Boardwalk Times: Stories from the Seashore —Disney Prime Is Happening — Here Are My Ideas On How It Could Work
Disney is looking to build a membership bundle service in similar vein to Amazon Prime and Apple One. How could it work?
Welcome back to Boardwalk Times: Stories from the Seashore! In this month’s newsletter, we will be discussing how Disney’s upcoming membership service — internally referred to as Disney Prime within Disney — could potentially work.
I also have some podcast plugs and as always the LINKS OF THE MONTH.
Disney Prime Is Happening — Here Are My Ideas On How It Could Work
On August 31, Disney confirmed its intention to create a membership program that could offer discounts or special perks to encourage Disney fans to spend more on its streaming services, theme parks, resorts, and merchandise.
This idea is known as Disney Prime at least internally.
Disney+ was just the start. Now Disney looks to create a much more robust membership program that would not only encompass the streaming services but would drive guests of the programs to the theme parks, resorts, and shopping online.
To me, we just have to break it down into three pillars.
FRAMEWORK (The Three Pillars for Disney Prime)
To me, the three pillars of Disney Prime will be.
Disney+ — The Core Piece
shopDisney
Disney Parks
I believe those three pillars represent Disney’s entire intent for the membership program, and everything else is just extra gravy.
Disney+ — The Core Piece
Disney+ is the core piece.
It is the streaming service and what Disney hopes to be its cash cow alongside the parks in the near future. Disney+ is expected to be profitable by fiscal 2024.
Amazon Prime wraps in Prime Video as part of its other perks. To me, a Disney Prime service would have Disney+ be the core piece. From a consumer angle — the consumer is getting a streaming service with originals and content from Disney’s past. From Disney’s point of view — a Disney Prime member gives them a loyal Disney+ subscriber they would unlikely lose to churn. Adding in other incentives like discounts across Disney’s wide portfolio should be enough to incentivize subscribers to stay subscribed.
shopDisney
Disney may not have a fleet of delivery trucks like Amazon but I could see them really pushing Disney Prime members into the shopDisney ecosystem. Whether it’s for discounts or Disney Prime member exclusive merch.
It seems with the restructuring of the Disney Store and the hyperfocus on shopDisney. Disney may have ambitious plans in the shopping/e-commerce space.
With Disney Prime, the data Disney gets across streaming and the parks may be a big factor in your future shopDisney experiences. While on the other hand, the data that Disney gets from shopDisney may be easier to translate across streaming and the parks.
Disney also has been working on an e-commerce feature that would directly live in Disney+. For example, you watch The Mandalorian but then it links you to products from the series (a plush Grogu or a Darksaber).
Disney Parks
As Disney reimagines its annual pass system on both coasts. They have a huge opportunity to utilize Disney Prime as a way to bring back perks that annual passholders no longer have. Yes, this may be partially my own wishful thinking. But I do think Disney has a huge opportunity though to create more discounts across the board for Disney Prime members within the parks. And it would lead to even more revenue for Disney.
Also, let’s consider this combo.
A guest that is a Disney Prime member, Walt Disney World AP, and Disney D23 Gold member should get a good amount of incentives and discounts to come and stay on Walt Disney World property and spend money.
Maybe Disney Prime members will get other benefits for the Disney Parks as well. After hours? VIP tours? Exclusive in-park lounges? The sky is the limit.
There have already been Disney+ subscriber deals for Disney hotels/Disney Cruise Line. All of that would go up 100% for Disney Prime as the main goal would be to get members to save — but spend — more on all things Disney. That’s why the Disney Parks are a cornerstone of the Disney Prime framework.
A mix of tiers and access
To piggyback off of my example from the Disney Parks section.
The goal of Disney Prime should be to use it as a way to have a mix of tiers and access.
For example, I can’t imagine an average consumer paying for Disney Prime unless it’s extremely well-priced and includes Disney+, the key selling point. The average consumer would get Disney Prime just to have the access to Disney+ which includes all the Disney content, the latest films, and the latest Star Wars and Marvel Studios Disney+ series.
On the other hand, I can imagine hardcore Disney fans paying for it all day long and twice on Sunday.
This is where Disney has the ultimate opportunity.
They can create Disney Prime to cater to those two demographics. It’s through a mix of tiers and access. Maybe there is a version of Disney Prime that includes Disney+, discounts at shopDisney, and discounts at the Disney Parks. Then maybe there is a different —although more expensive — tier that includes Disney+ with special features, higher discounts and exclusive merch from shopDisney, and more benefits and discounts at the Disney Parks.
You have the potential to gain subscribers/members on two different fronts.
When it comes to price do you start around $10? Do you potentially just start it off at $15? Maybe it can go higher to $25 a month/$300 a year. Just depends on the tiers and how the value is structured.
Back when Disney+ was announced many actually wanted a Disney membership service. Now that is coming true.
The potential to grow Disney Prime
Now you run into the issue of how do you grow a service like Disney Prime over time.
In comparison, Amazon Prime features all this for $139 a year:
Fast, free delivery from Amazon
Prime Video
Prime Music
Prime Day (savings event)
Prime Gaming
Exclusive deals
Rx savings
Prime Reading
Amazon Photos
Prime Pantry
One year free of GrubHub+
Another comparison with Apple One which has various tiers and pricing includes:
Apple Music
Apple TV+
Apple Arcade
iCloud+
Apple News+
Apple Fitness+
What makes Amazon Prime, Apple One, and the potential Disney Prime so attractive for these companies? The massive recurring revenue opportunity.
Amazon Prime makes $25 billion in recurring revenue from Prime yearly according to estimates. Apple One hit $19B for its services division (Apple One and its products) in Q2. Amazon and Apple are much larger entities than Disney but it’s easy to see why Disney may want to tap into this recurring revenue. The bigger question is how many Disney Prime members would you need to make it worth it. For example, if every Disney Prime member paid $180 a year ($15 a month). Let’s say Disney is able to attract 90 million Disney Prime members. That’s $16.2 billion in yearly recurring revenue. Just for Disney Prime.
That was just an example and not even taking in the fact Disney could price it higher and lower, or even attract more members. It’s clear though Disney Prime would have to attract a large member base to make it a worthwhile concept.
How does Disney continue to make their bundle and by the contrary its Disney Prime member base grow?
Right now they have three solid potential perks. They may need to beef it up to six to ten perks if Disney wants to seriously get into the membership bundle game.
That’s where some fun hypotheticals come in with Disney Prime… Does Disney start to merge Disney Prime with other existing membership services they operate? What if a tier of Disney Prime includes Disney Parks AP? Or on a smaller scale the access to Disney D23 and its events? What about a perk/deal for Disney Prime members to become Disney Visa card members?
What about going as radical as making Disney Prime an add-on with Disney Vacation Club and Castaway Club?
Unique Opportunites for Disney Prime
Something like Disney Prime will provide unique opportunities for both Disney and its members. Disney will absorb even more data. Disney already gets data from Disney+, Disney Parks, shopDisney, D23, Disney Vacation Club, etc. Now they will use the data generated from Disney Prime across the verticals.
The unique opportunities for members could include the following. These may be a bit more daunting than what Disney currently has planned for its membership service:
Virtual Attractions — If you want Disney+ to become an experiential experience platform. Give Disney Prime members the first chance to test out virtual attractions. Who knows how this will work or how Disney will utilize the tech but Disney Prime members would likely enjoy virtual Haunted Mansion and Pirates of the Caribbean attractions, Maybe there are special moments in the virtual version that can’t happen in the physical world.
Exclusive Events — This is straight out of the Disney D23 fan club playbook. Create exclusive events! Whether it’s a Q&A, special panel, a party, a screening, etc. People love “exclusive” things. Imagine exclusive parks events or even Disney Prime member-only Disney cruises. Maybe discounts on Disney location-based experiences in your area? Maybe Disney Prime could even partner with a theater chain so fans can have special screenings/early access to the latest Disney films. (More on Disney reimagining the theatrical experience in a future newsletter).
Special Access within Disney+ — Maybe Disney Prime members who have Disney+ get early access to Disney+ original films. Maybe they get to watch their favorite Disney+ series a couple of hours early? What if we go so far that they can watch the latest Disney theatrical film on Disney+ before it arrives for the rest of the world? It would increase value and for hardcore fans, it would likely be a must-buy.
Those are just a few unique opportunities for Disney Prime to explore. We already know it will explore automatic merchandise recommendations. Something that Disney has been doing for a while now. Disney Prime will have to feature unique opportunities and showstopping features to make people purchase it alongside Amazon Prime, Apple One, or whatever the hot bundle is.
What other showstopping features could make Disney Prime over-the-top? Maybe access to Disney’s Metaverse next-gen storytelling? Just like how we discuss virtual attractions above. Maybe Disney Prime includes Disney video games within the bundle? Video games continue to rise in popularity.
The Cons of Disney Prime
Figuring out the price point for Disney Prime could be a difficult challenge. You can’t really underprice it but it also can’t be extravagantly priced.
It could cannibalize some of Disney’s other membership services — along with those revenue streams — if launched with the ideal perks.
Again, it could potentially cannibalize revenue from Disney+ and the Disney Parks division if it’s too successful.
The ARPU (average revenue per user) for Disney+ may grow even smaller with Disney Prime.
As mentioned in the earlier sections, Disney Prime may only appeal to “superfans” if it doesn’t have a long list of perks.
Disney+ has already disrupted Disney’s various divisions. Are they willing to disrupt both Disney Media and Entertainment Distribution and Disney Parks, Experiences, and Products again?
Disney’s Next Chapter
Disney CEO Bob Chapek inherited Disney during the pandemic and had to chart his own path. His predecessor was the acquisition king and added Pixar, Marvel, Lucasfilm, and 21st Century Fox to Disney’s portfolio. Chapek couldn’t just acquire another company, he was given a pretty tough hand with the pandemic and the debt from the 21st Century Fox deal.
Yet, Chapek’s strategy and path forward are coming to light. Instead of trying to be Netflix or acquiring a Nintendo, Spotify, or a shiny new media/tech company. Chapek realized Disney’s unique and powerful position within our culture. He saw the rapid growth of Disney+ and the bounce back after the pandemic at the Disney Parks. He knows that a Disney membership service is doable and could be highly successful. He knows for a portion of his audience that Disney is a lifestyle/utility, not just a company.
Chapek is now banking on next-gen storytelling and this membership service to help kick off Disney’s second successful century. He’s also deep down hoping that maybe this story helps Disney’s underperforming stock. Chapek has said many times that Disney is the envy of the entertainment industry. Will Chapek’s recent transformations finally make Wall Street realize how undervalued Disney is as a stock?
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Podcast Plugs 🎙
Boardwalk Times columnist Iris Nijholt and I broke down Marvel Studios’ first Halloween special, Werewolf by Night! We adored Marvel Studios’ tribute to the monster movies of yesteryear and we want more. (Apple) (Spotify)
This is the Waycast hosts Sara Edwards and Giovanni Delgadillo have been breaking down Andor every week. If you haven’t listened yet. Now is a good time to catch up because I have a feeling Andor is only going to get better. (Apple) (Spotify)
We wrapped our season of Better Call Hulk, a She-Hulk after-show. I want to thank Richard Nebens, Ayla Ruby, Giovanni Delgadillo, Julia Delbel, Thomas Carter Rochester, and Elizabeth Pfeiffer for all discussing She-Hulk with me this season. (Apple) (Spotify)
LINKS OF THE MONTH
— The good folks over at ThemedEntertainmentJobs.com released their IAAPA Guide for 2022. We’ll be at IAAPA next month and expect some coverage in this newsletter. (Themed Entertainment Jobs)
— Disney Execs had a global retreat at Walt Disney World this month. Hopefully, we hear good stories from this down the line. (Blog Mickey)
— Should Themed Entertainment Media Production Use Virtual Sets aka LED Volumes? by Roby Brown (LinkedIn)
— First ballot Disney Legend and former Walt Disney Imagineering President Bob Weis announced his retirement from Disney. (Boardwalk Times)
— Boardwalk Times columnist Kelly McCubbin takes a look at the EPCOT film which introduced Walt Disney’s most ambitious project. (Boardwalk Times)
— Blade causes a Marvel Studios slate shuffle but it may be a blessing in disguise! (Boardwalk Times)
— Michelle Rejwan leaves her SVP position at Lucasfilm for a producing deal with Disney & Lucasfilm. (Boardwalk Times)
—Disney: The Metaverse, Digital Transformation, And The Future Of Storytelling. (Forbes)
— Read this amazing oral history about the production of Lilo & Stitch. (Vulture)
— I hope to be rich enough one day to own a home in Disney’s Golden Oak neighborhood. (CNBC)
Thank you all for reading and supporting Boardwalk Times: Stories from the Seashore.
Have a Happy Halloween!
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