Leading Kids’ Execs Talk Distribution Shifts, Funding Challenges

The MIPJunior keynote superpanel featured Genius Brands International’s Andy Heyward, WildBrain’s Josh Scherba and Serious Lunch and Eye Present’s Genevieve Dexter weighing in on how their companies are navigating a fast-changing kids’ market, in conversation with World Screen’s Anna Carugati.

Carugati, group editorial director at World Screen, opened the session in the JW Marriott’s Grand Theatre by asking the panelists how streaming platforms have changed the kids’ business.

Heyward, chairman and CEO of Genius Brands International, noted, “All the new and emerging technologies coming forth, like streaming, are increasingly important. Every kid is an early adopter of these new technologies.”

Scherba, president of WildBrain (the recently rebranded DHX Media), added, “Streaming services taking kids seriously has been a really important factor in the industry. They’re putting more resources into kids than we’ve ever seen in the history of kids’ content. It’s more opportunities to make great content. There are challenges that go along with that, but [nevertheless] the industry is healthier than it’s ever been.”

Dexter, founder and CEO of the distribution outfit Serious Lunch and production company Eye Present, noted that whenever new players arrive in the business, “it’s a period of bonanza. As those services settle in, then the business does become more and more difficult to work with—certainly as a distributor.”

Carugati asked the execs if the needs of streamers are different from those of linear broadcasters. “There are differences,” Scherba said. “It all starts from a great story and characters, but streaming services have been taking more chances around serialization, knowing that their viewers tend to binge. Linear networks are trying to hold onto ratings, so they want to be as broad as they possibly can. So they tend to want to see more gender-neutral, not too boy- or girl-skewed—those are chances that are easier for the streamers to take.”

Serious Lunch’s Dexter pointed out that on streaming platforms like Netflix, a show’s promo image “needs to immediately arrest you. That little square travels across the screen and you’ve got to want to grab it. That’s quite different from some of the national broadcasters.”

Heyward added that more and more kids are watching content on their handheld devices. “That’s a very important area that we need to be mindful of today.”

“Kids don’t decipher between platforms,” Scherba added. “They can go between platforms seamlessly. That’s why we’re big believers that when you’re looking to establish a brand, you have to be on all these platforms. It’s great that you’re making premium content for a streaming service, but if a kid is watching Netflix and is then going to go to YouTube, if you don’t have something there that has a connection to that brand, you’re missing an opportunity, and they move on to something else.”

The conversation then moved to how distribution companies make the decision to take a global streaming deal or opt to roll a show out market by market. Dexter used as an example Best & Bester, where “the licensing and merchandising potential and particularly the gaming potential were paramount. We wouldn’t necessarily achieve that on a streamer. So we’ve targeted a global pay-TV network, and we can do the streaming deals and free TV after that. The terms being demanded by Netflix now and the incompatibility with the other networks means that if you’ve got L&M, it’s going to be hard if you’re just on a streamer.”

Heyward agreed, adding, “If you have a need for the licensing and merchandising to make the property viable today, it’s much harder to do so on a streaming service.”

Scherba said, “I think there will continue to be innovative ways to work with streaming services in terms of building brands, but it’s situational. The opportunity that Apple TV+ presented to us with Peanuts content is we knew it was going to be a major service launch, we’d be part of the global marketing, so that made perfect sense. Each situation has its own merits.”

Dexter added that digital platforms often don’t want to commission third, fourth or fifth seasons of shows, “they want new stuff which will drive subscriptions. That is also a challenge. It’s yet to be seen if, for kids, they’ll commit to a brand over the long term.”

The discussion then moved to windowing. Dexter spoke about her experience introducing the Netflix original The Legend of Monkey King to linear broadcasters. “I had a meeting with a German broadcaster who said, if it’s European content quota, then we put up with just having catch-up on a rolling five basis—five episodes up at any one time. But if it’s not European, we won’t put up with it. Other broadcasters say, ‘SVOD is fine but not Netflix! We see them as our biggest competitor. When HBO Max, Apple TV+ and others launch, we’ll be more relaxed because the situation won’t be so polarized.’”

Heyward added, “The sequencing and chronology are in part dependent on how much a particular buyer wants that show. If they want it, they’ll let the rules go away. In the past, it was very clear: over the air broadcast, cable and satellite, syndication, whatever it was. That was a very strict way of rolling out shows. Today there are no rules.”

“You could argue,” Scherba added, “that in kids’ television, always-on is actually the best approach. Platforms that are more willing to experiment with always-on strategies are going to win.”

In the U.S., Serious Lunch is licensing Operation Ouch to all of the AVOD platforms “in order to drive the brand.”

The slew of new platforms launching in the on-demand space present “more opportunities for great original content,” Scherba said. “It continues to speak to fragmentation in the market. And how you get around that is by having known IP, taking creative risks and then working with more than one platform, finding innovative ways to support your show on YouTube and not just put it up on an SVOD service and hope it gets discovered.”

“The pie is divided into so many slivers,” Heyward added. “The ability of one service to really get a big audience is so hard today. You have to be on multiple platforms. You have to be advertising your brand, promoting it in all kinds of ways, you have to have a YouTube presence.”

Dexter added that she’s heard from linear broadcasters that they are concentrating on “experiential connections with their programming—they can be on the ground with roadshows. Experiential is also a real driver behind sales of publishing and toys. That is something the streamers can’t do. They can’t be on the ground in the kids’ lives.”

Scherba noted that kids don’t have great memory skills. “Linear television always did an amazing job of reminding kids what they love. And as linear gets more fragmented, that’s harder to do. SVOD hasn’t figured out a way to do that yet, because they drop ten episodes and then wait a year to get more episodes. Our job as producers and distributors is to find innovative ways to remind kids and bring them back to the shows they’ve fallen in love with.”

The conversation then moved to talent relationships. “The most important A-list talent you can have is the writer,” Heyward said. “Those words, when spoken, have to be better than words that are on the other channels. I always look for the writers—I look at what they read, what their history is. At the end of the day, the technologies evolve, but we’re still telling stories. It goes back forever. We have to have better stories, better words, better characters, complex, crisis, jeopardy, stakes, all of those tools.”

For Dexter, a big concern is Brexit, as many of those employed at her production studio are from outside of the U.K.

In North America, meanwhile, Scherba said that Disney and Netflix “have done more overall deals with creatives than the kids’ industry has ever seen. But if you present the right opportunity and give the right amount of freedom and great IP to work on, that’s a big calling card.”

On financing, the panelists noted that partnerships remain paramount. Heyward said, “It’s almost impossible to find one broadcaster or party that will pay for the entire cost of production. You need to find multiple sources. It might not be a co-production, it might be a combination of a licensing partner in some form, a publisher, but you have to. Otherwise, you absorb too much risk.”

“For me, if it’s not a co-pro, I’m not happy,” Dexter quipped. “I’m launching a show here which is a co-pro between Netflix and ABC originally. On the second season, ABC couldn’t come in. Now on the third season, we’re looking for new partners to marry the streamer and linear rights requirements.”

Scherba added, “Co-production is important, but there is this other model where streaming services are paying full freight and taking global rights. That comes with pros and cons because you’re left with fewer rights on the distribution side and less control.”