Disney to launch Portal Website

Disney, the worlds largest media company, with partners Infoseek is planning to launch a so-called portal website later this year. The basis for this is the acquisition of a minority stake in Infoseek which has an annual revenue of about £35.7 million. To acquire a minority Infoseek stake, Disney is handing over ownership of Website developer Starwave Corp, which it bought from Microsoft co-founder Paul Allen for approximately £400m, including $70m in cash.

Web portals which feature news, entertainment, messaging services, directories and electronic shopping have become hot properties. Portals are transforming the Internet from a chaotic collection of thousands of websites into more manageable entities which are familiar to both investors and consumers by capturing large audiences and establishing themselves as primary Internet channels. These portal sites are beginning to pose a challenge to television, radio and print media.

Screen International reports that Disney sounds committed enough, Mr. Jack Winebaum, chairman of Disney's co-ordinating Buena Vista Internet Group called the project "mission-critical" to the entertainment group. Usually when Disney moves into a business, it is a sign that the business is becoming highly organised, user friendly and profitable. Disneys new portal may one day produce more revenues from advertising and from shopping transactions fees, than its television channels.

The question remains as to whether Portals sites are the way to reach net audiences, proprietary on-line services, interactive television and push technology all failed, but push technology the most recent attempt displays the essential flaw in all three. Media companies attempted to deliver news and entertainment to the desktop PC in the same way as television receives a signal and here in lies its flaw it attempted to put the information provider rather than the user in charge, which ignores the whole premise upon which people use the net. Portal websites will need to draw users to them and keep browsers within their properties - looking at advertisements and purchasing products - through high content interest and aiming at the right type of consumer.

Essentially this is where Disney has its key card to play. According to Harry Motro, Infoseek's chief executive, his and similar companies had added services such as chat and commerce, but lacked the "editorial sensibility" (ie knowledge of mass-market consumer tastes and promotional clout which is Disney's core business). But perhaps the most important point is that Disney's Portal will be primarily designed to attract 'ordinary' consumers' (i.e. non Web-heads) who Disney believes are now ready to get on-line but wish to be spoon fed. These 'ordinary consumers' will have no desire to accumulate technical knowledge of the web and will use it as an addition to their entertainment systems and widescreen TV. Like the local mall if it provides enough entertainment and safe reliable shopping they will go no further.

In the first moves Reel.com the Web-based movie merchant which claims to have the world's biggest selection of video titles for rent and sale has entered into a partnership agreement with E! Online, the web service operated by Disney owned entertainment cable news network E! Under that deal Reel.com will serve as E! exclusive seller of recorded video product for the 1.8 million users that tap into the site for movie news section. Reel.com offers Internet users an inventory of 85,000 video titles and more than 1,200 DVD titles for sale as well as 35,000 video titles for rent. Selected titles which include the upcoming video release for Titanic at a bargain price of $9.95 are then mailed to the on-line customers. Reel.com received 10.5m in new venture capital recently. This has helped fend off threats from Blockbuster and Amazon.com who are now entering the on-line video market.

In either case it's a fairly large 'ordinary' video store to have in your Portal attracting 'ordinary consumers'. God forbid they should have to look any further they might get lost and have to learn something new.