So many diversified media companies often talk the talk of synergy, but don't walk the walk. Getting different divisions to coordinate timing, priorities, budgets, meeting schedules, etc... is very difficult, even when the overall goal is the same - optimizing shareholder value. And even when it does happen, there's no guarantee that type of concerted effort can maintain itself over the long haul.
But right now, Walt Disney Co. has several divisions clicking on all cylinders, so much so that the combined fuel of these divisions is providing above-sized returns for the company's Disney Music Group in a very down market for the record industry. Disney has learned how to leverage the following divisions of their company:
- The Disney Channel
- Disney Home Video
- Disney Music Group
- Walt Disney Consumer Products
- Radio Disney
- Go.com Internet properties
Epitomizing the success that these divisions have created are two dominant properties: "High School Musical" and "Hannah Montana." These aren't the only properties gaining market share, but they are great case studies.
"High School Musical" was a TV movie on The Disney Channel which spawned the CD soundtrack and download business - it was the best-selling album of 2006, going quadruple platinum. The tracks from the album were plastered all over the Radio Disney network. The home video business then raked it in on the DVD. The consumer products business made hay with all other ancillary products (including the company's book publishing division - oops, forgot that one). Next month the mania will begin again with "High School Musical 2," which includes the same cast as the original movie. Will the magic repeat itself in 2007? I wouldn't bet against it.
"Hannah Montana" is Disney Channel's #1 series, starring young Miley Cyrus, and the popularity of the show and the show's soundtracks (all performed by Ms. Cyrus in character) have launched Ms. Cyrus as a solo music star in and of herself. This is a formula Disney first used with Hilary Duff when she starred in the "Lizzie McGuire" series, and Disney appears to only have upped its game as time has gone on. The new Hannah Montana/Miley Cyrus 2-CD set just debuted at #1 on the Billboard albums chart - quite the feat considering the title was going up against the new release from Kelly Clarkson, whose last album is one of the few titles in recent memory that actually tallied more sales than the original "High School Musical" soundtrack.
Strategically, Disney efforts like these and "The Cheetah Girls" have focused squarely on the tween girl market. But would that focus have been rewarded if there was not a burgeoning retail channel that also caters to this demographic? Three chains: Limited Too, Justice, and Club Libby Lu, represent 800+ mall-based stores that have been fertile ground for Disney's efforts on all of these key properties. Limited Too and Justice are both owned by Tween Brands.
I had the opportunity to work as the rep for the Tween Brands accounts during my tenure at Sony BMG Custom Marketing Group. Here is how powerful these chains were to these Disney Music Group properties - on each of the titles mentioned above Tween Brands was at least a TOP THREE(!!!) account. One always thinks that big-selling records have to cater to a large amount of retail chains which carry (at the minimum) a fairly wide selection of other CD releases. Disney's success has proven this theory to be turned on its head. Sure, Wal-Mart was a huge seller on these titles. But Limited Too, Justice, and Club Libby Lu carry only a limited selection of titles, carefully chosen by the accounts' buyers. There is no profanity in the lyrics to protect the impressionable young audience the stores cater to (and provide a safe environment to parental gatekeepers). And, to my amazement, they sell CDs at full price!!!
Two years down the road... no other label group has developed an artist with a CD title, much less a multi-channel juggernaut, that has really caught fire at these key accounts. As to why that hasn't happened - you'd have to ask the geniuses signing all the pop-punk and emo bands. These Disney projects certainly don't represent any significant musical movement per se, but they do represent how the record industry can find some channels which represent rays of hope for its future... if they only developed releases that fit in these highly targetes retail channels! How about Sony BMG and the partnership with Nickelodeon! Nope. D'OH!
The irony of all this tween-targeted good news is that many of the marketers that used to heavily target kids: packaged foods, QSRs, etc..., have had to greatly curtail their own marketing towards kids due to regulatory pressure. If marketers could get past that conundrum to partner with these key Disney properties, then they'd hit upon a goldmine.