Inside the business of children's digital media


Disney Mobile raises the bar


Swampy

For 20 days this past October, an amicable alligator gave some bitter birds a run for their money.

Where’s My Water? starring Swampy the alligator—Disney’s first original mobile character—took the top spot on the Apple iTunes store, briefly eclipsing the reign of mobile juggernaut Angry Birds. Since its September 22 launch, Where’s My Water? has been crawling up and down iTunes’ bestseller charts and has spawned a new web series that will run on its own dedicated YouTube channel. But perhaps the most tangible outcome of the Where’s My Water? launch is that it signifies that Disney Interactive Media Group’s burgeoning Mobile division is making strides.

Current stats on kids and mobile speak volumes. Since 2009, the incidence of gaming on mobile devices has risen from 8% to 38%, mainly driven by the availability of new devices such as tablets and smartphones, as well as the growing amount of content available for these devices in the form of free and paid apps. In fact, roughly 70% of educational iPad apps on the market target young children, according to The Joan Ganz Cooney Center’s recent iLearn study.

So it comes as no surprise that Disney is shifting its Mobile unit into high gear. The House of Mouse has restructured priorities within its Interactive division, which incurred operating losses US$308 million in 2011 and is expected to continue losing money until 2013. The first step involved bringing Bart Decrem, founder of iPhone gaming company Tapulous, on-board last year to lead the charge as GM of Disney Mobile.

“At Disney, we were a little all over the place with promotional apps aimed at kids and parents and synergy apps that were making money off other franchises,” says Decrem. “The bigger picture now is being more focused around innovation and staying true to Disney’s tradition of embracing technologies.” That embrace over the past five years has entailed purchasing social gaming company Playdom and virtual world Club Penguin, each for roughly US$700 million. And in July 2010, Disney bought Decrem’s Tapulous in an effort to gain more mobile expertise.

“Today, we are staring at a generation of kids for whom mobile is their first screen,” he says. “A year ago, kids would come home from school and watch Disney Channel on TV. Now, the behavior is expanding and shifting to where they are watching on iPhones and iPads after school,” notes Decrem.

In playing catch-up with both on-the-go kids and agile mobile development companies, Decrem’s team took the hugely successful virtual world Club Penguin, which boasts 150 million registered users, into the mobile space with Puffle Launch this past September. Available on iOS and Android devices, the app is based on the original Puffle Launch game played by more than 150,000 kids every day within the virtual world. In terms of syncing up with Club Penguin’s home base online, the app allows kids to earn virtual coins for use on the website through playing mobile games.

A month later, Disney launched an entirely new iPad-compatible product in conjunction with Toronto, Canada-based toy company Spin Master. Appmates mobile toys allow kids to turn an iPad screen into a virtual play mat. The initial line featured miniature Disney Pixar Cars 2 vehicles (sold in US$20 packs), which contain sensors that are recognizable in a free-to-play companion app.

“What’s great about Appmates is that you see kids play on the iPad and then take their cars and play elsewhere,” says Decrem. “It’s exciting to blend physical and virtual worlds.”

But piggybacking on the successes of Club Penguin and popular brands like Cars was still reminiscent of old habits. So Disney Mobile conceived and developed an entirely new original character in the form of Swampy, the star of Where’s My Water?

Angry Birds, Cut the Rope and Fruit Ninja are top sellers that appeal to people of all ages. That’s a top criterion for doing well,” says Decrem, adding that Swampy was designed to be relatable to both kids and adults. The puzzle game is expected to be followed by at least one more Disney original mobile IP in 2012.

“We can get games to market in six months and continue to iterate. A billion is the right target in terms of audience reach, but it will probably take a year to prove [Where's My Water?] as a classic property,” says Decrem. “Look at YouTube and Facebook: They’re all about getting huge audiences and then mobilizing and monetizing over time.”

Disney is already looking at YouTube, and vice versa.

Swampy is headed for his own original YouTube series following a November 2011 deal between Disney and the world’s largest online video community. Under the partnership, Disney will produce a series of web shorts based on the Where’s My Water? app that will live on a co-branded YouTube channel and at Disney.com.

Tuna Amobi, an entertainment analyst at Standard & Poor’s Capital IQ, believes that the Disney–YouTube deal is more about audience aggregation than monetization. “For Disney, it’s all about franchise and core brand,” says Amobi. “Disney has been aggressive in terms of reaching out to new partners. YouTube has also recently entered into partnerships with other major film studios like Warner Bros., Sony and Universal. However, this partnership is somewhat unique because it goes well beyond motion pictures to include family-friendly content specifically produced by Disney for that platform.”

Amobi says Wall Street is closely watching the way in which such digital collaborations are more focused on attracting new audiences and generating brand power rather than big bucks. Disney Mobile and its overarching Interactive division make up a mere fraction of the media conglomerate’s business—last year, the Interactive Media Group contributed US$982 million in revenue to the company’s US$40.1-billion overall haul.

Still, Decrem says investment in Disney Mobile will increase significantly. And while smartphones are currently regarded as a top-tier platform by his group, he’s insistent on focusing on creating new experiences rather than creating content for specific devices. “People are responding to the Swampy character and hoping to promote it in other markets like Europe and through other platforms,” he says. “We’re in discussions already about that. But we need to make sure we have a successful game and a compelling character first.”


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