Even the powerful Disney (DIS) brand hasn't been able to completely use the subscription-based model effectively for its Toontown.
While there has been success at using the model, when competition emerged that uses a free ad-based model, the growth of the competition dwarfed Disney.
In a comparatively short time, Nickelodeon surpassed Disney in users by allowing visitors to freely explore and interact with its Nicktropolis virtual world. As of May, Nicktropolis surpassed Disney in unique users, drawing 1.4 million people to the site, according to comScore. Disney's Toontown on the other hand, only had 1.165 million unique users, and they've been around since 2003.
“We’ve had such a great success with Toontown that we wanted to make a portion of the game accessible to even more people, which will take our Tooniverse to new heights, beyond the more than 17.5 million Toons that have already been created in the game,” said Paul Yanover, executive vp and managing director, Disney Online.
Disney, which has been charging users $9.95 a month for the service, is now moving toward an ad-supported model. They've launched a beta version of the virtual gaming world which will be able to be accessed free by users for however long they want.
Along with the fast-growing competition, another reason for the move by Disney is probably the demand by advertisers for quality, safe landing places for their products online.
It will be interesting to see if Disney's response to their competition will end up making them more profitable in the long run than their existing subscription model. It will definitely increase the amount of users on the site, which will of course drive up the amount they can charge to advertisers.
With the shortage of good online advertising spaces, Disney should have no trouble filling up its advertising space on the site in a short time. They're in the middle of talks with a number of advertisers at this time.
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