MISSION: KIM POSSIBLE FOR DISNEY COMPANY LOOKS TO TV ARM.

Byline: Greg Hernandez Staff Writer

BURBANK - The Walt Disney Co. is looking to its popular cable shows like ``Lizzie Maguire'' and ``Kim Possible'' to restore its merchandising arm that's been weighed down by declining interest in its movie tie-ins.

Speaking to investors in New York, Disney Consumer Products President Andy Mooney said Wednesday feature film-related merchandise now accounts for a mere 5 percent of Disney's products, compared to 20 percent in 2000. Disney has been challenged by rival studios with hot merchandising properties like ``Spider-Man,'' ``Harry Potter and the Chamber of Secrets'' and ``Lord of the Rings: The Two Towers.''

The company has also been vulnerable to such animated failures as the recent ``Treasure Planet,'' which has made the consistent popularity of its television properties a more sound merchandising strategy.

Mooney said his division will continue to support Disney's theatrical releases with its licensing programs, ``but we will no longer rely upon film merchandising to drive our business, and our results are therefore more sustainable and predictable.''

Media analyst David Joyce said the change in course toward television is a wise one since it is where Disney is enjoying some merchandising strength.

``It really is reflective of where they have been successful more recently,'' said Joyce, an analyst with Guzman and Associates in Miami. ``They haven't had the big blockbuster like 'The Lion King' or 'Beauty and the Beast' for a while and have had success with 'Lizzie Maguire' and other shows on The Disney Channel.''

A more crowded theatrical animation field is also a major contributing factor to the shift in merchandising from film to television properties. In 1994, Disney's animated smash ``The Lion King'' was the only animated release from any studio that year, while a whopping 17 animated films were eligible for Academy Award consideration in 2002.

The consumer products division's two core properties, Mickey Mouse and Winnie the Pooh, generate roughly $5 billion in annual sales for Disney, but Mooney said the company must continue to develop new properties in order to grow.

``Given the lead-in time required to make movies, the increased competition in film licensing was easily predictable, and we began developing more stable, enduring properties offering 365-day-of-the-year retail opportunities in early 2000,'' Mooney said.

Disney's strategy comes at a time when Viacom Inc.-owned Nickelodeon is enjoying tremendous merchandising success with toys and other products based on its popular children's series ``SpongeBob SquarePants,'' ``Rugrats'' and ``Dora the Explorer.'' The company also recently signed deals with manufacturers to create about 100 products ranging from toys to clothing for another hit show, ``The Fairly OddParents.''

Mooney said The Disney Channel is his division's key partner in property development. Lizzie Maguire merchandise was introduced in Limited Too stores last year and will expand to the Kohl's chain this year, while WalMart stores will add Kim Possible merchandise this fall. In development for The Disney Channel is Witch, a property developed as a comic book in Italy that also has merchandising potential for girls.

``As these properties develop, Disney will become an even bigger powerhouse in girls over the next three to five years,'' Mooney said.

For boys, Disney has enjoyed merchandising success with ``Power Rangers,'' which airs on ABC on Saturday mornings and is also a staple on The Disney Channel. The cable channel has also developed a series based on the lead alien character from last summer's animated smash ``Lilo & Stitch.''