Ever since Bob Iger took over the office from Michael Eisner as CEO of the media giant Disney on Sept. 30, he has been trying to push the company hard on the digital frontiers.

The landmark deal that Disney had signed with Apple to sell its content on iTunes store for $1.99 a pop, just 12 days after Iger took over, shows just how serious he is about Internet as a medium for growth of the company.

But what will the mouse’s adventures mean for you and Bob Iger?

Before I get started on Disney, let me update you about the latest in the digital entertainment front.

1. Google announced the release of Google Videos a few days ago, at CES Las Vegas. It is a service similar to Apple’s iTunes store and allows you to purchase videos to be viewed online.

But I have absolutely no opinion about their service because I can’t try it as they don’t support this feature in my country. Whenever I try to access any video in there, I get this error :

Thanks for your interest in Google Video.

Currently, the playback feature of Google Video isn’t available in your country.

We hope to make this feature available more widely in the future, and we really appreciate your patience.

I dunno if I should shout at Google for being evil to discriminate or suck it up and move on. Ok, I’ve decided : That’s an evil thing for Google to do.

2. NBC is offering its programming, including Law & Order and Late Night With Conan O’Brien, on Apple’s iTunes Store.

3. CBS has licensed its hit reality TV show Survivor to Comcast for video-on-demand.

4. Sprint Nextel has formed a joint venture with four big cable operators to deliver streaming content to your cellphone.

…and a few more things that are slipping my mind right now.

Back to topic. For consumers, i.e. you, this will mean nothing but great news. Reason? The good old supply and demand theory.

1. The quality of content will go up. The more content people will have access to, the more choice they would have. This implies that all the companies in competition will have to work harder to create the content that people will like and see! Overall, this means, the quality of content will go up.

2. The price of accessing the content will come down. With the same reason as that for the first point, the price of accessing the content will come down.

3. People who never had access to this content may get access to it. Okay this one needs a bit of explanation. There exist a lot of people in this world, like me, who do want an access to real ‘legal’ content but can’t because companies would not want to offer it to them.

Since we are talking about digital entertainment, let me give you an example of English movies and me. I love watching movies, but the problem is that I can get them only on HBO or Star Movies. This means, my consumption of most movies is about 1 year after they are released.

Uh, but don’t the studios release the movies in theaters and on DVDs? Well yes, but the problem is that most movies in theater are dubbed in Hindi and it is next to impossible to get DVDs of most new movies.

The supply and demand theory also crawls in here. With the Internet, the point of low demand in a certain region becomes a moot point as the variables of distribution don’t figure in here and the cost to deliver content in New York or Jaipur is exactly the same.

Oh, I added the word may because chances are that Disney or other companies may do evil stuff like Google is doing on Google Videos.
4. The access to quality content will get easier. All you have to do is decide what you want to see today, pay for it, download it or watch it online. It really doesn’t get any easier than this.

5. More choice for consumers. More competition in the field will mean that the fight to win the clicks will intensify and in the end consumers will have more choice in content and how they consume it.

6. Innovation on technical front. With all of the above factors in place, innovation will inevitably take place in ways how the content is delivered to the consumer. It goes without saying that this means ease and choice for the end users.

Even though all is good for the end users but Bob Iger still has a few obstacles to overcome.

1. The biggest challenge he faces is to bring a 180 degree change in company’s mindset. The way his company has always worked, while it was dealing in just conventional media outlets, is not what it can get away with online. Some of the mindset changes that Mr. Iger will have to usher in are :

a. The end of enforcement. Since end users don’t have the level of control over their TV Sets or the local theaters (other than deciding not to go to the cinema or switching the channel) like they have on the internet, mose media giants get away with enforcing sub-par content on you.

On the internet it is not possible to do so, thanks to the wonderful invention of blogs and the excessive amount of information that exists on it. If Disney (or any other digital media company) has to survive, they have to raise the quality of content to make the user punch in the numbers on their plastic and be extremely happy about it (see #2).

b. Scew up once and you have a serious trouble. Information travels extremely fast on the Internet. Bad experiences travel even faster. If you screw up once, more people will be up in arms against you before you can even blink your eye. Mr. Iger, you have been warned!

c. The end of mass and discovery of niche. This can actually be thought of as a sub-part of the point a. You can’t enforce content on people on the Internet.

The fact is that something that some people plain love will be absolutely hated by others. You can’t create for-all content on the Internet. You will need to focus on niches, much more than what you do offline.

d. Guess what mate? Now you don’t really know all your competitors. The beauty of the Internet is that anyone with a digital camera or the ability to create digital content can create a site to put his or her content online and be in competition with the big guys.

In conventional media, Disney could have tracked each and every activity of its competitors (which they could count on hand) but that’s impossible to do on the Internet as they don’t even know who all their competitors are.

This thing increases the importance of creating content of highest quality and reaching out to the users who actually want your content (like me) even further.

2. The need to push innovation faster. You will need to find ways to deliver your content faster and more easily to the people who want it. Plus, you will need to listen to what your consumers are demanding and respond to their feedback.

Conclusion - The future of digital entertainment is extremely bright and Bob Iger has taken the right path for his company. Now his challenge is to innovate faster and bring a change in the mindset of his company.

For me and you, it is going to be a really fun ride ahead.