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network in 2007: Disney Ad-free kid-friendly network beats out the big boys Jan 9, 2008
Now that seems a silly question. It also became the first non-ad-supported cable network to take the top spot, beating out usual frontrunners like USA and TNT. Much of Disney’s 2007 success came from the “High School Musical” franchise, which debuted a record-breaking sequel in August, and the second-year comedy “Hannah Montana,” which spurred the country’s hottest concert tour as well. "You could argue that Disney Channel is just one long commercial for the various Disney products," says Derek Baine, a senior analyst for SNL Kagan. "It's a huge marketing machine." “Musical 2” was the year’s No. 1 movie on broadcast or cable, drawing 17.2 million viewers in its debut. “Hannah” was the top scripted show on any network among 6-11s and tweens. It only served to validate Disney’s decision to keep the network commercial-free when it moved from a premium subscription model with just 4 million subscribers in the 1990s. Disney stayed commercial free partly to please parents, and eventually made up for the lack of ad revenue by charging cable operators large subscription fees, at 81 cents per subscriber some two to three times the competition. With Disney debuting hot series in the late ‘90s and early 2000s like “Lizzie McGuire” and “That’s So Raven,” cable operators had little choice but to pay the high premiums. Disney does do some sponsorship deals, such as a seven-figure agreement with McDonalds years ago. Their names may be read over the air in brief 10-second shout-outs. But mostly its shows run with only brief interruptions hyping its own upcoming shows or original movies. Other cable networks snipe that the low interruption factor gives Disney a big advantage over them, leading to less channel-surfing by Disney viewers. But perhaps the biggest plus for Disney is that it has a huge platform for branding, another lucrative part of its business. The first “Musical” generated upwards of $500 million in revenue, for sales of everything from soundtracks to pencil cases to pillows to clothing. “Hannah” has been similarly monetized, through sales of CDs and T-shirts, and Disney stores in malls across America carry merchandise from virtually every series on Disney or Playhouse Disney, the channel’s morning preschool block, from “Suite Life of Zack and Cody” to “Handy Manny.” "I think they would have problems converting it to ad supported," Baine says. "They would probably get flack from cable and DBS operators." According to estimates from cable industry sources, Disney Channel ranks among the top 20 broadcast and cable channels in terms of net revenue, hitting almost $1 billion in 2006. Disney finished ahead of USA by a slim margin in 2007, just 15,000 total viewers. TNT was third, followed by ESPN and TBS.
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