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Children in the U.K. spend about two hours online in a typical day, 20 minutes more than they spend in front of a TV set, British media regulator Ofcom reported in a study earlier this year.<\/p>\nChildren in the U.K. spend about two hours online in a typical day, 20 minutes more than they spend in front of a TV set, British media regulator Ofcom reported in a study earlier this year.<\/p>\n
Perhaps the most significant finding in the detailed study, which measured viewing habits in that busy children\u2019s broadcasting market, was that while time spent online had stayed the same from the previous year, TV-viewing time fell from about 2 hours to 1 hour and 52 minutes. YouTube is the primary online destination, with about 80 percent of respondents having used the platform. In terms of SVOD, nearly 50 percent of kids and 32 percent of preschoolers watch services such as Netflix, Amazon Prime Video and NOW TV. Will Disney+ soon be part of that mix? Perhaps. The platform is set for a U.S. launch later this year. International expansion is likely, but no details have emerged yet.<\/p>\n
The tidal wave of on-demand launches has caused enormous upheavals across the traditional kids\u2019 TV landscape, changing viewing patterns and disrupting revenue streams in its wake.<\/p>\n
RISING TIDE<\/strong> YouTube is just another complication, Gardiner adds. \u201cThree years ago, ratings suddenly fell off a cliff. What happened? Well, in a nutshell, half of the world\u2019s kids\u2014in the West, at least\u2014inherited an iPad. This had an immediate knock-on impact in lost revenue. Plus, established players are now confronted with having to spend less on content and more on technical development to compete.\u201d<\/p>\n In part, lost revenues on linear platforms have been offset by the growth in distribution and commissioning opportunities on the new platforms.<\/p>\n Dorian B\u00fchr, the head of global distribution at Studio 100 Media and m4e,\u00a0 explains, \u201cThe arrival of the OTT platforms resulted in a shift within the home-entertainment business from physical towards digital sales. These new revenues have not replaced the loss from the DVD market yet, but still make a substantial contribution and show immense potential for further growth in the near future. Not counting AVOD revenues, we now generate approximately one-quarter of our distribution revenues from OTT\/digital platforms.\u201d<\/p>\n Mediatoon Distribution also reports a dramatic redistribution in revenues, with DVD falling fast and digital on the up. J\u00e9r\u00f4me Alby, the company\u2019s managing director, says that revenues from OTT are growing. \u201cIn 2008 it made up 2 percent to 3 percent; in 2018 it was up to a third. But DVD revenues are going down fast.\u201d<\/p>\n At CAKE, OTT revenues are increasing year on year. For the last two years they have made up over 50 percent of the company\u2019s revenues.<\/p>\n While the growth curves of platforms such as Netflix are widely predicted to plateau soon, OTT\/digital share will continue to increase as linear broadcasters evolve in the face of the on-demand challenge.<\/p>\n At 9 Story Media Group, OTT\/digital now accounts for over a third of revenues, but in time, the distinction will become irrelevant, predicts the company\u2019s chief strategy officer, Natalie Osborne. \u201cWhat we expect to see going forward is a second wave of digital proliferation, as traditional free- and pay-TV channels launch their own OTT platforms. Disney, Nickelodeon, France T\u00e9l\u00e9visions, BBC, ITV and many others are all launching their own services. Linear and OTT are now converging, so more and more, we are looking at this as part of the same revenue stream.\u201d<\/p>\n For linear platforms, adding a digital offering isn\u2019t really a choice anymore, insists Ed Galton, the chief commercial officer and managing director at CAKE. \u201cDelivery systems are collapsing, and traditional channels need to find new opportunities to stay relevant, with many now offering an on-demand service of their own. With more platforms launching, there is a greater demand for these rights, and we foresee continued growth.\u201d<\/p>\n Another factor fueling the growth of digital is the fact that launching an OTT service has never been easier. In the early days of streaming platforms, players would need to acquire or produce content, create a bespoke app and then organize the distribution, as well as find a content delivery network, all of which had the potential to be a very expensive process, especially since costs were a lot higher back then.<\/p>\n Fast forward to today. Content delivery costs have plummeted and there are many different ways to enter the market. No longer do IP owners have to produce their own app or build an end-to-end SVOD service from scratch. They can choose to launch on preexisting distribution platforms, a useful option for those who feel they may struggle to scale up quickly or for those who do not have the funds to do so on their own.<\/p>\n Lower barriers to launching an on-demand service have also resulted in a new generation of niche services such as ad-free preschool pay platforms Hopster, PlayKids and Azoomee. \u201cIt\u2019s admirable what they are doing, and we are looking at content deals with them,\u201d Jetpack\u2019s Gardiner notes. \u201cFor these players, the name of the game is all about distribution\u2014getting kids or their parents to download their apps.\u201d<\/p>\n Given the proliferation of new services, are linear platforms still relevant in an increasingly on-demand world? For the time being, at least, the answer appears to be yes.<\/p>\n \u201cFor now, a linear TV launch is still the gold standard for a successful L&M campaign,\u201d says 9 Story\u2019s Osborne. \u201cThat being said, it is possible that OTT will be able to anchor an L&M success in the future.\u201d<\/p>\n Studio 100 Media\u2019s B\u00fchr adds, \u201cWe still need our traditional linear partners to finance our shows and to build strong L&M campaigns. These linear partners are, however, not always happy to share rights with OTT platforms. If there is an opportunity to sell in a second window, we prefer to work with the bigger platforms on a non-exclusive basis, allowing us to make deals with smaller local players in the market. For bigger brands, we tend towards exclusive deals with bigger platforms, in as far as our linear broadcast deals allow for it.\u201d<\/p>\n CAKE\u2019s Galton adds that the contribution of a linear TV launch to audience numbers and brand awareness continues to be substantial and is certainly one of the elements that helps to build a strong campaign.<\/p>\n \u201cHowever, a \u2018Netflix Original\u2019 is also a valuable brand endorsement, which can reap huge rewards,\u201d Galton notes. \u201cIn addition, retailers are understanding the growing significance of YouTube and are specifically asking about exposure on the platform. Lucas the Spider<\/em>, an original series of YouTube shorts, achieved significant numbers, helping to shift 40,000 plushies in just over ten days. So, while a linear TV launch can play a significant part, it is no longer the only route to market.\u201d<\/p>\n BRAND-SAFE<\/strong> B\u00fchr acknowledges that the security of content and safety of viewers can\u2019t be taken for granted. \u201cWe create and manage our YouTube content and channels ourselves. That\u2019s still the best way to control what happens with your content.\u201d<\/p>\n CAKE\u2019s Galton adds that there\u2019s plenty that producers and distributors can do to ensure that content remains in a \u201cbrand-safe\u201d environment. \u201cMultichannel services try to put provisions in their agreements enabling them to have the choice to broadcast on all platforms. However, in our agreements, we restrict broadcast to kids\u2019-specific platforms only. We manage our own YouTube channels through our digital arm, Popcorn Digital, and although advertising placement is done by YouTube using algorithms and is therefore difficult to control directly, we take care to make sure that all our content is fully optimized to help ensure it is recognized as family content. We also work closely with YouTube to make sure that our titles are exposed to family-friendly advertisements and are specifically available in the YouTube Kids app.\u201d<\/p>\n Osborne points out that 9 Story employs specific controls to safeguard content. \u201cWe block ads by sensitive categories to make sure appropriate and brand-safe ads run in the content. In light of recent YouTube events, we\u2019ve ensured stricter controls by further refining our comment filters and manually reviewing all comments made on our official channels.\u201d<\/p>\n She adds, \u201cFor additional digital platforms that run on an AVOD model, we make sure that the streaming services are kidSAFE COPPA and GDPR compliant. The onus is on the platform to ensure advertising that is completely appropriate, and we\u2019ve seen successful results. For closed VOD systems such as SVOD and TVOD, we research and vet the platforms to make sure that their offering is reputable for our content to sit alongside the entire portfolio.\u201d<\/p>\n While three or four years ago OTT players were buying bulkier preschool packages to beef up their schedules, now they are selecting shows with more caution.<\/p>\n As Mediatoon\u2019s Alby points out, \u201cAll channels at launch need a lot of content fast. The difference is that with a linear broadcaster, at least half of the shows they take are likely to work well, and you can be pretty sure\u00a0that many of our successful shows, like Garfield<\/em>, will be renewed.\u201d<\/p>\n Nonlinear platforms might initially take bigger packages of shows to build up their inventories, but when the rights expire and renewal comes, they are much choosier. \u201cAnd when it comes to taking new shows, it becomes much harder because now those OTT platforms are pickier,\u201d Alby says. \u201cThey are more aware of what is working on their platforms.\u201d<\/p>\n MATTERS OF SCALE<\/strong> That mix includes shows of varying lengths, with the proliferation of digital platforms encouraging producers to venture out of traditional episode durations. For example, this year, Mediatoon is rolling out Garfield Originals<\/em>, consisting of 3-minute shorts, commissioned by France T\u00e9l\u00e9visions.<\/p>\n The way the OTTs work is very different from traditional broadcasters, adds Jetpack\u2019s Gardiner. \u201cBecause they are primarily tech companies, their approach to content is very scientific. It\u2019s all about metrics, audience measurements, performance and brand-awareness scores. They are very clued-up on what works and what doesn\u2019t and are much more mature and selective. Effectively, they have gone all \u2018nouvelle cuisine\u2019 on us.\u201d<\/p>\n CAKE\u2019s Galton observes that there is \u201cno hard-and-fast rule to the deals you can do. It will depend on the territory and competition in the marketplace, but as a general rule, the more new platforms grow and mature, the more influence they have.\u201d<\/p>\n Galton adds that CAKE is developing a number of shows with global SVOD platforms that insist on exclusivity to all rights. He adds that while traditional broadcasters are currently reluctant to option second windows on digital-first content, they may ultimately have to change tack and work with the new ecosystem of rights.<\/p>\n SHARING IS CARING<\/strong> 9 Story\u2019s Osborne notes the uptick in global SVOD deals on the kids\u2019 side. \u201cWe\u2019ve had a number of series greenlit by Netflix in the last few years, including The Magic School Bus Rides Again<\/em>, Charlie\u2019s Colorforms City<\/em> and the holiday special Angela\u2019s Christmas<\/em>.\u201d<\/p>\n Allspark, formerly Hasbro Studios, used a digital-first strategy for Hanazuki: Full of Treasures<\/em>, which premiered on YouTube. It was the company\u2019s first original IP not based on an existing toy or gaming brand. \u201cIt was a really interesting experiment to see if we could launch a new property on a digital platform like YouTube and actually get the audience,\u201d says Finn Arnesen, the senior VP of international distribution and development. \u201cWe now have a second window on linear. So we flipped the rollout model around. We\u2019re always trying to find new ways to bring things to market and innovate in terms of where our audiences engage with our properties.\u201d<\/p>\n Allspark is also deploying new distribution strategies with Equestria Girls<\/em>, an older-skewing spin-off of\u00a0My Little Pony<\/em>. A digital series premiered on YouTube and is being re-versioned for the linear-TV market.<\/p>\n The future of distribution will be dealing with a mixed economy of OTT players and traditional brands with their own SVOD options, insists Mediatoon\u2019s Alby.\u00a0 \u201cAt the end of the day, the decision about how to launch or distribute a new show will always be about numbers. The winner will be the platform that comes up with the best deal and the best promotion offered around your brand.\u201d<\/p>\n Osborne concludes, \u201cA key consideration going forward will be making sure content is available wherever kids are watching, and that might be on YouTube, Netflix and a traditional linear channel. Plus, it\u2019s important to remember that, irrespective of platform, licensing success is only possible if you have great content.\u201d<\/p>\n Pictured: A family using Hopster.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" David Wood hears from leading distributors about how they are working with digital platforms.<\/p>\n","protected":false},"author":1,"featured_media":16052,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":0,"footnotes":""},"categories":[79],"tags":[221,100,958,231,3750],"class_list":["post-16051","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-features","tag-9-story-media-group","tag-cake","tag-jetpack-distribution","tag-mediatoon-distribution","tag-studio-100media-and-m4e","pmpro-has-access"],"yoast_head":"\n
\nAs Dominic Gardiner, the CEO at Jetpack Distribution, points out, it\u2019s hard to overestimate the impact of OTT. \u201cThere used to be only three main commercial competitors\u2014Disney, Turner and Nickelodeon. Suddenly, there are two other major players in Netflix and Amazon, which have succeeded in changing the landscape. It doesn\u2019t matter what market you are in\u2014kids\u2019 TV or car manufacturing\u2014if you suddenly get two new competitors on your doorstep, it gets everybody thinking.\u201d<\/p>\n
\nLinear platforms still have a few significant advantages, such as the almost-universal approval of preschool parents. With many parents perceiving the digital world as a kind of unregulated Wild West, the safety issue is one that some popular online platforms\u2014notably YouTube\u2014are struggling with. Stories of kids encountering inappropriate content and advertising are common. This is not the case for SVOD providers such as Netflix, Hopster and Azoomee.<\/p>\n
\nVolume certainly helps in the new landscape, Alby states. \u201cOur catalog has grown a lot over the last few years. It\u2019s about 3,000 hours of animated TV shows and movies. That\u2019s both from our internal production studios and third-party agreements. That allows Mediatoon Distribution to release a great diversity of shows.\u201d<\/p>\n
\n\u201cAs platforms grow and command more influence, broadcasters may have to put aside their resistance,\u201d he declares. \u201cWe are now in the process of launching our YouTube original series Angry Birds On the Run<\/em>. A fantastic response from fans made us feel that there were additional distribution opportunities to be had, leading us to reformat the series into longer-form specials with the view of introducing to broadcasters and platforms. As we move increasingly into producing original content for YouTube, we think that some content may translate and migrate effectively onto linear channels.\u201d<\/p>\n