Margaret Loesch

This interview originally appeared in the MIPTV 2011 issue of TV Kids.

 

Last October, The Hub, a joint venture of Hasbro and Discovery Communications, took the place of Discovery Kids. Tapping into well-known properties from Hasbro’s stable of classic brands, The Hub set out to attract children and their parents. Industry veteran Margaret Loesch, who had already successfully run the Fox Kids Network, is the CEO of The Hub. She talks about the challenges and opportunities of launching a kids’ service in today’s media landscape.

 

TV KIDS: The Hub launched into a very crowded environment. How did you decide the channel’s mission and what it would offer children and families?

LOESCH: First of all, you are absolutely right, it is a very crowded marketplace, and it is probably the toughest time ever to launch a new channel. However, our launch was facilitated and enhanced by the fact that we had some big marquee brands to bring to the table. So the process involved doing two things: evaluating the programming that we did have access to, and at the same time researching where there might be some white space, where there might be underserved audience opportunities.

 

We did qualitative and quantitative research and we kept getting the same response, and that was that the nostalgic marquee-value properties were resonating on two levels—with kids and with their parents. We were also hearing two things from parents. First, their opinion was that the 6- to 11-year-olds were still underserved, and they cited how Disney Channel and other kids’ services were skewing older, going more for tweens and a little older. Parents’ perceptions were and are that there is a growing white space, so that seemed to us an opportunity. The other thing we heard from kids and parents, interestingly enough, was that they both wanted more programming they could watch together. That piece of research surprised me, and I’ll tell you why. I wasn’t surprised about the parents’ sentiment; I was very surprised about the kids’ sentiment. When we were doing Fox Kids, what we heard loud and clear was that kids would control the set and they wanted to watch their stuff and they didn’t want to watch with their parents. So it’s interesting to see what’s happened in the last 20 years. I guess kids are time-constrained and so are parents, and they are looking for opportunities to do fun things together. Maybe that’s been facilitated by video games, the Wii, Nintendo DS, etcetera—whatever the reason for wanting to watch together, it’s a good sign. So from that research—identifying opportunity and listening to parents and kids—we started to form our mission and goals.

TV KIDS: How are you balancing original productions and acquired product? What percentage of original product do you want to reach and within what timeline, because that’s an expensive proposition.

LOESCH: It’s a very expensive proposition. A cable channel can’t afford to have all original programming. You have to rely to varying degrees on acquisitions. You have to analyze your needs and what’s available, and then cherry pick the best for your lineup. Then you have to build on the success of those. The truth is, at The Hub we have a good deal of original programming, and we’d like to have more. Right now, of the 168 hours of programming we air each week, we have ten new series, so around 20 percent of our schedule currently consists of original shows. I would hope within the next three years to get to between 30 and 50 percent. With 30 percent we would be successful, 50 percent would be fantastic.

 

TV KIDS: In your acquisitions, what kind of shows are you looking for and what fits the Hub brand?

LOESCH:First of all, what fits the brand is programming that’s really attractive to kids 6 to 11. And that’s the hardest to find, to tell you the truth. There is a tremendous amount of preschool programming available from around the world, and we have some of it already on The Hub with The WotWots!, In the Night Garden and Animal Mechanicals. But it is harder to find those programs that target the older child that would work for us. By that I mean programs that have that celebratory, upbeat attitude, or are iconic. We acquired Batman Beyond because it fit our strategy of going after marquee-value properties, which as you know, with a startup company, it’s imperative that we get properties that kids know about because they help steer kids to us. So one comment that I’m often met with is, Gee, you don’t have many original productions? Well, who more than me loves original projects, having been a producer for so many years? But in building a network the marquee-value programs help drive audiences to us.

 

So what we’re looking for is either programming that attracts 6- to 12- year-olds that is either breakout because it is so unusual and offbeat and original, or it has some marquee-value attributes. The second type of programming we are looking for is programming that will serve the whole family, kids and their parents. We’ve made some key acquisitions that tap into the nostalgia of the parents but whose stories might be interesting to kids, too. Happy Days is a great example. And that market is also very competitive. It’s hard to get those shows.

 

TV KIDS:What has been the reaction from advertisers?

LOESCH:Very positive, better than I had hoped originally. What we learned first of all is that advertisers absolutely accepted and got the strategy of building our network off of nostalgic marquee-value brands. They recognized that nostalgia would provide mom and dad approval. The mom who loved Pound Puppies or My Little Pony or Strawberry Shortcake or Happy Days would be supportive of her children watching our shows. And because these are evergreen properties, the advertisers recognize that they would resonate with kids. So they liked the strategy. The other thing, quite frankly, is that our competitors are so strong and doing so well that they are driving very tough deals for the advertisers. So the advertisers have a duty to their clients not only to deliver reach but also to deliver value. What The Hub offers as the new kid on the block is a value for the clients; they knew that we would be willing to work with the advertisers and deliver some efficient value. So on the two levels, our program philosophy has been embraced, and the concept of delivering value for their clients has been embraced. Now, our challenge is not to disappoint our advertisers, and being a startup it’s always a challenge to deliver the ratings that we promised. We are still working on that.

 

TV KIDS:How important are online videos, games, mobile apps and other new media in complementing the linear channel?

LOESCH:They are very important, and we are still building out that area. The expectation of kids today is that they can find their favorite stories and their favorite characters everywhere. And it’s not just about importing it from one platform to another; it’s about each experience being gratifying on its own platform. We can certainly offer programs VOD and streaming and so forth, but…kids expect each platform to deliver its own unique experience. And that is very challenging. It’s so much more challenging than when we launched Fox Kids. A couple of years ago I realized that we actually had the precursor to online, and that was our Fox Kids Club, which was an actual club. It had a magazine and a radio show called Fox Kids [Radio] Countdown. We were trying to reach kids in a variety of ways, and each experience had its own entertainment value. But today, kids are more demanding. I have seen kids go to their iPhone—yes, their iPhone—and if they can’t find one of our shows in some format, whether it’s a game or a clip or a show on their iPhone, they are disappointed. It’s like instant gratification. So we are working as quickly as we can. We are not nearly as robust as we will be a year from now and two years from now.

 

TV KIDS:What does it take today to get a breakout hit? Is it more complicated than it was when you ran Fox Kids?

LOESCH: It’s more complicated. While we are fully distributed, we are striving to be in even more households with each of our cable and satellite providers. We are in approximately 60 million households. And at Fox Kids we were in 98 percent of the country, so the minute we put a show on, 98 percent of the American kids had access to it. It is more complicated in that it’s probably going to take larger distribution for us to have a highly effective breakout hit. But I do think that having successful marquee-value programs, like Transformers or My Little Pony or Batman, will help build our distribution, and that will help drive the hit-making process.

 

I think the short answer is time. People don’t remember that the first big hit from Nickelodeon was Rugrats. They played that show, they played it and played it and played it and slowly it caught on. It wasn’t an instantaneous hit. Unlike broadcast television, on cable you have to create a new habit. And so the short answer to your question is, it takes the right brand or program combined with time.

 

TV KIDS: What do you know about the audience composition of The Hub?

LOESCH:What we are seeing is really validating. We still have low ratings; however, we have doubled and tripled our audience numbers from Discovery Kids, which is a great start, and percentage-wise, of all the four key networks, Nickelodeon, Cartoon, Disney Channel and ourselves, The Hub has the highest percentage of co-viewing. Isn’t that amazing? They have larger audiences, but percentage-wise our co-viewing is the highest. So it is working.