Disney Seeks To Pull Off An Amazon With 'Prime-Like' Bundle Service: WSJ

Walt Disney Company DIS is reportedly planning to ape a tried-and-tested route to rope in more customers for its multiple services.

What Happened: Disney is considering launching a membership program, which could be something similar to Amazon Inc’s AMZN Prime service, the Wall Street Journal reported, citing people familiar with the discussions.

Through the proposed program, the entertainment giant plans to offer discounts or special perks to induce customers to spend more on its streaming services, theme parks, resorts, and merchandise, the report said.

Amazon’s Prime is currently available for $14.99 per month or $139 per year, plus taxes, which offers advantages such as free shipping, discounts at Whole Foods supermarket chain, access to the Prime video and ad-free music, among other things.

Disney’s explorative discussion on the Prime-like service is in early stages, with the launch timeline and potential membership fee yet to be finalized, as per the report. 

The company is internally referring to the service as "Disney Prime," although it wouldn’t be called by that name when it launches, WSJ reported.

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Disney CEO Bob Chapek is reportedly in favor of the program, given it is in line with his drive for doing more cross-selling to customers.

The membership program will be different from the special program the company currently runs for superfans, called the D23 Official Fan Club, costing $99.99 to $129.99 a year, and it would target more casual Disney fans and customers, the report said.

Why It Matters:  A membership program, successfully exploited by companies such as Amazon and Starbucks Corporation SBUX, could help Disney better understand customer behavior, based on the data collected regarding the shows they watched, trips they took, and the merchandise they purchased, sources were quoted as saying.

The company intends to use the data to make recommendations based on customer preferences, it added.

That would also help the Disney+ streaming services as competition intensifies.

Disney has reportedly made a study of Amazon’s Prime program as well as Apple, Inc. AAPL One, which bundles Cupertino’s services offering such as AppleTV+, Apple Arcade online gaming services etc. 

The company is also planning to add perks for its members from third parties such as discounts on tickets for Disney shows on Broadway.

Price Action: Disney closed Friday’s session down 0.31% at $112.08, according to data from Benzinga Pro.