“Game-Changing Analytics – A Disney Perspective”
Talk by Mark Shafer, Senior Vice President for Revenue and Profit Management and David Parker, Senior Managing Consultant, Walt Disney Parks and Resorts
Sponsored by the Center for Pricing and Revenue Management
October 7, 2015
Mark Shafer and David Parker (MS Statistics, ’07) addressed a packed room of Columbia faculty, students and alumni on October 7, 2015. Their theme, “Game-Changing Analytics”, emphasized the core role that analytics plays across the many brands and products within the Disney organization, including the parks, the cruise line, the media networks, including ESPN, ABC and NBC, interactive media and other entertainment products.
Mr. Shafer cited a Variety article that emphasized how applying science to pricing helped The Lion King generate the highest box office revenues in Broadway history. It achieved this despite being staged in a smaller theater and having a shorter run than other popular shows. The Lion King became Broadway’s highest grossing show without having had its highest average ticket price.
Mr. Shafer’s group has defined revenue management:
"The discipline of applying science and analytics in the relentless pursuit of increased long-term profitability through better business decisions."
Although housed in the Parks and Resorts division, the Revenue and Profit Management team provides analytic consulting services to clients across the Disney Company. The organization includes a primarily PhD-level Decision Science team and several Management Science and Integration business consulting teams tasked with ensuring analytic solutions are successfully integrated into Disney’s business units. The Science teams’ extensive analytic capabilities include customer choice modeling, stochastic models, price optimization, machine learning, and demand modeling, among many others.
After initially proving the value of analytics in areas such as hotel and theme park pricing, the team was asked by Disney’s CEO to extend the application of science and analytics to other areas outside of Disney Parks and Resorts, including the movie studios, television networks, on-line media channels and Broadway shows. As a result, the organization has experienced phenomenal growth. Mr. Shafer plans to hire 31 additional “cast-members”, as Disney refers to its employees, in the coming year.
“Analytics is still in its infancy,” noted Mr. Shafer. Tremendous opportunities remain to improve profitability across the wide variety of businesses within Disney. Disney is fast becoming a world leader in the application of analytics to personalize the guest experience and increase long-term profitability.
The event kicked off the Center for Pricing and Management’s annual Speaker Series for 2015-2016. To read more about Disney analytics, visit the Center Director’s business analytics blog.