‘Hooked on Phonics’ Seeks New Role in Schools : Education: Sales of the reading system have boomed, although some critics caution it may not lead to genuine literacy.

As a teacher holds five flash cards in front of a first-grade class in Inglewood, hands fly into the air. In her eagerness to be called on, a little girl named Stephanie jumps up from her desk and runs to kneel in front, waving her hand furiously.

After the child is recognized, Stephanie slowly pronounces each word on the cards, saying, “Read . . . the . . . book . . . out . . . loud,” as her classmates applaud.

But these first-graders are not learning to read with children’s books. As part of a pilot program in the Inglewood Unified School District, the instruction tool is “Hooked on Phonics,” a controversial reading method that uses cassette tapes of simple words set to music, flash cards and workbooks to teach reading phonetically.

In this case, the class is actually being taught by a Hooked-on-Phonics employee while their usual teacher, Delores Bryant, sits on the sidelines, encouraging the students to participate in the program.

“I’ve never seen them so enthusiastic. . . . The rhythm, the music, the patterns are catchy, so the kids pay more attention,” said Bryant, who has taught for more than 20 years. “The ‘Hooked on Phonics’ people came in with everything. We aren’t paying a thing. We’re just happy to have them.”

And Gateway Educational Products, the Orange-based company behind “Hooked on Phonics,” is happy to be there. It is counting on the Inglewood project to provide data that it can use to help sell the program to schools across the nation.

The company, founded in 1985 by John Shanahan, a former music jingle writer, is also venturing into Britain and has plans to eventually introduce a Spanish-language version of “Hooked on Phonics.”

Also scheduled is the first “Hooked on Phonics” store, a retail outlet and learning center scheduled to open in Inglewood in December. “When we show the extraordinary effects of the program on these kids, the parents are going to demand it,” Shanahan said of the company’s ambitious plan.

Although growing rapidly, Gateway had a rough beginning. An advertising watchdog group found fault with its claims, forcing the company to change its promotions. Educators questioned the validity of its instruction methods--some still do. But the company argues that it has addressed most of the concerns.

“Hooked on Phonics,” now in its seventh edition, has slowed down the music on the cassette tapes included with the basic program and revised other tapes. The company beefed up its package with SRA Reading Laboratories stories, published by a division of Macmillan-McGraw Hill.

And Gateway now has an advisory panel of 10 educators--with members from the California Department of Education, the University of Washington and San Diego State University--to review its reading program and assist in making changes.

The basic “Hooked on Phonics” package, sold for $199.95, includes five workbooks, 12 cassette tapes, 380 flash cards and a set of 100 SRA power-building stories, separate from the workbooks.

Gateway says its revenue has rocketed from $100,000 in 1987 to $98 million last year, mostly from sales of “Hooked on Phonics” programs. Shanahan said the privately held company, which employs more than 300, will surpass $100 million in revenue this year.

The 52-year-old Shanahan, a Newport Beach resident, said he got his inspiration for “Hooked on Phonics” from his son, who became ill on the days he was scheduled to read aloud in class. Reaching back to his own memories of phonics as a student in Boston, and with experience as a jingle composer, Shanahan said he wrote and recorded catchy lyrics on tapes to help his son learn to read.

Promoting the program as a means to help meet inner-city educational needs, the company recently joined forces with Amer-I-Can, a self-esteem program for gang members and ex-convicts developed by actor and football Hall of Fame running back Jim Brown.

“When Shanahan came up and sat in my living room, I thought, ‘This makes sense,’ ” said Brown. “Shanahan has a vision. I want Amer-I-Can to be in every school in the country, and he wants “Hooked on Phonics” to be in every school in the country. It was a perfect marriage.

“A lot of young men in crime can’t read. It creates a lack of self-esteem and no options for employment,” Brown said. “What else can you do but become a criminal?”

Shanahan said the company will eventually alter some of its tapes and workbooks to incorporate the Amer-I-Can positive self-esteem message. It will target reading packages for certain groups, such as people in prison.

Some educators say Shanahan’s program is not the kind of help America’s inner cities need.

Doris Roettger, president of the International Reading Assn. and a longtime critic of “Hooked on Phonics,” said that sounding out words does not equal reading comprehension. She tells of one small boy who was taught to read with the phonics method and could sound out everything, but couldn’t understand what he read.

“He hated reading,” she said. “People say if you sound out the words you can read, but that just isn’t true. You have to put it into context and look at the meaning.”

The company has managed to quiet some of its earlier critics. Jeanne Chall, a Harvard University education professor who directed a 1991 critical study of the program, said the company did make some changes--namely the addition of the Science Research Associates reading component--that addressed concerns raised in the study.

However, Literacy Volunteers of America--a group dedicated to increasing literacy through a national tutoring program--remains critical of “Hooked on Phonics,” saying the $199.95 price is too high for many children targeted by the company and that the program holds out false hope to adults that sounding out words and memorizing word lists will translate into reading competence.

“Working in isolation with tapes and flash cards will almost certainly result in yet another failure for these adults,” said Beverly Miller, a Literacy Volunteers spokeswoman.

With an estimated 40 million illiterate adults in America, Shanahan said, educators would do better to re-examine their own methods than criticize “Hooked on Phonics.” However, he said every time educators criticize “Hooked on Phonics,” sales of the program actually increase.

“The people look at the educational system in this country and they wonder why we’re being shot down by the system,” said Shanahan. “If the educational system hadn’t created this vacuum of illiteracy in this country, we wouldn’t be here.”

Eric Fisher of Zanesville, Ohio, considers the program a success. The 28-year-old said he bought “Hooked on Phonics” two years ago after several failures with other reading programs.

“The schools just passed me through; they could never figure out why I couldn’t read,” Fisher said. After using “Hooked on Phonics” daily for two months, Fisher said, he went from a third-grade reading level to a 10th-grade level. He then returned to night school and now runs a locksmith company.

“When I would use the program, I would sit alone and feel about two inches tall,” Fisher said. “But it was better than being in a room full of people. Now I have my own business and my own apartment.”

In Inglewood, some school officials say at least 40 parents, sensing reading skills improvement in their children, have asked where they can buy the program.

“ ‘Hooked on Phonics’ is geared for this generation of kids, whose parents may be unemployed or are too tired from work to read to them every night,” said Betty Steward, principal of Highland Elementary School in Inglewood. “My concern is that the parents who buy this might not know how to use it.”