with inside access that the true price tag is closer to $1.5 or even $2 billion. The program isn’t even active yet, so I would not be surprised to see it cost even more when all is said and done (that would match other projects of this scale, in fact). So for the sake of making a point, let’s assume it’s super-expensive. Let’s use the figure of $3 billion. We can still see a way for Disney to recoup that money.

Let’s say that only 17 million people visit Walt Disney World per year (it’s more than that, but this is the MK attendance figure, so let’s use it as a baseline). If you get each of those visitors to pay $10/day more in 2014 than they paid in, say, 2011, then you’re making $170 million more per year. If you do that for 20 years (pretending that inflation didn’t exist), you’re at $3.4 billion dollars after twenty years.

If you were Disney management, would you approve a $3 billion investment that would return $3.4 billion in twenty years at a minimum? You might. You would at least pay attention to the numbers. $10 per person, per day in additional spending isn’t really that much money. If you convince people to spend more for the “better” hotel (and more FP+ tickets) then you’ve already made your money back. Anything extra is gravy. All those packages and character experiences you can sell now? Pure profit on top of all that.

But the reality is that few Disney execs will wait 20 years. They may be looking at numbers for 10 years, or even for five years. If the latter, they would need to generate four times that much per person–$40/day extra. At these numbers, it’s looking a little less likely that FP+ alone and upsold hotel rooms would recoup ALL of that, so they may end up depending somewhat on those upsold character experiences. Or accessories to go with your MagicBand, which they’re already starting to sell.

IMG_8161

The recent news about RapidFill mugs at Disney’s resorts is part of this. The new RapidFill mugs are RFID-enabled “length of stay” soda/coffee mugs that will replace existing refill stations. Translation: your old mug from a previous vacation will not work to turn the soda machine on. If you want soda, you’ll have to pay for it on your current trip. This is another example of Disney enhancing profit not by “creating something new” but by “leveraging what’s already there.” This is the new paradigm of thinking, and the shifted mindset. Instead of “build it and they will come,” the operating metaphor now is “since they’re coming anyway, let’s maximize what they spend with us.” This is surely going to backfire with SOME of the heretofore audience. The question is how large is that audience with which it will not resonate?

Time (amortization) and increased guest spending (on the MARGIN, not “new” spending by “new” people) provide a simple, short answer for how Disney expects FASTPASS+ to pay for itself and generate future profit. Big Data is here to stay; Disney is merely the latest company to find a way to leverage it.

Free Online Class: Fairy Tales

Some of you know that my “day job” is in Higher Education. Among the classes I teach is one on Fairy Tales, with focus on Disney, Grimms, and Perrault. This college class is now available to the general public, and it’s completely free! There’s not even a book to buy for the class!

The class is a massive open online course (MOOC) and is administered through canvas.net – it’s free to sign up and take the class! It’s a four-week course starting on August 5.

IMG_8164

Here’s the schedule:

Week 1 – Cinderella
Week 2 – Snow White and Sleeping Beauty
Week 3 – Rapunzel and the Frog Princess
Week 4 – Little Mermaid and Beauty and the Beast

The class was built to expect about two hours of engagement/interaction (“work”) per week, so it’s not meant to overload the participants with chores and duties. In that sense, it’s less rigorous than my regular college classes. The class doesn’t have any required (synchronous) meetings; you do the work whenever you want within the week.

This course does not have a completion certificate – you’d be taking it just for the fun of it. There aren’t any papers or projects. While the class does offer quizzes and discussion boards, there isn’t really a rigorous process to “pass” the course since there isn’t a certificate offered anyway.

The class is, however, experimental in a different sense: it’s got game elements in it. We added badges and group competition, as well as Easter eggs, throughout the class. Each group is named after one of Walt’s seven dwarfs–it works a lot like the Harry Potter “house” competition, where individuals can earn badges for the whole group. This should be fun!

IMG_8172

Please feel free to sign up and spread the word. I can’t wait to share with you what these fairy tales used to mean and how they’ve been changed for modern audiences!! Sign up here: https://www.canvas.net/courses/fairy-tales-origins-and-evolution-of-princess-stories#enroll_form 

More information and updates

Kevin Yee is the author of numerous independent Disney books, including the popular Walt Disney World Earbook series and Walt Disney World Hidden History. Readers are invited to connect with him online and face to face at the following locations: