Disney Channel: the mouse that roared back into life

TEN years ago, the Disney Channel was considered a Magic Kingdom backwater. The cable channel reached just 14 million homes with a programming line-up that was little more than a dumping ground for Disney's animation studio and other departments.

These days, it stands out as one of the jewels of the Disney palace. The Disney Channel has been the top-rated children's network for 18 months, elbowing aside rivals such as Nickelodeon and Cartoon Network. On that performance, it now commands among the highest fees in the industry from cable operators, who beam it into 89 million homes.

The turnaround has been a case study in how to use intensive consumer research to gain a better understanding of the market.

As well as helping Disney Channel to outpace its rivals in audience ratings, the research effort – combined with trial and error and a bit of luck – has also helped it emerge as a creative engine in its own right and thereby breathe new life into an established brand.

Traditionally, Disney has relied on its animation studio to develop characters and stories that are the lifeblood of its various businesses, from theme park attractions to consumer products.

Animators have gone fallow in the past decade, forcing Disney to pay $US7.4 billion ($9.8 billion) this year for rival Pixar, but the cable network has sprung to life.

A new series of homegrown hits have become stars across the Disney universe. Its biggest may be this year's High School Musical, a made-for-television movie that has become a phenomenon.

A love story, it focuses on a sports jock and a nerd who defy their disapproving friends to audition for the school musical (think of Grease updated for the text-messaging set, and with only an "implied" kiss at the end).

With a budget of just $US4.5 million, it has gone on to draw more than 37 million viewers. It has also sold 2.4 million DVDs, lured millions of viewers to the Disney Channel website and produced the top-selling album of the year.

"We have gone from being the stepchild to the favourite son," says Gary Marsh, the Disney Channel president who has been with the division since the lean years of the late 1980s.

The transformation began in earnest a decade ago when Robert Iger, now Disney's chief executive, recruited Anne Sweeney from rival Fox Television. Sweeney knew Disney Channel since her days at Nickelodeon, where she led the Viacom network's international expansion. She was also familiar with it as a parent. It is fair to say that she did not hold it in the highest regard.

"My kids had never watched the Disney Channel and we'd had it in our home for years," Sweeney recalls.

Nonetheless, she knew the power of the Disney brand and saw potential in the company's recent moves to convert the network from a subscription service such as HBO, in which viewers paid a monthly fee on top of their regular cable bill, to a basic offering.

The conversion would require a fundamentally different approach to programming and marketing. A subscription service is built around big events – such as boxing bouts or a hit series like The Sopranos – intended to remind customers of its value come bill time. By contrast, a standard service must be more consistent in its offerings.

Before they could develop that programming, Sweeney and her team felt they needed to better understand not only the Disney Channel and its competitors, but Disney itself. "I felt like I needed to go to school to understand what made Disney tick," she says.

They began an exhaustive research campaign. It was something that had never been done at the channel, which did not even subscribe to the Nielsen ratings service, the most basic barometer of viewer preferences. Trying to get intelligent feedback from viewers as young as three years old may sound like an exercise in futility. Yet according to Eleo Hensleigh, who joined the Disney Channel in 1996 as senior vice-president of marketing, that is not the case. Some of the studies were as simple as placing toddlers in a room full of toys and waiting to see whether they would watch a program or play with the toys.

"They can tell you a lot even without telling you anything," Hensleigh says.

What they discovered was not encouraging. While children raved about Disney's theme parks, they used words such as "broccoli" when asked to describe Disney Channel. That made sense since in the subscription days the marketing strategy was aimed at chequebook-wielding parents. Essentially, Disney's pitch to parents was that the network was good for their children, even if it was not a lot of fun.

Gradually, a strategy developed to change the focus and make the network first and foremost for children and about them. "More and more, kids demand what they want," says Rich Ross, who Sweeney recruited from Nickelodeon six months after her arrival and is now president of Disney Channel Worldwide. To appeal to them more directly, Ross began to segment Disney Channel's programming by age. He created Playhouse, for example, for the youngest children. This was done not only to protect them, but also with the knowledge that a nine-year-old, for example, finds nothing so uncool as having to hang out with a six-year-old brother.

Disney also decided it had to differentiate itself from the competition. While Nickelodeon was increasingly relying on animation, Disney began to develop live-action dramas. Also, it tried to emphasise the notion that Disney Channel – much like Disneyland – was a place for parents as well as their children. At the time, Nickelodeon was cultivating a more defiant, kids-only swagger.

Marsh describes the network's self-consciously wholesome tone this way: "I can get a laugh out of an underarm fart any time I want. It's easy. Our challenge is to get comedy out of our characters and our stories."

Not everyone at Disney appreciated Sweeney and her team's efforts to break out on their own. While Disney Channel had not been highly regarded at the company, it was appreciated as a free promotional vehicle for the divisions.

Iger winces at the memory of those internal battles, and Sweeney credits him with giving her political cover.

It helped that after a period of experimentation, Disney Channel began to deliver steady hits. The channel's sweet spot has been a new demographic group that Disney's researchers were quick to identify: the Tweens. These are 9 to 14-year-olds trapped between childhood and an increasingly fast-arriving adolescence.

Or, as Mr Ross puts it: "If you're a girl, you have your lip gloss in one hand and your stuffed animal in the other."


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