Reborn 'Hooked on Phonics' Switches Strategy

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A California businessman is hoping to capitalize on the widely recognized brand name Hooked on Phonics, and dispel the product's reputation for making exaggerated educational claims, with a redesign of the popular at-home reading program and a more subdued marketing approach.

The new product, unveiled this month, is being promoted to parents as just one tool for helping children learn to read. The pitch runs counter to earlier claims that the skill-and-drill program offered a singular, sure-fire method of building literacy.

Company at a Glance:
Gateway Learning Corp.

Product: Hooked on Phonics--Learn to Read program
Headquarters: San Francisco
Established: 1996
Revenue: Unavailable
Employees: 48
Chairman and CEO: Chip Adams, founder of Rosewood Capital, a private equity partnership that invests in consumer-oriented growth companies. Bachelor's degree, psychology, Princeton University; master's degree, business administration, Stanford University.

The original advertising campaign, which suggested that parents could succeed where teachers had failed, "didn't endear itself to the educational community," admitted Chip Adams, the chairman and chief executive officer of Gateway Learning Corp., who bought the company nearly two years ago.

But Mr. Adams is trying to change the perception among educators, by pushing the new program--Hooked on Phonics-Learn to Read--as a way for parents to supplement their children's education. Company materials point to research suggesting that phonics instruction, coupled with reading practice, can help some children overcome difficulties in learning to read. As part of a yearlong redevelopment process, the San Francisco-based company sought the advice of researchers and comments from focus groups totaling more than 300 parents, teachers, and students.

Storybooks Added

The program is still based primarily on incremental, skill-and-drill phonics activities, offering flashcards, workbooks, and cassette tapes set to music that help children learn letters, letter sounds, and words. Now, the lessons include what many critics had said was lacking in the original program: follow-along reading activities and simple storybooks that enable children to read words in context. The company hired some popular children's authors to write decodable texts and storybooks coordinated with each of the program's five progressive levels.

At its peak, the original product, introduced about a decade ago by Gateway Products Ltd. of Orange, Calif., earned about $175 million annually. Gateway spent a large portion of its revenues on radio and television advertisements that claimed anyone could learn to read by using the program. After educators and consumer advocates questioned those claims, the Federal Trade Commission in 1994 forced the company to tone down its advertising. The company later filed for bankruptcy protection. ("Claims of Success By 'Hooked on Phonics' Called Into Question," Feb. 12, 1992.)

Because the revamped product has not been widely distributed, many critics of phonics-based methods of instruction have not had an opportunity to review the new program.

Still, it has gotten a somewhat complimentary response from some educators who have seen the materials.

"It appears to be more of a mainstream program aimed at parents," said Alan E. Farstrup, the executive director of the International Reading Association in Newark, Del., who had no comment on the quality of the product. "It is quite different from the original, infamous version. They are not making the kinds of claims made by previous owners."

Marcia Moon, a co-director of the Children's Literacy Initiative, a nonprofit organization in Philadelphia that consults with school districts, said the program is "a good resource for parents who are looking for additional pieces to support their children's reading development." At $249, she added, Hooked on Phonics is a good buy.

Buyer Beware?

Theodore R. Mitchell, the dean of the graduate school of education and information science at the University of California, Los Angeles, and an education adviser to the mayor of Los Angeles, has agreed to sit on Gateway's board of directors.

Mr. Mitchell, who said he has never before endorsed an educational product, scoffed when the company first approached him.

"I thought that'll be the day when I put my name on that," said Mr. Mitchell, who is likely to gain financially from the venture if the product turns a profit. "But after spending a couple of hours with Chip Adams ... I was convinced that he wanted to take the shell of this program and build the best learn-to-read program for parents that he could."

No documented proof of the product's effectiveness exists, although the company plans to conduct studies later this year.

But at least one critic says let the buyer beware. "The new Hooked on Phonics doesn't say that it really works, just that you know our name," said Gary L. Adams, the president of Educational Achievement Systems in Seattle, a company that evaluates educational materials for schools. "They don't say it works because there is no proof that it works."

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