Integration innovation

By using VOD as brand extension, nets in win-win scenario

Kids programming and video on demand have proved a match made in digital heaven.

The tween-and-under set is an early adopter by nature, and the kid nets are developing programming exclusives and the freedom to personalize the viewing experience. While multisystem operators and the major broadcasters try to build VOD business models for adult-targeted programming that will maximize revenue streams, most kid networks are taking a more integrated approach.

So rather than develop VOD as a separate business, the technology is primarily being implemented as a programming brand extension.

“If you believe in your brand the way Cartoon Network does, you welcome a service such as VOD,” says Coleman Breland, Turner Networks’ exec VP of sales and marketing. “Plus, unlike some other companies, we’re in the position to take full advantage of the available digital capabilities because we own the rights to our programming. That’s what made it particularly smart for us.”

But the value of the service is directly dependent on the product being offered. “You have to have consistency and must keep the program offerings fresh so kids don’t get tired of seeing the same shows and get turned off to the service,” Breland stresses.

Despite its general acceptance as a desirable platform, there is no uniform approach as to when or how to implement VOD and other digital services.

4Kids, which provides the Saturday morning program block on Fox, and Kids’ WB do not currently offer VOD. All Discovery Kids on NBC programs are offered on-demand through Discovery’s digital kids channel at no cost to the consumer.

Likewise, Nickelodeon and Cartoon Network have vibrant VOD services domestically that are free of charge, although the networks pay the MSOs to have their content offered.

In contrast, Disney has already begun expanding its VOD business into subscription services. Playhouse Disney fare is included in some cable subscription VOD kids packages while Cablevision subscribers can opt for a standalone Disney Channel via subscription VOD (SVOD). Comcast, PBS, Sesame Workshop and Hit Entertainment announced in April the launch of PBS Kids Sprout, a VOD service offered on the MSO.

Internationally, implementation has been more fragmented because different technologies are emerging at different rates in different countries.

“The difference in how we look at all technology in a market-by-market basis would be how well anything’s penetrated,” explains Disney Channel worldwide president Rich Ross. “In the U.S., where we are in north of 86 million homes, we look at SVOD, mobile and broadband as complementary parts to the linear service. We have a couple of great SVOD deals and it supports priority properties.

“But when you go into other markets, such as Europe, we’re on premium services. So we may reach 15% of a population. In that situation, something like VOD, mobile and broadband become even more important because we’re a mass brand and we need to be in homes. We look what the greatest opportunity is in each market to reach more people.

“For example, in Korea, broadband has leap-frogged the television platforms. In that situation, it’s important to look at broadband in some ways as replacing that linear channel but still look at other opportunities like mobile. That’s why in each market, we have to look at the distribution possibilities and work accordingly.

“We know in a world of multitasking, a 12-year-old girl is watching a show, reading a magazine, doing her homework and IM’ing a friend. They are immersed, so you need to be in as many touch points in that immersion as possible.”

On-demand services are proving to be valuable promotional tools for the kid nets. Discovery has offered sneak peeks of its new Discovery Kids’ fall series entry, “Flight 29 Down,” as has Nick Jr. offering “Go, Diego, Go!”

Cartoon Network offers supplemental material on VOD that’s unavailable on the linear channel, in the same way DVDs have added value with bonus features such as interviews.

The biggest issue facing kid nets is how to quantify the technology’s effectiveness. So far, there is no indication VOD services are cannibalizing linear audiences.

To the contrary, Turner’s Breland says early research shows such services are in fact bringing addition eyeballs to the screen. “And once enough data from these VOD services is accumulated and analyzed, the business will evolve accordingly. What you need is measurement. Once you get metrix you can build a specific business plan, although, as always, in the end viewers will determine how it plays out.”

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