M-I-C-K-E-Y Mouse Teaches Chinese English, Love for Disney

Five-year-old Wei Ziyun chose “Robot” as his English name after the title character in the Walt Disney Co. (DIS) movie “Wall-E.” Now a Disney learning center in Shanghai is teaching him how to spell it.

“I want to come here every day,” he said after one of his twice-weekly lessons at a Disney English classroom in the Chinese city’s Pudong area. “It’s fun to learn English.”

“Robot” and his classmates are also learning to love Disney characters as the world’s biggest theme-park operator builds the $4.4 billion Shanghai Disney Resort, scheduled to open in five years. Teaching English to children in the world’s most populous nation has proven so lucrative that Burbank, California-based Disney has tripled its number of language schools there in the past year, with plans for more.

“It’s a very efficient way of marketing their brand as well as the amusement park,” said Shang Yang, chairman of Shangyang Enterprise Management Consulting Co. “They’re starting years early, brainwashing Chinese children and cultivating them as potential clients in a very indirect, yet penetrative, fashion.”

Growth Forecast

China’s private-education market, including international schools, is projected to grow to 517 billion yuan ($79.6 billion) by 2012 from 356 billion yuan in 2009, according to a December report by Bank of America Corp.’s Merrill Lynch unit. The catalysts include increased domestic consumption, government subsidies for schooling and a cultural emphasis on education, the report said.

The market for children’s English-language learning may increase 29 percent annually over the next four years from the current 24 billion yuan, said Andrew Sugerman, senior vice president and general manager of Disney English.

The first Disney English center opened in Shanghai in September 2008 and the number has increased in the past year to 22 from seven. China is the only market where unit Disney Publishing Worldwide operates the language schools.

“Being surrounded by all sorts of Disney products and characters, it’s almost impossible for children and their parents not to love Disney,” said Wang Bing, an analyst with Phillip Securities Research in Shanghai.

“All good feelings toward the company will surely translate into visitations to its theme park.”

Focused on China

Sugerman declined to give financial details about Disney English except to say that it’s profitable. There also are learning centers in Beijing, Hangzhou, Nanjing, Ningbo, Tianjin and Suzhou.

The company eventually will look to expand the business outside China, Sugerman said, declining to provide details.

“All of our focus right now is geared on China,” he said.

Disney said Tuesday its profit in the quarter ended April 2 fell 1.2 percent to $942 million, or 49 cents a share, as a shrinking movie box-office, a park shortfall and the disaster caused by the March 11 earthquake in Japan overshadowed gains in television.

“I believe Disney English is profitable without taking into account licensing fees for these cartoon characters,” said Jason Ding, a Beijing-based partner and vice president at management consultant Roland Berger AG. “The business may have a huge potential if Disney licenses its content and teaching methods to others.”

‘Most Important Subject’

The market is fragmented, according to the Merrill Lynch report. New Oriental Education & Technology Group (EDU) Inc. is the largest private education company in the country with less than 1 percent market share as of 2009.

New Oriental, based in Beijing, made about $64 million from children’s English training in the year through Feb. 28, an increase of more than 35 percent from a year earlier, President Louis Hsieh said. The “POP Kids” program, launched in 2001, is expected to expand by at least 40 percent during the next couple of years, he said in an interview.

“As families get a higher income, they are going to spend a lot of money on early-childhood education,” said Hsieh, who also is the chief financial officer. “The most important subject for Chinese kids is English. It’s also seen as an absolutely necessary skill to get a good-paying job.”

Disney English worked with an academic advisory board to create its Disney Immersive Storytelling Approach, and the company produced more than 300 songs for the program, it said.

Education Standards

The curriculum follows standards set by the national and Shanghai education ministries, Sugerman said. A team of 10 Los Angeles-based Disney staff creates culturally relevant content.

“What Disney is doing now in China is growing a future consumer base,” said Mary Bergstrom, founder of Bergstrom Group, a Shanghai-based consumer consulting company. “They are giving them the opportunity not only to learn English, but also to create really deep, intimate memories with those characters.”

Disney charges between 3,000 yuan and 12,000 yuan for the programs, including “Hello World” for 2- to 4-year-olds; “Foundation” for 3- to 6-year-olds; and “Step Up” for primary-school ages.

Classes typically last 45 minutes and are taught by a native English-speaking “trainer” -- certified in teaching English as a foreign language to children -- and a Chinese- speaking assistant. When it’s time to start, kids march down a hallway decorated with characters from “Bolt” and “Ratatouille” to classrooms referencing “The Lion King” and “Mulan,” a Chinese warrior princess.

Sleeping Beauty

After the “Hello Song,” children interact with two projection screens, called the Magic Theatre, to study words and phrases. Their lessons include learning the colors of fish on Mickey Mouse’s boat and the articles of clothing Goofy needs when the weather gets cold.

They also manipulate a warrior who fends off a dragon’s fireballs to save Sleeping Beauty while also teaching the words “defeat,” “defend” and “celebrate.”

“Their use of English becomes a comfortable, natural reality as opposed to a forced, painful reality,” Sugerman said in a room filled with stuffed toys including gray cats, blue birds and watermelon slices with bite marks.

Children are tested every six weeks on their reading, writing, speaking and listening comprehension. They also can study at home with materials featuring Mickey Mouse, Winnie the Pooh and “Monsters, Inc.”

Meredith Ge, who works for the regulatory affairs department at Procter & Gamble Co. (PG), enrolled her 4-year-old daughter, Melody, at the center after trying others. Her daughter says the way Disney teaches English is “relaxing.”

“English language is a very useful tool,” said Ge, 33. “I want to lay a solid foundation before Melody goes to primary school.”

--Michael Wei and Margaret Conley. Editors: Michael Tighe, Frank Longid

To contact the Bloomberg News staff on this story: Michael Wei in Shanghai at mwei13@bloomberg.net; Margaret Conley in Shanghai at mconley3@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net

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Photographer: Kevin Lee/Bloomberg

While the world’s biggest operator of amusement has lost money at its Hong Kong location since the 2005 opening, the schools in mainland China are making a profit while boosting Disney brands.

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Photographer: Kevin Lee/Bloomberg

While the world’s biggest operator of amusement has lost money at its Hong Kong location since the 2005 opening, the schools in mainland China are making a profit while boosting Disney brands. Close

While the world’s biggest operator of amusement has lost money at its Hong Kong location since the 2005 opening, the... Read More

Photographer: Kevin Lee/Bloomberg

Walt Disney Co. English teacher Kay Brown interacts with students at the Disney English Century Park Center in Shanghai. Close

Walt Disney Co. English teacher Kay Brown interacts with students at the Disney English Century Park Center in Shanghai.

Photographer: Kevin Lee/Bloomberg

Wei Ziyun, a student at a Walt Disney Co. English school, center, participates in a class in Shanghai. Close

Wei Ziyun, a student at a Walt Disney Co. English school, center, participates in a class in Shanghai.

Photographer: Kevin Lee/Bloomberg

Andrew Sugerman, general manager and senior vice president for English language learning for The Walt Disney Co., poses for a picture at the Disney English Century Park Center in Shanghai. Close

Andrew Sugerman, general manager and senior vice president for English language learning for The Walt Disney Co.,... Read More

Photographer: Kevin Lee/Bloomberg

A child watches television at the Walt Disney Co. Disney English Century Park Center in Shanghai. Close

A child watches television at the Walt Disney Co. Disney English Century Park Center in Shanghai.

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