We’re Disney fans – at least, that’s how we identify. Those of us who love visiting Walt Disney World, or who surf the web looking for that one song from that attraction we love, or who cruise eBay waiting for that vintage piece of Disney memorabilia to pop up. We think we’re fans.
Unfortunately, we aren’t. We may have love for Disney – love borne out of nostalgia, fun, and family – but we aren’t really fans. Not to Disney. They call us guests, yes, but that’s not who we really are to them. We are their customers. Plain and simple. Because, despite acting like our friends, they aren’t – they’re a supermassive corporation.
And that’s not inherently a bad thing!
It may be a bit on-the-nose to put it so bluntly, yes, but it’s totally OK to like the products a corporation sells, and even to feel loyal to them. That relationship is part of the fundamental fabric of our country – supporting entities which give us the products we like. But it’s important to acknowledge that, beneath the pleasant and friendly exterior, there exists a machine designed to do one thing and one thing only: Separate you from your money as efficiently as possible. As long as you feel like you’re getting your money’s worth, it’s a win-win for everyone.
But there is a negative to the kind of loyalty we’re all grown to have for Disney. As much as we may love them, they cannot love us back. “They” are really an “it” – a soulless entity that, officially, is only embodied by a sheet of paper registered in California. “It” has shareholders. “It” is judged not by the smiles that it creates, but by the increased revenue it generates. “It” cannot have friends. Cast Members can be your friend. Bus drivers, mousekeeping, and desk attendants can be your friends. Disney, however, cannot.
Because Disney isn’t your friend, it doesn’t feel the same loyalty to us as we do to it – it feels loyal only to its shareholders, who grow more demanding year after year. It’s not enough for the shareholders that Disney makes money – which it does – instead, they want the company to be making more money each consecutive year. That’s how corporations work. And now, to please those shareholders, Disney is adopting a new strategy – one which is pricing out a lot of people.
This is a gross simplification, but go with me here – there are two ways to build a business: The first is to price your product in such a way as to encourage the most amount of people possible to purchase it. This means you have a slightly lower pricing structure, but a broader consumer base. The second method is to charge higher prices – meaning you have a smaller consumer base, but that lesser number of people pay more and more.
For the longest time, Disney did business from that first group, as evidenced by its structure of “Deluxe, Moderate, and Value” resorts – they wanted everyone. But recently, they’ve begun the shift toward the latter group, opting for more private, luxurious experiences to a select few.
Why would they want to do that? What does it mean for those of us who love Disney? What will it mean for the future of the company? We’ll get to that, but first, let’s look at the one company Disney looks up to: Apple.
How Apple has Become America’s Most Valuable Brand, and Why Disney is Copying It
The common story of Apple Computers goes like this: Steve Jobs and Steve Wozniak invent the personal computer. After a few years of growth, Jobs gets pitched out on his own, where he starts his own company – building better computers – knowing that Apple would eventually have to buy his company and bring him back. They do, and his obsession to detail means that Apple creates the best (and, you know, most expensive) products on the market, pushing them to higher and higher heights.
It’s a good story, but here’s the thing: Why are Apple products are inherently better? They work with fewer applications. They are more expensive to repair. And, perhaps most importantly, they are vastly more expensive than their non-Apple competitors. Even if they are better, which is largely subjective, are they hundreds or even thousands of dollars better?
It doesn’t actually matter, because Apple isn’t selling you a laptop. Apple is selling you a piece of art that makes you feel a certain way when you look at it and use it. The guts of it aren’t worth the extra thousand dollars, but the feeling you get when you feel the cool metal in your hands might be.
That’s what made Steve Jobs a genius – he knew that what makes technology valuable isn’t necessarily what it can do, but how it makes you feel. Apple products make you feel like a cooler version of yourself, and people pay a premium to achieve that feeling.
And that’s Apple’s business model: They aren’t trying to sell laptops to as many people as possible, they’re trying to sell expensive laptops to as many people as possible. That’s a unique thing in business, and it only really works when you have customers that are loyal – and Apple customers are as loyal as can be.
So, if you look at Apple’s valuation – which is over $700 Billion – it’s not hard to see why Disney might be envious. And it’s definitely not hard to see why Disney might try to follow in their footsteps and become, for all intents and purposes, a luxury brand. Disney already creates amazing experiences, and so they clearly think those experiences are worth more than what they’re currently getting for them.