KidsCo caters to indies to build its launch sked

IF it were anyone else talking up plans to launch a pan-regional kids channel by September, they'd probably be laughed out of the room. But the combined experience and assets possessed by the triumvirate behind KidsCo - not to mention their very indie-friendly model for accessing content - has been stirring up a considerable amount of curiosity in kids production circles lately.
May 1, 2007

IF it were anyone else talking up plans to launch a pan-regional kids channel by September, they’d probably be laughed out of the room. But the combined experience and assets possessed by the triumvirate behind KidsCo – not to mention their very indie-friendly model for accessing content – has been stirring up a considerable amount of curiosity in kids production circles lately.

A joint-venture between DIC Entertainment, Nelvana Enterprises and Sparrowhawk Media (which bought Hallmark’s international broadcast and distribution outfit in April 2005, and is headed up by ex-Disney International president David Hulbert as CEO), KidsCo is essentially a 24/7 multi-platform channel for preschoolers and kids ages six to 10 that aims to stand apart from pan-regional veterans Cartoon Network, Nick and Disney/Jetix in several key ways.

First, it’s European in sensibility, rather than North American. Second, while established channels work slowly towards breaking their dependence on ad revenue, KidsCo is starting off in line with the anti-commercial zeitgeist of the day. And third, the net is open to library programming that may have trouble finding a broadcast home now that its newness has faded.

This last element no doubt held particular appeal for share-holding content partners DIC and Nelvana, both with deep libraries of programming, much of which is well past its premiere phase. KidsCo MD Paul Robinson says vertical integration is at the root of this particular distribution challenge. ‘It’s getting harder because acquisition budgets at the Hollywood channels are going down, and they’re putting more and more US content on air instead. Producers like DIC and Nelvana see KidsCo as an opportunity to get their product out to market fast in a way that’s neater and cleaner, and that delivers lots of eyeballs, which are critical because they lead to ancillary revenue and brand-building.’

To this end, KidsCo’s three-year rollout plan is quite aggressive, with Central and Eastern Europe pinpointed as the launch targets. Sparrowhawk’s team is currently in negotiations to lock down carriage deals in four countries to start with, drawing from a nearly-there shortlist comprised of Poland, Hungary, Romania, the Middle East, Turkey and Russia. Once the September launch is accomplished, the company plans to add territories including the Ukraine, the Baltics, Latvia, Estonia and Bulgaria in short order. Asia-Pacific is up next, with a rollout shaping up around Singapore, Malaysia and the Philippines fluidly scheduled for sometime in November. Next year will be devoted to bringing the rest of Western Europe (including the crowded UK market) and Latin America online, and the JV also has ambitions to tackle the much more complicated Japanese, Chinese and Indian markets down the road. All tolled, the long-term goal is to be operating channels in 40-plus territories by the end of 2009.

The MO for establishing this ambitious footprint is to leverage the channel-launching expertise and on-the-ground relationships tied up in the Hallmark infrastructure, which operates broadcast outlets in 165 countries from a state-of-the-art facility in Denver, Colorado. Not having to set up from scratch brings KidsCo’s launch costs down monumentally and allows for a speedy market entry. The JV also plans to shoulder the cost of dubbing the programming it airs in all necessary local languages, and this may open up additional sales opportunities for the content owners it does business with.

But as far as tangible payment goes, KidsCo has pledged to set aside 40% of its total revenues – whether they be from subscriptions, limited sponsorship or interactive media – for IP owners who sign over their libraries on a non-exclusive basis. These earnings will be allocated depending on how many shows producers provide to the channel, with a premium given for tentpole shows. ‘So we’re essentially rewarding the content owners for giving us the good stuff, and not just the library fare they can’t sell,’ says Robinson. ‘And the non-exclusive nature of our deal model means producers can still sell to other broadcasters, so their distribution revenues aren’t cannibalized.’

In some cases, shows in libraries KidsCo has access to may be tied up in exclusive sales to free- or pay-TV channels, but Robinson estimates that no more than 25% of the shows in the DIC and Nelvana catalogues are in this predicament. And this is just a temporary situation, he emphasizes. ‘At the moment, we’re working around our partners’ deals because they’re pre-existing, but going forward, these companies will be factoring KidsCo into their distribution strategies.’

Although they opted not to own shares in the venture, both Entertainment Rights and TV-Loonland have agreed to provide KidsCo with content, and EM.Entertainment’s recent move to merge its distribution business with Sparrowhawk’s could see the Junior catalogue play into the channel’s programming lineup in the future. KidsCo is currently negotiating with several additional prodcos, and new deals are expected to be nailed down over the next two months. In the meantime, Robinson (who spent eight years growing the Mouse’s broadcast presence in the UK as SVP and MD of Walt Disney Television International/ABC Cable Networks Group) expects the following high-volume shows to figure into the launch schedule: Sabrina, Inspector Gadget, Dennis the Menace, Madeline and Strawberry Shortcake from DIC; Babar, George Shrinks, Brace Face and Rolie Polie Olie from Nelvana; ER’s Postman Pat and Basil Brush; and My Little Pony and Clifford from TV-L.

Robinson has already defined his blocking strategy for the channel. On weekdays, the broadcast day will start off targeting kids six to 10 during breakfast time from 6 a.m. to 9 a.m., before switching to preschool until 3 p.m. Then kids will take center stage again until the 6 p.m. family movie slot, after which live-action fare rounds out the schedule until midnight, when repeats will fill the gap until the next morning. On weekends, preschool shows lead off from 6 a.m. to 9 a.m., and then programming for core kids kicks in and runs until the family movie’s 6 p.m. start time.

With more than 6,000 half hours from DIC and Nelvana in his arsenal, Robinson plans to refresh the lineup fairly regularly with library fare in the beginning. But he still needs family-friendly movies to feed into the nightly block, and is in talks with companies such as PorchLight Entertainment and Fireworks Entertainment to fill the gap. He’s looking for pics that are 60 to 90 minutes long, and is open to both animated and live-action pitches; the channel overall will feature a 75/25 genre split. Robinson also expects to get into original production at some point, although it’s not a priority for the near future.

Surveying the competition currently operating in Central and Eastern Europe, Robinson says KidsCo offers an alternative to well-entrenched nets Cartoon and Jetix because it doesn’t intend to carry any boys action shows, and Nick isn’t a direct rival because it targets older kids. Disney, meanwhile, is just getting into the region, which is home to a very strong local channel called Minimini.

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