Disney’s ultimate product placement test

Michael Hedges July 6, 2008

Nobody – ever – said the folks at the Walt Disney Company aren’t smart. When broadcasters are ditching children’s programming because of ad restrictions, the Disney Channel is moving from pay-TV to free-to-air. Why not? The money is in the Disney products.

When first announced, in late May, that the Disney Channel would migrate from pay-TV to free-to-air in Spain, CEO Europe John Hardie called it an experiment and downplayed the possibility of doing the same in other countries. Immediately after the July 1st launch of the free-to-air Disney Channel in Spain, he seems to have changed his tune.

The Financial Times (May 28) described Mr. Hardy as “wary of predicting that the model would be copied elsewhere, but would not rule it out.” To Handelsblatt (July 3) he said, “It is quite possible that we’ll set up free-to-air channels in other European countries." From “wary” to “quite possible” in one month, Disney has its eye on the money.

Concurrent with the launch of free Disney Channel in Spain, Disney Consumer Products unveiled its new Europe targeted clothing line at a Barcelona trade show. Said Disney VP of apparel, accessories and footwear Marc Low; “Disney's iconic characters are legends in their own right, instantly recognizable and hugely popular with people of all ages around the world.”

“We are not affected by the fluctuations in the advertising market,” said John Hardie to Handelsblatt. “We rely on our channel to sell products.” Recent Disney blockbuster world-wide successes include ‘Hannah Montana’ and ‘Camp Rock.’ The Spanish Disney Channel offers US produced content with Spanish voice-tracks. Hardie indicated that independent Spanish productions would be commissioned.

Product placement on television vexes European broadcasters and media regulators. The European Commission’s Audiovisual Media Service Directive (AVMS) is due to take effect at the end of the year and will cautiously introduce product placement to terrestrial TV, but not in children’s programming or news shows. The AVMS is harder on advertising that might be seen by children on TV. Rolling out the Disney Channel free-to-air across Europe on digital terrestrial television (DTT) will hardly raise an eyebrow.

Tougher rules on advertising, sponsorship and product placement in and for children’s television are the norm. Even the American regulator Federal Communications Commission is edging toward restrictions. The result is satisfying the public’s interest in saving the little ones from Gummy Bears and other evils but it’s also drying up funding for children’s television programming; ITV (UK) recently cutting back.

Meeting last week to debate children’s TV at the annual Showcommotion conference in the UK, politicians mixed it up with producers over funding. Oft heard were complaints that broadcasters have turned from locally produced children’s fare to the dreaded Americans, largely because of cost and availability.

Shadow media secretary Ed Vaizey advocated relaxing product placement rules and advocated a tax break for producers to stimulate more interest in getting more children’s TV shows produced.

"The real question is if there are enough broadcast platforms that are commissioning," said Nigel Pickard, former ITV director of programming and now RDF Television’s director of family and children’s programming. “If there aren't enough platforms, it doesn't matter how many tax breaks you have. They should have been done 10 years ago.”