Taking a page from the Angry Birds playbook, Disney is introducing a line of licensed merchandise based on a mobile-first brand, the game Where?s My Water?

Licensed merchandise based on characters from the game, including plush toys and T-shirts will be available at retailers such as Toys R Us beginning in June. This is the first time Disney has licensed a mobile character and it reflects the growing importance that mobile is playing for large media companies as their audiences consume more and more content via smartphones and tablets.

?There is no question that mobile is becoming one of the largest media platforms in the world so it is an increasingly critical platform for us? said Brian Nelson, director of communications at Disney Interactive Media Group, Burbank, CA.

?Mobile will become a primary screen for reaching the next generation of Disney guests,? he said.

Mobile-first characters
The Where?s My Water? mobile game launched in Sept. 2011 and is available for iOS and Android devices. 

The game centers around characters created specifically for mobile and requires players to find the best way to get water to Swampy ? one of the characters ? who does not like being dirty.

With the licensing strategy, Disney is trying to follow in the path of Angry Birds, one of the most successful mobile-first brands to date. There is already an extensive array of licensed Angry Birds merchandise and retailers are embracing the brand, with Walmart recently making Angry Birds the focus of a major in-store promotion (see story).

?Angry Birds has cleared the path where other mobile first brands may follow,? said Harry Kargman, CEO/founder of Kargo, New York. ?Given that many toys launch as standalone brands ? without a game franchise to back them up ? the successful mobile game gives Disney a leg up. 

?They have a large loyal audience that is familiar with the brand and would love to own the extension toys,? he said.

The Where?s My Water? strategy also points to how Disney is leveraging mobile to help it establish new characters that are not based on its portfolio of classic titles.

Later this year, Disney will extend Where?s My Water? to YouTube with a 12 episode Web series.

?Mobile, primarily gaming for the three thru eight set, is driving huge character awareness,? Mr. Kargman said. ?Kids between these ages are spending more times on their parent's iPads than they are watching TV.?

The line of licensed merchandise was designed to help extend the story for Swampy the Alligator, the lead character in Where?s My Water? The game as well as the licensing program also features Swampy?s friends Cranky and Allie.

Limited reach
While Disney has found success with digital media, the challenge it faces in trying to build a mobile-first brand is driving awareness with those who do not have access to a smartphone. 

?The challenge with mobile is still audience size ? the kids have to have access to an iPhone or iPad, which limits the total available universe,? Mr. Kargman said. ?Therefore, only those kids that have access will recognize the characters. 

?That being said given the amount of time kids typically spend with these characters when they have an iPad or tablet, there is a probably greater loyalty than potentially older more established brands.?

The mobile-first approach Disney is taking with Where?s My Water? points to the growing role that mobile is playing for Disney more broadly.

However, one of the challenges for Disney and other media companies face with this approach will be integrating advertising into the equation.

?Disney is a great example of a company that has really focused thinking about digital content in the post-PC world,? said Chia Chen, New York-based senior vice president of the mobile practice at Digitas.

?The big challenge isn't scale ? it's really about finding a way to integrate advertisers into the engagement that these ?mobile first? brands can create ? not just the content,? he said. ?That's when it'll command a justifiable pricing premium.?

New opportunities for developers
Licensees signed up to produce products based on Where?s My Water include Hasbro Inc. and JAKKS Pacific. The line will include plush and novelty toys, consumer electronics accessories and apparel.

A second wave of product for the fall will include a face-to-face game, electronics, stationery, home accessories and Halloween costumes.

Items will also be available at Toys R Us, Disney Store, DisneyStore.com and other retail locations.
With successful mobile games increasingly considering licensing to extend their brands, this is opening up new revenue opportunities for developers.

?This will provide brand new revenue opportunity for game makers as a successful game can now branch into licensed goods as a key secondary revenue driver,? Kargo?s Mr. Kargman said. ?With this revenue extension, the dollars and quality being poured into mobile games will only go up thereby reinforcing this cycle.?