Disney Internet Sees Future Growth From Content

The Walt Disney Internet Group will bring in $1.5 billion in revenue this year, and is expecting 30% annual growth rates in the areas of media and services, as well as mobile, according to its president Steven Wadsworth.

Last year, it was e-commerce--including the sale of merchandise and travel packages--that accounted for most of the group's revenue at $800 million. But, while Web media and services--including paid and ad-supported content--brought in just $350 million last year, Wadsworth said it is this segment that will drive digital revenue growth in the future as the company aggressively pursues opportunities to monetize its vast content base across new media platforms.

"Because of the robustness [of Web media and services], we can create a range of models," Wadsworth explained during a Goldman Sachs conference on Thursday. Those models include everything from subscription to ad-supported to micro-payment.

Subscription revenue is a huge component of Disney's strategy, and the company plans to increase use of free ad-supported services to lure consumers into subscription deals, according to Wadsworth.



"[Content] will be free to a certain point," he said, explaining Disney's up-sell strategy of baiting consumers with free content.

Disney's Internet and mobile properties include ABC.com, ABCNews.com, Disney.com, ESPN.com, ESPN360, and Mobile ESPN.

For mobile, a market dominated by paid subscriptions, advertising is emerging as a viable alternative in Japan, Wadsworth explained. Also in Japan--seen by many as an indicator of future U.S. digital trends--mobile micro-transactions are catching on.

Stateside, Disney's mobile strategy is not surprisingly centered around families. Regarding mobile, Wadsworth explained: "Families are the fastest-growing market segment in the U.S., and also the most underserved."

Earlier this year, Disney relaunched Disney.com. The total redesign allows users to personalize content, including sharing of videos, TV shows, and other Disney video content as well as listening to music, and playing video games. Through the new Disney Xtreme Digital area, users can access premium content such as a "Pirates of the Caribbean" video game.

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