Hollywood now part of virtual world order

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If there was any doubt that Hollywood is wide awake to the potential of virtual worlds, it was dispelled at last week's Virtual Worlds Conference & Expo in San Jose, Calif.

Such media companies as CBS and Disney were represented there, elaborating on how they are creating explorable online lands faster than you can say "Christopher Columbus."

Paul Yanover, executive vp and managing director of Disney Online, is candid about his company's intentions.

"We view virtual worlds as being very meaningful entertainment experiences for the public, and we see them as absolute and clear opportunities for Disney," he says. "We are definitely looking at building new businesses in that space."

Most recently, in August, Disney paid $350 million to purchase Club Penguin, a virtual world created and run by New Horizon Interactive in British Columbia. It was an unusual move for Disney, which is known for doing development in-house.

"It was hard to resist," Yanover says. "We saw fantastic people there doing fantastic work, and they had created a really successful and artfully done connection with a lot of kids, which is, of course, an audience segment that's very meaningful to us.

"We looked at our strategy -- which is to build out a portfolio of worlds -- and decided that there really was no need for us to build everything ourselves, especially if the already existing world has as much momentum as Club Penguin does."

Indeed, when Disney acquired the site, it already had a paid subscription base of 700,000, with 12 million free and paid visitors showing up regularly, Disney says.

The media giant might have been one of the first to enter the universe of virtual worlds, especially those targeted to kids and their families, having launched Disney's Toontown Online in summer 2003.

"At that time, the power of personal computers had grown dramatically, the price point had dropped, and we here at Disney had some pretty amazing people on staff who had done a lot of development work with virtual reality at our theme parks," Yanover says. "We had this crazy idea that we could build another virtual world -- not out of brick and mortar as we had done in Anaheim and in Orlando, but online."

The experience was such a positive one, Yanover says, that Disney went full speed ahead on other online virtual worlds, including Virtual Magic Kingdom two years ago; Disney Fairies, which has had 3 million visitors since it opened in January; and Pirates of the Caribbean Online, which is expected to launch next month.

"Some people might say that Pirates is more an MMOG (massive multiplayer online game) than a virtual world, but I maintain that the lines are blurring," Yanover says. "In Pirates, you create a pirate avatar and then live in the world that we introduced in the 'Pirates of the Caribbean' films. You have thousands of people with you online, you have your own pirate ship, and you can assemble a crew of other people to sail around and adventure with you. You have relationships, you gain experience points and skills, and I say those attributes are very similar to what exists in Club Penguin."

The business models differ from one Disney online world to the next. For instance, Pirates will be free to play, but a subscription fee will be required "in order to enjoy the entire experience," Yanover says. He is looking at numerous business models for future worlds.

"So far, our sites are not ad-supported," he says, "but I wouldn't rule out anything. A lot of it depends on the expectations of the consumer. Because we have all been watching ad-supported TV for many decades, ad support is well within people's expectations."
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