Disney channel, long considered an also-ran against high-profile competitors such as Nickelodeon, has become a power broker by creating a talent incubator that's churning out some of the most popular personalities on the kid and tween scene and raking in piles of cash for Disney.
The tactic, a kind of 21st-century version of the 1940s Hollywood studio system, is creating multi-media franchises out of youngsters such as Miley Cyrus and Raven Symone, with the TV stars fanning out across the Walt Disney Co. empire and into feature films, CDs, live performances, theme-park shows, magazines, clothing and merchandise.
The goal is to be retail-friendly and mom-approved, and there's a horde of budding stars in the making.
The soundtrack for "High School Musical," a Disney Channel original movie with a $4 million production budget, has sold 3.9 million copies, making it the top-selling album of the year. The movie's CDs and DVDs alone have raked in north of $100 million in retail sales, according to Credit Suisse First Boston analyst William Drewry. That figure doesn't count a plethora of books, video games and clothing that have been selling since late summer. Theme-park shows, licensing fees for school productions around the country and a 40-city arena tour that launched this month all will fatten the movie's profit margin as well.
Disney chief executive Robert Iger recently cited "High School Musical" and "Hannah Montana," along with the company's feature "Pirates of the Caribbean," as reasons why Disney more than doubled its quarterly profit year-over-year.
The system has vaulted squeaky-clean kids such as Hilary Duff and the Cheetah Girls into a rarefied stratosphere in which they grab the spotlight in high-rated TV series, sold-out concerts and money-making films. The cast members from Disney Channel's "High School Musical" are next, as are potential breakout characters from "Hannah Montana," "The Suite Life of Zack & Cody" and "That's So Raven."
"No company's better at taking an asset and leveraging it across all their businesses," said Rich Silverman, president and founder of talent-management firm Edge Talent Group. "Every division works at 100 miles an hour."
Case in point: Not long ago, Miley Cyrus was the unknown daughter of country singer Billy Ray Cyrus. Though she had no acting experience, she caught the attention of Disney Channel executives looking to cast a comedy about a character who's a regular kid by day and a rock star by night.
Ms. Cyrus now stars in "Hannah Montana," which was the most-watched show on TV last season, after "American Idol," among kids ages 6-14. The soundtrack from her series, on which she sings, was recently the top-selling CD in the country for two straight weeks, with a half-million units sold, according to Billboard. Ms. Cyrus also has branded lines of clothing and other products hitting department stores this month.
In addition, the hot properties are helping once-sleepy Disney Channel, which has been on a ratings roll lately, nearly catch up to Nickelodeon, where ratings have been flat. Disney Channel's ratings are up 23% in the key 6-11-year-old demo, and the channel is now seen in 90 million homes. Its website traffic has doubled in the past year. The channel logged its most-watched October ever in prime time, with 2.87 million viewers.
The channel markets its original series and movies through national print in Nickelodeon magazine, Teen People, Scholastic and similar titles, plus mall and bus-shelter posters in top markets, national Radio Disney, and local radio and cable. The channel also relentlessly uses its own air, plus its website. DisneyChannel.com is the top entertainment website for kids 6-14, according to ComScore Media Metrix.
Disney Channel executives aren't talent managers and don't collect a finder's fee for shuttling young stars to the parent company's various divisions. The synergistic approach, though, boosts the channel's ratings and the corporate bottom line.
"We've put together the elements to make this a one-stop shop for talent," said Rich Ross, president of Disney Channel Worldwide and a former children's casting director. "We provide opportunities for them to broaden their horizons."
Industry watchers said the channel has been savvy in reaching young girls in particular, who can be a loyal and vocal audience.
"Tween girls like to be part of a community," said Jane Buckingham, president of Intelligence Group, a trend-watching firm. "They want to be surrounded by a property they love, and this multiplatform approach is very effective with that group."