The Walt Disney Co drew kudos from analysts in an otherwise dismal earnings report for breaking out results for its Interactive Media Group for the first time.

The unit, made up of its console, mobile and online gaming operations and Disney.com, turned in an 18 percent revenue increase but operating profit dropped after the soft retail environment, competition for consumers’ time and Disney’s “substantial” investment in the product lines were factored in.

The decision to break out the unit’s results — it comprises just 3 percent of Disney’s total revenue, according to one analyst — came in the same quarter in which Disney CEO Bob Iger warned investors that its older media businesses — DVD sales and broadcast television — face “secular changes” from which they may never recover.

Disney CFO Tom Staggs said the company plans to invest upwards of $200 million in video games development in 2009, and a more “modest” increase in spending on Disney.com and in virtual worlds like Club Penguin.

The new transparency by the often tactiturn Disney management struck Barclays Capital analyst Anthony DiClemente as a good thing in a “modestly disappointing” first quarter earnings report.

“As an analyst I love to see that because it gives some more transparency into the digital businesses and the profitability of those digital businesses,” DiClemente said.

Is it really giving if the money you’re shelling out for charity isn’t real? The 6- to 14-year-olds that Disney is targeting in a Dec. 12-22 charity drive on its social networking Club Penguin Web site probably would answer an emphatic “Yes!” to that existential poser.

That’s because donating the make-believe coins they earn playing games on Club Penguin to charities like the Elizabeth Glaser Pediatric AIDS Foundation and the World Wildlife Fund – two beneficiaries of past penguin largesse — means less “money” to spend in the snowy virtual world on rugs and armchairs for their igloos, or hairdos and clothes for their penguins. Talk about a painful choice!

Kids who donate will actually be voting on which of three real-world causes to support, and their giving will determine how the New Horizon Foundation, whose principals started Club Penguin, splits up a $1 million donation to charities that represent those causes. During last year’s 10-day campaign, 2.5 million kids ponied up more than 2 billion virtual coins to help other children around the world, New Horizon’s Lane Merrifield said.

This year’s campaign — at the height of a real-world global recession — could show whether Disney’s message that  “It’s a Small World” — the one that sticks in parkgoers’ heads for days — is getting through.

Disabled Segway riders who were barred from using the vehicles at Walt Disney theme parks may soon find themselves four-wheelin’ down Main Street under a proposed settlement the company reached with three disabled parkgoers who had sued for the right to use the personal transporters.

In their 2007 lawsuit, the three Segway owners argued that Disney violated the Americans With Disabilities Act by providing only sit-down wheelchairs and motorized scooters for disabled parkgoers.  Disney denied any wrongdoing in the settlement, court documents showed.

Under the settlement, Disney won’t allow Segways in its parks because of the potential danger to other parkgoers because of the vehicles’ 12 mph speed capability. The company will instead develop its own four-wheeled ESV, an electrically powered vehicle designed for operation while standing.  If the settlement is approved by a judge, Disney will make at least 15 of the vehicles available for parkgoers to rent at each of its U.S. parks starting in April 2009, court documents showed.

The proposed settlement provides each of the three plaintiffs with $4,000 toward a one-week stay at a Walt Disney World hotel and complimentary use of one of the new ESVs, the documents said.

And they all lived happily ever after.

The new prime-time TV season is starting and that means all eyes are on Nielsen ratings. While that’s the case every fall, this one is a bit different — the industry is recovering from a writers’ strike that threw the 2007-08 season into disarray.

AdAge points out, for instance, that serialized dramas already appear to be having trouble getting their footing back. It says two NBC dramas, “Chuck” and “Life,” both opened the season to sharply lower viewing numbers for the 18-49 demographic than they did a year ago.

Both are indicative of how many serialized dramas lost media momentum last year due to the strike, and how hard it will be to rebuild it without the buildup of free media any new show receives

Unscripted shows might hold up better, the article says.

Since nature — and TV — abhors a vacuum, many viewers during the strike got sucked into reality shows like “Dancing With the Stars” and many are coming back.

Overall, the Wall Street Journal reports, the big five broadcast networks saw a 4.3 percent decline in viewership from the first week of the season a year ago. The article cites Nielsen figures.

General Electric’s NBC faced the steepest overall declines, with 16.3% fewer viewers. Older-skewing CBS, a unit of CBS Corp., was down 9.6% among viewers between the ages of 18 and 49. News Corporation’s Fox and The CW, a joint venture between CBS Corp. and Time Warner Inc.’s Warner Bros., were both up over last year, but still ranked Nos. 4 and 5 in viewers among the English-language networks, respectively.

But executives say they are being patient — as are advertisers. Both say they are aware that it may take some time to bring back viewers. Besides, it has only been one week.

Keep an eye on:

• More than 100,000 Bollywood and television workers began an indefinite strike, protesting irregular pay and the hiring of non-union members, a move that could delay major releases for India’s festival season (Reuters)
• Social network software maker, Slide Inc has signed a deal with major media companies to distribute video content on Facebook, capitalizing on the success of social networking (Reuters)
• The Nasdaq Stock Market said it will cancel some of the late trades in Google Inc, whose shares appeared to plunge as low as 1 cent at the close of North American markets on Tuesday (Reuters)

(Photo: Reuters)

Thanks Amazon! The online retailer put out a release this morning with some juicy details about Google’s new mobile phone — even as we’re still waiting for the official unveiling later today.

So, here’s what they say about the phone…

“The T-Mobile G1 is the world’s first Android-powered mobile phone in an exclusive partnership with Google. The T-Mobile G1 combines full touch-screen functionality and a QWERTY keyboard with a mobile Web experience that includes the popular Google services that millions have enjoyed on the desktop, including Google Maps with StreetView, Gmail, YouTube and others. ”

Amazon, which has a deal with Google related to the phone, also says that the phone will have “one-touch access” to Google Search and will allow access to Android Market, “where customers can find and download unique applications to expand and personalize their phone to fit their lifestyle.”

More details will be coming, including pictures. So stay tuned. While you do, read why some experts say the phone won’t be a game changer.

Keep an eye on:

• NBC Universal will present a sweeping new study this week showing that audiences recall advertisements far more clearly when they are run on both TV and the Internet, findings that could change the way commercial time is bought (Reuters)
• Online movie rental company Netflix has signed agreements with the CBS Corp and Walt Disney Co’s Disney Channel that will allow current season episodes of a number of TV shows to be streamed at Netflix (Reuters)
• Time Inc’s “Life” magazine is being brought back as part of a joint venture that will launch a Web site offering photos (NY Post)

(Photo: Reuters)

AOL has relaunched with a redesigned page. It has also unveiled a new ‘every email’ feature that allows consumers to access multiple email services and integrates access to social networking sites.

Effectively AOL is getting more ’social’ by allowing users to access not just AOL and AIM email on their AOL page but also Yahoo, Gmail and Hotmail. Paid Content points out that Hotmail is not directly accessible through AOL.com, so AOL is providing a link that can be inserted in one of the module email slots and and a link to Microsoft feedback so people can ask for the feature.

 In addition to being more open, AOL hopes the email aggregation will help recapture some of the user attention it lost before people leaving the ISP were allowed to keep their AOL addresses - Paid Content.

AOL said that over the next eight weeks, it will launch tools and features to further personalize the page. This means opening up AOL.com to third party content and services for the first time, including networking feeds like Facebook, Bebo, MySpace and Twitter.

Personalized Web pages like Netvibes or Pageflakes or even Google’s iGoogle and Yahoo’s MyYahoo have become more popular for users.

“For a portal to be relevant to consumers today, it has to recognize that users seek a variety of different experiences and connections with their various networks and information sources,” said Bill Wilson, AOL’s executive VP of programming. 

Keep an eye on:

• Disney says business is resilient despite the economy - (Reuters)
• CBS chief optimistic of U.S. TV ad market (Reuters)
• Liberty Media eyes merging DirecTV, Liberty Entertainment (Reuters)

(Photo courtesy of AOL)

The genuinely gorgeous and the jaw-droppingly gimmicky are rare sights on the floors of TVs and tumble dryers on show in in Berlin at IFA, which claims to be the world’s largest consumer electronics fair, but this year Sony takes the dubious accolade of having both on show within a few metres of each other.

First the sublime: Sony’s XEL-1 TV, based on OLED technology, will go on sale in Europe for the Christmas season for around 3,000 euros after being available in Japan for almost a year. With just an 11 inch diagonal, you don’t get much screen size for your money, but you do get a TV that’s just three millimetres thick and has strikingly more vivid picture than conventional LCD technology.

Of course, Sony isn’t going to be alone with OLED televisions for long. Samsung also has an impressive array to go on sale next year, though theirs will be pricy too — product executive Noh Young Joong told Reuters they would likely cost two to three times as much as equivalent-sized LCD units.

Turn round the corner at Sony’s stand, though, and things rapidly go downhill. Remember those artificial flowers from the 1980s, which gyrated around when you played music? Possibly not, but their spirit lives on and seems to  have possessed ‘Rolly‘. Rolly is egg-shaped, about the size of a hand grenade and plays tinny music. It rolls around (dances even) and flips lids covering its speakers. You can stream music from your mobile phone via a Bluetooth wireless network, or store several hundred songs on board. If you have time on your hands, you can even program its dance moves using a laptop.

You may be wondering what the point of it is, though seemingly not the design experts who gave it a prestigious Red Dot award. Rolly goes on sale for 350 euros in October:  roughly the cost of one of Sony’s Playstation 3 video games consoles.

A more deserving winner of a design award — and one that stays the right side of gimmicky — is an MP3 player from Korea’s iRiver that offers a minimalist, and miniature, take on Mickey Mouse. Mickey’s features are reduced to two small pastel-coloured spheres for ears and a larger one for the face. The ears act as a volume control and a track skip control respectively; the face has a socket for headphones and a discreet Disney logo. The price is right too, at around 40 euros when it goes on sale in Europe later this year.

It’s one of the big weeks for advertising (well, in terms of parties and sunshine), so we couldn’t pass up the opportunity to check in on Cannes. More than 12,000 advertising types have gathered in the South of France to toast the industry — and perhaps even collect an award.

This is an interesting year for Cannes, where a lot of the chatter at parties and meetings will likely be about either the recession or the rise of online advertising, Reuters notes.

The festival, in its 55th year, awards excellence with the so-called Lions trophies and hosts seminars and workshops. In a sign of how crucial the Internet has become to advertising, the Film Lions awards now includes films for Internet and mobiles.

The $40 billion online advertising market remains a bright spot in a global industry facing dire times with soaring oil prices and an economic slowdown denting clients’ budgets.

Even though Cannes gives a nod to new media these days, AdWeek writes that the event is nonetheless struggling to keep up with the times. Like the industry itself, Cannes is ”an old institution struggling to reinvent itself in a new-media environment.” 

In many ways, Cannes is a perfect reflection of the ad industry. The city itself is glamorous and beautiful, yet downright gauche and a little scruffy at times. The week of seemingly non-stop events and parties is inspiring and fun, while at the same time depressing in its ephemeral hedonism.

As for economic worries, well, ad executives won’t let those stop them from having some fun, AdAge tells us.   

Skyrocketing gas prices, credit crises, procurement officers: none of these can stop the ad-world extravaganza that is Cannes. This year’s festival will be the biggest ever, complete with more entries, more delegates (especially more marketers), more agencies planning beach bashes or lavishly catered parties, and an even bigger presence — and yacht — for Microsoft.

The Australian also noted that the hot ticket of the week is no less than its boss, News Corp Chairman Rupert Murdoch and Chief Operating Officer Peter Chernin.

Meanwhile, USA Today points out that the first batch of winners on Monday “illustrate more than ever that agencies are crossing into each other’s areas of expertise as mediums continue to converge.”

The top direct advertising award went to JWT India for a print ad in The Times of India. While it was an ad promoting the newspaper, it was also the launching pad for a campaign, which included TV, mobile, video and outdoor, urging people to get involved and “lead India” in honor of the country’s 60th anniversary of independence.

In sales promotion, HBO won the Grand Prix for a multimedia campaign by BBDO, New York.

Keep an eye on: 

• One of Walt Disney’s biggest jobs is uncovering talent that appeals to 8- to 12-year-olds “tweens” so it can keep flowing the pipeline of clean-cut Disney Channel stars (WSJ.com)
• The U.S. newspaper business still has not seen the bottom of a persistent deterioration in advertising revenue, and growing Internet revenue will not compensate for the declines, McClatchy Co Chief Executive Gary Pruitt said after the publisher cut about 10 percent of its work force (Reuters)
• NBC Sports is investing in World Championship Sports Network, a small TV network that broadcasts Olympic sports year-round (The Hollywood Reporter)

(Reuters photo of seafront in Cannes)

Does “iCarly” have that Hillary Duff-stuff? Is she serious like Miley Cyrus?

Viacom’s Nickelodeon and Sony Music are betting big that 15-year-old “iCarly” star Miranda Cosgrove will be the next “tween” media goldmine, stepping into the shoes of Duff (she of the “Lizzie McGuire” series, multiple films, and music releases) earlier in the decade, and current golden goose Miley Cyrus, aka “Hannah Montana.”

The challenge is significant if Nickelodeon can steal some tween thunder from Walt Disney, which is home to both the Lizzie McGuire and Hannah Montana franchises, and the future home to a show by hot boy band The Jonas Brothers .

The time may be right, given the negative buzz Cyrus got from sexually provocative pictures. That said Cyrus has a new album coming out in July, and she may easily bounce back into the public’s good graces.

Nickelodeon and Sony Music will launch tomorrow the soundtrack to “iCarly” — a show in which Cosgrove’s teenage character produces Webcasts from her attic — hoping to spark Cosgrove’s career as a recording artist. She’s got help — talent development executive Jay Landis, who helped launch the music endeavors of Duff and others at Disney.

Disney, meanwhile, is already readying its next star - Demi Lovato of the network’s upcoming Jonas Brothers movie “Camp Rock.”

(New York Post)

Keep an eye on:

• The average share of Americans listening to radio has shrunk about 14 percent over the past ten years, led by the flight of teens, and oddly enough, college graduates. (New York Times )
• Warner Music has pulled its catalog out of Last.fm’s “on demand” free streaming service. According to the New York Times the issue is money. (Silicon Alley Insider)
• Veteran rockers AC/DC are set to become the next major band to sell a new album only through Wal-Mart Stores Inc., according to people familiar with the matter, a move that highlights the growing music-industry clout of Wal-Mart. (WSJ)

(Photo: Nick.com)

Madison Avenue should breathe a sigh of relief, thanks to the retail sector. Big U.S. retailers posted slightly better-than-expected sales last month, which may give them confidence to keep their advertising budgets intact.

Like everyone else, advertising executives have watched the economy, falter a development that could threatens to crimp marketing spending. By and large, admen say, spending had held steady, with some weakness in financial services and other areas.

But Madison Avenue is hardly in the clear — just look at the mounting troubles in the auto industry, which has banked on SUV sales, as evidenced by General Motors’ announcement earlier this week about plant closures and job cuts.

Keep in mind, automotive was the single largest ad spender last year, so the industry’s troubles are hugely significant for advertisers. The second largest spending category? Retail.

That’s why the sales data released by retailers on Thursday should come as good news for ad giant like Omnicom, WPP and, particularly, IPG.

(Remember, IPG’s Martin agency has the Wal-Mart account, and the world’s biggest retailer and huge advertiser posted a 3.9 percent rise in same-store sales. Consumers seem to be taking seriously the slogan “Save money. Live better.”)

For sure, it’s just one month of sales in one category. But if you’re an advertising agency in this economic environment, you’ll take the good news where you can get it.

Keep an eye on:

• HarperCollins Publishers Worldwide Chief Executive Jane Friedman is resigning, parent company News Corp said on Wednesday, making her the second book publishing executive to quit in recent weeks as financial pressures weigh on the industry. (Reuters)
• The upcoming Triple Crown bid by Big Brown has turned into a payday for the Walt Disney Co’s ABC and ESPN networks, as advertisers line up to buy ads on programming leading up to the Belmont Stakes. (Reuters)
• Paramount Pictures said its main studio will absorb the marketing, distribution and physical production departments at its specialty label, Paramount Vantage. (The Wall Street Journal)
• Screen Actors Guild President Alan Rosenberg and National Executive Director Doug Allen want to convince dual card-holders to oppose ratification of the prime-time TV deal recently agreed to by American Federation of Television and Radio Artists and the studios and networks. (ADWEEK)

(Photo: Reuters)