{"id":17662,"date":"2023-10-15T10:16:18","date_gmt":"2023-10-15T14:16:18","guid":{"rendered":"https:\/\/d3.harvard.edu\/platform-digit\/?post_type=hck-submission&p=17662"},"modified":"2023-10-15T10:16:18","modified_gmt":"2023-10-15T14:16:18","slug":"disneys-magical-big-data-transformation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/disneys-magical-big-data-transformation\/","title":{"rendered":"Disney’s Magical Big Data Transformation"},"content":{"rendered":"\n\n\n

In 2013, Disney augmented its physical resort experience with data analytics in order to better personalize guest visits by understanding individual consumer preferences and broader trends.1<\/sup> The overall program of big data at Disney Parks and Resorts was part the MyMagic+ technology suite, while the linchpin of this new initiative was a digital wristband Disney dubbed \u201cMagicBands\u201d.2  <\/sup>By investing in digital technology and big data, Walt Disney World Resort was able to increase attendance despite rising prices while maintaining the magical, personal experience that visitors have come to expect.<\/p>\n\n\n\n

For customers, the RFID enabled MagicBands allow visitors to unlock their rooms, check in for attractions, and even pay for items.3 <\/sup>In addition, they gain from personalized benefits that Disney can unlock based on collected data. For example, park staff can greet visitors by name and Disney can recommend rides or activities based on previous habits. The wristbands also act as wearable credit cards, ensuring folks are less likely to pull out their wallets (or their phones) which can lead to a more immersive experience, allowing Disney World to deliver on its magical value proposition.<\/p>\n\n\n\n

On Disney\u2019s side, there are a number of benefits to collecting individual level data. First, Disney can now track movement through the park by monitoring which customers go on what rides and when.1 <\/sup>This data, especially when paired with additional demographic and psychographic information, can be used to target repeat visitors with more personalized marketing. It can also be extremely useful to increase overall park efficiency and monitor crowd control.1<\/sup> For example, one 2016 report quoted Disney CEO Bob Iger saying that operational improvements from MagicBand data have enabled them to support around 3k more daily visitors during the winter holidays by \u201calleviating congestion and helping Disney allocate staff in critical areas.\u201d4 <\/sup>As of EOY22, Disney World had not yet recovered to annual attendance levels seen before the pandemic.5<\/sup> However, with 17 million reported visitors that year5<\/sup>, it\u2019s still crucial to manage occupancy and wait times to ensure a good customer experience.<\/p>\n\n\n\n

Investments in data analytics are not cheap, particularly when companies need to pay for both the data collection and analysis. MagicBands are said to have been around a $1B investment.5 <\/sup>This was a significant cost given the Parks and Resorts revenue for 2012 (at the time of wristband development) was only ~12.9B.6 <\/sup>In fact, Disney\u2019s FY13 earnings report calls out that a portion of Parks\u2019 and Resorts\u2019 \u201c[h]igher costs [in FY2013] were due to spending on MyMagic+.\u201d7<\/sup><\/p>\n\n\n\n

In addition to this upfront investment, Disney had a number of challenges to overcome before being able to realize the full benefits of the data. Firstly, Disney had to ensure that park visitors actually used <\/em>the bands the way they were intended. Wearables was still a relatively nascent market in 2013 (Apple didn\u2019t launch the Apple Watch until 20148<\/sup>). MagicBands were said to be glitchy at first9 <\/sup>and people had to remember to charge them every night (each full charge only lasts approximately 8 hours).10<\/sup> Secondly, once Disney had the data, they needed the right people and infrastructure to analyze it, draw conclusions, and implement subsequent recommendations. It\u2019s not unbelievable that data analysis at this scale could require further investment in compute and storage capabilities. Addressing any talent gaps could involve hiring and training a new team (which takes time) or shifting employees from other areas of the business (which could disrupt ongoing operations).<\/p>\n\n\n\n

While these are real challenges, it\u2019s clear that Disney found a way to overcome them; park attendance grew from approximately 18.5M11 <\/sup>guests in 2013 to 20.96M12<\/sup> guests in 2019, despite ticket prices rising from $9513<\/sup> to about $125.14<\/sup> But Disney\u2019s big data story is not yet over as the world around the park continues to evolve. Future challenges that Disney could face with regards to their MagicBands and data initiatives are no less daunting than the ones that have been overcome. With the release of the Apple Watch (and other smart watches), Disney now is competing for wrist space. In addition, the MagicBands are no longer complementary for guests and cost an extra $15-$39 depending on the model.15 <\/sup>If Disney were to leverage existing technology like smartphones or smart wearables to collect data, they would likely need to collaborate closely with manufacturers and maintain multiple software versions to ensure coverage. Finally, data privacy continues to be consideration as individuals better understand the value of their personal data; Disney might see a drop off in willingness to participate if this concern grows.<\/p>\n\n\n\n

Citations<\/strong><\/p>\n\n\n\n

1 <\/sup>Prakash, Anand. \u201cDisney Data Analytics: How it Transformed the User Experience?,\u201d Appventurez, Oct 13, 2023, https:\/\/www.appventurez.com\/blog\/how-big-data-and-machine-learning-drove-disneys-magic-globally#:~:text=Every%20guest%20at%20Disney%20world,entertainment%20venue%20a%20giant%20computer, accessed Oct 2023.<\/p>\n\n\n\n

2<\/sup> Toor, Amar. \u201cDisney’s ‘MagicBands’ will track the movements and behavior of theme park attendees,\u201d The Verge, Jan 7, 2013, https:\/\/www.theverge.com\/2013\/1\/7\/3845622\/disney-world-magicbands-mymagic-data-gathering, accessed Oct 2023.<\/p>\n\n\n\n

3 <\/sup>Hollander, Jordan. \u201cDisney\u2019s MagicBand: Breaking Down One of Hospitality’s Greatest Innovations,\u201d HotelTechReport, Oct 28, 2022, https:\/\/hoteltechreport.com\/news\/disneys-magicband, accessed Oct 2023.<\/p>\n\n\n\n

4 <\/sup>Walker, Russel. \u201cDIGITAL LESSONS FROM DISNEY\u2019S $1 BILLION EXPERIMENT: MARKETING AND OPERATIONS INTERTWINED,\u201d Big Data to Big Profits, Mar 30, 2016, https:\/\/bigdatatobigprofits.com\/2016\/03\/30\/digital-lessons-from-disneys-1-billion-experiment-marketing-and-operations-intertwined\/, accessed Oct 2023.<\/p>\n\n\n\n

5 <\/sup>statista \u201cAttendance at the Magic Kingdom theme park (Walt Disney World Florida) from 2009 to 2022,\u201d https:\/\/www.statista.com\/statistics\/232966\/attendance-at-the-walt-disney-world-magic-kingdom-theme-park\/, accessed Oct 2023.<\/p>\n\n\n\n

6 <\/sup>The Walt Disney Company, Fourth Quarter and Full Year Earnings for Fiscal 2013, p. 2, https:\/\/thewaltdisneycompany.com\/app\/uploads\/2015\/10\/Q4-FY13-Earnings-Report.pdf, accessed Oct 2023.<\/p>\n\n\n\n

7 <\/sup>Ibid, p.4.<\/p>\n\n\n\n

8 <\/sup>Verizon \u201cA timeline: A brief history of Apple Watch,\u201d https:\/\/www.verizon.com\/articles\/smartwatches\/brief-history-of-apple-watch\/, accessed Oct 2023.<\/p>\n\n\n\n

9 <\/sup>Murphy, Anthony. \u201cThe Good, the Bad, and the Ugly of Disney’s Magic Bands,\u201d Theme Park Insider, Nov 2013, https:\/\/www.themeparkinsider.com\/flume\/201311\/3756\/, accessed Oct 2023.<\/p>\n\n\n\n

10 <\/sup>Button, Danni. \u201cDisney World Has a Problem Visitors Won’t Like,\u201d TheStreet, Aug 10, 2022, https:\/\/www.thestreet.com\/investing\/disney-fans-experience-another-magicband-problem#:~:text=Some%20customers%20have%20reported%20some,worked%20for%20about%208%20hours, accessed Oct 2023.<\/p>\n\n\n\n

11 <\/sup>Doctor Disney. \u201cGlobal Theme Park Attendance for 2013 Released: Magic Kingdom Tops List Again,\u201d Doctor Disney: The Ultimate Walt Disney World Guide, Jun 3, 2014, https:\/\/doctordisney.com\/2014\/06\/03\/global-theme-park-attendance-2013-released-magic-kingdom-tops-list\/#:~:text=Magic%20Kingdom%20has%20topped%20the,Kingdom%20attendance%20figures%20for%202012, accessed Oct 2023.<\/p>\n\n\n\n

12 <\/sup>statista \u201cLeading amusement and theme parks worldwide from 2019 to 2022, by attendance,\u201d https:\/\/www.statista.com\/statistics\/194247\/worldwide-attendance-at-theme-and-amusement-parks\/, accessed Oct 2023.<\/p>\n\n\n\n

13 <\/sup>Disney Parks Blog \u201cMagic Your Way: Facts on 2013 Walt Disney World Resort Prices,\u201d https:\/\/disneyparks.disney.go.com\/blog\/magic-your-way-facts-on-2013-walt-disney-world-resort-prices\/, accessed Oct 2023.<\/p>\n\n\n\n

14 <\/sup>Tolliver, Laura Jazmin. \u201cDisney World tickets: How much did they cost the year you were born?,\u201d Daily Commercial, Dec 3, 2019, https:\/\/www.dailycommercial.com\/story\/news\/state\/2019\/12\/03\/disney-world-tickets-how-much-did-they-cost-year-you-were-born\/2165796007\/, accessed Oct 2023.<\/p>\n\n\n\n

15<\/sup> Powell, Joshua. \u201cAre Magic Bands Free?,\u201d MagicGuides, Feb 12, 2023, https:\/\/magicguides.com\/are-magic-bands-free\/#:~:text=They%20will%20cost%20you%20between,priced%20at%20just%20%2414.99%20each, accessed Oct 2023.<\/p>\n","protected":false},"excerpt":{"rendered":"

By investing in digital technology and big data, Walt Disney World Resort was able to increase attendance despite rising prices while maintaining the magical, personal experience that visitors have come to expect.<\/p>\n","protected":false},"author":19397,"featured_media":17665,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-17662","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/competing-with-data-4\/","yoast_head":"\nDisney's Magical Big Data Transformation - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/disneys-magical-big-data-transformation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Disney's Magical Big Data Transformation - 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