Disney Kids Networks Profits By Sponsorship Model
Disney Channel still racks up big viewership totals among kids and teens. As a sponsorship-driven network, devoid of the usual slate of 30-second commercials, it continues to push a different marketing message to TV advertisers.
Of Disney's now core group of kids' networks comprised of Disney Channel, Disney XD, and Disney Junior, Disney Channel and Disney Junior still maintain the model of running selective 15-second sponsorship messages -- commercials that end with a TV marketer noting, more or less: "it is a sponsor of the following program." Disney says no more than two of these messages appear in a given hour.
"We will continue the sponsorship model," says Rita Ferro, executive vice president of Disney Media sales and marketing. "It works for us. We have been able to expand our list of advertisers."
Some recent sponsors include Best Western, Chrysler, Nissan and Hasbro. These sponsorships are a piece of a broad range of multiplatform media that Disney owns. Even then, Disney is selective. "There are a lot of brands that want to work with us that are not the right fit," Ferro says.
A key sell for Disney comes from touting heavy co-viewing in prime time, where a parent -- mostly a mother -- watches with their child. Disney Channel says it is the No. 1 channel for moms watching with kids in prime time.
All this has helped Disney expand into new, non-kids endemic categories: automotive, consumer product companies, travel/ hospitality, toys and food.
What are the hurdles for Disney with sponsorship? "It's really getting people to understand the value of sponsorship integrations," explains Ferro. "Sometimes, advertisers look at sponsorship and don't think it is as effective as the 30-second spot. When you have categories that only consider the 30-second spot and the cheapest price, sometimes that's a challenge."
Although Disney Channel and Disney Junior continue with their sponsorship model, Disney XD -- a channel that targets boys -- is fully ad-supported.
Overall, Disney sees the kids' TV market at around $1 billion, says Ferro. The current kids' TV marketplace continues to spike higher with a short-term scatter market, and double-digit-percent CPM viewer increases over the upfront market of a year ago. Ferro believes the full brunt of deal-making for the 2011-2012 upfront market will move in late May/early June.
"It has been a very strong scatter marketplace," says Ferro. "There have been big amounts of money from the toy manufacturers, which you don't typically see. This time of year, you typically don't see business as strong. That why we are getting excited." She adds that entertainment advertising business remains strong: video games and a number of kids-targeted theatrical movies.
One remaining problem area for the kids' TV network is the food category. "You are seeing many companies reformulate," says Ferro. "A lot of companies have taken to heart the new guidelines. For us, we have seen a lot of milk and bread companies, such as Sara Lee."