Disney's $1 Billion Strategy to Make You Spend More Money at Disney World Is: 'Magic' Bracelets

Why Disney is treating its customers like whales

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Earnings calls are usually heavily scripted, dry and formulaic. That's why we perked up when we read the Walt Disney Co. conference call transcript last night. In it, Chief Financial Officer Jay Rasulo laid out in plain terms the thinking behind an interesting new technology push at the entertainment giant known as MyMagic+.

In the industry, it's known as a "vacation management system." But most humans would call it a RFID bracelet with an embedded credit card. The bracelet also acts as a room key for the company's hotels and as a theme park ticket. And like the tracking tags marine biologists plant deep in the blubber of particularly mysterious whales, it enables Disney to keep track of customers' park usage and take advantage of the data, for example, by coaxing guests toward attractions where lines are shorter. (Visitors will be advised by messages to their smartphones where to find shorter lines.)

The idea is that MyMagic+, which is the company wants to roll out some time this year, will improve the visit for customers and, likely revenue for the park. Here's how Rasulo explained it to analysts who were listening to the company's post-earnings conference call, according to a corrected transcript published by FactSet CallStreet:

We have known for a really long time that getting our visitors to Walt Disney World to make decisions about where they spend their time before they leave home is a powerful driver of visits per guest. When they get into the Orlando market and their time isn't yet planned, they can be subject to everything you see down there, which is a lot of in-city marketing for all the many products that people have put there to basically bleed off the feed that we fundamentally motivate. So if we can get people to plan their vacation before they leave home, we know that we get more time with them. We get a bigger share of their wallet. So that's one thing for you guys to think about.

And the second thing is, what happens to purchases when they become much more convenient and you don't spend time queuing up for a transaction, queuing up to get in the park and you actually have more time to enjoy the entertainment and subsequently spend more money doing things other than standing in line which, of course, you can't spend any money while you're doing that.

Seems pretty straightforward. The company has spent roughly $1 billion developing the system, so it had better work.

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Matt Phillips is a reporter at Quartz, where he writes about finance, markets, and economics.

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