“This Better Work” Disney Park’s Digital Transformation

           “This better work” Bob Iger said after the board meeting had ended. The board meeting was in February 2011 and Disney’s board had unanimously voted to approve nearly $1 billion dollars into its MyMagic + plan to bring digital transformation throughout Disney’s parks. The statement was directed at Tom Staggs. Tom Staggs was chairman of Disney’s Parks and Resorts division at the time.1 He would later be promoted chief operating officer in 2015 and leave the company in 2016, although we are probably getting a bit ahead of ourselves.2 In fact, we should start even before this meeting in 2008. That is when the Next Generation Experience or NGE project began.1

            In the mid-2000s Disney world had issues. Certain key metrics including “intent to return” were dropping. A variety of pain points like long lines and high-ticket costs were causing Disney World to become referred to as a “burning platform” in the company.1 To combat this in 2008 the NGE project was launched. It was tasked with dealing with these issues and reinventing the vacation experience.1 One idea that came up was a Magic Kingdom without turnstiles.3 This was extrapolated to have a vacation become a truly frictionless experience. This was then combined with the new development of the wearables market at the time. This included the Nike SportBand3 and Trion:Z a magnetic wristband from a SkyMall catalog.1 This led to the focus of NGE what is now know as a Magic Band.1

Disney’s Magic Band and Touchpoint5

            Disney’s Magic Band is a waterproof colorful wristband that you use to touch to a sensor called a touchpoint.4 They serve as a Disney World guest’s hotel room key, theme park ticket, payment method, and other uses in the park. They interface with a collection of tools called MyMagic +. MyMagic + primarily consists of Disney’s website and mobile app which allows guests to plan their vacation in advance. In addition to hotel and theme park reservations, guest can add in extras like dining reservations and can cut the line for theme park attraction using a system called FastPass +. Finally, guests can make any adjustments while they’re at the park using the mobile app.5

Inside Disney’s Be Our Guest Restaurant3

                Some of the first prototype Magic Bands were simply Velcro, plastic liner, and a RFID tag.1  RFID or Radio Frequency Identification refers to a wireless system of tags and readers. The readers can emit radio waves and receive signals back from RFID tags.6 Disney can use these tags to identify who is using a touchpoint and connect it to their larger database of the user’s information. The final version of Disney Magic Bands also includes long range radio transmitters which let Disney know where you are in the park.This allows Disney to delight guests like having waitstaff “magically” know where you are to deliver your food in the Be Our Guest restaurant.7 This also gives Disney a massive amount of data on their guests generally within the park. It can allow them to see areas being overwhelmed with guests at the park and focus on ways to disperse traffic. This also could allow Disney to fit more guests in the park. It would also allow them to treat guests more individually avoiding a one-size-fits-all.1

            During the development of the Magic Band, Disney used outside third-party partners like a San Francisco firm Frog to work on the NGE project.1 This reportedly led to push back from Disney’s Imagineers. Disney’s Imagineering is their research and development that designs and builds the theme parks, resorts attractions and cruise ships.8 While there were likely many disagreements one key example is Magic Band touchpoints.

            Frog had thought the touch points would be a waist-high stand of Mickey Mouse’s head. Guests would touch Mickey from the magic band to Mickey on the touch point. Crucially these touchpoints would be uniform to predictably work the same way each time for guests. Imagineers instead that touchpoints should be customized to each attraction. They wanted touchpoints immersed in the world to match the aesthetic of each area. Both groups eventually compromised with consistent touch point features, like the Mickey icon, but with the ability for flourishes for each themed area.1 Interestingly, the touchpoints glow green for success and blue if there is an issue. The touchpoints intentionally do not use red as it implies that something has gone wrong.3

            During the development in January 2010 Tom Staggs enters the picture. He became the head of parks partially to see if he would be a good fit to succeed Iger. As part of the way to demonstrate the MyMagic+ capabilities, the NGE needed a tangible proof of concept beyond a PowerPoint. To do this they created a living blueprint R&D lab inside a 12,000-square-foot soundstage in Disney World’s Hollywood Studios. The lab featured a full living room where a family could book the vacation. They simulated the airport experience from Orlando International using a touchpoint to check into the Disney Magical experience. They also had hotel a setup with front desk and bedroom from Disney’s contemporary resort. They even had a mini version of the Haunted mansion ride showing MyMagic+ ride personalization. The sound stage would then be visited by Iger, Staggs, and many others at Disney including Disney’s board.1

           Now we are back to February 2011 whereas previously mentioned Disney’s board authorized the $1 billion dollar expansion. There was a lot to do. 28,000 hotel doors needed to have their locks changed, and more than 70,000 cast members needed MyMagic+ awareness training as just one example. MyMagic + was finally announced on January 7, 2013 and finished completing its rollout in the 1st half of 2014.Disney has reported turnstile traction time reduces by 30% and allowed for more than 5,000 more people in the magic Kingdom alone.1 From my personal experience having used the system I would describe it best in one word magical.

From left to right, Bob Iger; Ben Sherwood; and Tom Staggs2

            Magic Bands seem to be mostly exclusive to Disney World. Disneyland’s guests being more residents seem to not quite be the right fit.9 Disney’s new Shanghai resort has opted to use guest’s mobile phones for tasks that the Magic Band would traditionally do in Disney world.10 As for Tom Staggs he was certainly on track to become CEO after his promotion to Chief Operating Officer in 2015. He probably even saved Bob Iger’s life when he successfully performed the Heimlich maneuver during a lunch meeting in the Disney board room in 2003. It looked like he was the natural Disney successor. However, in mid-March of 2016 Iger had informed Staggs that the board was broadening its searching for Iger’s successor as CEO. Staggs left shortly after.2 Iger ended up stepping down in February 2020 when he was succeeded by Bob Chapek.11

1Carr, A. (2017, December 02). The messy business of reinventing happiness. Retrieved February 15, 2021, from https://www.fastcompany.com/3044283/the-messy-business-of-reinventing-happiness

2James. (2016, April 07). Behind the scenes at disney as it purged a favorite son. Retrieved February 15, 2021, from https://www.nytimes.com/2016/04/08/business/media/behind-the-scenes-at-disney-as-it-purged-a-favorite-son.html

3Kuang, C. (n.d.). Disney’s $1 billion bet on a magical wristband. Retrieved February 15, 2021, from https://www.wired.com/2015/03/disney-magicband/

4 Magic kingdom park hours. (n.d.). Retrieved February 15, 2021, from https://disneyworld.disney.go.com/plan/my-disney-experience/bands-cards/?CMP=SOC-DPFY13Q2MyMagicatWaltDisneyWorldResort000905-01-13

5 Taking the disney guest experience to the next level. (n.d.). Retrieved February 15, 2021, from https://disneyparks.disney.go.com/blog/2013/01/taking-the-disney-guest-experience-to-the-next-level/

6Center for Devices and Radiological Health. (n.d.). Radio frequency IDENTIFICATION RFID. Retrieved February 15, 2021, from https://www.fda.gov/radiation-emitting-products/electromagnetic-compatibility-emc/radio-frequency-identification-rfi

7Domingo, J. (2015, July 31). Hands on: DISNEY MagicBands, Mymagic+ web service. Retrieved February 15, 2021, from https://www.pcmag.com/news/hands-on-disney-magicbands-mymagic-plus-web-service

8About Imagineering. (n.d.). Retrieved February 15, 2021, from https://disneyimaginations.com/about-imaginations/about-imagineering/

9Ethan. (2015, May 22). MagicBands won’t be coming to disneyland any time soon. Retrieved February 15, 2021, from https://www.magicbandcollectors.com/magicbands-wont-be-coming-to-disneyland-any-time-soon/

10Ethan. (2019, August 30). Shanghai Disney resort will not have MagicBands; will use mobile phones instead. Retrieved February 15, 2021, from https://www.magicbandcollectors.com/shanghai-disney-resort-will-not-have-magicbands-will-use-mobile-phones-instead/

11 Whitten, S. (2020, February 25). What you need to know about Bob CHAPEK, disney’s 7th CEO. Retrieved February 15, 2021, from https://www.cnbc.com/2020/02/25/who-is-bob-chapek-the-new-ceo-of-disney.html

10 comments

  1. abigailholler1 · ·

    Who knew Disney had changed so much since my visit as a kid! While various elements of the MyMagic+ rollout had a profoundly positive impact on the customer experience, I have also read that other technology & data driven improvements to their operating model also lead to huge efficiency gains on their bottom line. Specifically, through their digital transformation efforts, Disney rolled out rules-based technology to have more accuracy in employing their labor force, leading to 20% in gained efficiencies. Other examples include the use of consumer data and forecasting models to streamline laundering services and other everyday operations behind the scenes. Quite a large (and seemingly successful) transformation!

    Great article on Disney here: https://capgemini.com/consulting/wp-content/uploads/sites/30/2017/07/disney_0.pdf

  2. olivia_levy8 · ·

    To think about the amount of data and insights that Disney is collecting from this is wild, they may as well have put a tracking device into our brains. I have gotten to use a MagicBand when visiting Disney about 6 years ago and can confirm they are as cool as they seem. The rollout of these bands is brilliant.

    One of the buzzwords around tech and user experience these days is “frictionless” and this is exactly that. It is said Apple strives for 3 steps or less on all transactions and Amazon’s dash button is another example of frictionless transactions. This has definitely been a turning point for Disney and shows their commitment to innovation. I can only imagine how many little kids have made purchases via MagicBand!

  3. alexcarey94 · ·

    This is a very interesting article- it shows how when doing a digital transformation properly it requires a lot of planning and capital. I think if this roll out was not successful it would have been detrimental to Disney as they had invested so much into the magic band. I never thought of before how this could actually allow for more people in the park- it is very interesting how they can use this feature to mitigate traffic in certain parts of the park (I wonder how they do they? Pulling people to other attractions?) I think there is something to be said for this as it would be useful with Covid tracking in stores. For example the supermarkets could use something similar so they could fit more people in the store by optimizing their traffic flow.

  4. Great post. Looking forward to seeing it augmented with your presentation.

  5. conoreiremba · ·

    Really insightful post William and looking forward to hearing more about it during your presentation. I recently read Bob Iger’s autobiography (Ride of A Lifetime), and would strongly recommend it as one of the best business books I’ve read. Iger points to the fact that it is the people within Disney who have allowed it to go from strength to strength, and it seems to be very much the case within their digital transformation strategy. This idea of frictionless experiences is very interesting, and we have seen so many companies be successful by eliminating customer pain points, Uber and Airbnb come to mind. Disney was also able to make a strong entry into streaming in the same way, by identifying how the customer would want to consume data in the future. Their aggressive move into the streaming wars with Disney+ has been their saving grace during the pandemic as shown by recent earnings (https://www.cnbc.com/2021/02/11/disney-dis-q1-2021-earnings.html).

    But it is just interesting to see how there seems to be a trend within Disney of identifying the pain points of customers first and then using technology to solve them, instead of identifying new technology and trying to match it with a problem.

  6. Wow, really great posts!! I initially asked myself why Disney wants digital transformation? How does it make any impact? From the post, I can clearly see how digital transformation can solve existing problems and align with the value proposition! “Disney’s Value Proposition is to always deliver the most exceptional entertainment experiences for people of all ages. All five business segments want to deliver the same value to their customer: happiness and well-being of kids and families.” Disney is willing to put as much effort as possible to make Disneyland the world’s most exceptional entertainment experience. Through digital band, it not only saves visitors time on waiting in the line but also allows visitors to spend more time on other activities such as having lunch/dinner while waiting their turn. It’s a win-win situation for both Disney and its customers. It all makes sense now!

  7. It has been almost 15 years since I’ve been to Disney World and it seems like a lot has changed! When my family went there in 2006, the FastPass was something that was cutting edge. The Magic Band has clearly taken this to a new level though. As a consumer I would love the ease of use that it provides. To have everything simplified to a simple tap on a receiver is very convenient. I remember we used to have so much paperwork running around Disney. From maps to tickets, it seems like we had way too much going on. I would love to go back now and experience this in person.

  8. sayoyamusa · ·

    Highly informative post, William!
    I’ve learned a lot from your way of taking a deep dive with your expertise into what was happening in the development of MyMagic+. The collaboration of the third parties and Disney’s Imagineers is one of the great examples of collective intelligence. The episode of their demonstration in Studios gives another valuable insight that seeing (or experiencing) is believing in the digital world.
    It’s also noted that the technology fits so well with Disney’s key brand image of “magical” that it contributes to much stronger brand building. It always starts with value (superior customer experience,) then technologies and I think this order of reinforcement, not the other way around, is essential for implementing digital strategy.
    I look forward to learning from your presentation as well!

  9. lourdessanfeliu · ·

    What a great post. With ~58 million guests every year I can’t imagine the amount of data Disney collects! It must be so interesting to create models and analyze the data find meaningful inputs and process improvements. It is amazing to see how technology is shaping user experiences. I look forward to your presentation and learning more about Disney’s digital transformation.

  10. Divya Jha · ·

    Thanks to your deep dive into Disney’s use of Magic Bands, I now know what (else) to look forward to when I finally visit Disneyland! Their use of technology to create a seamless, magical and frictionless (as Olivia mentioned above) ‘world’ is noteworthy. The fact that you can eat, get on a ride, stay in a hotel room and even shop using these bands is amazing. To think of the data they are collecting on consumer behavior, it’s a gold mine! Quite frankly, I’m so surprised Disney’s competitors haven’t tried to emulate the Magic Band on the same scale.

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