The budget may have included some padding but not at the levels you are about to experience.
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NextGen Deep Impact
- Thread starter Funmeister
- Start date
The budget may have included some padding but not at the levels you are about to experience.
CountryBearFan
Active Member
Sad, but true.
GoofGoof
Premium Member
I have no idea what the budget is, I've never seen it. Like I said, just a guess.
Since you have some insight into the nextgen budget what is the breakdown of the $1.5B between hardware, software, staffing, etc... Just curious how the number gets that high.
Tom
Beta Return
Every time someone mentions the NextGen cost/budget, it changes. I don't think anyone around these parts really knows, and they most certainly can't break it down into expense categories.
I will say that a significant amount of money went into infrastructure. Not only the Mickey Head Pods you see at all the queues, but now the turnstiles too. But behind all that, they had to implement major IT upgrades, including new fiber optic runs, several new telecom locations and systems upgrades (remember all those electrical/telecom permits in the tunnels in the last few years?).
And then, I'm sure this is requiring a HUGE server farm added to their Data Center at the north end of property, and probably just as much at their off-site backup location. I still think the new office suite they built out in a nondescript office building in Orlando is for the Data Miners to do their magic.
Plus the R&D for the wristbands, RFID chips in the cards, replacement of every hotel room doorknob on property, new credit card machines at every POS terminal.
The list goes on and on, before you even get to the human aspect.
Honestly I haven ot worked directly on the project. I do not know exact numbers however I do know there were no contingency plans for certain overages and now there is somewhat of a scramble. Same type of scramble with "Project Tomorrowland" and "Magic on Demand." Set the bar WAY too high and then the execution failed (MOD in this case...Project Tomorrowland had no choice but suceed but at a much higher price) due to under-preperation. Another great example...go look at the ground around "Discovery Island" at DAK. There is a reason why the edges of the walkways in many areas are a different color and overlap. Did not think of the logistics and went ahead without thinking.
Skibum1970
Well-Known Member
Ah, someone has thrown down a gauntlet to do the math. So let's number crunch.
During the 2012 fiscal year conference call, CFO Jay Rasulo said:
It's uncertain what "up substantially" or "down modestly" means. Let's play with some numbers to guess:
- Domestic attendance is up 3%
- Total DLR 2011 attendance was 22.5M according to Themed Entertainment Association (TEA)
- Total WDW 2011 attendance was 47.4M according to TEA
People have suggested that DCA could break the 10M mark this year, up from 6.34M in 2011. DL might be down a bit (1M?) since more people are visiting DCA. Combined together, I'd guess DLR's total attendance might be 26M. This is just a guess but I'd call that "up substantially". Total attendance is up 3% (22.5+47.4 X 1.03 = 72M) so WDW's attendance would be about 46M (72 - 26) or down about 3%. I'd call that "down modestly". Ok, those projections seem to be in the ballpark based on limited information.
If this calculation is approximately correct, DLR annual attendance might be up 3.5M (26M - 22.5M). Just a guess but let's assume including tickets, food, parking, merchandise, and onsite hotel (some guests only), the average guest spends $100/day. $100 X 3.5M = $350M. In one year. It's likely the $1.1B investment in DCA will be a gift that keeps giving year-after-year, for a decade or longer, just like MK and Epcot. Food and merchandise costs Disney but, taken as a whole, it seems Carsland is already proving itself to be a huge financial winner.
I suspect TDO is worried. The pressure is now on them to make Next Gen just as big of a financial winner. I wonder if, secretly, they were hoping Carsland would fail.
Again, capital expenditures at DCA were in rides and tangible results (tangible to the guest). Disney's ROI appears to be positive although it will need time to offset the cost with sustained attendance. While granting that NextGen is not WDW-centric long-term, I remain doubtful. Plus, if TDO can't maintain a ride like Splash Mountain, how are they going to maintain sophisticated electronics?
Disneyhead'71
Well-Known Member
I wonder if Disney current plan of letting repeat guests "walk away" while courting once in a lifetimers plays into how much increased staffing they are going to need.
pjammer
Active Member
This doesn't apply to Disney World though. I love that your calculations are pretty close but you have to realize the demographics. DLR is mostly APs that won't spend as much and it's only two parks now that they have made DCA relevant. Disney had to pretty much give free entrance to DCA when to came to DL to get people to go. They had to spend that money to get people to go to DCA. It wasn't pulling it's weight. Even though Disneyland ranked 2nd (according to TEA)...it's sister park sat way below all of WDW. This has helped that park become relevant. WDW is 4 parks but even if you crunch the number so DAK and DHS is 1/2 day parks they still come ahead, even with decreased attendance.
doctornick
Well-Known Member
I was thinking about this... if regular FP is going away (eventually), there is a lot of FP machines all over the parks, including in new areas (like in Storybook Circus) that would be pointless. Switching them to Kiosks for FP+ makes a lot of sense.
flynnibus
Premium Member
But this is where the math goes into the twlight zone.. and none of us can get a true guestimate. Average Guest spending is totally a different beast in DLR vs WDW. Based on the huge AP population, their frequency of visits, and differences in spending behaviors... its difficult to pin their spending down as a running average. Add to that, DLR attendance being up so much - doesn't necessarily mean more guests, but could just be more visits from the same visitors. So attendance numbers, especially for DLR - can be murky. The revenue numbers would be the more telling tale.. but are hard to estimate from the info TWDC releases.
Now don't get me wrong.. I'm not doubting the positive impact and viability of Carsland - just saying that when attractions go in for 100+M - they are the types of investments aimed at getting an ROI through a very neubulous cloud of positive impacts - not immediate direct return. Massive infrastructure upgrades intended to be a platform for probably 5-10 years.. are also going to be measured by difficult, indirect gains - not necessarily direct revenue associated with the service.
ParentsOf4
Well-Known Member
As I think about it more, I see how Next Gen could be used to generate even more revenue than what I previously outlined. Next Gen will be tied into everything you do at WDW. Do something that Disney likes and you will be rewarded with a "bonus" FP+, a sort of Pavlov's Dog experiment.
Being a WDW addict, let's say you decide to spend $200 on merchandise at the Main Street USA Emporium. (Not too difficult considering their prices.) Of course, with Next Gen, you use your RFID device to pay for it. WDW is so happy that you just spent $200 that they reward you with a "bonus" FP+, good for you and your party for one MK attraction that day. Wow, this is so great that you spend another $200 (you never can have too many Disney t-shirts) and maybe get another one. Even better, you go home and tell your friends or, better yet, you tell several thousand people on the Internet.
Once the word gets out, how many people will head to the Emporium to drop $200 to get their "bonus" FP+?
The best thing, from Disney's perspective, is that FP+ is free. It cost them nothing to give it to you as a reward for exhibiting the behavior they want to see. If too many people start spending $200, they simply change an input parameter and raise the limit to $300. Then $400, then ...
FP+ is "free" but it's "more free" for those who spend more.
Being a WDW addict, let's say you decide to spend $200 on merchandise at the Main Street USA Emporium. (Not too difficult considering their prices.) Of course, with Next Gen, you use your RFID device to pay for it. WDW is so happy that you just spent $200 that they reward you with a "bonus" FP+, good for you and your party for one MK attraction that day. Wow, this is so great that you spend another $200 (you never can have too many Disney t-shirts) and maybe get another one. Even better, you go home and tell your friends or, better yet, you tell several thousand people on the Internet.
Once the word gets out, how many people will head to the Emporium to drop $200 to get their "bonus" FP+?
The best thing, from Disney's perspective, is that FP+ is free. It cost them nothing to give it to you as a reward for exhibiting the behavior they want to see. If too many people start spending $200, they simply change an input parameter and raise the limit to $300. Then $400, then ...
FP+ is "free" but it's "more free" for those who spend more.
Buried20KLeague
Well-Known Member
I think I love you.
nytimez
Well-Known Member
So what are you so afraid of?
wendysue
Well-Known Member
Alot of us CAN text, but refuse to pay the stupid data plan prices when we can just pick up the phone and actually TALK to someone....
dreamfinder
Well-Known Member
Pretty sure this was just a typo, but imagine if RCID got involved in the purchase process? Would end up putting the current firehouses (amazing already!) to shame with their cut of the pie.
COProgressFan
Well-Known Member
I just love that line. Perfectly sums up this entire FP+ debacle.
danlb_2000
Premium Member
That is am especially important point. WDW has over 25,000 hotel rooms so anything you do to them adds up quick. If you spend just $300 on each room for example your are talking about $7.5 million total. Any changes to cash registers would be a similar issue, not as many as there are hotel rooms, but I would think that there are quite a few registers on property.
Bravo!
What is the ROI on a detailed building exterior or attraction queue? What is the ROI on a character meet n greet? What is the ROI on parades, street performers, fireworks displays and even attractions themselves?
I am quite sure that they have ideas for reducing costs and increasing revenues which are tied to these enhancements, but there is also value in improving the guest experience, too.
I will admit that I tested FP+ last week and aside from a couple of technical glitches, it was an impressive addition. Helped us ride Toy Story Mania without being there at rope drop and we completely avoided the 30-120 minute waits for the new Belle and Ariel attractions.
I also found that we could change our FP return times pretty much on the fly. At one point I checked the mobile app after one return window had already begun--before using the FPs--and we still could have cancelled that one and switched to something else.
Comparing to ADRs is a flawed analogy given the sale. Restaurants may seat a couple hundred parties during any given meal. Meanwhile there are thousands and thousands of FPs distributed daily for each attraction. Popular attractions like TSM, Soarin, etc. are likely to be an issue...but the same is true today with the paper tickets.
Until more details are known, bringing class warfare into the equation is just FUD.
As for the original topic, it should surprise nobody that Disney will have to spend a lot to educate guests. There will be mailers, emails, websites, videos and even live CMs. Implementing any new system can be challenging but that isn't a good enough reason to derail progress. I'm sure many Disney park guests are returning visitors. They will need some assistance early on and little or none in the future. Substantial resources will be required in the early months, and slowly reduce over time. No surprise there.
Buried20KLeague
Well-Known Member
I'm quite sure TWDC as a whole has some sort of formula that they use to directly determine what adding an attraction or show does as far as ROI. Just because you don't feed a dollar into a machine when you get on SM doesn't mean they don't equate an exact dollar amount to you getting on SM. We just don't know how they figure it. Same with parades, etc.
Same goes with NextGen. While it certainly will be more directly tied to actual revenue dollars (meaning we'll probably be able to get a better idea of things from the outside looking in), I'm quite sure there's some formula (probably multiple, actually) that they will use.
I keep hearing the argument come up over and over about TSMM and being able to get a FP for it without being at rope drop, and honestly that's the ONLY thing this FP+ does that I couldn't easily think of a way to do using the curent FP system. To me, that's literally the only thing that I've heard about it that my only reply for is "yep. Okay, I get that one." But then my next thought is that allowing everyone a FP+ for TSMM without getting out of bed also isn't worth anything close to what the system costs will be to allow that. The easiest solution would be to take a page out of DCA's book and REMOVE FASTPASS FROM THE RIDE!!!!!! Boom. Problem solved.
Everything else about this FP+ system is doable with the current system, with minor tweaks.
There is a complaint that with the old system, you'd have to criss-cross the park to get FP's. This is solved by putting a bank of FP machines in each land (rather than at indivdual rides at all).
With the new system, we have the ability to reschedule FP's. This is fixed by allowing late returns again, like they have for years.
Those two issues, along with TSMM, were the only weaknesses I saw in the old system. And there were ways around them. For next to no capex.
They're killing a fly with a sledghammer, IMO.