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Disney Channel: The New, Low Risk Launching Pad

Hannah Montana
Hannah Montana

Disney Music Group dominates the Billboard 200 chartwith eight titles in the top 50. High School Musical 2 Soundtrack (Walt Disney Records) is #1, Hannah Montana 2/Meet Miley Cyrus (Walt Disney Records/Hollywood Records) is #2 and Jonas Brothers (Hollywood Records) is #8. The Disney Music Group is managing to top the charts while the rest of the music industry suffers thanks to the power of the Disney Channel.

Disney uses the Disney Channel to launch new young talent and franchises. Kids get hooked on the tweeny-boppers, and they go out and buy CDs, DVDs, and all sorts of branded stuff. The perfect example of Disney Channel's power--"High School Musical."The sequel debuted

High School Musical 2
High School Musical 2

on the Disney channel last Friday night and scored the biggest audience of any cable broadcast EVER--more than 17 million viewers. The films cost only $4 million, and Disney didn't have to spend the tens of millions it costs to advertise and distribute a film to theaters.

By the end of this year, Disney will have reaped one billion in revenue from the franchise. And surely, the huge draw of the movie has attracted new subscribers to the Disney Channel which charges more than any of its competitors--it's the fourth most expensive basic cable station after ESPN, Fox Sports, and TNT.

The Disney Channel seems to me like the perfect, low-risk way to establish new franchises. Instead of spending tens of millions marketing and distributing a new movie. If you launch on Disney Channel, the films are cheaper to produce, without the hefty P&A costs of a theatrical release. Now, Disney is of course, going to make a High School Musical to put in theaters. But after its strong launch on the Disney Channel, that film won't bear the risk of a new concept, and is sure to be huge for the Mouse House.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.