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THE MORNING BUZZ: Disney's Borrowed Magic

13 Aug, 2002 By: Holly J. Wagner

It's no secret that HBO is rapidly becoming the top of the series TV heap. The cable channel keeps racking up nominations and awards for its original series like "The Sopranos," "Sex and the City," "Oz" and Emmy's prom date for the year, "Six Feet Under." I like all of those shows – all distributed by Warner Home Video, by the way, and I think destined to turn in good home video numbers based on word of mouth from subscribers.

I'm hooked on another HBO show right now. It's called "The Wire" and it's about the cops and drug dealers in a Baltimore housing project. It's interesting because, unlike detective shows that unravel crime scenes or clues after the incident, it's a cat-and-mouse game that lets viewers see bits of strategy on both sides. It has that grim soap opera quality its HBO predecessors have, the character involvement that makes you tune in each week to see what happens next. Already I can't wait for the first season DVD set.

HBO's latest move to the mass market is a deal with sister company Warner Books, to publish a cookbook called The Sopranos Family Cookbook: As Compiled By Artie Bucco. The collection of southern Italian style recipes peppered with advice from series characters promises to spread the brand where it has never been before. HBO is reportedly planning a gourmet food line under a deal with Halifax Group as well, to include marinara sauce, pasta, salad dressing and frozen pizza. Sort of Tony Soprano meets Emeril LeGasse.

While Warner/HBO is kickin' it up a notch, it's pretty interesting to me that sagging Disney (Geez, their stock dipped below $14 yesterday, even after an unexpectedly strong two weeks of box office on Signs) -- heretofore the master of Branding and Brand Management -- is striking a deal for television programming from the HBO studios. Disney cousin ABC's prime time ratings are in the dumper and, to hoist them up, the Mouse House is knocking at HBO's door.

No doubt the Disney execs are riveted to the same shows as the rest of us. They know where the weekly winners are coming from. It's smart to go there looking for booty they can bring home to their own TV empire.

I think much of Warner's and HBO's growing success (which lately is the tentpole in parent company AOL Time Warner's descending stock valuation) is their eagerness to embrace digital media. Warner (not entirely for altruistic reasons) led the parade to DVD. Hot title DVDs from Warner-distributed New Line Home Entertainment hit the shelves complete with InterActual's media player software. Disney, by contrast, has dragged its feet and in some cases even works to obstruct the progress of digital technology – although the Buena Vista Home Entertainment arm now rightfully has embraced DVD with such elaborate and well-made releases as the “Toy Box” collection of Toy Story movies.

Maybe the lion's share of the Mouse's anti-copying offensive is a smokescreen – a scapegoat for a loss of vision and behind-the-consumer-curve adoption of media technology. Maybe it's easier to point fingers at shadows (nobody at Disney has yet explained how its products get into the online stream before they make it into theaters) than to rethink a strategy that doesn't work so well any more.
Disney's formula has relied, for many decades successfully, on branding the same characters across theme parks, movies, merchandise and grocery items. Disney succeeds where it can control the environment, so Disney fights to control as much of the environment as possible. It is a company utterly unprepared for the wild and wooly frontier of the Internet.

Back in the 50s and 60s, Walt Disney took his company to the top on his vision. He embraced technology and looked for ways to be the first to harness it for entertainment and profit. I think the company's recent performance illustrates the leadership vision now.

Too bad for Disney – and good for Warner/HBO.

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