Stream On

Kristin Brzoznowski explores how on-demand and streaming platforms are changing the game for kids’ programming producers and distributors.

Kids today wield a tremendous amount of power with their tiny fingertips. In one click of a button or swipe of a screen they can call up their favorite TV shows at any time in any place, and their penchant for on-demand viewing is reshaping the children’s programming landscape as we know it.

Kids are “transforming the business that we’re in from a ‘push’ business into something that is entirely consumer-centric,” Catherine Balsam-Schwaber, the chief content officer at Mattel, said in her MIPJunior keynote. “Kids are the primary reason that people everywhere have become consumed with creating their own content. Most significantly, when we think about what kids are doing, they’re turning media from a medium that is defined by form [into] one that is defined by platform. They’re the ones driving us into this new age of connected platforms for telling stories.”

Indeed, the number of on-demand services seems to be multiplying by the minute, and kids’ content has become a staple of their slates. The proliferation of these platforms has had a widespread impact on producers and distributors of children’s programming, who are learning to adapt to the myriad challenges and opportunities of selling kids’ titles to on-demand and streaming services.

“It’s the unknown frontier!” says Rick Glankler, the president and general manager of FremantleMedia Kids & Family (FMK). “We’re all figuring it out together. There are growing pains that come with that.”

THE RIGHTS STUFF
Olivier Dumont, the managing director of Entertainment One (eOne) Family, lists the “slicing and dicing of rights” as one of the most challenging issues to grapple with nowadays when it comes to deal-making. He says it has become “more and more complicated to do multiple deals, as they all need to be compatible with regard to nonlinear viewing, including catch-up rights of traditional broadcasters.”

Dumont also notes that certain SVOD platforms are now “aggressively pursuing” first windows and exclusivity.

For the time being, though, the majority of nonlinear players remain perfectly pleased to take the second run. “They do still see value in having a broadcast window first, to build general awareness, and then having the SVOD window after,” says Josh Scherba, the senior VP of distribution at DHX Media. “Those are tricky deals to negotiate, but when it works, it can be a great symbiotic relationship. The initial broadcaster might not have to pay as much for exclusivity over the term, but they still get first-run exposure, and our SVOD partner that took a little bit of the burden off the first-window partner financially gets the benefit of linear exposure.”

Jérôme Alby, the managing director of Mediatoon Distribution, has seen more requests coming through for first runs, “especially when it’s a key franchise or property.” However, he notes, “When we have requests for a first run, very often it’s for a series that we’re not able to grant those rights for.”

Mondo TV is looking initially at nonlinear slots for two of its latest series, Invention Story and Heidi, Bienvenida a Casa. “We’re knocking on the doors for digital to have the first window, and then we will take these to free-to-air broadcasters,” says Micheline Azoury, the company’s head of TV sales. Mondo has also teamed up with the kid-focused on-demand entertainment service Toon Goggles for the original IP Eddie Is a Yeti.

BEING ORIGINAL
Hasbro, meanwhile, signed a deal with Netflix to produce its first original for the platform, Stretch Armstrong and the Flex Fighters. The company has also placed several series from two of its top franchises with digital platforms, including My Little Pony: Friendship is Magic, My Little Pony: Equestria Girls and Transformers: Rescue Bots. Gustavo Gomez, sales director for Latin America and Iberia at Hasbro Studios, cites recent deals with such services as Telefónica, Claro Video, blim and VTR.

Part of the appeal with these Hasbro shows is that they are based on well-known properties, making them stand out when kids and parents survey a vast catalog of on-demand titles.

The slate at Mattel Creations is filled with series and specials based on iconic brands, among them Barbie and American Girl. The latter inspired the animated series WellieWishers, which has Amazon Prime Video as its exclusive premium subscription streaming home.

“Without question, brands are winning the day,” says DHX’s Scherba. “That goes for linear as well. As the market is increasingly fragmented, having familiarity is key, particularly in kids’ content, which has a certain amount of parental control and impact on what’s being viewed. It has always been important, but the new technology is emphasizing just how important it is.”

Scherba also notes that nonlinear players are trying out different types of kids’ series. “With on-demand consumption, you can change the storytelling slightly,” he says. “We’ve had huge success in the U.K. with Topsy and Tim. The ratings are excellent for CBeebies, and the on-demand views are great on iPlayer. What’s interesting is that it’s a live-action preschool series that has a slight series arc. There are events in episodes early in the season that have an impact on what happens later in the season, which is new for preschool content. I’m not sure it would have worked without on-demand technology.”

“There is a resurgence of serialized content,” echoes eOne Family’s Dumont, “although SVOD platforms do see the same trend as linear platforms with regard to the lack of repeat viewing for that type of content. That being said, it is good to see more variety in the formats of the content being commissioned by SVOD platforms and this includes serialized series.”

Dumont says that overall it’s a “great time to be making TV content, because the rise in these digital platforms has created opportunities to do a wider variety of shows, such as action-adventure series, prominently girl-skewing shows or [shows about] niche subjects that traditional broadcasters would have required to be more gender-neutral or have broader audience appeal in order to commission them.” He adds that producers can also push the boundaries a bit more “with some of the digital platforms that are actively looking for content that is more authentic and a little less sanitized.”

FMK has been both reactive to and proactive about the changes in the marketplace caused by the rise in on-demand and OTT players. “One of the things I’ve learned over the last couple of years is that there is a difference in the consumption needs of linear broadcasters and SVOD broadcasters,” Glankler says. Traditional broadcasters, he explains, constantly have a need for more episodes, new seasons and fresh content to drive ratings, which are their metrics of success. “SVODs, especially the younger you go [regarding the programming], comparatively could live with fewer episodes and have less of a need for the constant newness that a linear broadcaster has.”

“It will be interesting to see how we balance that, especially in terms of originals, because we want to create franchises and properties that will have multiple seasons,” Glankler continues. “That’s the struggle that we’re finding. We build our development and production [pipelines] based on the linear model. That’s the next wave, reconciling the differences in consumption needs.”

BALANCING ACT
DHX’s Scherba has also encountered this challenge and says it becomes particularly tricky with properties that have SVOD partners in some territories and linear partners in others. “Linear services tend to burn through more episodes quickly, and their audiences are expecting new [content] from the shows they have on air. With SVOD, the data supports that having fewer episodes in seasons is beneficial for them, or there’s less of an impact from having a higher volume than there is in linear. It’s about finding the middle ground between both.”

Scherba says that another issue in dealing with the on-demand world involves the marketing of content on these platforms. “The promotional aspect and discoverability aspect of video-on-demand is something that we’re all talking a lot about. There’s an understanding that that’s going to need to evolve so that these shows have a better chance of finding their audience.”

“Unlike linear platforms, which have built-in self-promotion and advertising structures, it is more difficult to keep viewers on digital platforms aware of what content is available on which devices or on an on-demand basis,” agrees Hasbro’s Gomez.

While many execs in the kids’ content business acknowledge that marketing exposure can be a challenge with on-demand platforms, Mediatoon’s Alby views these services as having an interesting opportunity when it comes to their consumer reach. “If you subscribe to an SVOD platform, sometimes they will send you an email telling you about a program that’s going to premiere or giving you a recommendation,” he explains. “‘You watched this, this and that, so we believe you might like this.’ There is less exposure; however, the contact with the end-user is stronger.”

A pressing aspect for Alby when it comes to working with on-demand players is rooted in technology. “Shows that have been produced, for example, at the end of the ’90s or in the early 2000s don’t always have the technical specifications that are required by an SVOD platform,” he says. “Sometimes it can demand a lot of technical investment and money. That’s difficult when you leverage that with the income you get” from doing these deals.

Speaking of revenues, for Mondo’s Azoury one of the most difficult parts of structuring deals with on-demand or digital platforms is adjusting to their business models. “Most of them, maybe 70 percent, are on a shared-revenue model of 50-50 or 60-40,” she explains. For a company like Mondo, which is publicly traded and has financial investors checking in on contracts quarterly, it’s challenging to not always have a hard figure to peg to a sale.

MONEY MATTERS
“I always ask about expectations…of how much money we will be generating,” Azoury says. “This is something that we can attach to the agreement, but in so many countries you can estimate a figure but not get close to it.”

She says that often, when negotiating an agreement with a smaller platform that offers a license fee, doing a volume deal is the best way to go. The fact that Mondo has a library of titles that are available in multiple languages is alluring for bulk on-demand buys as well.

“Many of these platforms do not want to venture into an extra cost with dubbing,” Azoury says. “If you come as a producer and negotiate a small fee with them for other versions on top of the license fee, they will take it! If they would have to dub it into another language themselves, it’s a headache for them”—and a costly one at that.

With regard to volume, DHX’s Scherba believes the trend nowadays is for platforms to be more selective when picking up titles, particularly as these services begin to develop more original content. “There are only so many hours that they need, and as more originals come they are going to push out more of the library,” he says.

“The thing to keep in mind is that the world is a big place and platforms are at different stages,” Scherba continues. “The U.S. is the most mature market in this space, but if you go to Southeast Asia, for example, where services are newer and getting a foothold, we’re continuing to sell interesting large packages, as it’s important for them to have a big selection of content to see what’s going to work or what’s not going to work.” The company recently announced sales for more than 2,400 half-hours of preschool and kids’ content across VOD services in China.

China, and Asia at large, has also been a market of keen interest to FMK when it comes to on-demand. Glankler says that because there isn’t one dominant service in the Chinese on-demand space, but rather several “very nimble, fast-moving players,” the strategy there is not about landing an exclusive SVOD deal with a single platform.

WHERE THE KIDS ARE
“We launched Tree Fu Tom and Kate & Mim-Mim on CCTV in China…and then immediately after expanded to all of the footprint of SVODs to have hundreds of millions of eyeballs watching. As we look at global [strategies], it’s still important to recognize unique markets like China or Japan to make sure that we have a regionalized focus that maximizes those markets.”

But global strategies are proving to be increasingly important in this space, Glankler says. “The local regional SVOD players are now becoming global. Look at Amazon and Netflix. Their biggest gains aren’t in-market year-over-year subscriptions; it’s about global footprint. With that come global deals.”

Despite the complexities that accompany this, distributors and producers in the kids’ space recognize that the opportunities of working in the on-demand arena outweigh the challenges. “The reality is that kids are consuming in very different and evolving ways,” says Glankler. “We have to create shows and deliver our stories in each and every one of those ways and then look at how we leverage those platforms to deepen engagement even further.”

At eOne Family, Dumont says that sales projections for digital platforms are becoming “very substantial. With shows like Peppa Pig, PJ Masks and Ben & Holly’s Little Kingdom in our portfolio, we have prime content that drives tremendous viewership on these platforms, and they are therefore prepared to pay premium license fees to access our content.”

Nevertheless, he says, “Linear platforms are still a big part of our business, and there is still no better way to get your brand discovered than having it on linear platforms, even if digital platforms are catching up.”

Pictured: Hasbro’s My Little Pony: Equestria Girls.