International channels bank on Asia’s potential

Despite Asia's economic struggles, this emerging TV market is luring the international kids channels with its long-term potential. Nickelodeon, Disney Channel and The Kermit Channel are launching their first or additional services to get in at the ground floor, joining brands...
December 1, 1998

Despite Asia’s economic struggles, this emerging TV market is luring the international kids channels with its long-term potential. Nickelodeon, Disney Channel and The Kermit Channel are launching their first or additional services to get in at the ground floor, joining brands such as Cartoon Network that have already established a presence in the region.

The impact these new channels will have is hard to gauge. So far, producers and distributors of children’s programming say, the international children’s services that have already set up in Asia appear to have had little impact on terrestrial programmers. ‘Children are very important for the Asian society,’ says Rodrigo Piza, director of London-based Nelvana Enterprises U.K. Limited, which is reflected in a steady commitment to airing children’s programming. South Korea’s animation channel Tooniverse and Singapore’s educational channel Eureka are examples of dedicated Asian services that are also targeting kids in a bigger way. Terrestrial programmers tend to air more local than imported programming, with Japanese animation in particular popular throughout the region. What is having a noticeable impact on terrestrial programmers is the economic crisis, forcing services to cut back the amount of programming they air, rerun shows or use their inventories.

For Nickelodeon International, the ‘vast opportunity’ offered by Asia encouraged the company to open its first full channels in the region last month, in the Philippines and Japan, says Bruce Tuchman, general manager of global network ventures. Fewer than 9% of TV households in the Philippines have cable, and total multichannel penetration (cable and satellite) in Japan is about 15% of TV households. Still, despite being in a recession for some time, Japan has seen a 35% increase in the number of multichannel homes between this year and last, says Tuchman, a rate of growth that is ‘enviable anywhere.’ Getting the services off the ground now is also less costly. Both services will be supported by distribution and advertising sales revenues.

In the Philippines, ACCION is handling cable distribution. The Japanese service initially will be distributed by DirecTV for DTH, but Tuchman is looking to expand onto every cable operator. He hopes to have 100,000 to 300,000 subscriber households in the Philippines within the first year, and DirecTV’s most recent subscriber count totaled more than 180,000 households.

At the launch stage and into the near future, the 24-hour channels will draw entirely from the Nickelodeon library. The Japanese channel will be fully dubbed into Japanese, and Nickelodeon will air in English in the Philippines. The channels will be tailored through locally produced interstitials, called ‘Right Here, Right Now’ in the Philippines and ‘Me TV’ in Japan, that offer a glimpse into the lives of kids, and graphics. Tuchman estimates that these localized interstitials, as well as global pieces from Nick’s library, will fill 10 minutes per hour on average.

For Disney Channel, the importance of adapting to the local market cannot be overemphasized. Disney Channel hopes to expand into the Philippines before the end of the year, and has been running in Taiwan since 1995, and in Malaysia since 1996. Much effort has gone into creating ‘a bridge between the programming and the Disney brand and the real lives of kids in [these markets],’ says Robin Paxton, VP of broadcasting at Walt Disney Television International Asia Pacific, and managing director of Disney Channel Asia Pacific. Local hosts introduce programming, and locally produced interstitials explore the details of everyday kid life. Off-air, Disney Channel is looking to develop connections with the community by sponsoring events. All of this is supported by ongoing market research. The Taiwan channel is dubbed into Mandarin, and the Malaysian channel airs in English.

This localization must be balanced with a strong emphasis on the Disney brand, says Paxton. ‘Disney is a hugely recognized brand in these markets,’ with well-known characters, and Disney theme parks are a major aspirational destination for families. Disney Channel airs less than 10% acquired programming in Taiwan and Malaysia. Paxton is open to acquisitions, primarily from Western producers with styles similar to Disney programming. He’s most likely to buy live action, sitcoms and movies. A good balance would be less no less than 70% Disney shows.

In Taiwan, where the channel is distributed to cable operators by Filmate, Disney Channel has 4.4 million subscriber households. In Malaysia, it is distributed by Astro, a relatively new DTH platform with about 185,000 subscriber households. Both channels are supported by distribution revenues, and Disney Channel in Taiwan is the only Disney Channel worldwide that accepts advertising.

Asia’s economic difficulties aren’t discouraging The Kermit Channel, which launched in Asia on August 31. The biggest challenge for the fledgling service in the short term is gaining distribution. At press time, The Kermit Channel was available on satellite for preview by cable operators, and deals were pending. Revenues will come from distribution and advertising.

The 24-hour channel acquired nearly 40% of its first-year schedule, mostly from U.S. producers, to round out the libraries of its partners, The Jim Henson Company and Hallmark Entertainment.

The channel is available in Mandarin. The company is open to launching separate feeds in territories where this investment is economically feasible, such as the larger market of Taiwan. Betsy Bruce, who came on board as senior VP and general manager in late September, says the channel will rely on feedback from local markets about how to best adapt.

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