Web watchers await Disney site’s revamp
The new-look site aims to get its over 25 million monthly visitors to stay online longer and deepen their connection with its characters, beside providing multi- player online games.
The stakes could scarcely be bigger for Walt Disney Co. as it unveils a revamped flagship website. Reversing the company's past Internet stumbles is a top priority for Disney Chief Executive Robert Iger, whose reputation as a new-media leader in an old-media business could be tarnished if the site fails to attract more viewers.
Disney.com is already among the most popular sites with kids, so company executives have tried to convey modest goals. They say Disney simply wants the current 25 million monthly visitors to stay longer, watch more ads and deepen their connections to the company's characters.
But investors will be looking for more dramatic results. "We've seen a lot of announcements out of Disney with respect to the Net. Now the expectations are higher," UBS analyst Aryeh Bourkoff said. "This year, the focus has to be on execution."
Since assuming the top Disney job from Michael Eisner 15 months ago, Iger has dropped Disney's previous antagonism toward Web innovations and struck such pioneering deals as the first one to sell prime-time television shows and movies over Apple Computer Inc.'s iTunes store.
But Disney's own website has changed little, and the zealous policing of its creations has limited the environments kids can create using its characters. "I believe we successfully strike the right balance between the huge strength of the existing business and the potential of new media," Steve Wadsworth, president of the Walt Disney Internet Group, said in an interview.
More than any other big media company, family-oriented Disney must worry about navigating between the strict controls that appeal to parents and children's increasing expectations of freedom.
The new Disney.com will present itself differently to various age groups, although all will get expanded video, games and other interaction. As on MySpace, visitors will be able to create their own Web sites, communicate with each other and mash together and share music and videos — as long as it's Disney music and videos.
Parents will have to use their credit cards to register their children as regular site visitors and will get detailed options for limiting what their kids can do.
Although Iger has predicted a substantial gain in Disney's digital revenue in the current fiscal year, he isn't predicting any meaningful increase in profit.
Disney's current Web revenue of more than $500 million comes in roughly equal parts from product sales, advertising and subscriptions to such premium services as the multiplayer kids game Toontown Online, in which the virtual world's characters team to play practical jokes on humourless robots.
Now is a time for more Internet investment, analysts said — as long as it is better managed than the more than $800 million Disney blew during the dot-com bubble on the failed Web portal Go.com.
As for the concept of controlled creativity, probably the clearest precedent for the new Disney.com is Toontown, Wadsworth said.
Kids who play there can chat with each other with pre-approved phrases, unless they show that they know each other in real life. In that case, they can converse normally. Disney based Toontown on a theme-park attraction. "It's a good analogy, and we've been quite successful even though Toontown is not a major franchise," Wadsworth said.
Imagine, he suggested, what could happen with an immersive environment stemming from hit movies such as Pirates of the Caribbean, which will spawn a multiplayer online game on Disney.com within a few months.
Analyst Li Forrester Research analyst Charlene Li said other Disney.com mini-worlds could please kids, too. "If they can write anything they want on the homepage and if the interactions themselves have a safe environment, I think it will work pretty well," Li said. "It definitely draws an affinity to the brand, and branding in the end produces commerce."