Disney has their hands in a large variety of markets, from their parks and resorts to movies to cable TV channels, international markets, and consumer products, and their newest endeavor with the Walt Disney Internet Group. Each of these components contributes to their overall financial success. Featured on the title page of the the section on “Media Networks: Cable Networks” is a two-page spread picture of the cast of “High School Musical,” claiming that nearly 90 million viewers have seen the movie since its debut on the Disney Channel.
Overall, the company boasts revenues at $34,385 million for the year, a seven percent increase since 2005. For perspective, 2005’s revenues were a four percent increase from those of 2004. Their net income weighed in at $3,374 million, which is thirty three percent higher than last year’s income. The percent difference between 2005 and 2004 was only eight percent (p.57). Obviously they’re heading in the right direction, up. But when I was looking at the numbers for their Media Networks section, nothing seemed unusual or different from the previous year. The eleven percent increase to revenue of $14,638 million is close to the twelve percent increase last year (p.59). The increase specifically from cable networks (as opposed to broadcast television) was ten percent, whereas last year’s revenues increased by thirteen percent (p.60). At least when looking at the numbers, it doesn’t look like the cable networks experienced any sort of huge jump from previous years.
The note about Disney’s purchase of Pixar, however, shared some relevant insight into the company’s philosophy of the nature of feature animated films: “Disney believes that the creation of high quality feature animation is a key driver of success across many of its businesses and provides content useful across a variety of traditional and new platforms throughout the world.” (p.83) Not only do they consider feature animation important in its own right, but they see the multitude of possibilities that it creates in their other markets. Disney is already used to the idea of cross marketing, because they’ve existed across so many different forms of media for a long time already. I’m glad to see that they’re sticking to tradition in putting feature animation at the top of their priorities, because it has been proven to be their most successful endeavor as well as a valuable fuel for the rest of their departments.
Note: Page numbers are based on the print version of the Annual Report. To download a PDF copy, click on the tab labeled “Financials.”
Jacques Steinberg, October 22, 2006
In this article, Steinberg presents an inside look at the daily work of Mr. Rich Ross, president of Disney Channel Worldwide. He is at the head of the company responsible for what most children watch on television, not just in this country but all over the world. Mr. Ross often consults with an expert in the area of child audiences when making decisions about Disney’s television programming, that is, he has a family friend’s eleven year old daughter take a look at what Disney’s been working on and offer her opinion. But that anecdote is not meant to minimize his credibility. In fact, Mr. Ross has worked hard to keep up in the changing nature of children’s marketing, and he’s been quite successful. He was able to coordinate the publicity of “High School Musical” between Disney’s radio stations, magazines, and websites, which ended up as the perfect combination to create such a strong fan base. It’s nice once in a while to get a glimpse at what goes on in the boardrooms and the studios, and to see that the people running these major companies are just normal people who happen to love their jobs and be very good at them. But it may be fair to note that it seems Steinberg has gone a little far in praising what appear to be purely capitalist motives on the part of Mr. Ross, sugarcoated with idealism and altruism.
Mr. Ross seems to think a little more idealistically about the television shows than one would expect from the president of a huge moneymaking entertainment business. He values the fact that “High School Musical” and many of Disney’s other recent programs “share an unapologetic emphasis on traditional life lessons” just as the Disney programming of his childhood did. He wants music to be embedded within the storyline; he wants each episode to demonstrate strategies of problem solving when issues arise between friends or with parents. As an example of his desire not to condescend to his audience, the Disney Channel website now features a space where children can create mash-ups of their favorite episodes and have control over how they turn out. Steinberg presents this as a measure of Ross’ connectedness to his audience, but it seems more like Ross is just picking up on the user-generated content trend that has become prevalent because of the internet and the accessibility of video editing software. Since Mr. Ross feels that “High School Musical” is truly about kids anywhere and not just about Americans, he has traveled all over the world to bring the movie to as many countries as possible. My reaction to this statement is questioning whether he is doing all that traveling just for the sake of spreading the good messages in the movie, or to make more money in the international entertainment markets. Ross’ influence on the nature of the channel can certainly be felt when looking back to the days before he entered the scene. His leadership helped bring the Disney Channel into its current 90 million homes from a bare 15 million, and lead it to practically knock all other children’s television channels out of the competition.
A Musical For Tweens Captures Its Audience - New York Times
Ben Sisario, February 8, 2006
Ben Sisario examines the marketing strategy that went into Disney’s High School Musical and how it was able to engage its target audience with not-yet-standard techniques. The movie premiered on the Disney Channel on January 20th, and by February 8th it was already making news for its popularity. The soundtrack released with the movie reached top 10 of the Billboard charts, made 45 percent of its sales online through iTunes and had no radio airtime outside of Radio Disney’s station, and that was only in the first two weeks.
Sisario quotes Gary Marsh, president of entertainment for Disney Channel Worldwide, as explaining the value of the story in its themes such as “express yourself, believe in yourself, celebrate your family, follow your dreams,” but it wasn’t just the optimism that made this movie and all of the other media associated with it into such a success. Because Disney’s presence exists across multiple forms of entertainment, it was able to use cross-platform advertising to build excitement about the movie before it was first aired. The show’s characters appeared on a New Years Eve show, the Disney channel played music videos from the movie’s songs “in heavy rotation,” and Disney even offered a free download of the song “Breaking Free” around the time of the premiere. After the movie aired for the first time, Disney directed viewers to a sing-along version online where they could download the lyrics. According to Sisario, the lyrics were downloaded 500,000 times in the first 24 hours. That’s successful cross-marketing.
Disney capitalized on its integration of web content into the TV market, something that they’ve gotten very good at of late. They also benefited from the fact that the movie and soundtrack were released in the winter, specifically because of the holiday sales of iPods and iTunes gift certificates.
Sisario sees this movie as the beginning of “a new musical phase,” referring to the previous cultivation of pop stars Brittney Spears, Christina Aguilera, and the members of ’N Sync. They are creating a new generation of pop icons following the success of Hillary Duff, which began with her TV show “Lizzy McGuire.” The most interesting element of the movie and album’s success is the fact that it did not rely on traditional radio or MTV for its publicity. They know that their audience, because of their age, is very comfortable with the internet and digital music, so they were able to make use of their own website and their relationship with Apple’s iTunes to set the movie up for success.
Chicago Tribune (IL); 2/02/2007
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Ken Stromberg is the musical director for Palatine High School in Illinois. His decision to direct “High School Musical” caused a great deal of commotion, even before auditions had begun. The Disney Channel made-for-TV movie was extremely successful, with a chart topping soundtrack and a fan base as large as the number of 6 to 14 year old kids, and that’s just in America. Kevin Pang’s article exposes the craze that built up around this one high school’s performance of the now famous musical.
It’s as pathetic as it is amazing: parents of children from far outside the school district started calling for tickets even before the actors had been cast or started rehearsing. The high school added two performances to their standard four and added 40 chairs to their theater for 600 (the most that the fire department would allow), but still the waiting list for tickets was long enough to fill the theater twice over.
Although Pang spent most of his article quoting conversations between Stromberg and a slew of crazed parents and explaining to readers that High School Musical has become a pop culture icon to so many children, he found a few paragraphs to devote to describing just how Disney capitalized on their successful movie. Disney Theatricals Productions usually spends about a year adapting a movie to a stage play, but this one they were able to churn out in six months, tweaking some of the dialogue and adding two new songs. High schools all over the country rushed to get their hands on a licensed copy of the script as soon as it was available, and the play has revitalized many small theater groups who’d had trouble finding kids to audition and enjoy acting until it came along.
Pang’s article is a valuable window into the fan culture surrounding this movie. The parents who felt a desperate need to get their children tickets to the show were responding to the enormous success of the movie in the eyes of their children. However it was that this movie managed to get everyone’s attention last year, it has certainly generated a lot more than just buzz, and Palatine High’s experience is certainly just one example of many.
THEATER REVIEW; Trading Math Class For Corsets And Minis - New York Times
Ginia Bellafante. January 10, 2007
Ginia Bellafante is disgusted with “High School Musical: The Concert.” She does not take any pains to hide that feeling. In her review of the event, she shares her experience of seeing the actors from the Disney Channel movie turn into incredibly poor models of success and individualism. The characters in the movie dealt with cliques that tried to hinder their choices and limit their interests, but they were able to find their own passion, theater, outside of the math nerd or basketball jock world. Bellafante enjoyed Disney’s “just-be-your-real-self message” and was shocked to see it lost entirely at the live performance.
The concert, one of the many ways Disney has cashed in on the success of their movie last year, features most of the original cast members performing all of the songs from the movie, to a wild adoring audience of adolescents. What upset Bellafante most about the performance was not only way the lead female actors danced and dressed inappropriately both for their characters and their age, but also the fact that the concert was really just a way of launching each of the actors’ solo albums directly to their target audience. She saw straight through that marketing pitch, and is sure that the teens felt the same way.
Bellafante notes at the end that it’s quite curious that Disney made a movie about students learning to love musicals, just as the company jumped back into the business of making them. I admit, put that way it does sound scheming. I happen to be in favor of the production of musicals and the cultivation of an attitude that they’re an enjoyable form of entertainment. It says something about the quality of the music that so many kids desperately wanted to attend a concert where the music was the central focus. The self-appreciation lesson is certainly an important one, but it seems that Disney’s emphasis was on the music, and with a concert, a theatrical adaptation, and a top selling album, that’s where they’ve been the most successful.