Disney site music to parents’ ears?

Looking to profit directly from the growing market for music downloads, Disney (DIS) has launched an online store for kid-focused singles, albums and music videos.

"This is the first direct-download service (Disney) has done," says Chris Heatherly, the consumer products unit's head of electronics.

Disney Mix Central (disneymixcentral.com) initially will offer about 1,500 songs and 19 music videos from Disney stars such as Hannah Montana and The Cheetah Girls.

"It's a (Disney) branded line of music so parents know that it's safe," Heatherly says.

"In these big music stores, kids can have access to safe content," Heatherly says. "But they can have access to inappropriate content, too."

Disney already sells downloads for kids, such as episodes of Disney Channel's That's So Raven, along with ABC shows and other material on outside outlets, such as Apple's iTunes Store.

Pricing for Disney Mix Central's kid-friendly selection is similar to iTunes: singles for 99 cents, music videos for $1.99, and albums — such as the soundtrack from High School Musical— begin at $9.99.

The online store is set up for kids to browse and parents to pay. A system coming this year, however, will let parents pre-pay for credits kids can use.

Disney is looking for direct sales as online digital music revenue is expected to mushroom to $1.7 billion this year, up 55% from 2006, according to eMarketer.

Disney Mix Central downloads will be compatible with most devices that support Windows digital rights management, which means no iPods.

It certainly includes, however, Disney's Mix line of players, such as the Mix Stick MP3 player and Mix Max video/MP3 combination. Heatherly says Disney hopes the site spurs sales of those devices. Also compatible are most other non-Apple MP3 players.

Since Robert Iger became Disney's CEO in 2005, he has made technology initiatives a priority. He stressed that again during a Tuesday call with analysts after Disney reported its quarterly earnings.

He pointed to growing sales of Disney TV shows on iTunes (23 million downloads since the service began in late 2005) and nearly 2 million of the movies available since last year.

Disney reported net income of $931 million, or 44 cents a share, a 27% rise over the period last year. Analysts surveyed by Reuters Estimates expected 37 cents. Revenue rose 1% to $8.07 billion, shy of analysts' expectations of $8.1 billion.

Shares closed at $36.55, up 1.4% before the earnings report.

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