Why Disneyland Embraced the Enterprise

This is a guest post by Manhattan Perry, a entrepreneur who also runs marketing at Skurun, an LA enterprise startup that empowers sales with content and data delivery to mobile devices.

Yes even the happiest place on earth has learned from decades of experience, that when given the choice of a consumer or enterprise business model, enterprise monetization is hands down the better option.

Now for the sake of clarity, the consumer model is aimed at the individual, while the enterprise caters to complicated organizations with various employees. In the enterprise large upfront costs and on-going service maintenance fees are custom. In the consumer model, free is the norm, the theory being that advertisers will pay for users’ data, or users themselves will pay-for features down the road or upgraded service. So in consumer you can really cancel at any time, and to quote The Eagles, in enterprise “you can check-out anytime you like, but you can never leave.”

In 1955 Disneyland had a low upfront plus model. You paid a buck to get in and $2.50 to see 8 attractions. First Disneyland probably had a mountain of upfront costs at this stage. They had to purchase the land, build the rides, market the new concept of a theme park, and even prove to themselves that it was a good idea in the first place. This is similar to a video-game consumer model today. Pay a dollar for the app and then pay more to upgrade your artillery to compete later-on.

Turns out it was a good idea, so much so that by 1975, it cost $6 to enter the Magic Kingdom, and that included 11 rides. Soon with the organization building out restaurants, stores, and churro stands it was clear that limiting the number of attractions per user was forcing people out of the park instead of keeping them in.

By 2005 a flat $56 got you into the park. No limits, no discounts, no deals.

By this stage the powers that be could tell you which day was the busiest, what ride attracted the most riders between the hours of 2:00-3:00pm when it was75 degrees on a Tuesday in April.

With this information, the park became successful in determining the science of pricing everything from mickey ears to bottled water, all in the name of price fixing gouging and maximizing profit.

With success comes competition. Southern California is inundated with others that want to steal customers away from the happiest place on earth; for shame Snoppy at Knotts Berry Farm, Bugs Bunny at Magic Mountain, and Jaws at Universal Studio.

In 2013 however Disneyland is a very different place. There are hotels a plenty, a gigantic mall with bars, restaurants, and disposable fashion. A whole brand new theme park called California Adventures and everything anyone would need to satiate a theme park junkie’s fix for a year.

This is not enough for a publicly traded company with a high dividend and demanding board!

So the Disney executives asked themselves – How do we ensure that our customers come to us and only us?  Why risk a customer having a better time with Tweetie Bird or Daffy Duck, when they can be fist pumping with a real duck, Donald, every day. In ad-lib, what would the enterprise do? Because there is only one thing better than a loyal customer, and that is a loyal customer invested with large upfront fees.

First jack the price.

In 2013 a one day “park-hopper” is $125. But don’t worry the churros are $3.50, not $4 like they are at Knott’s Berry Farm.

Second make prices inside the park reasonable with more options- Done! A little less price fixing gouging and maximizing profit for anyone inside the park.

Third allow ins-and-outs.

Now you can come and go as you please. Jump on Pirates of Caribbean in the morning, go be dropped five stories from the Tower of Terror after lunch, and have a beer at the House of Blues in the afternoon.

The best part is for just over $250 you can do the same thing for 5-days straight!

For those real Snow White addicts out there, that demand access to happiness 24/7, there is the premier passport. For a mere $850 (it’s around $329 for non-peak days for Southern California residents) you can come to any Disney theme parks around the globe. With these bad boys you even get a 20% discount on anything within the park! That’s only $2.80 churros, holy smokes!

So instead of viewing individuals as customers to be sold-to on a one-time basis, and hopefully up-sold on necessities inside, Disney now treats each of its customers as individual businesses that have one large upfront payment and unlimited access. Drum roll….the stickiness of the enterprise model triumphs!

For anyone that plans to go to Disneyland more than once a year, the $125 one day pass makes little financial sense. Disney wants you to keep coming back and be your very own de facto theme park solution. Once someone buys a yearly Disney pass, good luck convincing that person that Six-Flags is better. Their legacy theme-park system has already been installed and put in place. Switching costs will be high, very high.

Even Mickey Mouse embraces the enterprise business model, shouldn’t you figure out how a little enterprise fairy dust can help your start-up?

One comment

  1. karenleahansen · February 18, 2013

    Disney definitely has it down to a science. However, as a long time premium pass holder, I finally decided that this year the price was just a tad too high. I, along with a bunch of other friends, have decided that although it makes sense to get a Disney AP, it’s better to alternate years or maybe every 3rd year.

    It was very difficult to convince non-disney passholders to spend the money for a day pass. I practically had to beg my boyfriend to get a two day for a weekend in the park just before my 2012 pass expired. He did and we had a great time, but he feels zero need to get a pass or come back anytime soon.

    I would definitely consider the world pass, if I was planning a vacation to a Disney park out of the area. Many years ago, I got a WDW pass and used it for two separate vacations amounting to a huge savings.

    I think that the other local parks have good price points for their passes. Although this is a good price from a consumer POV, as clearly Disney is having no problem making money even with the raised prices!

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