As a Disney (NYSE: DIS) shareholder, the High School Musical juggernaut is important to me. It means money for the company. It means a point of distinction for Disney that adds value to its content and differentiates it from other media businesses such as News Corp. (NYSE: NWS) and Time Warner (NYSE: TWX). It means that tweens have something realistic to relate to that reflects their own days of breaking out in song while walking through school (okay, that was a joke).
But I was disappointed to hear that a reality show extension of the brand is having a tough time in the ratings. According to this blog post at The Hollywood Reporter, the show, called High School Musical: Get in the Picture, had the worst ratings on Monday night. It's some sort of competition show with a prize related to being in some sort of video in the Musical franchise.
I'm not sure of the specifics, but my main concern is that it couldn't offer any competition to CBS (NYSE: CBS) or General Electric's (NYSE: GE) NBC. Remember, Disney's big model is to take its content and spread it around to enhance the value of the company's other platforms. It's all about the synergy. Unfortunately, it didn't work this time. I honestly thought that ABC would have seen huge numbers from the kids on this one. It makes me wonder if Musical might be getting long in the tooth.
There's good news and bad news for shareholders of Disney (NYSE: DIS). The good news, according to data published in this Hollywood Reporterarticle, is that the latest Disney Channel movie, Camp Rock, achieved better ratings than the first High School Musical movie. Rock attracted 8.9 million eyeballs while the first Musical brought in about 7.7 million viewers. The bad news is that Rock unfortunately couldn't match the success of the second Musical project, which captured the attention of over 17 million viewers.
This movie is extremely important. Disney execs want to find out if they truly know the formula for creating new fads for the kids. This is definitely a strong start, although I thought the movie's ratings might come a little closer to the second Musical film since all we've been hearing about lately is how hot the Jonas Brothers act is right now. It at least should have brought in over 10 million viewers.
I don't know, maybe it's me, but I just don't feel the same kind of buzz for this project as I do for the Musical franchise. Here comes the interesting part: Can Disney grow the movie from here? That will depend on how fickle the Disney Channel audience actually is. Don't fool yourself, the powers that be at Disney are under pressure to form a suitable pipeline of intellectual properties to replace the aging Musical and Hannah Montana brands. Make no mistake, they are aging quickly, as these kinds of things don't have terribly high half-lives.
Shareholders will want to see the Jonas Brothers and Camp Rock really grow into a merchandising phenomenon in the coming months. No matter what, though, the cable channel is a great asset, and it is a strong competitor of Viacom's (NYSE: VIA) Nickelodeon network.
Disclosure: I own Disney; positions can change at any time.
Disney (NYSE: DIS) needs more and more very young stars to appeal to the teenage demographic. Its ability to deliver this group to advertisers is critical to the company's success.
Disney recently signed 15-year old Demi Lovato to a new record deal. According toThe Wall Street Journal, "For Disney, there are few more crucial tasks than finding and developing talent that appeals to 8- to 12-year-olds." The company already has big teen sensationMiley Cyrus, aka Hannah Montana.
With all of the money being made from the TV shows, records and movies using these youngsters as talent, perhaps no one is pausing to ask whether it is good for a 15-year-old to be taken out of a fairly normal family and childhood to be paraded around the world so that Disney can make money. Although no one keeps statistics on this, it seems that these kid are more likely to have drinking, drug and personality problems within a few years of when they become extraordinarily famous.
But they are used up then, and are not of any use to Disney. So, who cares?
Douglas A. McIntyre is an editor at 247wallst.com.
I knew Disney (NYSE: DIS) was an awesome licensor of its content. Still, I was pretty happy when I read the following Hollywood Reporter piece about the Mouse and its success at growing retail sales of its merchandise. Disney is looking at revenues of $30 billion at retail channels based on products bearing its logo and characters to be booked by the end of its current fiscal year. That would represent a magical double-digit growth rate of 12% if the figure is reached.
Merchandise sales based on characters and intellectual properties owned by companies such as Time Warner (NYSE: TWX), which licenses heroes such as Batman, and Viacom's (NYSE: VIA) Nickelodeon, which has had great success with SpongeBob SquarePants, don't compare.
The article rightfully reminds readers that the total amount generated in retail sales is only an indication of how seemingly popular a company's brands are in the marketplace. It does not point to the amount of revenues or profit a company books on the sales (Disney will only receive a small percentage of those sales, perhaps between 5% and 15%).
The important thing I take away from this as a shareholder is that Disney is doing a reasonably good job of milking its franchises. As one might expect, the usual suspects were cited as drivers: Hannah Montana, High School Musical, the Jonas Brothers music project, and Disney Princesses are doing the heavy lifting for Disney's consumer-products division, along with a property that continues to surprise me: Cars. Amazing that the latter remains a popular seller in the boys category.
A few days before reports surfaced of topless photos of the teen star set to appear in Vanity Fair, struggling clog-maker Crocs (NASDAQ: CROX) signed a licensing deal to market "an all new collection of footwear and accessories inspired by the smash hits, Hannah Montana and High School Musical, and the upcoming Disney*Pixar film Wall-E."
Disney spokesman Patti McTeague lashed out at the magazine for the spread: "Unfortunately, as the article suggests, a situation was created to deliberately manipulate a 15-year-old in order to sell magazines."
Cyrus took responsibility herself in a prepared statement: "I took part in a photo shoot that was supposed to be 'artistic' and now, seeing the photographs and reading the story, I feel so embarrassed. I never intended for any of this to happen and I apologize to my fans who I care so deeply about."
Whether she'll be able to recover remains to be seen. It immediately reminds me of the Rolling Stone cover featuring David Cassidy, and the interview that portrayed him as less family-friendly than he was thought to be. I'm no expert on Partridge Family lore, but I understand that the group's popularity waned following that incident.
If that happens with Ms. Cyrus too, Crocs will need to find a new savior.
Toymaker JAKKS Pacific (NASDAQ: JAKK) lost the expectations game earlier this week, my friend. Wall Street was looking for more in terms of earnings per share than the company was apparently able to deliver. Was JAKKS playing around too much these last three months? Who knows -- this business can certainly be fickle, after all.
For the first quarter, JAKKS saw its revenues increase over 5% to nearly $131 million. Earnings per diluted share came in at $0.03 if you take into account litigation expenses, restructuring charges, etc. On an adjusted basis, JAKKS earned $0.13 per share, compared to a year-ago adjusted earnings of $0.14 per share. According to Briefing.com, this was $0.06 less than what the Street wanted.
JAKKS, which competes with Hasbro (NYSE: HAS) and Mattel (NYSE: MAT), didn't have a great quarter, it's true. But I've always found this company and stock to be an interesting one, as it seems to do well over time with its various licensed products, such as merchandise based on some Disney (NYSE: DIS) brands, including Hannah Montana, and toys based on Viacom's (NYSE: VIA) Nickelodeon channel.
Whenever the stock is on a pullback, it always catches my attention (although, I should point out, I have never owned it). In addition, the balance sheet appears to be in good shape: there's a nice amount of cash and cash equivalents at $238 million, long-term debt has remained stable, and the accounts receivable line is down.
JAKKS is still forecasting $2.91 per diluted share for the current fiscal year. Given the share price as of this writing, the P/E ratio on the stock remains compelling.
Disclosure: I own shares of Disney; positions can change at any time.
JAKKS Pacific (NASDAQ: JAKK) didn't toy around during the holiday quarter -- it got serious and delivered some solid growth. For the fourth quarter, JAKKS increased its top line by nearly 20% to $285.1 million. Earnings per diluted share jumped 45% to $1.06.
The company cited various members of its toy portfolio as drivers for the Q4 season, including those joystick videogames that you plug directly into the TV -- you've got to admit, those are pretty fun, especially the one with Galaxian. Also, the company mentioned that items based on Disney (NYSE: DIS) properties turned out to be big helpers during Christmas. And, yes, they had to mention Hannah Montana -- they have a plug-and-play joystick title based on the pop princess. Sure, she's a fad, but she's still going strong for now.
JAKKS may play in the highly competitive world of toys, but it's definitely doing all right, even as it fights it out in the trenches with biggies Mattel (NYSE: MAT) and Hasbro (NYSE: HAS). It focuses on building little unique niches for itself, and it knows how to effectively work the licensing game; in addition to Disney stuff, JAKKS makes products based on Viacom's (NASDAQ: VIA) Nickelodeon characters and Neopets universe. The stock doesn't look too expensive here, so it's worth a look if you are looking to gain some exposure to retail toys, although I'd probably keep it on a watch list in anticipation of a pullback.
On RottenTomatoes.com, recent Warner Brothers release Fool's Goldearns a rating of 10% (out of a possible 100%) and a consensus review: "Full of humorless gags, a predictable storyline and flat performances." Nearly 750 users of The Internet Movie Database give the stock a grade of 4.8 on a 1-10 scale.
And still, the romantic-adventure led by Matthew McConaughey and Kate Hudson (and featuring Malcolm-Jamal "Theo Huxtable" Warner) scored big at the box office, drawing nearly $22 million to nab the number-one spot for the typically slow weekend. With Valentine's Day on Thursday, the Time Warner (NYSE: TWX) unit is hoping Fool's Gold continues to lure couples into the theaters this upcoming weekend (unless they place a lot of weight in Internet reviewers).
Box-office expert Paul Dergarabedian told The Wall Street Journal that the release date is shrewd marketing indeed. "A great marketing campaign, two appealing stars, and reviews be damned... heading into Valentine's week, it's sort of a natural."
Elsewhere on the charts, Martin Lawrence vehicle Welcome Home Roscoe Jenkins opened at number 2, pulling in $17.1 million. In its second week, The Walt Disney Company (NYSE: DIS)'s Hannah Montana & Miley Cyrus: Best of Both Worlds Concert (phew) took in $10.5 million, moving into third place after topping the box-office charts last weekend.
And in case you missed it, The Hottie and the Nottie, starring Paris Hilton, was released in 111 theaters and earned an average of $225 per site, for a pitiful total draw of $25,000, according to estimates. Write your own joke here.
The Walt Disney Company (NYSE: DIS) had a great weekend -- a lot better than Tom Brady et al.'s weekend, to be sure. I don't care about football, but I do care about Disney, since I am long the stock. Its Hannah Montana & Miley Cyrus: Best of Both Worlds concert film grossed about $29 million for the three-day frame. Not too shabby.
I liked the original concept for the release of this film: get in and out, quick and dirty, with a one-week release schedule. Of course, I knew in my gut that, if successful, the run would be extended (I think everyone's gut probably told them the same thing). According to reports, the film will be allowed an extra week of play.
As a Disney shareholder, I obviously want profits maximized to the fullest extent conceivable. But, I wish Disney acted a bit edgier with this one. The company should have released it just for one weekend, taken in the dough (I presume this was a pretty low-budget affair), and then dumped the film on DVD and pay-per-view immediately on Monday. It is time to find out once and for all if near day-and-date release patterns truly can work for major projects. Remember, there's been a lot of buzz in recent years about cutting costs by simultaneously releasing movies to multiple platforms; I think this would have been a great test case for the media industry.
The Associated Press reports that tests on 1,200 children's products -- most of which are available for sale -- revealed that 35% contain more lead than allowed by federal recall standards used for lead paint. Lead poisoning can cause irreversible learning disabilities and behavioral problems and, at very high levels, seizures, coma, and even death
Of the toys tested from the shelves of Wal-Mart Stores Inc. (NYSE: WMT), Toys "R" Us and Babies "R" Us, here are three that had particularly high lead levels:
This post is part of our Hottest Products of 2007 feature. Also check out our other Hottest Products of 2007 posts and let us know which product you think is the greatest thing since sliced bread.
Maybe I am getting old, but when I hear the name Hannah Montana, I think stripper, not wildly popular Disney (NYSE: DIS) Channel show.
But as countless parents of countless girls will tell you, Hannah Montana isn't just a TV show, it's a lifestyle dedicated to the character played by the spunky 15-year-old Miley Cyrus. There are Hannah Montana DVDs, books, cake decorations, and toys. Oh, let's not forget a concert tour where tickets sell for several hundred bucks a pop. A woman who joined the official Miley Cyrus fan club in the hopes of getting tickets before they went on sale filed a lawsuit after she wasn't able to get them.
Before I watched my first Hannah Montana episode, I decided to check in with two experts: my nieces. "It's the best show on the Disney Channel," said Danielle, 11. "Miley Cyrus is a great actress," said Allison, 9. With those endorsements, I took my first steps into a world I knew little about.
Mothers, you wouldn't let your sons grow up to be cowboys, would you? That's how the song goes, anyway.
So why would you let your daughters grow up to be Hannah Montana? Apparently, it's too late for that. Now there's a song that should be on the top of the charts these days.
Given the tween-beat frenzy around the fictional Walt Disney (NYSE: DIS) star, it probably should come as no surprise that "Hannah Montana costume" ranks at the top of the ten most searched-for Halloween costumes for the week ended Oct. 20, according to Hitwise.
To those of you with younger females in the house, you may know the Disney television show Hannah Montana. It features the real-life daughter of country singer Billy Ray Cyrus as a normal teenager that has a secret double life as a Hillary Duff-esque teenie-bop singer. This past Saturday morning, tickets were to go on sale at 10 a.m. CDT for tickets to a December Hannah Montana concert.
To girls in the eight-to-15 age bracket, this is gold stuff. Problem is -- no tickets were actually available at 10 a.m. when they were supposed to go on general sale. Using a combination of live, box-office presence, wireless Internet website checking and old-fashioned box-office phone calling, it was pretty clear to probably thousands of local parents here that no tickets would be for sale.
As always, the problem with high-profile concerts and appearances is the scam-laden "ticket broker" industry. These opportunists somehow manage to scoop up all tickets to major events (especially high-demand children's events) before general public ticket sales even happen, then spread them all over the web at 400% to 1000% markups. Some parents don't care and will do anything to buy these tickets, while level-headed ones become incredibly annoyed that ticket travesties like this happen, and consistently.
It doesn't seem that long ago that Hilary Duff was The The Walt Disney Company (NYSE: DIS) Channel's shining -- well more like blinding -- star. Hilary had it all: talent, looks, and an innocence that emanates only from Disney Channel stars. But once Duff's 65-episode Disney series Lizzie McGuire peaked in 2001, she went on to other things, including a 2003 album that reached No. 1 on the Billboard 200 (the project sold 3.7 million copies), an Elizabeth Arden fragrance, a clothing line, and another album that debuted earlier this year. What that meant for Disney was that Hilary was out. It didn't take long for someone else to move in -- Miley Cyrus.
You're probably wondering why that name sounds so familiar. Well, it's because Miley Cyrus is the daughter of country singer Billy Ray Cyrus, best known for his top 40 hit "Achy Breaky Heart." Not only are both father and daughter singers, but they are also actors and show off both of their talents, together, on Disney Channel's new hit show Hannah Montana. The show premiered with 5.5 million viewers and 2.3 million tweens (kids 9-14) and became basic cable's top series in the tween demo in its first seven weeks. On the show, Miley plays a teenager trying to lead a normal life while hiding her secret, alter-ego rock star persona Hannah Montana from her classmates. Billy Ray plays her father (you can't get anymore true-to-life than that).
How are Miley and Hannah doing? According to Fortune, "The Disney Channel Hannah Montana series hasn't just been a huge hit with kids and 'tweens; it's become a ubiquitous franchise." The 2006 Hannah Montana soundtrack entered the Billboard 200 at No. 1 and has gone double platinum, with 2.2 million copies sold since October. Hannah clothes are already the No. 1 tween brand at Macy's, and her new double-CD set that serves as a soundtrack and showcase for the actress, Hannah Montana2: Meet Miley Cyrus, has outsold American Idol winner Kelly Clarkson's new album, both released June 26, by 34,000 copies.
As if that isn't enough for a 14-year-old, Miley's The Best of Both Worlds tour kicks off October 18 and features songs that showcase Miley Cyrus as an artist as well as Hannah Montana. This best of both worlds concept seems to be a smart move for a budding star, since she is establishing her career as a solo artist (Miley Cyrus) as well as a Disney star (Hannah Montana). In a few years, she may be able to drop the whole Hannah persona and continue a singer/actress career as Miley. But for the time being, It makes you wonder if there will be any room in toy and department stores for anything without the Hannah brand-stamp come holidays. Looks like Disney Channel has become nothing more than Miley's kingdom.
Toymaker 
Maybe I am getting old, but when I hear the name Hannah Montana, I think stripper, not wildly popular 
Mothers, you wouldn't let your sons grow up to be cowboys, would you? That's how the song goes, anyway. 
To those of you with younger females in the house, you may know the Disney television show 
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Is the market always right?
Comfort Zone Investing: How this all might play out
