Mickey’s Mags : Disney Parlays Its Marketing Strength, Family Franchise Into Publishing Ventures

Think of the Walt Disney Co. and theme parks, Mickey Mouse and big box-office movies come to mind. But the Burbank-based entertainment giant is also a budding magazine publisher, and despite the long odds against new publications, Disney is using its marketing savvy and financial muscle to keep growing its 4-year-old magazine group.

With two start-up publications, Disney has turned to themes that it knows how to exploit perhaps better than anyone: kids and families.

Its first magazine, the digest-sized Disney Adventures for kids, was launched in 1990 and has soared to nearly 1 million in circulation. Family Fun, acquired by Disney in 1991, now has a 615,000 circulation of mostly baby-boomer parents. Its third magazine, Discover, a slick science publication that Disney acquired in 1991 from now-defunct Family Media Inc., has a circulation of 1.03 million.

Now Disney is planning its fourth publication, Family PC, in a joint venture with New York-based Ziff-Davis Publishing Co., a major computer-magazine publisher.

Granted, magazines are still a minuscule part of Disney’s $8.5 billion in revenue. Disney Magazine Publishing has only 130 employees and is so small that analysts who follow Disney say they can’t--or don’t bother to--estimate its revenues or profits. Disney doesn’t break out such figures publicly, but based on total circulation and subscription and advertising rates, annual magazine revenues probably don’t exceed $90 million. That’s about as much as one hit Disney movie might reap in domestic ticket sales.

“In terms of Disney, we’re a gnat,” said John Skipper, the former US magazine publisher and Spin magazine president who was recruited in 1990 as a Disney Co. vice president and head of the magazine group. “Actually,” he added with a laugh, “we might be a fly by now.”

Gnat or fly, it’s becoming clear that in magazines, Disney has found yet another way to cash in on its franchise. The monthly Disney Adventures unabashedly plugs Disney movies and TV shows, and an upcoming cover is themed around Disney’s NHL hockey team, the Mighty Ducks. Next to features on hiking in Glacier National Park and other family getaways, Family Fun runs ads for Disney resorts. The Disney Channel on cable TV has had “Discover” science programs.

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Such self-promotion has engendered harsh critiques. But even critics admit that Disney does it no more blatantly than some others in the cutthroat magazine business these days. Disney Adventures “a little bit crosses the line” because it’s hard to distinguish editorial from ads, said Samir Husni, head of the magazine program at the University of Mississippi and publisher of the Guide to New Consumer Magazines.

But it doesn’t go as far as magazines based on GI Joe and Barbie dolls, and Disney Adventures also mixes education with the entertainment, Husni said. Disney Adventures, with its hodgepodge of comics, snippets on teen-age idols and features on subjects ranging from snakes to Chelsea Clinton’s favorite food, “is a nice complement to the film and television business.”

As far as Disney is concerned, magazines aren’t merely promotional tools, they are to become profit-generators. Take Discover, which was sold by founder Time Inc. to Family Media in 1987. The monthly magazine was profitable under Family Media, Skipper said, and he liked the way it made technology accessible to non-scientists. But he also observed that the magazine had a tired look and lackluster ad sales.

After Disney acquired Discover for an undisclosed price, Skipper overhauled its design, hired a new business staff, banned tobacco advertising and limited direct-mail ads--previously Discover’s mainstay. The result: Discover now attracts big national advertisers such as computer-chip maker Intel Corp., Aetna Casualty & Surety Co. and Toyota Motor Corp. The magazine’s 1993 ad revenue zoomed 42% to $13.1 million from $9.2 million in 1992, according to Publishers Information Bureau Inc. in New York.

More problematic in terms of ads is Disney Adventures. Skipper said he’s still having a hard time convincing potential advertisers that they can reach kids through a medium other than television. Nonetheless, he expects Disney Adventures magazine to turn the profit corner this year, which would be a rare feat for such a young publication.

Disney Adventures was conceived more than four years ago when Michael Lynton, then director of business development for Disney’s consumer products division, took note of Topolino, a kids magazine in Italy. Topolino, which means “Mickey Mouse” in Italian, consisted mostly of comics but was a raging success. It had been put out by an Italian publisher for many years under license from Disney, and Disney had just taken the license back.

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Lynton proposed starting a similar publication here, but with fewer comics and more features. At first, it was seen as a way to promote the Disney Channel’s afternoon cable TV programming.

But the concept quickly broadened to encompass sports, celebrities and films--even those from other movie studios. Similar to strategies employed at Sports Illustrated for Kids and the new Nickelodeon magazine, Lynton’s bet was that kids would forsake video games and pick up a magazine if it had ready-made brand identification and didn’t read like a textbook. The editor of Disney Adventures, Tommi Lewis, said she stays in touch with her young readers by “talking” to some of them on the America Online computer network.

“Sports Illustrated for Kids, Nickelodeon and Disney Adventures don’t look like school. They’re exciting, fun and cool,” said Lynn Lehmkuhl, former publisher of Disney Adventures who is now publisher at Nickelodeon magazine. “It took companies who had experience communicating and connecting with kids in a commercial way.”

Family Fun, published 10 times a year by Disney, is also expected to become profitable later this year and is “our best ad success,” Skipper said. Some issues have had an impressive 100-plus pages of ads from such companies as Quaker Oats Co., consumer products giant Procter & Gamble Co. and Apple Computer Inc.

Started by former U. S. News & World Report executive Jake Winebaum and acquired by Disney after its second issue, Family Fun veers from the old formula of aiming at new mothers by focusing on activities for families with kids age 3 to 12. “That magazine talks to me in a way that publications like Parenting and Parents do not,” said Tony Silber, executive editor at Folio, a Stamford, Conn.-based magazine for the magazine industry.

Still, survival in the magazine business is no easy task. Of the 789 magazines started last year, half will die within a year, Husni said. After four years, fewer than one-third will survive. The costs can be daunting: Operating budgets for each of Disney’s publications likely run well in excess of $10 million a year and may be closer to $25 million, observers say.

With so many magazines competing in a soft ad market, publishers must rely increasingly on subscriptions and newsstand sales. To try to boost newsstand sales, Skipper said Disney pays a premium to place Disney Adventures in the “expensive real estate” of magazine racks next to supermarket checkout counters. Annual subscriptions are $19.95 for Disney Adventures, $14.95 for Family Fun and $29.95 for Discover.

Lynton, now head of the Disney publishing division, which also includes books and art publishing, argued that most new magazines fail because they are “underfinanced, not terribly well thought out or don’t build on an existing franchise. With Disney, we had those things pretty well licked.”

Disney has “a good circulation story,” said Jacqueline Leo, editor in chief of Family Circle magazine, published by the New York Times Co. “The question is always renewals. It takes about five years to see if they’ve really got something there.”

In the meantime, Disney is forging ahead with plans to start Family PC in September. The new magazine, with Winebaum as publisher, is aimed at the 15 million families with kids and home computers. Skipper said the idea is generating interest from potential advertisers, including computer and software firms.

Skipper added that he plans to start or acquire more magazines themed around kids, families or technology. Ideas in the works, according to Folio magazine, include a kids’ version of Discover and a Family Fun spinoff themed around consumer electronics and video games.

But for Disney, more challenges lie ahead as new competitors mine the same markets that Disney has staked out. About a year ago, Rolling Stone Publisher Jann S. Wenner started Family Life, which, like Disney’s Family Fun, is aimed at boomers with kids and is also enjoying fast circulation growth. Wenner Media Inc. Senior Vice President Kent Brownridge maintained that “our magazine has more of a full range of activities. . . . Theirs is more restricted to fun things to do, like trips to Disneyland.”

And Family PC will have a rival even before its first issue hits the newsstands. Home PC, published by CMP Publications in Manhasset, N. Y., is being launched in May. A decade ago, home computing magazines were tried and failed, but many say it’s an idea whose time has finally come. Before long, “there will be a lot more,” Home PC Editor in Chief Ellen Pearlman said.

Said Husni: “Once one publication breaks ground, then there are more copycats than you can ever imagine.”