360-degree Play

June 22, 2009 World Screen
There is a bit of a disconnection in the new-media world when it comes to the business of entertaining kids. Everyone in kids’ television recognizes that their networks and shows have to have elaborate new-media components to be full-time players in the business.
But at the same time that they are attracting millions of kids to their new platforms, they are having a hard time figuring out how to make any money on them. That’s especially the case as 2009 begins, in the throes of a global economic downturn that is making broadcasters and advertisers quite jittery.
“There’s a lot of noise about having to be in this space, to play in this space,” says Brian Lacey, the executive VP of international at 4Kids Entertainment. “All of that is true. There is a lot of noise, but there isn’t a lot of money. When you look around and see companies that are cutting their workforce, take a look at which departments are most heavily hit. It’s the new-media stuff. There isn’t a lot of financial return for these investments. People are struggling with it. In hard times you have to get back to your core business.”
Nevertheless, 4Kids is a robust player online. Lacey says that the 4Kids website, 4kids.tv, is averaging 16 million clips a month, compared with 6 million just a year ago. And its website for the Chaotic trading-card game, chaoticgame.com, signed its millionth registered user before its first anniversary in the U.S. late last year.
“People are getting more information and entertainment off the web. It’s growing incredibly fast,” Lacey says. “There are revenues coming in but nothing to match the total reach we’re getting. Advertisers aren’t building it into their plans. There’s a lot of activity there, but not a lot of revenue.”
Still, Lacey says 4Kids is nowhere remotely near giving up on new media. “You get really smart,” he says. “Maybe we don’t develop as many games for our website this year. Maybe we come up with better ways to stretch the content. You can’t walk away from it, because too many people are using it.”
On the cable-network side, Cartoon Network has posted impressive numbers for its website, CartoonNetwork.com. In December it had a 112-percent increase in video plays from a year earlier and nearly 2 billion game plays for the year. Its Total Drama Island game, launched with the series last June, has topped 133 million game plays and more than 30 million video plays to date.
Cartoon Network is watching the economy closely but is not making changes in its online strategies, says Stuart Snyder, the president and COO of animation, young adults’ and kids’ media at Turner Broadcasting.
“Certainly, if things go one way or another, we’re all going to be making adjustments,” he says. “The key is adaptability and flexibility. If you start cutting prematurely, you could have a self-fulfilling prophecy. We’re not backing off. We’re continuing with our plans for 2009. We’re monitoring ad sales very closely. We’re monitoring the economy very closely. We’ll obviously be fluid and make changes if we feel we need to.”
Snyder says he hasn’t seen any advertisers backing away from new media as a result of the economy. “They’re challenging us to deliver more and do more special things for them. Those are good, healthy conversations. It’s good to challenge each other to see how we can partner better.
“There is no doubt in our minds that today’s youth thinks more and more in terms of multiple devices and platforms,” continues Snyder. “They are experiencing entertainment on a multiple-platform basis. As long as they are doing that, we need to be where they are watching entertainment and are playing games.”
Jonathan Wiseman, the senior VP of Canada’s Amberwood Entertainment, sees a slowdown in the entire entertainment industry, but isn’t suggesting that digital platforms be curtailed. “Broadcasters are moving a little slower than normal in terms of committing their funds,” he observes. “It’s affecting us in that things might move a little slower than we’re used to, but certainly the online component is something that we’re staying focused on. The challenge now is doing things that are fresh and unique for brands that make sense to be online, and doing it in a very cost-effective way while keeping the quality high. It’s challenging ourselves as content creators to do things in a new way.”
Andy Goodhand, the VP of planning and presentation for Nickelodeon U.K., says simply that new-media applications are required regardless of the current economic woes.
“We have to be where the kids are,” he says. “Anything that is current, and that we want to engage kids with, is going to have a multiplatform approach. Kids have that expectation—to be able to receive content wherever they are. It’s about cementing that deeper relationship with our brands.”
Over time, Nickelodeon will be thinking about enhancing new revenue streams to support the dominant revenue-driver that is linear television.
“Our TV business is shored up,” Goodhand says. “In this climate you have to try to find those new revenue streams. Corporations, at times like this, need to invest for the future. You invest in this period and, hopefully, in the next you’ll be in a good place. It’s all about what our audience wants. If you provide services the audience wants, that is ultimately good for your business.”
 
ONLINE MOMENTUM
All that being said, program producers and kids’ networks recognize that a multiplatform approach is mandatory, and they are continuing to build on to their websites and find creative ways to use digital content.
For instance, it wasn’t that long ago that broadcasters would put on a kids’ show, and if it attracted an audience, would launch a companion website. They aren’t waiting anymore. The online content launches simultaneously or, in many cases, before the TV launch.
“We try to do things holistically,” says Turner’s Snyder. “We look at when we’re going to start the show and work backwards to say, maybe we’ll launch a game based on the brand or the characters. We’ll seed that on CartoonNetwork.com. We may put on some shorts, some snacks, some behind-the-scenes. We’re talking a lot about behind-the-scenes these days, about little trailers.”
Three months before Cartoon Network launched The Secret Saturdays in the U.S. last October, it rolled out a three-stage online campaign to hype the show, which is about a family of zoologists surnamed Saturday, who track animals called cryptids around the world.
“We created new interstitial spots for The Secret Saturdays that lived completely online,” Snyder says. “They were mystery spots; you didn’t quite know what we were promoting.”
The spots included several commercials for a website called CryptidsAreReal.com. The second phase brought the cryptids concept into the modern world through a marketing campaign for a make-believe television series called Weirdworld that actually is a part of thethe Secret Saturdays show. Finally, it shifted into the main campaign for the actual series itself.
For Star Wars: The Clone Wars, launched at the same time, Cartoon Network worked with Lucasfilm Animation to develop an online game that preceded the series.
“There was a Star Wars site promoting the saga, the mythology, the back story and characters. That all launched before the show,” Snyder says. “Once the show premiered, we started talking about story lines, more games, then we’re streaming episodes and so forth.”
Furthermore, Cartoon Network has launched Game Creator, which lets fans of selected shows design their own games. “We started it with Ben 10 in May,” Snyder says. “This isn’t just about going to Cartoon Network and playing a Ben 10 game. This is the opportunity for them to go and create their own game and post it online. To date we’ve posted 3.7 million fan-generated games. And more than 357 million game plays. This is a very engaged, robust group. We followed that up with Batman: The Brave and the Bold.”
Joe Tedesco, the VP and general manager of Canada’s premium noncommercial service Family Channel, says it’s been years since the channel launched anything without a multiplatform component.
“Multiplatform has become essential to our business and has become a cornerstone of how we extend our properties,” he says. “When we launch a new property, there’s generally a strategy attached to it of how we’re going to promote and possibly tease the property through Family.ca, our popular website.”
Family Channel uses new media in varying ways with different show launches. “We’ve done show launches where we’ve premiered the first episode online before it’s gone onto our broadcast,” Tedesco says. “We’ve teased it with clips. We also have a subscription on-demand service. That’s also become a key tool in launching series. We’ll give them an advance window on Family on Demand.”
In January of this year, Sesame Workshop and PBS launched the new Electric Company, updated from the original 1970s series, with an aggressive online campaign.
“With Electric Company we wanted to hit as wide a national audience as possible,” says Terry Fitzpatrick, Sesame Workshop’s executive VP of content distribution. “We did tease the show on PBSkids.org/go, but when you take a broad approach, broadcast television is still the most effective platform to reach that breadth of viewers. So we’re launching it on TV and online to provide that access and awareness, and then we’ll build out those specific digital platforms and opportunities afterwards.”
The show’s website provides kids with depth and breadth. “There is video content, gaming that ties in specifically with the videos, and user-generated capabilities,” says Fitzpatrick. “We’re not viewing the website as a promotional opportunity for the TV show. It’s a critical media platform that works alongside the television programming.”
Sesame Workshop is in discussions with potential partners for handheld and console gaming applications, Fitzpatrick says. “Those will flow after the broadcast and online push.”
Nickelodeon’s Goodhand says digital platforms can’t be an afterthought in the development process. “We’re very keen when we’re developing an original production to combine our and the program-maker’s depth of insight to kids to ensure that the starting point is a multiplatform concept,” he says. “We don’t just end up with a TV program with online support. You’re looking for linear success to drive online success to drive linear success—a virtuous circle.”
Amberwood rolled out RollBots, its 3-D action comedy for 6- to 11-year-olds, for YTV in Canada earlier this year, after it had launched the online component.
“We created an online gaming world based on the show, where kids will be able to create their own RollBot character,” Wiseman says. “There’s an in-game economy where kids can collect points and currency to buy things to customize their RollBot character, and a wide variety of mini-games that kids will be able to play with their character to enhance their profile. It will be updated continuously throughout the on-air airings of the series.”
 
IT’S ALL IN THE STORY
If there is a simple answer to the question of what works best online, it would be, Pretty much the same things that work on tele­vision for the same audiences. Although it would seem that animated series are most easily adapted to new media, there are plenty of live-action series with blockbuster applications.
One of Family Channel’s most popular online games is based on the Shaftesbury live-action series Life with Derek. “If you were to look at that property—it’s a great show with great characters—you wouldn’t conclude that it’s going to be a property that will knock your socks off in the multiplatform world,” Tedesco observes. “But the games work, the podcasts work, all the multiplatform extensions we’ve done with that property work.” Just as they do with the Disney shows on Family Channel, including Hannah Montana and Suite Life on Deck.
“If it’s the right property from a story-line and character perspective,” Tedesco says, “we know it’s going to work across the various platforms.”
Another live-action hit online is iCarly, which Nickelodeon’s Goodhand calls a “phenomenally successful” multiplatform show. “It illustrates the true multiplatform approach—there’s a website, there’s a call to action on the show to go to the website, there’s content relating to that episode, and there’s opportunity for other content. It’s all around the Internet, but at the end of the day it’s a great show with all the right ingredients.”
Other bits of conventional wisdom are that the Internet appeals only to boys and that preschoolers aren’t ready for new media. Not quite so simple, those in the business say.
Family Channel, which has an output deal with Disney, skews female, as does the Disney Channel in the U.S., according to Tedesco. “The boys’ numbers have been growing, though,” he says, “and audience composition online is reflective of that.”
The network has done some research on the subject and found that boys are more engaged in the gaming aspect. “When they’re online, they’re more apt to be playing games and be big users of the set-top gaming sets or the handhelds, and girls seem to gravitate more to the social aspects—use of the cellphone, text messaging, social-media sites, the Facebooks, etc.”
4Kids’ Lacey concurs. “As boys get older they have a tendency to prefer games, so they look for platforms, devices that are game-driven,” he says. “Girls wind up being generally more into the social e-mail message boards. Boys are gamers and girls are social networkers.”
Sesame Workshop’s Fitzpatrick observes that kids seem to be using new platforms at a younger age these days. “Sesame Street has a strong multiplatform model for preschoolers,” he says. “We have a podcast that comes out on a weekly basis. It’s based on a segment from the TV show called ‘What’s the Word on the Street?’ We don’t assume that 3-year-olds have their own iPods, but their parents do. When parents are involved with the kids, it greatly increases the educational efficacy of that content.”
Family Channel’s Tedesco, who also runs Playhouse Disney, says that younger kids now are online, too, usually with parental help. “All our priority series on Playhouse Disney have an online component, a micro site with games, activities, etc.,” he says. “Preschoolers are playing the games and engaging in the activities.”
Nickelodeon’s Goodhand sees the same trend toward kids going online at a younger age. “A preschool show like Dora the Explorer clearly is very appropriate for online gaming,” he says. “The whole concept of interaction and exploration has always been important to the preschool audience. Multiplatform certainly meets demands that way. Keep it simple and intuitive. You have to use recognizable characters they know, and it has to have a clear reward.”
 
CREATING REVENUE STREAMS
Still, the real challenge in the kids’ business is making money on the digital side, especially for those companies in smaller markets or without full global coverage.
Family Channel, which is noncommercial in linear TV, carries some advertising and sponsorships online in what Tedesco calls a “controlled, responsible” manner, and he hopes someday to see some revenue generated by mobile content.
“The costs of data in Canada are still very high,” he says. “We expect in coming years the costs of consumers’ accessing video through their wireless or mobile devices are going to drop dramatically. That’s space we want to be in.”
In the U.K., Nickelodeon is having success with selling mobile content and using Apple’s iTunes. “We’re number four among some 60 mobile services,” Goodhand says. “It’s all about access to the technology and who has the phones. SpongeBob does very well. We’re on iTunes, and on mine I have a few episodes of Dora, and that’s a treat for my daughter.”
Mobile and podcasts are easier to monetize, Goodhand says. “You can see direct payback. The art of monetizing is knowing exactly the number of interactions you’re getting, and clearly with mobile [and iTunes] you can do that.”
Amberwood takes advantage of Canadian incentives for new-media properties. “We apply for a variety of different funds that are available in Canada,” Wiseman says. “Through those funds, and a financial commitment from our Canadian broadcasters, we are able to fund the online productions, which sometimes can be quite costly.”
Sesame Workshop doesn’t carry child-directed advertising, but it does include parent-directed sponsorship messaging online, Fitzpatrick says.
“I don’t think anybody has figured out the new-media platforms yet. People are testing a lot of ideas. For us, the four options are sponsorship, e-commerce, philanthropic support and subscription, but we’ve chosen not to walk down the subscription road now.”
4Kids’ Lacey notes that there is still a lot of work to do if new media is going to play a major role in financing kids’ brands. “You don’t get the ads spent against the web yet. You get hardly any ads spent against VOD, and then you go to a retailer, where you’re trying to build licensing programs to generate revenues, and their eyes glaze over when you start talking about this.”
But Lacey, a veteran of the kids’ business, sees favorable parallels with the old days. “Back in the ’80s, retailers used to say, ‘Where’s your program?’ Well, we were in syndication and on Nickelodeon. They’d say, ‘I don’t care about Nickelodeon; it’s cable.’ Now if you aren’t on Nick or Cartoon Network, you have a hard time getting your merchandise in the stores. I suspect something similar is going to happen in this world, but we’re some time away from it.”