Report Says Spending on Children’s Programming Remains Flat

LONDON, July 23: A new report from research firm Screen
Digest shows that while the number of children’s television channels has
proliferated throughout the world, broadcaster spending on children’s
programming has remained virtually unchanged over the last five years,
decreasing from 1.10 billion euros in 2002 to 1.03 billion euros in 2006.

The report, titled The Business of Children's Television, reveals the impact that an increasingly competitive
broadcasting market has had children’s television. From 1985-2006, the number
of children’s channels has increased, with 14 full-time channels in the U.S.,
17 in France and the U.K. and nine in Germany. However, the U.K., Germany and
North America have seen a decline in spending on children’s programming,
compared to Belgium, Italy and Spain, which have experienced a moderate increase
in expenditure. According to the report, broadcasters now rarely provide more
than a minority of production budgets, leaving producers to raise the remainder
from co-production and presales or to shoulder the burden themselves.

The home entertainment market for children’s TV programs has
also declined, from 1.2 billion euros in 2002 to 911 million euros in 2006.
Sales in the preschool genre have suffered in particular from a combination of
lower prices, the withdrawal of the VHS format and the growing availability of
round-the-clock children’s TV channels.

In an analysis of the top 25 companies in children’s
television, Screen Digest found that despite the decline in TV budgets,
companies like Rainbow, Chorion, Alphanim, BKN International and DIC Entertainment
are flourishing. These companies were able to implement the right strategies
and launch their properties in a global market. The report also reveals that
companies which are less reliant on broadcaster commissions and acquisitions
have fared considerably better than those which operate on a more conventional
independent production model.

“In many ways, children’s producers are at the sharp end of
changes in the market as their traditional customers seek to cut the cost of
their schedules,” says Tim Westcott, the author of the report. “Despite an
explosion in the number of thematic channels and the rapid spread of new media
platforms, the majority of producers are small enterprises which are exposed to
the decline in funding by generalist broadcasters.”

The report also notes that the market is dominated by the
“Big Three‚” —Disney, Nickelodeon and Cartoon Network—who accounted
for two thirds of the $9 billion in revenues reported by the top 25 companies
in 2006.