Could HIT-Amazon partnership spread like wildfire?
For more than 25 years, Fireman Sam has been a leader in the fictional Welsh town of Pontypandy, helping locals with everything from water rescues to retrieving cats stuck in trees. Last week, however, Fireman Sam stood at the forefront of what may be the future of online content and consumer products sales. Amazon and HIT Entertainment, a division of Mattel, announced a partnership that will bring the preschool series, as well as an array of consumer products exclusively to Amazon.com, via a Fireman Sam hub on the site.
Fireman Sam launched on Amazon Instant Video, Prime Instant Video and FreeTime Unlimited earlier this month with 13 episodes from a completely new season. By the end of 2014, 76 10-minute episodes and two movies will be available to stream, and most of it will be content new to the US market. (Fireman Sam ended its run on US preschool net Sprout prior to launching this partnership.) HIT is providing the content, while specifics regarding licensees involved in the program have yet to be announced. Fireman Sam consumer products will launch on the content hub in October.
It is the first deal its kind for the two companies and it could also shape the business of streaming video services such as Netflix and YouTube. “Many are already investing in original content. They just haven’t integrated commerce into it,” says Brian Solis, a digital analyst and business strategist with the Altimeter Group. “This is an experiment, not just for Amazon and Mattel, but I think for the industry overall.”
In its native UK, Fireman Sam is the fifth-largest preschool brand, according to the research firm The NPD Group, which is partially why the brand was selected for this deal. “Through Fireman Sam, there are two things we know – one, there is a base of content, and second, it is a brand that has been working in other markets, so we know what resonates about the brand,” says Sid Mathur, VP of HIT Americas. “If I took one of our larger brands, which already exists, or if we did a complete fresh IP launch through this new model… the expectations would be too high in terms of what success looks like.”
Mathur says it’s tough to say at this point what will be deemed a success for this business model. It could be equally difficult for outsiders, with Amazon often tight-lipped about its sales figures. Figuring out how the Amazon’s Kindle is selling, for instance, involves a bit of guesswork. Forbes estimates Kindle device sales for last year, be it the e-reader or Kindle Fire, were 19.7 million units—down from 21.1 million in 2012. It’s a far cry from Apple or Samsung’s share of the tablet market. With an estimated 5.8 million Kindle tablets shipped in Q4 2013, compared to 41 million Android tablets shipped in the same period, Business Insider estimates Amazon’s market share fell from 10% in Q4 of 2012 to 8% by the end of 2013.
The deal also poses a conundrum for regulators that require a strict division between programming content and commercial sales directed to children. America’s FFC rules, for example, stipulate:
[I]n television programs directed to children ages 12 and under, program material be separated from commercials by intervening and unrelated program material. The purpose of this separation policy is to protect young children who have difficulty distinguishing between commercial and program material and are therefore more vulnerable to commercial messages. If a program fails to adequately separate program and commercial material, the entire duration of the program may be counted as commercial material (a “program-length commercial”).
For watchdog groups, this new merger crosses the line. “It doesn’t make sense that there’s something that can’t be done on television…but when you’re showing it on the internet, then all of a sudden it’s fine,” says Josh Golin, associate director of nonprofit org Campaign for a Commercial Free Childhood. “Unless there’s a public outcry or regulators saying this is something that shouldn’t be done, then there’s no reason we wouldn’t see others rushing to do this.”
HIT and Amazon promise that video content offered via Amazon Instant Video, Prime Instant Video and FreeTime Unlimited will be free of advertisements. “It is no different than watching on a PBS website or Netflix,” says HIT’s Mathur. “The consumer product side of things takes place in a different space.” Amazon will promote Fireman Sam products through marketing strategies such as Amazon Prime site takeovers, Kindle Lock Screen advertising and through its recommendations feature.
“It’s blurring the lines between what’s beyond reproach when marketing and selling to children,” Solis says. However, the model could have its advantages for some parents. “My child adores Peppa Pig. There’s no way to buy Peppa Pig products easily in the United States,” Solis adds. “If there was an integrated e-commerce system every time we watch Peppa Pig through Amazon, her birthday party would have been a lot easier to decorate.”