Magenta Panther
Well-Known Member
OH, that would be sweeeeeeet.....
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Sentinel reports that MyMagic+ executive vice president Nick Franklin will be leaving in July
- Thread starter wdwmagic
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OH, that would be sweeeeeeet.....
PhotoDave219
Well-Known Member
Wait. I've seen you state many times that the company should be investing for long term and not short term. I see NextGen as exactly that type of long term investment. IF, and yes, that's a big IF, NextGen ends up creating a lot of ROI over the next 5 to 10 years, what would be the better investment?
Now, personally, huge fan of Star Wars, so I'd rather see both! NextGen for the revenue generation and future money for more investment and Star Wars since it could be awesome.
Lets just assume for a minute that the $1B dollar figure is correct. So over 10 years, we need $100M cost savings from MM+ alone (on top of operational costs).... thats a lot of money. I'm not sure they can break even.
PhotoDave219
Well-Known Member
Oh i get where youre coming from.... This forum tends to run crazy with unsubstantiated caca.
Lee
Adventurer
Oh, I won't. Ever.
And the first time I show up at a park and can't get a decent FP because the obsessive planners got them all a month ago...
Nonsense, as usual.
And I'm getting really tired of you calling me a liar...
Lee
Adventurer
Break even? Hah!
Franklin and his group promised to deliver an 11% increase in guest spending. They were aiming a little higher than even...
Lee
Adventurer
An yet, even unsubstantiated (unsustanatiable?) caca is often accurate. The two are not mutually exclusive.
PhotoDave219
Well-Known Member
wannab@dis
Well-Known Member
Of course that 10 years is only an example, but let's say they internally want to see positive ROI over the 10 year period. As you noted, that's $100M per year average. How many customers do they have a year? Can't really base it on turnstyle clicks, but would 10M be a fair estimate (probably low?). If so, that's only $10 increased spending per customer per year. Now, once they fully roll out the project, they will have multiple positives they are looking for...
1) get more people onsite (resort stays = more money for Disney)
2) get more people happier in the parks due to FP+ and better crowd control (happy customers spend more on food and spur of the moment purchases)
3) increased spending due to understanding the consumer wants, needs, high points and low points (that nasty data mining actually being used) and
4) increased spending due to localized marketing with texts, notifications (my bet is this is coming soon)
All those points can lead to increased consumer spending. If it's $20/yr, they double their money. What happens if it's $50/year? Now I think we're starting to see how they could see some really good ROI on this project. But, it may take some time for everything to get rolling. Plus, as with many major projects like this, corporations tend to long haul their ROI. So, the first couple of years will have lower ROI and future years will have much higher ROI as the system matures and they add more features. NextGen is a whole new outlook on how WDW interacts with their consumers.
PhotoDave219
Well-Known Member
You have much more of a "glass half full" outlook on this than I do.
What makes me sad is that all the interactive queues & random things that were the original premise behind this project wont actually be coming to fruition.
wannab@dis
Well-Known Member
My apologies as I can see how that post was not clear. I stated "you and others" don't like it and you (collective) spread lies. I'll be glad to re-word if you wish. But I think you understand the point that the claims of Billions overruns are not accurate and we've even seen one person try to claim it was $4B. That's not accurate, is it?
wannab@dis
Well-Known Member
I honestly don't feel like digging through the financials, maybe @ParentsOf4 has the numbers on a sticky. What's the annual guest spending currently? 11% increase just doesn't seem like an insurmountable goal.
Lee
Adventurer
No, $4billion is not accurate.
Around $2billion is, though. And you won't ever get them to publicly admit it.
Yes. 11% year over year increase in guest spending was projected, directly attributable to the NextGen initiative. That's (supposedly) not taking into account the price increases that have inflated the numbers by 20% or so the last few years.
PhotoDave219
Well-Known Member
wannab@dis
Well-Known Member
Sorry, I'm just not buying the $2B number without a reliable investor source to back it up. If that's the number being put out there via anonymous forum posters and has any merit, the investors would be breathing down their necks to get much more information. That's not happening and that's completely out of the ordinary for institutional investors to ignore Billion dollar overruns --- 100% increase over their released numbers. Your billion dollar overrun sounds like a huge issue, but if the investors think Disney is not being honest in their outlooks, they would stand to lose many more billions in investor funding. They are not going to take that chance to save face.
Lee
Adventurer
That's fine. You buying it isn't of major importance to me.
All I know is what has been relayed to me (and others whom I trust) by company sources, and that is that NextGen was hemorrhaging money, and that it blew past the initial budget way before it was even fully being tested.
(That's not to say that all the overruns were written down as NextGen related.)
Wall St. is, and has been, getting antsy about it. With good reason. They know it's over budget and without a firm grasp on how much financial benefit it will actually generate.
wannab@dis
Well-Known Member
It's a lofty goal, but doable via multiple streams.
1) Increased on-site bookings
2) Increased spending on drinks and meals... Just an example - family may normally get to the park in the morning, tour, have lunch, tour some more and then head back to the resort for a meal offsite or in their room. However, now, they have a FP+ for the fireworks / late night ride and stay in the park and eat dinner.
3) Increased spending on souvenirs - localized text from Disney when they walk out of Mouse Gear without a purchase with a 10% coupon good for 2 hours. Head back in and make a spur of the moment purchase.
4) Increased length of stay -- planning their vacation, make their FP+ selections, and decide they want another day to be sure they have passes for other attractions they didn't have earlier.
5) Ease/opportunity of spending - I'd like to find an article I read a while back about loyalty cards with 0% financing specials and how much it increased spending in the moment. We all know that people fall for those opportunities where businesses hold out a hook and people grab - financing specials, coupons, quick options, etc. People that pull dollar bills out of their wallet spend less than people that pull out their credit card. Reduce that barrier even more - hold up the magic band, and there will be increased spending. Amazon didn't patent the one click purchase just for the fun of it!
PhotoDave219
Well-Known Member
I understand your skepticism, but given the scope of the project and the amount of contractors used, plus all the infastructure? I can believe $2B without a problem.
I havent seen anything that confirms it but I havent seen anything that proves it wrong either.
IMO, its well within the realm of possibility.
ParentsOf4
Well-Known Member
Until the most recent quarter, domestic Per Capita Guest Spending (PCGS) (i.e. spending at the theme parks) had averaged an 8% increase year-over-year for 13 straight quarters, ranging from a couple of quarters at 10% to one outlier low at 5%. This performance was pre full rollout of MyMagic+.
With MyMagic+ fully rolled out to onsite guests last quarter, PCGS was at 4%, the lowest since 2009 when the economy tanked.
Right now, there's simply no publically available financial data to support the notion that MyMagic+ is ever going to pay for itself, never mind achieve additional growth.
Even worse for future growth, the last 3 consecutive years of 8% growth per annum is the highest ever in the 40+ year history of WDW.
The problem is very simple. Disney can't keep trying to squeeze blood from a stone.
As I've posted before, the problem is represented by this:
Median Household Income has stagnated while prices have skyrocketed.
Any business strategy based on the notion that the American public (80% of WDW's market) can keep paying these kind of price increases is simply unsustainable.
Iger and Rasulo need to get out of their mansions, out of their boardrooms, away from their $1000/plate fundraisers, and start paying closer attention to what's happening at their theme parks.
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wannab@dis
Well-Known Member
I understand that you say someone is telling you about it. But, no offense, why would someone tell you that, but absolutely nothing is out there in the investor news about that Billion dollars. Maybe they are just telling you what you want to hear? Maybe they were passed over for a promotion? I don't know. But I just can't buy the fact that information can get to you, but nothing is discussed in reliable news. Think about that. What better than a huge story about a public company trying to hide massive Billion dollar overrun from investors? Journalists would drool over breaking a story like that.
PhotoDave219
Well-Known Member
Youre right. And if I could prove it, I'd break it.