Those of a certain age will recall American Express’ famous advertising campaign that touted the value of “membership.” You’re not a customer. You’re a “member” and part of an elite Illuminati with access to travel discounts and a personal concierge you’ll never use but like having on call just in case.
Of course, membership doesn’t always have to emphasize exclusivity. In the world of streaming, it can mean many things. On one hand, Netflix refers to its paid subscribers as “members” as part of its corporate ethos that elevates community over the transactional element. It may be window dressing, but it makes a certain statement that can pay PR dividends. Amazon, on the other hand, operates under a more traditional membership structure, giving its online retail customers free shipping and access to its burgeoning Prime Video product if they agree to pay an annual fee. That has more of a Costco or Sam’s Club feel to it, which makes sense considering Amazon’s core business. But it’s really just a packaging scheme that encourages customers to buy even more (but it’s free shipping!) and partake in some included entertainment. Same when it comes to Apple’s Apple One package of cloud storage, Apple TV+, and Apple Arcade – although that feels more like a service bundle than a membership. But is that simply a function of Apple not marketing it as such? Tom-AY-to, Tom-AH-to.
Reports this week that Disney may create a broad membership program could change the game. Perhaps no media company on the planet has more to offer in a membership bundle than Disney–especially for families with kids. Sure, there’s Disney+ and Hulu, but Disney is a merchandising powerhouse with the most recognizable theme parks, resorts, and cruise lines in the U.S. and around the world. It oozes Disney magic from every pore. And the company already has legions of enthusiasts and super-fans who already willingly pay hundreds–even thousands–of dollars per year to buy movie tickets, swag, family-fun experiences, and more. The idea that all that wholesome goodness could come wrapped in a “membership” bow should put competitors on notice. Few have as much to offer. Consider that Disney’s fiscal Q3 earnings suggest there’s no limit to what consumers will spend, even in an inflationary environment, as its Parks, Experiences, and Products revenue was up an insane 72% year-over-year to $7.4 billion. Granted, much of this stems from the “we’re sick of COVID and want out of the damned house” effect, but it’s a fascinating commentary on the power of the Disney brand.
It’s also a reminder that Disney has far more wiggle room here than many of its peers. Paramount Global, for example, touts some impressive IP, but beyond a free studio tour in LA or perhaps discounted movie tickets, its options are more limited than Disney’s. We’ll note, however, that Paramount+ has been savvy on the packaging and partnership front, integrating its Showtime premium service into the streaming app this week and earlier this month linking Paramount+ to Walmart+’s own membership offering that primarily competes with Amazon Prime. Netflix, meanwhile, is mostly limited to simply calling its customers members. That could change as it integrates gaming and ups its merchandising tactics, an effort currently in progress. At least Amazon Prime Video and Walmart+ can offer retail benefits. The last time we checked, Reed Hastings and Ted Sarandos have yet to break ground on NetflixLand or set up Netflix stores in key markets or churn out significant amounts of globally distributed merch for hit shows. Again, that’s potentially coming from Netflix, Paramount, and others, but Disney has a massive head start on just about everyone. Its ability to maintain that lead could be a key factor as others nip at its heels.
Next? It’s unclear when Disney might announce its rumored membership program (and how much it will differ from its current D23 Official Fan Club aimed at die-hard fans who pay up to $130 per year for a few perks.) How much will parents pay to get to the front of the line at Disneyland? Or outfit their kids with discounted Disney swag? We’re guessing a lot based on what they already fork over for that stuff. But in terms of how this will all evolve from a competitive standpoint, the one to watch is Comcast NBCUniversal, which could closely match Disney on some of its perks if it too were to adopt a membership model. Its five Universal Studios theme parks – Universal Studios Hollywood, Universal Orlando Resort, Universal Studios Japan, Universal Studios Singapore, and Universal Beijing Resort – offer plenty of possible benefits for members across the globe. And NBCU has a competitive merchandising machine and valuable IP all increasingly tied to resurgent streaming play Peacock, with the Comcast side of the house making inroads with its FAST-live channel Xumo. Of course, Comcast has one thing that Disney likely will never have: Telecommunications infrastructure. If Comcast was to institute a Peacock Club, for example, it would be able to package everything from theme parks to merchandise to streaming – but also throw in discounts on linear TV, broadband, and even mobile service through its MVNO. Call it a membership. Call it a bundle. But it could be powerful stuff all around, even if it could require significant de-siloing between the Comcast and NBCU factions. And who knows how the streaming partnership between Comcast and Charter will shake out. Perhaps that could enable new perks for the Peacock Elite in entertainment-rich Charter markets like Los Angeles and New York City.
The Disneys and Comcasts of the world may go the membership route to cement loyalty and retention, but the other key corporate benefit would certainly be customer data. Comcast might have a leg up there because of its longstanding subscriber relationships across services and tied to specific markets, but Disney is no slouch in that department either as it could aggregate member data on just about everything from their favorite streaming shows to their travel habits to merchandise bought and yes, even deep insights on how they move through Disney parks by harvesting that sweet MagicBand data. Put all together, membership has its privileges. And not just for the members.
