Thursday, July 29, 2010

It's About Building Brands

... and Bloomberg lays it out:

Behind Disney's Digital Shopping Spree The purchase of game maker Playdom may help Disney's brands with the Facebook generation

Four years ago, Bob Iger, the chief executive officer of Walt Disney (DIS), tried to build a cell-phone business. Disney created a family-oriented mobile service that included a global positioning system so parents could track their kids. Too few consumers signed up, and the company killed the operation after 15 months. Disney Interactive, the division that ran the ill-fated cell service, is still unprofitable ...

Iger retains his enthusiasm for digital business and has switched strategies to buying rather than building. ... Since paying $350 million for the kids' social network Club Penguin three years ago, Disney has purchased Wideload Games ... Early last month, the entertainment giant acquired Tapulous, a publisher of music-related games for Apple's (AAPL) iPhone. On July 27, Disney made its biggest video game bet yet, agreeing to pay $563 million for privately held Playdom, the Mountain View (Calif.) maker of Sorority Life and Mobsters, which are played on Facebook, MySpace, and mobile phones. ...

You can see why existing divisions have to cut salaries and staffs wherever possible. There are new operations to purchase, new employees to integrate and then lay off. Our fine entertainment conglomerates are much like sharks. If they don't keep moving and devouring new acquisitions, they sicken and die.


Anonymous said...

I only wish that tale about Walt being frozen were true. Imagine him being thawed and then unleashed upon the bean-counters, accountants and suits ruining his company. It'd be like Jesus kicking the money-changers out of the temple.

Anonymous said...

How's Club Penguin working out anyway? I was about to post something mocking that purchase but then I realized I wasn't part of the target audience. Do the kids like it?

I don't want to hear Iger and his cronies complain about the soaring costs of producing animation movies when he's intent on throwing $350 million around on kiddie social networks using penguin avatars.

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