3 Ways Disney's New Tech Can Make It a Small World

It's just the beginning for Disney World's MyMagic+ technology.

Aug 6, 2014 at 6:18PM
Mkspeedway

Photo source: Rick Munarriz.

Things are rocking at Disney's (NYSE:DIS) theme parks. The family entertainment giant posted strong quarterly results after the market close on Tuesday, and its parks and resorts division helped fuel Disney's stellar showing.

Revenue and operating income climbed 8% and 23%, respectively, at its parks and resorts segment. Margins widened domestically on the strength of attendance gains and improved guest spending, despite an uptick in costs. 

One item that's driving the higher park overhead is the implementation of MyMagic+. Disney has reportedly invested about $1 billion in the next-gen platform that allows guests armed with RFID-backed tickets, or MagicBand bracelets, to enter the parks, reserve expedited attraction queues and, in some cases, pay for transactions. 

Disney is coming off the first full quarter that MyMagic+ was available to all park guests, and it's clearly gaining traction. It revealed during Tuesday night's conference call that half of its park guests are now using MyMagic+ MagicBands, and 90% of them are rating the experience as very good or excellent. 

MyMagic+ is free -- unlike rival parks that charge for line-skipping perks -- but that doesn't mean that Disney doesn't see it as a revenue driver. Improving guest satisfaction is something that it sees increasing length of stay, repeat visitation, and positive word of mouth. It feels that the well-received popularity of the platform is already being priced into its offerings.

Things can get better, of course; Disney just doesn't want to talk about the specifics yet. "There are other opportunities from a direct revenue generating perspective that I won't get into in great detail but we'd be glad to detail at a later day," CEO Bob Iger said during Tuesday night's call. 

Well, because we're down to dreaming out loud and connecting the dots, let's explore a few ways that Disney could use MyMagic+ and its growing army of MagicBand-wearing fans to raise the bar.

1. Welcome to personalized rides
Let's say that you're on It's a Small World. It's the final room, where the farewells are scrawled in different languages on colorful plywood. Boring. Right? The boats are stacked up again. That song is burning in your brain. Now, picture a more high-tech twist. Guests tap their MagicBands on scanners before entering the boat and, armed with personal information that patrons can decide to opt in or out of, Disney knows the nationality of everyone on board. A world map could offer digital pushpins of everyone on board the boat, with farewells offered in any related languages.

Speaking of foreign languages, why can't a Haunted Mansion doom buggy offer narration in the desired language based on the tap of a MagicBand? This could be offered on any ride where familiar guests are grouped together and the ride dialogue won't bleed into other vehicles. 

Personalized rides already exist. Rival Universal Studios Florida features an E.T. ride where riders offer up their names, which are then encoded on cards and spoken by E.T. at the end of the adventure. Disney's Spaceship Earth in EPCOT takes snapshots of guests, and uses a brief on-screen questionnaire to create a visual representation of what their futures might be like. MyMagic+ can go beyond all of these things because the information is pre-submitted, with more data to mine.   

2. Theme parks are the ultimate social network
Custom-tailored rides would be a game changer. After all, if a ride entering a room watching a TV just happens to be watching your favorite ABC show, or favorite team on ESPN, that would be a pretty neat trick. If a family digital portrait hanging on a wall was your family portrait -- if the ride itself could be different every time based on your evolving interests -- you would probably visit a park more frequently. It gets you.

Now, let's think about what's possible if Disney knows not only you, but also many of the tens of thousands of guests sharing the park with you on any given day. Your smartphone could alert you and all of your fellow Jack Skellington fans about a surprise in-park gathering with an A Nightmare Before Christmas bent. Based on who is visiting the park, Disney could fill a day with niche-specific events, or even flash-sale in-store discounts that aren't publicly announced, yet ultimately serve to get like-minded guests to share a bonding experience. It's OK if you just want a day in the park with your family; MyMagic+ should be only as invasive as you want it to be. However, for bored teens and adventurous adults, MyMagic+ is the key to social opportunities that would make park visits more valuable and enjoyable.

3. Life goes on outside the parks 
MagicBands are cheap and low-tech. The real grunt work is performed in the fleet of scanners at ride entrances, store registers, and eateries. Why should the scanners be limited to Disney's gated attractions and resort hotels? Why not have them at Disney Store locations? It's not about finalizing transactions -- at least not right away -- but about getting to know its guests even better.

Scanning your MagicBand at a local Disney Store location could unlock an in-store discount, contest giveaway, or perhaps even a virtual character or trinket used in a mobile app game. Disney could partner with other select retailers and movie theater chains to install scanners that offer similar perks. Anything that draws you closer to any of its revenue centers is fertile soil for expansion. And if we're starting to wear MagicBand bracelets outside the parks, how far away are we really from a MagicBand fitness-tracking bracelet? Disney could be the sneakiest and smartest wearable computing play that no one saw coming, and it's just starting to scratch the surface.

Rick Munarriz owns shares of Walt Disney and is a part-time resident of Celebration, Florida. The Motley Fool recommends and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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