By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Although parents gripping the wheels of their Suburbans may tune in to Radio Disney only to pacify their charges, those adults nevertheless represent a captive audience for advertisers. Radio Disney's own research suggests that for every 2.5 children tuning in, one adult is listening as well. That ratio allows the network to market advertising time to a strange mix of products -- ads for sugary breakfast cereals and toys airing with spots for Chevy minivans and tax software. More than 1.5 million kids and more than 500,000 parents tune in to Radio Disney every week, according to Statistical Research Inc., an independent firm hired by Disney.
But for Disney, the network remains a high-risk, cash-hemorrhaging venture. The network earned at best $20 million in revenue last year, estimates Chris Dixon, an entertainment industry analyst at PaineWebber, or less than 0.11 percent of Disney's total revenue and about as much as Michael Eisner's troops sell in videos in one hour.
Part of the problem is that, with a few exceptions, major national advertisers such as kid-favorite McDonald's have been reluctant to sign on with the network. "When we see more extensive coverage, we might take a second look," a McDonald's spokesman told American Demographics magazine last February.
Jones says that the affiliates now have enough local sponsors to air five minutes of advertising per hour, while the network itself is selling only about 2.5 minutes in national advertising. The company's goal is to increase the national ads to five minutes. (Jones' boss, ABC Radio Vice President Scott McCarthy, says Jones' figures aren't quite accurate, but he declined to provide any himself.)
Ratings are the biggest stumbling block when Radio Disney tries to woo national advertisers. Arbitron, the independent company that rates radio broadcasters, doesn't survey listeners under age 12, so Radio Disney must rely on its own research to convince advertisers that the network is reaching its target audience. Census bureau figures show there are plenty of kids -- 23.8 million of them ages 6 to 11 -- but no one has proved yet that they listen to radio.
"Television, for advertisers, is the most important medium," says Debbie Solomon, a senior partner at the advertising firm of J. Walter Thompson, which focuses on marketing to children. "Radio will always be a secondary medium." Solomon believes, however, that Radio Disney has a chance. She particularly favors the network as a medium for advertising to parents, who can walk away from the television set when children watch, but may be trapped in the car when their young ones tune in to Radio Disney.
Others before Disney have tried to launch radio programming for kids. A Seattle-based company created a similar venture called Kids Star, but it lasted only four years before closing shop in 1997. Minneapolis-based Children's Broadcasting Co. (CBC) tried to launch a kids network called Radio Aahs, but it failed in 1997.
CBC closed its doors about a year after ABC Radio (which had not yet then started Radio Disney) severed a 7-month-old agreement to develop Radio Aahs. ABC had agreed to take responsibility for CBC's national advertising sales and assist CBC in acquiring affiliates for its network in exchange for $25,000 a month plus commissions and a chance to later purchase part of Radio Aahs.
But in July 1996, ABC told CBC it wanted to terminate their agreement. On the same day, ABC, which had in the interim been purchased by Disney, announced plans to launch Radio Disney.
In September 1996, CBC sued Disney, claiming breach of contract and alleging that the larger company had stolen trade secrets. A jury agreed with CBC and issued a $20 million judgment against Disney, but the verdict was overturned by a U.S. district judge in St. Paul. CBC is appealing.
Despite the lawsuit, the failures of others, and the trouble selling a kids network to advertisers, Disney is at least assured one side benefit from creating the network: Radio Disney serves as a ready-made marketing tool for its parent company's theme parks, movies, toys, and clothing. Jones and her boss, McCarthy, become a bit testy when it's suggested that Radio Disney might be considered little more than an empty billboard for Disney to slap ads onto. When Radio Disney took over a New York station that had previously played Frank Sinatra, the New York Post described it as "The Day the Music Died" and reported that "Radio Disney is nothing more than a cog in the Disney promotional machine." To such charges, Jones says: "Disney is just a big part of kids' lives. I'd much rather have that than hard rock."
But questions about the commercialization of children's programming persist. While that issue has been a major concern in television programming, where the line between cartoons and toy advertisements has been nonexistent, Radio Disney is still too new to be on anyone's radar screen. Still, Amy Jordan, a senior researcher at the University of Pennsylvania who monitors children's television for its commercial content, says the network may be skirting Federal Communications Commission rules that discourage ads for products such as toys from being aired too close to programs featuring those products.
At Radio Disney's offices, meanwhile, the receptionist's desk bears an image of Tarzan, the star of the latest Disney animated feature film. The network is offering a tree house as a prize in its current promotional contest.