Star Gazing

Several leading distributors share their thoughts on what 2022 holds for the global kids’ content business.

The British kids’ content industry was dealt a significant blow this month when the Department for Digital, Culture, Media & Sport said it was pulling the plug on the Young Audiences Content Fund following a three-year pilot program. The fund had helped support 144 development projects and 55 brand-new productions.

“These have considerably enhanced the public-service offering of CITV, Channel 5’s Milkshake!, Channel 4, S4C and others,” said Anna Home, chair of the Children’s Media Foundation. “Now we face a definite decrease in the number and range of programs being made for young people in the U.K. We could very quickly be back where we started three years ago, with the BBC as the only body commissioning content for children. And in fact, it’s worse, as the BBC is facing government-imposed budget cuts of its own over the next few years, too.” Indeed, the BBC learned this month that its license fee would be frozen for the next two years.

As pubcasters and commercial linear channels look to new funding models to survive in this environment, the streamers continue to exert their influence on the industry. The streaming wars kicking into high gear last year, and continuing into 2022, is the industry development that most impacted distributors’ businesses last year.

“Everyone can agree that the rollout of Disney+ and other streamers across several international regions changed the dynamics of the children’s TV industry in 2021,” says Cécilia Rossignol, executive VP of international sales and development at Gaumont France.

For Martin Krieger, CEO at Studio 100 Media, the trend that had the most significant impact on his business last year was the fast growth in the AVOD space, “with more and more players emerging and global players like ViacomCBS/Pluto TV and Comcast/Xumo being part of it,” he says. “FAST channels were not a significant part of our business in 2021, as we were testing the waters. For 2022, we will actively be pursuing an ambitious strategy to push and expand our activities in this area.”

Christophe Goldberger, managing director of indie distributor GoldBee, also has his eye on AVOD developments, projecting some consolidation in that space this year “as the business matures and revenues increase—but not all of them will survive in a very competitive environment,” he observes.
The overall growth of the streaming business, he notes, “has had a significant impact on our business, as we have seen a growing appetite for our renowned IPs,” on both the live-action and animated sides of the company’s catalog.

FLIPPING THE SCRIPT
However, while the opportunities created by the streamers have been immense, they are not without their complications. “With financing for new kids’ shows largely coming from digital streamers, the challenge of retaining second-window and licensing and merchandising rights continues to have an impact on independent studios,” observes Jonathan Abraham, the VP of sales and business development at Guru Studio. “Studios like ours that continue to develop incredible new IP are having to get more creative with how financing gets pulled together.”

Indeed, funding models continue to evolve as the marketplace adapts to a raft of new players. “We are seeing fewer prebuys from linear channels as they contemplate shifting to a VOD-first strategy, which naturally locks up territory VOD rights,” Abraham continues. “It’s a paradigm shift as broadcasters change their business model. In the end, we’ll have to do what we do best in the animation community and think creatively to build out new financing models from a broader range of potential funding partners.”

In terms of content trends, meanwhile, Gaumont’s Rossignol highlights the enduring demand for “big franchise brands,” especially among streaming platforms. “These established brands that strongly resonate across the kids’ and family demo contribute to the elevation of the individual streamer’s brand, playing a major role in their ability to deliver upon their customer value propositions. Never was this more evident than during the period of successive lockdowns around the world, when we saw families, in record numbers, come together to enjoy the co-viewing experience while in the safety and comfort of their own homes. As we continue to navigate our way through what we hope will be the end of this challenging time, this trend continues, and therefore, the search for the right intellectual property is on!”

Goldberger cites a growing demand for “positive and joyful kids’ programs,” especially since the onset of the pandemic. “We have received a very positive response to our newly launched preschool IP The Game Catchers, which promotes games, friendship and an active lifestyle with adventures full of laughter.”

At Studio 100, as demand from platforms surges, the company will be looking to expand its content output, Krieger reports. This includes a second season of the 100% Wolf franchise after the first batch of episodes sold to almost 100 countries, including Australia (ABC), Germany (Super RTL), France (Gulli), the U.S. (IMDb TV) and China (Tencent). It is also gearing up to roll out FriendZSpace, which wraps production this year, and Vegesaurs, a key pillar in the company’s efforts to expand its licensing and merchandising business. “We own a strong portfolio of IPs and have recently added high-value third-party licenses to it,” Krieger says. “This will push our L&M business even further in 2022.”

For Abraham at Guru, the priority this year will be “pursuing projects that are best suited to leverage our strengths as a production, distribution and brand-building entertainment company,” he says. “We’re looking at a wide variety of projects from potential partners [seeking] help with anything from early-stage development, production, distribution or financing. We’re also actively looking at some interesting partnership opportunities on new IP with emerging players in the toy and L&M space.”

The key, Abraham adds, remains in “adapting to the changing landscape and keeping your finger on the pulse.”

Gaumont’s Rossignol also offers up a big-picture take on navigating the complexities of the business this year. “In 2022, decision-makers and the industry as a whole have an opportunity to take a breath and consider the purpose content holds for young viewers and parents in addition to the question of: What do they want to watch and why? It is this back-to-basics approach that will guide us as we forge a new path forward, applying all we have learned over the last two years—it is about thinking differently as we push the creative process to new heights.”