Well let's take a look at your evidence shall we?
The number of complaints vs. total guest usage is irrelevant in evaluating MyMagic+'s success or failure. Technical problems will be solved and we'll be left with a new system that will have to stand on its own merits.
MyMagic+'s measurement of success should be judged solely based on revenue and profit growth.
With typical price increases in recent years, domestic theme parks have been averaging about 7% growth annually. That's the baseline. Anything above that represents positive growth; below that negative growth.
To justify its tremendous capital investment and increased operating cost, MyMagic+ needs to increase revenue by about another 12-13% on top of that.
Seriously, if you're investing over a billion dollars and can't realize a double-digit growth annually, then that's just a pitiful financial performance.
In the most recent earnings call, when asked:
"And just a follow-up question on the domestic parks. I think in the past, you've sort of called out some incremental expense that we may see in different initiatives. I guess is there something incremental we should look out for in fiscal 2014? I guess, where are you on the spending around Magic+? And then on Magic+ when we might see, I guess, some signs or data points of how it's impacting the business?"
CFO Jay Rasulo replied with:
"Alexia, let me take the back-end of your question first on MyMagic+. So, the situation we're in right now is that we basically are continuing to roll forward with making this benefit available to more and more of our guests. And at this point, if you are staying on property at one of our hotels, you're basically a beneficiary of MyMagic+. And, you know, we've talked about the benefits in two basic categories, in terms of the financials of the company.
"The first, as it greatly improves the experience at Walt Disney World, we expect that -- as we have with everything else we've done to improve the experience at our parks -- to have an underlying increase in business. Whether that's more individuals coming to the resort every year, or those individuals who come down to Orlando, spending more time with us and having a better time. That tends to reverberate throughout our business in a very positive way. And then, sort of easing some of the, let's say, logistics of getting around the property -- paying for things, entering the parks, getting in and out of the resort hotels -- when you make that easier, people tend to spend more time on entertainment, more time on consumables, be that food and beverage, merchandise, et cetera. So, as we are still very much in the early days of rollout, we haven't been characterizing that impact, but we do expect this to be a net positive and growingly positive impact on our business in the years to come.
"Relative to the front-end of your question on spending, continued spending and ramp-up of new initiatives in Florida -- and that's not only MyMagic+, which, you know, the operating portion, of course, the costs are kicking in, and we're now seeing, as we put the assets in place, some of the depreciation that comes with that project being reflected in our expenses. But if you look at it on an overall basis, those new initiatives are accretive -- were accretive in 2013 -- continue to be accretive in 2014. I said in my comments that the margin impact of that in fiscal 2013 was about 30 basis points on our overall margins. And this year, we're looking at about a $300 million expense item, and more or less the same amount on the revenue side. So, you know, we'll continue to see accretion into 2014 and ramping upward beyond that."
Basically, Disney is already saying that MyMagic+ will be a net 0 in FY 2014.
MyMagic+ represents a lot of money spent with nothing to show for it so far.
The impact of WWOHP and Carsland were immediate. No two-year "test" phase. They were obvious and immediate financial successes.
So far, MyMagic+ is shaping up to be a big dud financially. However, it's also premature to call it a failure. We won't know it's true impact until customers start evaluating the benefits of staying onsite vs. offsite (e.g. like the DAK FP+ announcement that started this thread) and change their purchasing patterns accordingly.
I'm hoping corporate Disney learns their lesson and abandons plans to implement MM+ at Disneyland. However, at WDW, it's here to stay. Regardless of whether it stays or goes, that's no measurement of its success or whether senior management is happy with it.
I believe if they could go back in time and know then what they know today, then MyMagic+ never happens.
