Mobile Movies

Microsoft and Disney agree to cooperate on digital-media initiatives. Looks like this deal will likely be a boost for gadgets like Microsoft's Portable Media Centers shipping later in the year.

Microsoft and Disney are now kissing cousins in a multiyear agreement to cooperate on digital-media initiatives. The news arrived only days after Apple Computer announced plans to sever long-standing ties with Disney. Under the deal, Disney will license Windows Media digital rights management (DRM) technology, and Microsoft will get Disney content.

"Its not surprising that Disney went with Microsoft, which has been devoting a lot of research to digital rights management," says Dwight D. Davis, a VP at market research firm Summit Strategies.

The bigger winner in the deal may be Microsoft. Its Media Center Extender initiative is partly focused on putting movies on gadgets such as Portable Media Centers. When the first Portable Media Centers ship later this year, expect to see content from Disney and several other Hollywood partners.