Windowing Shifts: Time to Share

TV Kids explores how kids’ IP owners are tapping into the AVOD and FAST space and adjusting their windowing approaches.

Conversations about evolving exclusivity and holdback arrangements are happening across the media ecosystem, but none more so than in the kids’ media space, where being everywhere kids are—which is everywhere—is essential for boosting discovery and building a brand.

“All channels, subscription services and platforms want audiences to spend more time with them, and content is how they attract audiences and build their brands,” says Kate Smith, executive VP of audience engagement at WildBrain. “We recognize the importance of supporting their investment by helping relevant audiences discover content. However, more and more, we’re seeing these clients open to exploring other platforms, including YouTube, to build awareness of their IP, which in turn can also help to drive viewers to their platform.”

“Almost every platform in the world is open to different funding strategies,” says Richard Goldsmith, president of global distribution and consumer products for Atomic Cartoons and Thunderbird Entertainment. “A platform that has traditionally, or at least in the last ten years, said, ‘We need global rights,’ is now saying, ‘It’s OK if you bring in a partner in a couple of territories, and we can give them a first window.’ That allows us to bring in co-production partners and do a couple of presales.”

Joe Barrett, VP of global sales at PBS Distribution, says buyers “always want exclusivity where they can get it. But there are two factors weighing in on this exclusivity piece. One is tightening budgets. The second is accessibility. The release approach needs to be multiplatform, and having your content on multiple platforms with tightening budgets tends to lean toward non-exclusivity. So, the attitudes are changing based on the complexity of the platform strategy.”

IP owners should “have a windowing strategy that makes sense,” Barrett adds. “Particularly with new series, you don’t want to be cutting and structuring deals on AVOD and FAST before the broadcast and SVOD deals just for the revenue that it’s generating.”

It is the AVOD and FAST space that holds the most potential—for both driving revenues, albeit at a much smaller scale than traditional broadcast or SVOD deals, and building brands.

“When we take something out that has toy value, we sit with the toy companies and ask what they want us to do,” Goldsmith says. “Traditionally in the U.S., you had to be on Disney, Nickelodeon or Cartoon Network, and that is still the main priority for some toy companies and retailers, but it’s changing dramatically…. No matter what platform you’re on, you need to have a very significant YouTube plan.”

WildBrain saw the importance of being on YouTube early, Smith explains. “Our deep experience and broad network of channels—currently more than 500—gives us a sizable advantage in this space. YouTube is the number one destination for kids’ viewing—its popularity with kids and family audiences means it is an undeniable tool for building IP today. The platform is always evolving, so our presence is hugely helpful in tracking data and adapting to trends. Currently, we’re seeing the need for multi-format publishing with different types of content, including longer videos, shorts (under 1 minute), live streaming, etc. It’s all about delivering relevant, platform-appropriate content to your audience, curated to their preferred viewing style.”

While many IP owners are figuring out how to mine their properties on YouTube, pocket.watch has built a thriving business on taking digital-native content birthed on the video-sharing site out into the wider media economy, including traditional linear channels, SVOD and now FAST. The company launched its first FAST channel in 2018 and followed that up with Ryan and Friends two years later. The pocket.watch channel and Ryan and Friends operate as part of the company’s overall “flywheel,” according to Corinna Fisher, senior director of programming.

“We use the channels to amplify other business lines. For example, with the movie [Ryan’s World the Movie: Titan Universe Adventure], we rolled out themed blocks and a stunt marathon leading up to the theatrical release. We also drive Ryan and Friends Plus subscribers by sampling exclusive original shows that we have on the SVOD service on the FAST channel and expanding awareness.”

KIDS GO FAST!
For Fisher, pocket.watch’s business model of bringing digital-first YouTube content to multiple platforms lent itself naturally to the FAST space. “We recognized early on that it made sense for us to get into FAST to expand and promote all of our franchise lines and our ever-growing OTT network as a whole.”

WildBrain, too, has made a significant commitment to the FAST space following its breakout YouTube success. Its library of well-known brands has helped power its gains in the FAST arena, Smith says.

“Single-IP channels are highly successful in FAST. As the largest player in the FAST space for kids’ content, we have launched almost 150 channels globally across major platforms—with each channel based around a single IP, including Teletubbies, Strawberry Shortcake, Inspector Gadget and more.”

Single-IP services, naturally, need volume, but, Smith notes, target demo does impact that equation. “When looking at an ideal volume of episodes, the number varies by age,” she says. “Fewer hours are needed for younger viewers, as preschool audiences tend to enjoy repeat viewings. For non-preschool kids’ content, a large bank of content is key for success, with an ideal minimum of about 100 hours.”

At pocket.watch, “We plan our lineups to maximize a day-over-day and week-over-week refresh so that the channels are always feeling new and fresh,” Fisher says of her approach to curation. “We also plan around cultural, marketable moments that are relevant to our audience. We’ve developed annual repeatable stunts for kid-relevant holidays. We also offer a lot of value to our audience by windowing content. For example, we have world premiere videos that debut on SVOD and FAST channels before they even go to YouTube.”

SPEED BUMPS
There are, naturally, hurdles for everyone navigating the always-evolving digital media ecosystem for kids. Indeed, just getting a handle on data can be a challenge given the disparate sources you need to rely on.
“YouTube performance translates to OTT and FAST,” Fisher says. “We also see analogs in terms of dayparts and seasonality. So, for example, if we see a peak at a certain time on YouTube, we tend to see that uptick as well on OTT. Similarly with seasonality, if there’s a dip at a certain time of year, that pattern will likely emerge on OTT as well. Audience alignment is also huge for us. We have found that we can attract and retain audiences by aggregating closely aligned content.”

The fundamental economics of the business have also shifted, with increasing capital investment needed to explore all modes of engagement.

“I’m looking at investing in Roblox and mobile games,” Thunderbird’s Goldsmith says. “All of that costs money. If you’re going to properly distribute something, as a producer or a distributor, you need to have a pool of investment capital that you’re able to spend. When you go on AVOD in the U.S., we might be on ten platforms, but we don’t get a dime as an advance from any of these platforms; it’s all on a rev-share. The only way that we’re able to do that is either with our own financing or to have achieved enough sales outside the U.S.”

Several elements need to be in place before AVOD and FAST see significant monetization gains.

“COPPA and GDPR inventory is just too small of a pie right now on FAST,” Fisher says. “Monetization is still not congruent with viewership. That’s going to start to even out. Ad revenue needs to move from linear and—pardon my pun—faster to FAST. If partners don’t feel like they’re monetizing their content or they can’t invest that revenue in funding more productions, the model won’t be sustainable. That shift is going to happen, and more ad dollars are going to move there.”

WildBrain’s Smith adds: “Better monetization is key at the moment, as the FAST space is still figuring out what’s next. There’s still further evolution required for both general audience content and, even more importantly, for kids’ channels. There’s increasing focus on improving the ad tech as viewing figures continue to rise across the AVOD and FAST space, but the advertisers haven’t kept the same pace. This will align, but it takes time. Essentially, through partners like WildBrain, increased monetization will come from improved ad sales. This can be supported by an augmented experience for advertisers with unified metrics and the ability to assess cross-platform performance.”

As we get there, Fisher expects “to see platforms and publishers focus more on integrating FAST into an overall ecosystem that includes AVOD, SVOD, gaming and other interactive elements, just making it feel more cohesive as a whole for the consumer.”