In the Iger Age, Disney Finds New Platforms for Content

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When Robert Iger succeeded Michael Eisner as chief executive of Walt Disney Co. in October, one of his publicly stated goals was to wed the company’s massive reservoir of content with new multimedia technologies.


The process has gotten under way, with the North Hollywood-based Walt Disney Internet Group making a variety of deals and acquisitions that have solidified its role in the mobile telephone, online PC game and online worlds.


Last month, the company purchased Living Mobile, a major European mobile game developer and publisher. Earlier this year, the unit made a splash in the wireless mobile world when it announced an agreement with Sprint through which Disney will create a national U.S. wireless phone service specifically designed for families.


Then there was the highly publicized deal with Verizon Wireless to make content from its two most popular ABC shows, “Desperate Housewives,” and “Lost,” available for download for Verizon Wireless Mobile Web 2.0 customers.


For a monthly fee of $2.99 (added to the $5 Mobile Web 2.0 monthly cost), customers can access special features including show recaps, character descriptions, local show times and links to premium content collections. This agreement comes on the heels of Disney’s earlier announcement to provide content from those shows to be available for download for video iPod’s.


Dennis McAlpine, a principal at McAlpine & Associates, believes that this leveraging of Disney’s content across a variety of platforms seems to reflect Iger’s growth strategy.


“These initiatives are all things that are indicative of the growth of the Internet and wireless markets,” McAlpine said. “When these industries mature, Disney is going to be right there to capitalize on it. Iger’s made a conscious decision to invest more time and effort into these endeavors.”


Steve Denault, an analyst at Northland Securities, said Disney’s moves come as little surprise, considering that all of the entertainment powerhouses are scrambling to gain a foothold in the rapidly growing wireless mobile and Internet worlds.


“These new means and modes of distribution are changing the world dramatically: everything from the way in which people buy consumer goods to the way in which advertisers market to people,” Denault said. “Companies like Disney have to be a presence in these forms of distribution. It’s not a business model in and of itself. For Disney, it’s a place to leverage its content in every way that it can. If people want to buy things on their cell phone, Disney can’t afford to ignore it.”


The deal with German-based Living Mobile, which will become a unit of Disney’s Internet group, underscores the Burbank-based media giant’s recent aggressiveness in the mobile world.


“The acquisition greatly increases our portfolio of games, expands our international games business beyond Disney-branded titles into publishing of third party content and significantly gives us our first in-house mobile game development studio,” said Kim Kerscher, vice president of communications for Disney’s Internet group. “Mobile content is a high-growth, high-margin business for us and we’ve been an early leader in the space and as the market grows.”

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