Power Couple on A Grand Scale

Having made its television shows, movies and music available for portable devices made by Apple, The Walt Disney Co. is now doing the same with mobile games. The acquisition this month by the Disney Interactive Media Group of Tapulous further strengthens the ties between one of the world’s largest entertainment conglomerates and the maker of cutting edge music players, phones, and tablet computers. Tapulous makes games exclusively for Apple devices and was reporting revenues of $1 million a month at the end of 2009 from titles such as Tap Tap Revenge, Riddim Ribbon and Tap Tap Radiation. Spokesperson Courtney Simmons refused to make a representative from Disney Interactive available to discuss the deal. The move by Disney is in recognition that mobile platforms are a growth area and one that many people are underestimating. Tapulous is a rather young company, started just two years, ago but its Tap Tap Revenge has proven to be one of the most successful game franchises for the iPhone. “People have been caught by surprise by gaming on the iPhone and how much it has caught on as a gaming device,” said Gigi Johnson, executive director of the Maremel Institute, a Pasadena-based research center on entertainment, technology and society. The Disney-Apple relationship has been ongoing for at least a decade but kicked into high gear in 2005 after Robert Iger took over as chief executive from Michael Eisner. Within weeks, fans of popular ABC shows like “Lost” and “Desperate Housewives” could view episodes through iTunes. Since then there has been no looking back. In 2006, Disney acquired Pixar Animation Studios, a move that made Apple co-founder and Pixar CEO Steven Jobs the largest Disney shareholder and a member of the company’s board. In the years that followed more and more Disney content became available through iTunes as Apple made improved versions of its iPod and then developed the iPhone and the iPad. With Apple making the devices and Disney the content both companies are responding to the anytime, anywhere consumption by consumers. Watching movies and television shows and playing games on computers and handheld devices is now on par with doing it on a TV set. Market share Disney is being forward thinking by linking itself with Apple and by doing that can keep their market share, said Bryan Gonzalez, a technology specialist for the Entertainment Technology Center at USC. “The lowest hanging fruit is the iPhone,” Gonzalez said. The Disney-Apple marriage is not limited to digital entertainment. When the new look to the Disney Stores was announced there was no secret made that the retail shops were patterned after the Apple Store. Gone is a traditional store lined with shelves and in its place is a high tech experience where shoppers can view movie clips, draw pictures, sing in karaoke contests or chat live via satellite with Disney Channel stars. The reboot is Disney’s way to reassert the brand following a lengthy period in which a third-party operated the stores. “They are looking to rebuild loyalty out of the crash and burn of that place,” said Jim Hill, who keeps tabs on Disney through his website, JimHillMedia.com. What better way to rebuild than copying one of the most recognizable brands in the world; whose new product launches bring out the early adopters to wait hours in line to get their hands on a new Apple device. Other than Jobs himself there is probably no bigger cheerleader for Apple than Iger, whose management style and approach so differed from his predecessor who was more likely to wait until a technology proved itself before bringing it into the Disney fold. Iger, on the other hand, recognized that that consumer viewing patterns were shifting away from physical media and toward digital. “That said it then becomes a challenge for Disney and how does it implement the new technology,” Hill said. Hybrid strategy The company appears to be pursuing a hybrid strategy of developing internal expertise and making acquisitions such as Tapulous. “To get the ball rolling they will want smart folks to come in,” Gonzalez said. Tapulous founders Bart Decrem and Andrew Lacy will remain with Disney Interactive in leadership roles in the mobile division, with Decrem reporting to Disney Interactive President Steve Wadsworth. Where Disney and Apple go from here remains to be seen. There is word that with the Blu-ray disc release of “Beauty and The Beast” this fall, Disney will enable an iPhone to be used as a game controller. Gonzalez foresees a day when Disney will expand beyond just the Apple devices so as to make their content as ubiquitous as possible. “In the short term they may limit (themselves) to Apple because they are comfortable in that ecosystem,” Gonzalez said. “It makes good business sense to be available in the other spaces.” Milestones in the Disney-Apple Relationship 2000 – Trailer for film “Dinosaur” made available at Apple website 2004 – Walt Disney Records catalogue made available on iTunes 2005 – ABC News, Disney Online and ESPN.com podcasts at iTunes 2005 – Robert Iger becomes CEO and President of Disney and immediately makes ABC programs available through iTunes 2006 – Disney buys Pixar Animation, making its CEO Steve Jobs the largest shareholder in Disney and getting him a seat on the Disney board. 2006 – Walt Disney Pictures, Pixar, Touchstone Pictures and Miramax Films made available on iTunes 2008 – “Disney’s All Stars Cards” game available for the iPhone and iPod Touch 2010 – The ABC Player app makes television shows available on the iPad 2010 – Disney Interactive acquires Tapulous, maker of mobile games for Apple devices.