Monetizing the Mouse


Steve Wadsworth, president of the Walt Disney Internet Group, told a gathering of industry executives and investors at the eighth annual Goldman Sachs Internet conference in Las Vegas on May 24 that his unit expects to bring in about $1.5 billion in revenue in fiscal 2007. About $800 million of that is from online travel bookings at Disney resorts, with the rest coming from online advertising, subscription fees from mobile-phone services and downloads of Disney products, such as ABC shows sold on iTunes. Here’s a partial transcript from an archived Webcast on Disney’s corporate Web site ( on how Disney’s digital businesses have expanded around the world.

Our biggest growth opportunity initially was in Japan, where we became a leader around the Disney brand in mobile-content publishing in that market. We’ve now extended into a number of markets around the world, primarily around our core brand. This is one category where we do explore and pursue opportunities outside our core brand, because there’s a lot of value to having a broader, more robust set of products when you go and do distribution deals with the carriers.

Because the primary business model here has been a pay-to-download or a subscription model around content that a consumer will engage in on their handset, on their mobile phone ... Personalization content, graphics and ring tones, data applications, news, sports scores, games. A lot of activity is in the games category in this marketplace. …

What we’re seeing is [that] the model continues to change and evolve. So one of the things we’re trying to do is stay ahead of the curve on this. Not only are we seeing the pay model change, we’re also seeing advertising start to emerge in this.

A couple of months ago we launched a new product in Japan called “Disney Wonder Days.” Disney Wonder Days is, in essence, a virtual environment on a handset. It’s a multiplayer, multiuser virtual environment where a user goes in and creates an avatar, and that avatar can navigate in that world, interact with other characters, buy merchandise with their avatar, engage in games and other interactivity with other players on their handset. … Not only is the subscription model continuing to grow, as we add subscribers, but we’re seeing the microtransaction model is substantially more robust than we thought it was going to be. So it highlights the opportunity to try other models … to build a more robust revenue stream.

However, at same time in the same market, we’ve just rolled out in the last week or so a new product called Disney Candy … [which] is, in essence a Web site for a mobile phone and it’s a different model. It’s free to the end consumer. It’s a way for a consumer to get free access to Disney activities and content, do things in this Web site that we’ve created where they can earn points. By earning those points they can then download free content for their handset. The model here is create a whole range of capabilities on a free model that’s supported by an advertiser... We’re seeing in just the week or so we’ve been out there we’re drawing some nice traction. ...

Do these cannibalize each other? They might. But it’s best for us to be out in the market early, establishing a relationship with the customer around a free product, building on our pay business and engaging people in a deeper and richer product, and expanding our revenue.”