WORLD: MEDIUM OF THE WEEK - Disney succumbs to advertising in Latin America

By introducing ad breaks, Disney is available to more homes, Kate Burnett writes.

Young consumers all over Latin America will note that advertising has arrived on the Disney Channel. Previously uninterrupted by commercials, ad breaks are now sandwiched between Lilo and Stitch and the Little Mermaid from Buenos Aires to Mexico City. The decision to commercialise the channel comes as part of its move from premium pay-TV to basic packages in the region.

From November 2003, ads have been showing throughout the Disney schedule in a roll-out which, Disney's Rita Ferro hopes, will have reached as many as 15 million homes by the end of its first year. The channel launched as a premium service in Spanish in July 2000 and in Portuguese for Brazil in April 2001. Until the move to basic, it had reached about one million homes around the region.

Ferro, the vice-president of international advertising sales, ESPN, Disney and Fox Kids, has to convince advertisers of the merits of Mickey and company. Many of them are already Disney converts and are merely being asked to add TV to the list of home video, theatrical and consumer product opportunities already on offer.

"We started presenting to advertisers in September, starting with our 'corporate alliance' partners, including Coca-Cola, Visa, McDonald's and Mattel, presenting the new subscription/advertising business model and explaining how it would work commercially to leverage the brand across all lines of Disney business," Ferro says. The response has been positive but she admits that she doesn't know of one Latin pay-TV channel whose commercial inventory is currently sold out.

Since she also sells Fox Kids, Ferro is quick to emphasise Disney is complementary rather than competitive. "Disney isn't just children, it's families too, whereas Fox Kids has edgier content. We want to grow budgets, not cannibalise the channels."

Considered as consummate capitalists in other areas, Disney had been defiantly anti-commercial as a broadcaster. But in Latin America, the lure of advertising has proved too tempting. "However, it is being kept to four minutes an hour at present," Ferro says, "compared with an average of six to eight on other networks."

Disney had only experimented with advertising in one market - Taiwan - before this move. Disney executives remain tight-lipped about the reasons that motivated the decision to take advertising in a whole region but they are not too hard to find. In the three years since the channel launched, Argentina - Latin America's strongest economy and one of the world's most highly cabled markets - has plunged into the economic abyss, undoing the regional plans of many international investors. What's more, piracy is still a big issue in Latin pay-TV so local economic problems have slowed growth forecasts.


Launched: July 2000 (2001 in Brazil)

Disney Channel audience: (Premium subscribers) one million homes

Cable distribution in Latin America between 15 and 17 million homes

Charter advertisers: Nestle

Number of markets in Latin America: 19, population 325 million

Competitors: children's and family channels Cartoon Network, Discovery

Kids, SET, Warner Channel, Fox Latin America

Disney offices: Mexico, Brazil, Argentina

Sales representatives: Colombia, Chile, Venezuela, Central America