Normally I try to avoid ripping into someone but Iger's responses to MyMagic+ questions at yesterday's earnings call genuinely concerned me.
Wall Street
twice asked about MyMagic+ revenue. Iger refused to answer the question twice.
Q: "Then for Bob, you guys had talked about the cost of MyMagic+ this quarter, but can you give us some indications of how the rollout's going on revenue and customer behavior, because per capita is really good at this point, so what's going on with MyMagic+?"
A: "I can't quantify it from a financial perspective yet. It's still early and we are still rolling out facets of it. What I can say is, that what has been rolled out has been a real success both, for the guest and for us.
"To give you, a for instance, our parks people in Walt Disney World believe during the peak holiday season that we were able to accommodate about 3,000 more additional guests in the Magic Kingdom per day thanks to MyMagic+.
"One of the, I think, most attractive features and one that I think will have possibly the biggest benefit is the FastPass+, which is the ability to reserve 3 times on 3 attractions per day, either before you visited the park if you are a resort guest, or the day you enter the park if you are a same day or a single day ticket holder.
"What we are seeing there is substantially higher utilization of that product among our guests than we saw with the traditional FASTPASS. By the way by a wide margin.
"Since the goal of this was to make the guest experience better, enable the guests to experience more, to do some more efficiently and essentially to be able to customize, we think that these are very, very good signs for us, because clearly guest satisfaction is very, very important to the value equation for us both, how they spend their time when they are with us and the determining factor in terms of whether they come back, so, this is all very good.
"I'd say the biggest impact is, one, being able to accommodate more people. This is just more efficient. Secondly, enabling guests to have a substantially better experience than they have had before, because they are doing more."
And later:
Q: "Then just my second question on MyMagic+, I know you said the benefit of guest satisfaction, but there must be some benefit to revenue to be able to put a device button, get out of the store, run to doors quickly. Is it showing up in the per cap revenues? On the cost side, how much more is there to go? How much more it is there to go now?"
A: "Well, look, what we spend and how we account for it, I don't really want to get into that. There's some impact on the bottom line, but this is still a very new product, so we are not even close to being able to quantify it. In a public sense, in fact, we are actually just learning more about how it's working and what impact it is having on our business today.
"I think you may be jumping to conclusions that the per cap spending was the direct result of MyMagic+ at this point, it's still a little bit early. It's possible that it had some impact, but I can't say today that we know for sure that it did.
"We do know, as I said, talking to George Kalogridis who runs Walt Disney World, [said] this morning that he really believes that he was able to accommodate 3,000 more people a day in the busiest period of the year in the Magic Kingdom, which is our number one park. That obviously has bottom line value, but we can't tell you what that is."
WHAT??!!!
2 BILLION spent and you "can't quantify it from a financial perspective yet"? You are "not even close to being able to quantify it"?
You mean Iger & Rasulo, numbers guys through-and-through, have no method in place to quantify MyMagic+ revenue performance?
Do you think Universal will have a problem this summer quantifying Diagon Alley's revenue performance?
This is a really big deal. Earnings calls are highly deferential affairs. They are polite Q & A's. Questions are asked nicely, answered calmly, and then it's on to the next one. The same question is almost never asked twice at an earnings call. The fact that Iger didn't answer the question twice raises all sorts of red flags for the project.
Look, Disney is doing great financially as a company. This is not about Disney's or even WDW's profits.
This is about corporate Disney investing in a loser of a project and the rest of WDW having to suffer as a result.
MyMagic+ represents a tremendous waste of capital resources. Resources that could have been invested so much more wisely on so many other projects. (Stop messing around and just give me
Star Wars Land!)
Now, let's look at the other interesting tidbits in Iger's responses.
"FastPass+, which is the ability to reserve 3 times on 3 attractions per day, either before you visited the park if you are a resort guest, or the day you enter the park if you are a same day or a single day ticket holder."
Resort guests? Before you visit the park. Check.
Day guests? The day you enter the park. Check.
AP holders? AP holders?
Bueller? Bueller?
So, no mention of AP holders. Do you think if MM+ was first rolled out at DLR that there'd be no mention of AP holders?
If you Florida AP holders have been feeling second-class, feeling like an afterthought, well, guess what? You are.
What else to cover?
"our parks people in Walt Disney World believe during the peak holiday season that we were able to accommodate about 3,000 more additional guests in the Magic Kingdom per day thanks to MyMagic+."
Wow, 3,000 more additional guests. Sounds impressive, right?
But then two sentences later, Iger lets the cat out of the bag:
"What we are seeing there is substantially higher utilization of that product among our guests than we saw with the traditional FASTPASS. By the way by a wide margin."
OMG.
You understand that FP+ is used more that FP because there simply are more attractions with FP+, don't you Iger?
You realize that adding FP+ to Pirates of the Caribbean, Haunted Mansion, and several MK attractions does
not mean that MK can actually "accommodate" more "guests", don't you Iger?
I mean, with all those hours of joy you've spent with your family at theme parks your entire life, you understand that shifting "guests" from one line to two lines does not mean you can actually "accommodate" more "guests", don't you Iger?
Or are you just taking George's word for it?
