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Disney's First Digital Subscription: Online Books

Tuesday, 29 Sep 2009 | 10:19 AM ET
Disney
CNBC.com
Disney

Today Disney announced the first-ever digital children's book platform, which also happens to be the media giant's first digital subscription business.

A "virtual bookshelf" of 500 books at launch, plus an additional 20 books every few weeks will cost $80 per year or a monthly fee of $9.

Most notably, the service will be accessible online - but not yet on the Amazon's Kindle - Disney says it's waiting for e-Readers to offer color and sound. Paying a subscription gives you online access to any of the books, which range from the classic Mickey Mouse and Winnie the Pooh story, to the more contemporary Cars, Toy Story and Hannah Montana. But you can't download the books to a laptop to bring them on the road to entertain kids on a long trip, so it doesn't yet offer the portability of an old-fashioned book or even a DVD.

Disney is hoping to snag more readers - customers - through a new, interactive approach to reading. Each title can be listened to as kids click through the pages, there's an interactive dictionary, and kids can create their own digital books. There are three reading levels, which critics say are a bit tough to navigate between, a technical glitch Disney is addressing. But the teaching approach behind these reading levels indicates that Disney will likely to grow this business to include more educational games and materials. It already has an "in" with the demographic: Disney is the world's largest publisher of kids books and magazines, selling 250 million books and over 400 million magazines annually.

Perhaps most important, this allows Disney to test the much-discussed digital subscription model. CEO Bob Iger has talked about putting Disney-branded content behind a subscription firewall, with the idea that above all, people will pay for quality content. Also, parents trust the Disney brand and kids are loyal to the characters and franchises. With the ad market weak and unstable, an additional revenue stream certainly seems a smart idea. So far the only real digital subscription models have been for music services like RealNetworks Rhapsody, and the Wall Street Journal. News Corp CEO Rupert Murdoch has talked openly about his commitment to rolling out subscription plans across his news platform.

Now we'll be watching to see whether Marvel comics are integrated into the platform once Disney's acquisition of Marvel Entertainment goes through. And I'd suspect that Disney is talking to makers of e-Books about developing a reader that targets just that children's book audience. It seems like a Disney branded e-reader could be key at advancing the digital children's book market, and a new gadget for Disney to sell.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.