Walt Disney is exploring a membership program that could offer discounts or special perks to encourage customers to spend more on its streaming services, theme parks, resorts and merchandise, according to people familiar with the discussions.
The program would be somewhat akin to Amazon Prime, which offers advantages such as free shipping, discounts at Whole Foods and a complementary streaming video service for a monthly or annual fee, the people said. Internally, some executives have referred to Disney’s initiative as “Disney Prime,” although that won’t be the name of the program, one of the people said.
Discussions at Disney are in the early stages. It couldn’t be learned how much the company would charge for membership and how long it would take to launch such a program.
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By creating a membership program, Disney would be betting it could offer customers more value, prompting them to spend more on the company’s products and services, while providing Disney with a trove of information about their preferences.
The effort is supported by Disney Chief Executive Bob Chapek, who has been vocal both internally and publicly about the opportunity for Disney to do more to cross-sell to customers, the people familiar with the discussions said.
“Technology is giving us new ways to customize and personalize the consumer experience so that we are delivering entertainment, experiences and products that are most relevant to each of our guests,” said Kristina Schake, senior executive vice president and chief communications officer at Disney, in a statement. “A membership program is just one of the exciting ideas that is being explored.”
Disney already has a special program for superfans, the D23 Official Fan Club, which costs $99.99 to $129.99 a year and comes with access to exclusive events and merchandise. That program offered members a discounted three-year subscription to Disney+ in 2019. A new membership program would be different in that it would be targeted at more casual Disney fans and customers.
As an early step to better link Disney products and services, Disney is working to enable subscribers to its Disney+ streaming service to buy merchandise such as t-shirts, themed accessories and children’s costumes associated with some of its shows by scanning a QR code on the service that links to the Shop Disney website, people familiar with the plan said.
One example that executives have discussed as a possible merchandise tie-in is offering an exclusive toy version of a “darksaber”—a weapon from the Star Wars-themed series “The Mandalorian”—for sale only to Disney+ subscribers, a person familiar with the plans said. The company expects to introduce the retail feature on Disney+ as soon as this year.
Disney has a range of products and services based on its vast stable of entertainment content. In addition to its movies and streaming programming, the company has theme parks and sells a host of travel experiences, from cruises to private-jet trips, as well as clothing and toys.
Mr. Chapek in May highlighted Disney’s “unique synergy machine, or franchise flywheel” on a call with Wall Street analysts, saying the company was different from competitors because it could reach people in many different ways.
Membership programs have gained popularity among retailers from Amazon.com Inc. to Walmart Inc. to Starbucks Corp. because they help companies better understand customers’ purchasing habits, while offering discounts or perks that encourage them to remain loyal.
Streaming video services can be sweeteners in those programs. Walmart said this month it will add free Paramount+ to its $98-a-year Walmart+ membership program and Amazon AMZN -1.52%▼ offers Prime Video through its program.
Competition in streaming video has intensified and all the major players are exploring various avenues to boost growth, from selling ads to raising prices to new distribution partnerships.
In the three-month period ended July 2, Disney+ gained 14.4 million new subscribers, bringing its total to 152.1 million. But the company brought down its forecast, saying it expected to have 215 million to 245 million subscribers by September 2024, partially due to losing the right to air popular Indian cricket competitions.
A membership program could help Disney learn more about its customers’ behavior by collecting data about which shows they watched, trips they took and merchandise they purchased. Ultimately, Disney’s goal is to harness that data to make recommendations based on customers’ preferences, some of the people said.
For example, a fan of Star Wars rides at its theme park would get recommended related programming on Disney+. That cross-company effort, which is ongoing, involves top leaders including Mike White, who leads Disney’s metaverse strategy.
In exploring the membership program, Disney has studied Amazon’s program as well as Apple One, which bundles cloud storage, AppleTV+ and Apple Arcade, among other services, for a starting price of $14.95 a month, some of the people familiar with the discussions said.
Disney has discussed adding perks to the membership program from third parties, such as discounts to tickets for Disney shows on Broadway, said one of the people familiar with the discussions.