Mickey Mouse Record Labels

It’s really poetic justice that the Walt Disney Company has become such a great example of how to run a record company.

In this era, the big four and even independent labels are beleaguered by a generation that is downloading music – legally and illegally. These labels are also suffering from a decline in CD sales. As much as they try, they can’t stem the decline.

The majors have taken solace in selling ringtones for fun and profit and relying on publishing rights. Downloads don’t seem to be the cure for declining CD sales.

Over at Disney – not a major label – things are looking up (again).

Their record company targets “tweens”, the generation before Generation Y. They target them very well.

Miley Cyrus – their Hannah Montana on its Disney Channel hit TV show -- is also their top recording artist. Of late, she is also the industry’s top recording artist with all due respect to rap, hip-hop and other “cooler” artists.

“High School Musical”, Cyrus’ big soundtrack album has sold four million units according to Nielsen SoundScan. The “Hanna” soundtrack sold 2.7 million. Hilary Duff’s “Metamorphosis” 3.9 million. Ally & AJ’s “Into The Rush” 800,000. Don’t forget the Cheetah Girls.

These current or previous Disney Channel stars are hitting platinum and gold without the help of Top 40 radio whose formula is still to skip the tweens for the teens and young adults – perhaps out of fear of media buyers who don't target them.

Oh, did I mention that the lyrics are clean? No Tip Drill on Disney’s record label.

The Jonas Brothers are being worked now. They do guest appearances on Hannah Montana and they are the number three-requested act on Radio Disney’s 43-station radio group according to the Journal.

Did I say radio?

When the rest of the industry was consolidating, Michael Eisner, the brash former CEO of Disney, resisted the temptation to buy expensive, over-priced radio stations. He just bought cheaper, crappy little AMs. These crappy little AMs are driving its music business today.

You know Clear Channel, CBS and the others are not going to play Miley Cyrus, right? Disney knows it, too.

Disney knows its music market a lot more than the majors.

The Wall Street Journal reports 10-14 year olds spent $875 million on CDs and song downloads last year (RIAA figures).

Disney knows how to do merchandising with the best of them so you can see how they achieved the success that they’ve gotten.

1. They concentrate on one market (tweens).

2. They have TV covered (Disney channel).

3. They get airplay from their Disney radio stations and eliminate the middleman.

4. They have a comprehensive merchandising plan.

Radio could have done this.

Record labels could have done this.

Both industries lost their focus and got caught looking the other way.

To Wall Street.

Disney performs for Wall Street by never losing focus on Main Street.

There are many lessons and you can also tell me what they are. I just remain amazed at how in our sophisticated world of music and media the Mickey Mouse company makes the others look like – forgive me, please – Mickey Mouse operators.

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