Mickey, Minnie, Goofy, and Donald have some new friends in the magic kingdom: Bill and Steve. The powers that be at Disney have given the green light to a long term deal with Microsoft to cooperate on digital media initiatives.

Under the agreement, Windows Media Digital Rights Management (DRM) will securely deliver high definition video into the home and onto PCs, optical media and portable devices.

The deal is the manifestation of Microsoft's ongoing attempt to woo Hollywood. Last September, Windows Media 9 Video (WMV) was submitted to the Society of Motion Picture and Television Engineers (SMPTE) as a candidate for an open standard in film distribution. Earlier in 2003, Landmark Theatres adopted WMV as the primary playback system throughout all 177 screens in its 53 locations.

Microsoft's focus has not been limited to the big screen. Windows Media Center Edition PCs are able to function as an entertainment hub, and stream digital video to a variety of household electronics.  Windows Media is also utilized by upcoming portables devices that will run Windows Mobile software for Portable Media Centers, once code-named Media2Go.

Video emerged as a key selling point of Microsoft's MSN Premium broadband Internet service.  The company has promised subscribers "a vast amount of broadband content" free of charge.  Both MSN and rival AOL are endeavoring to entice subscribers through members-only video services.

When asked whether MSN subscribers would gain exclusive access to Disney flicks, a Microsoft spokesperson told BetaNews, "There was no discussion yet about MSN or about availability."

"Our shared goal is to ensure that consumers will have access to great content on many different devices including Windows XP Media Center PCs, high-definition TVs or Portable Media Center devices — without having to worry about compatibility issues. Together we aim to prove that the distribution and consumption of digital media can be done in ways that benefit everyone," said Will Poole, senior vice president of Windows Client Business at Microsoft.

Despite being a victory for Microsoft, the deal is non exclusive, leaving Disney free to explore alternatives.