There’s been a lot of talk about the brave new world of emerging media. It stands to change the traditional TV landscape and the way kids producers hatch content. How do the platform providers from the realms of VOD and broadband see things shaping up? In the following discussion excerpts from a rousing panel held at the KidScreen Summit, we get the chance to: Meet the heirs apparent.
Doug Murphy, executive VP of new business development, Nelvana: Perhaps the biggest opportunity or threat to all of our business is what’s now being referred to as Web 2.0, the second coming of convergence. What helped to inflate the stock market bubble at the turn of the century is back again and this time it seems to be for real. What has happened? Three things: First, broadband penetration and the rapid growth of broadband the world over; second is the advent of what’s called secure rights management protocols. Now we have what’s called true content portability. The third thing that’s happened to bring this convergence upon us is this huge launch of new appliances and platforms to deliver content. We’ve all witnessed the dramatic uptake of the iPod. Mark our words: There will be a breakout winner that will enable video downloads and the transformation of the computer to your living room.
Malcolm Bird, senior VP of kids and teens, America Online: The one thing I wouldn’t want to be is a national TV network in 10 years time, because that idea is going to be obsolete with the adoption of on-demand and internet experiences.
Diana Wechsler Kerekes, VP of broadband content acquisition, Comcast: I find VOD to be very exciting and to put it in perspective, Comcast alone last year had 1.4 billion on-demand views. Kids is a huge category and a huge part of VOD. PBS Kids Sprout alone pulled in more than seven million views in January. VOD is very fast, flexible and gives a lot more opportunity for existing networks to adopt these new cross-platform strategies.
Richard Pierce, director of video content acquisitions, Sony Connect: We’re really in the Wild West. I think we have a lot of statistics and a lot of guesses as to what is and isn’t going to work, but nobody really knows. The consumer ultimately is going to dictate the form, business model and way of distribution that’s going to work for them. [And] I don’t think it’s so bad to be a network. The networks are still here and aggregate 48% of the advertising revenue. It’s an incredible platform and networks do well only because of the content that they have.
Murphy: I want to stay with the notion of the multi-platform universe. In the context of making new content, if you were a producer today what would you do differently? How do you make a meaningful piece of content that has a chance to rise above all of the clutter, leveraging multi-platforms?
Robert Tercek, CEO, Multimedia Networks: It’s hard to say what attributes are going to work in the deployment of various platforms. The first recommendation is, if you wish to develop a multi-platform property, try to think of those attributes that lend themselves to exploitation and most appropriately on different platforms.
Murphy: Different attributes, [explain that] a little more for us. What are you thinking?
Bird: I think you’re not looking at making a TV show anymore. You’re looking at making a property. So, how does that property live? If you’re developing an IP and its characters, how’s it going to live in gaming and on traditional delivered streaming media? How’s it going to live if you transfer that into an interactive storyline tool that you may build? Will it live in social networking, if so, how? Then the monetization of it is very interesting because it does change the way you build your business model.
Wechsler Kerekes: We launched Sprout with the on-demand platform first with 50 hours [of programming]; it started to set up what that brand is, then we launched linear.
Bird: Sprout is sort of a watershed product simply because you did launch VOD first. When you were planning Sprout, did you look upon all of those platforms equally?
Wechsler Kerekes: Yes.
Bird: So it wasn’t a case of, ‘the TV network is going to be the governing…’?
Wechsler Kerekes: No, not at all. We thought it was a very big mark to go out with VOD first. It was a very important statement. When we launched the linear, we also launched on-line at the exact same time to give credence to all three platforms.
Murphy: The one challenge that we had was Comcast, for the longest time, wouldn’t pay for any content. So I think the key for content owners in this room is trying to find a compelling packaging idea to take to Comcast or other VOD providers. They are paying some fees now.
Pierce: I wanted to jump in just in terms of what content providers can be thinking of in terms of the multiple platforms. I really believe that you have to let the idea drive where your content is going to go. I think you can actually make yourself pretty crazy in terms of how is it going to work for mobile, IPTV, cable and network TV. I would also think that when you’re developing projects, one of the advantages of the IPTV space is that you’re not limited to the traditional blocks of time where you have to program for a half hour or an hour…I think it’s very freeing for the creative producer. And when you’re shooting, shoot everything. Expand your shooting schedules if you can afford to do that to make additional product, which then can be monetized elsewhere.
Murphy: I think those are great points and I want to give Malcolm a chance to tell one of his success stories with regards to Princess Natasha. This is an example of content commissioned specifically for web delivery.
Bird: So we launched the kids site and got three million-plus kids on KOL. We made original programming, and one of the series, Princess Natasha, became an instant on-line hit. We built this audience up on-line, and it’s really interesting to speak to potential partners about the property. Not only do the kids watch the video, they play the games, download the printables, use the buddy icons and read the comic books. We’ve now got [Natasha] fully licensed in every major category and it’s going to be the first property that started on the internet and went to TV; it’s on Cartoon Network [US].
Murphy: The thing about the web that KOL does so well is that it’s engaging and it’s interactive; it is two-way and I think there’s a marriage of those two ideas in that content producers have the ability to use the web as a test kitchen for new ideas. There’s no reason why you can’t have kids comment on your character designs. Maybe next time you’re going to spend US$100,000 on developing scripts and a promo reel, maybe spend US$25,000 and toss it up on the web and invite children to come and make comments. That in and of itself could be a fascinating way to explore and evolve your content.
Tercek: My business is launching a pilot first on the web and then bringing those propositions to distributors. I just want to ask a question of the other panelists here…What is the engagement model? In April, I’ll be bringing my first network to each of you, hopefully, and I’d be curious to understand how you might engage with any company that has programming [and wants to get it] distributed on your network.
Pierce: Made for the medium? We haven’t really had full discussions on that at this point because we don’t know what the financial model might be. But again, we haven’t launched at this point. So I don’t have any data as to where we’re going to be.
Tercek: How about AOL? AOL’s got a proven model for engaging with outside media companies and partners.
Bird: If you’re talking about bringing in individual content, individual IP, that’s really simple. If you’re talking about a network or channel, that is a much more convoluted conversation. We’ve got a distribution platform, you’ve obviously got a channel that you’ve thought through a unique selling point. There’s a number of different ways we can work with you to distribute that channel and we actually do similar things on mobile. You’ve got a mobile-download ringtone channel that has 4,000 ringtones on it and we can say, ‘Great, we can target and distribute those via AOL Music and you’ll get 18-million people and they’re all people interested in music.’ And so we would work very closely with you on your distribution back-end through our platform.
Pierce: We are going to be offering a variety of business models on the site. There will be download-to-own. We will be bundling, where you can get a discount if you buy a certain number of pieces of content. That content will be available to your PlayStation Portable, which you can then push through to your [computer]. We will also have subscription services and promotional content. We will also have an advertiser-based business model for certain content – so we’re covering all the bases and we’ll see where it will ultimately end up.
Murphy: Nelvana’s just picking the digital sell-through piece and there’s a number of reasons why we’re choosing that lane. One of them is rights management. When you stream content, or you rent content, you may indeed find yourselves colliding with some rights you’ve given up to broadcasters for promotional usage of your content or potentially to some home video partners. I can’t get arrested at retail at with some of these great shows, but I might very well wake up and find myself selling 1,000 or 2,000 downloads a month.
Pierce: We are focusing on the download-to-own business… I think the theory is, let all the boats rise first and then start to extract. One of the areas that I think is incredibly important is the kids area. That is a niche business that is a huge business and Sony Connect wants to be in that business in a very bad way. We will be developing a specific channel for children’s content on a download-to-own basis and that will evolve.
Tercek: First of all, it’s not likely that the companies represented to my right and left, are going to be competitors. They’re going to be some kind of marketing partners, possibly a distribution partner and ultimately a partner that can collect revenue on your behalf and share some with you [as a content producer]. I think that’s what I’m hearing you all say.
Murphy: Is Comcast pushing to anything on the wireless platforms?
Wechsler Kerekes: Well we just announced our partnership with Sprint, so we’re absolutely looking at everything we can do on the wireless platform and what can be pushed down there and how to package it and put it together, absolutely.
Murphy: I find [these changes] thoroughly exciting, but what’s difficult for us – putting my content producer hat on – is that we work really hard to greenlight new shows, we get [small] license fees at least in the U.S. marketplace. So we placed the bets on the consumer products business [to make up the difference]. We’re hoping we’ll get Fisher-Price or Hasbro. But try to have a conversation with the big master toy companies about the web as a way to reach an audience and their eyes roll back in their head.It’s not meaningful.
Bird: Going back to Natasha, last year in June, I went to the [Licensing Show] and people were looking at me like ‘Why the hell am I talking to the guy from AOL for?’ So you start talking to people and say ‘I’ve got 3.5 million kids who not only watch it, but they’ve played the game and downloaded it. And in the future, they’re going to be walking around watching it on their cell phones.’
Tercek: You teach them a play pattern, that’s what you do on the web.
Murphy: I think all of us on this panel have drunk the Kool-Aid, I’m just not convinced the major toy companies have.
Bird: They’re going to have to, look what’s happening in the toy business. Mattel has gone through probably one of the most difficult years they’ve had in years, and Mattel’s Barbie.com is one of the most successful websites that’s out there for kids. So the toy companies and the licensees have to drink the Kool-Aid because it’s the future of their business.
For full downloadable audio files visit www.kidscreensummit.com