The Walt Disney Company is on the verge of announcing plans to launch a basic cable children’s channel in ’97 or ’98, setting the stage for the next battle royale in the supercharged kids TV business. Disney and other major kids players such as Fox and Warner Bros. have watched the inexorable dominance of Viacom’s Nickelodeon with growing alarm, and all have decided they must get into the game by challenging Nick. Disney will further expand its efforts to reach TV-watching families by reviving the Wonderful World of Disney series on its ABC subsidiary this fall.

Warner entered the basic cable business last year, when it completed its megamerger with Turner and thus linked up with the Cartoon Network. The potential synergies between Warner’s WB network and Looney Tunes library and Turner’s up-and-coming Cartoon Network are vast, but that effort is just beginning.

Fox Kids, with the top position on Saturday mornings, is also looking to launch a basic cable channel in September 1998, network president Margaret L’esch told station affiliates at a meeting last month at NATPE. Fox is also considering converting part or all of its fX cable network, a general entertainment channel, into a kids outlet.

Discovery Channel, the well-regarded documentary and educational cablecaster, launched Discovery Kids Channel last October. The new channel, mostly library stuff from the parent network, is being offered in a package of channels to the now-minuscule number of digital set-top boxes.

But it’s the Disney effort, tagged ABZ for now, that’s drawn the most notice, thanks to that halo floating over the Disney brand name and the company’s vaunted marketing muscle. Widespread press reports notwithstanding, at press time, Disney had not formally announced the new channel, though it has quietly discussed it with some major cable system owners.

Geraldine Laybourne, the visionary behind Nickelodeon who jumped ship for Disney a year ago and who is spearheading the new network, has refused to show her cards. In a rare press appearance last month, though, she said reports about ABZ being a channel for preschoolers are ‘inaccurate. [It] is for a much broader audience than that. It will deal with two- to 20-year-olds.’

One Nick executive says a preschooler channel makes no sense, since little advertising money is spent to reach two- to five-year-olds, and attempts to commercialize that very young audience would be a political disaster. Others speculate that Disney will mount an educational channel, but a top kids producer suspects this spin might be nothing more than ‘great PR for getting it cleared on cable systems.’ (Disney’s ABC will also carry three hours of educational kids programs on Saturday mornings this fall in compliance with the new FCC rules.)

Clearly, Disney faces a Herculean task in getting ABZ onto overburdened cable systems. Without a groundswell of consumer demand, in fact, the channel may not make much impact before the next technological leap in the cable business, which could be five or 10 years down the road.

Selling advertising on ABZ will be a no-brainer, according to kids media buyers. ‘Regardless of the subscriber base, it will sell out because of the Disney name,’ says one agency executive. But without a critical mass of subscribers, Disney faces immense start-up costs, on the order of half a billion dollars, estimates one kids TV player.

Nick president Herb Scannell d’esn’t sound a bit worried about Disney’s shot across his bow. ‘They have a long way to go [in kids TV overall],’ he says. ‘ABC’s Saturday morning lineup has problems, the Disney Afternoon isn’t in the afternoon anymore and the Disney Channel has never made a mark on our culture. They have a lot of work to do in their own backyard before they try to come into another yard.’

Scannell d’esn’t plan any defensive moves against the impending onslaught of cable competition, but Nick will mount a strong offense by roughly doubling its original production. And the network will strive to maintain its unique relationship with kids.

ABC is likewise mum on details about the revived Wonderful World of Disney, except to confirm the show will return this fall on Sunday evenings from 7 to 9 p.m., a traditional harbor for family viewing. Disney will bolster this venerable franchise it aired on ABC in the ’50s before moving to NBC for a two-decade run by unlocking its crown jewels, megahit animated features such as Beauty and the Beast and Pocahontas, which have largely been kept off broadcast TV. The backbone of the new Wonderful World, however, is a package of 20 made-for-TV family movies, such as Richard Dreyfuss in a retelling of Oliver Twist.

While Disney clearly has problems in television venues such as Saturday morning and syndication, this new cable channel and prime-time series demonstrate the mighty mouse’s resolve to become as powerful a force in kids TV as it is in feature films.