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Internet Group Getting Higher Profile in Disney Plans

When Robert Iger succeeded Michael Eisner as president and CEO of The Walt Disney Co., one of his publicly stated goals was to wed Disney’s massive reservoir of content with new multimedia technologies. Though the company long ago began to diversify its interests in various non film and theme park channels, this activity has picked up in recent months, as the company’s North Hollywood-based Walt Disney Internet Group division has made a variety of deals and acquisitions that have solidified its role in the mobile telephone, online PC game and Internet worlds. And with Disney’s CEO bullish on these new forms of media, one can expect that this division’s importance will only increase in the coming years. This month in particular has been an active period for the Internet Group, or WDIG as it is commonly referred to. At the beginning of the month, the company purchased Living Mobile, a major European mobile game developer and publisher. The German-based firm, its 40 employees and its offices in Munich and Prague were wrapped up to become a subsidiary of WDIG Europe. While the terms of the deal were not disclosed, it is known that Living Mobile had gained a solid reputation abroad, as earlier this year Mobile Games Analyst newsletter ranked Living Mobile among the top 10 of all European mobile game publishers in an analysis based on both games and distribution network. “The acquisition supported the continued rapid growth of our mobile content business internationally,” WDIG vice president of communications Kim Kerscher, said. “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, we’re committed to growing our business and remaining a top player in the space. 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. Earlier this year, WDIG made a major 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. The service, called Disney Mobile, will use the Sprint Nationwide PCS Network and is slated to launch next year. Disney Mobile plans to offer wireless voice service, exclusive handsets and a package of features and applications including a range of entertainment content for the family. Verizon deal Yet the decision to purchase Living Mobile and Disney Mobile aren’t the only moves that the company has made in the wireless realm of late. Just last week, Disney announced a 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 $5.00 Mobile Web 2.0 monthly cost, customers can now gain access to 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, the principal at McAlpine & Associates, believes that this leveraging of Disney’s content across a variety of platforms seems to be indicative of Iger’s new strategy of growth. “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. They’ve definitely been getting into new areas in the usage of content on the Internet and in the wireless realms. I wouldn’t be surprised if they continue to make more of these types of acquisitions.” Yet WDIG’s moves haven’t been limited to the world of mobile phones. Last month, the company debuted a revamped Movies.com website, in order to boost traffic with its significantly expanded editorial coverage. In tandem with the new site, WDIG hired entertainment journalism veteran Lew Harris to edit the site, as well as hiring venerable Hollywood journalist Jeanne Wolf to serve as the site’s news and gossip columnist. Online magazine “Movies.com is primarily ad-supported content and online ad marketing is growing rapidly today. In addition, consumer interest in entertainment news is at an all-time high. And while many media outlets are focusing on the personal lives of celebrities, we saw a real opportunity to expand our coverage and create a great online magazine focused specifically on movies and the news and gossip behind movies,” Kerscher said. “The redesign has gone very well and early traffic results are strong even before our new marketing campaign has launched. Our goals are to continue to expand and refine our content offering and to increase site traffic to be a top movie site.” According to analyst Steve Denault of Northland Securities, Disney’s moves come as little surprise, as all of the entertainment powerhouses are furiously 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.” And ignoring it doesn’t seem to be something in the company’s plans, as Kerscher asserts that it will indeed play an instrumental role in the company’s future. “(Iger) has noted that technology is a key strategic priority for Disney and that it powers creativity and innovation. Across our company we are using technology to improve creative product and remain at the forefront of the entertainment business,” Kerscher said. “WDIG is certainly playing a role in Disney’s overall strategy to leverage technology for growth and our work is becoming more and more integrated throughout all of the divisions of the company.”

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