July 11, 2007 / 11:08 PM / 10 years ago

UPDATE 1-US record labels follow Disney into "tween" market

5 Min Read

(Adds quotes from Arista executive)

By Sue Zeidler

LOS ANGELES, July 11 (Reuters) - Faced with a protracted sales slump, U.S. record labels are tapping into the tween scene after Walt Disney Co(DIS.N) became the unlikely hitmaker of the year with chart toppers like "Hannah Montana" and "High School Musical."

"A lot of entertainment companies are trying to figure out how to replicate Disney's formula and crack the tween code since it's one of the market's few sweet spots," said entertainment lawyer Fred Goldring.

After mostly ignoring tweens, kids between the ages of 6 and 12, music labels from Sony BMG Music to Warner Music Group WMG.N and EMI Group Plc EMI.L are signing or distributing tween acts. Many are trying to leverage these acts with TV deals to match Disney's success, people in the industry said.

"I predict in the next 12 months, you'll see a lot of these companies chasing the tween market, and I think they'll do it pretty well," said Goldring, noting that tweens and their parents are among the consumers still buying CDs at a time when many music fans are increasingly downloading songs from online stores like Apple Inc.'s (AAPL.O) iTunes.

Tweens overall spend about $51 billion a year in the United States, while family members spend another $170 billion on them, according to Alloy Media + Marketing. Getting a piece of this pie would help the U.S. music industry, which has seen annual sales drop 21.2 percent since 1999 to about $11.5 billion.

But Disney is a tough act to follow.

"I'd be surprised if labels don't try, but they don't have the multiple platforms," said David Agnew, general manager of Disney Music Group. "Disney Channel has been an incredible incubator and that's something our competitors may never have."

Television network Disney Channel features a near-constant flow of videos that promote its stars to its tween audience.

"Disney Channel is a real marketing juggernaut," Goldring said. "Parents buy these records for their kids and a lot of it has to do with the nag factor," he said.

The strategy has spawned hits like TV movie "High School Musical," which produced the top-selling CD of 2006 and the "Hannah Montana" series about a schoolgirl who has a secret nocturnal existence as a famous musician.

Last week, 14-year-old Miley Cyrus, star of "Hannah Montana", became the youngest artist to have two No. 1 albums on U.S. charts within a year. Disney this week released another new CD by sister duo Aly & AJ, another Disney Channel staple.

"There's an incredible future with tween music," said Deb Klein, general manager for independent label Firm Music, who signed a still unnamed tween duo -- two sisters ages 11 and 13 -- to a multi-platform deal.

"We'll have enough material to release an album in the fall, but we're trying to air a pilot as well," Klein said.

EMI will distribute the duo's music and has also distributed Disney's tween repertoire overseas with massive success, EMI spokeswoman Jeanne Meyer said.

Arista said it has already had two radio hits with Paula DeAnda, who was signed at age 16 last year by music mogul Clive Davis. Arista is part of Sony BMG, a Sony Corp(6758.T) joint venture with Bertelsmann AG BERT.UL.

"The teen audience is an incredibly reactive audience with disposable income that has to be served," said Scott Seviour, senior vice president marketing for Arista.

"We're in a unique time in the business. Paula could transcend into movies and TV, but you also have to be careful of overexposure," he said.

Sony will also release this fall the soundtrack to the "Naked Brothers Band," a Viacom IncVIAb.N Nickelodeon series that follows the ups and downs of a kids' rock band.

Warner Music Group CorpWMG.N signed "High School Musical" co-star Ashley Tisdale in a move an executive said signaled a change from the label's usual vision.

"At one time, our promotion guys had a hard time getting mainstream radio to pay attention to the tween acts, but now they realize it's not just kiddy stuff," said Disney's Agnew.

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