Mapping out its digital channel strategy, Australia’s national public broadcaster the ABC decided to lead off by leveraging its strong kid programming reputation into last month’s launch of ABC Kids.

The first children’s diginet Down Under, ABC Kids won’t initially stray very far from the tree; the schedule and on-air aesthetic are effectively the same as the current analog service for now. ‘Our plan is to build on the success already achieved in children’s programming on the ABC,’ says Donna Andrews, the former Nick Australia program director who is helming the new channel.

A mix of ABC-produced preschool fare including Bananas in Pyjamas and Play School is currently on the lineup, along with some older-skewing ABC co-productions such as The Saddle Club and series from the BBC in the U.K. (the ABC has

the first option in Australia on most Beeb programming). According to Andrews, the schedule is being kept simple in terms of organization, with demo-specific blocks for preschoolers, the five to seven set and eight- to 12-year-olds.

Andrews is looking to acquire free-to-air digital rights for animation and live-action series that appeal to both genders in short, five-minute, 10-minute, 15-minute and half-hour formats. The channel airs from 6 a.m. to 6:30 p.m. seven days a week.

Digital terrestrial television broadcasting started in most Australian capital cities in January, but the service has suffered several major setbacks already. Set-top boxes were not available to the public at the time of the January launch, and the cost of the boxes now is prohibitively expensive for the average Australian family.

As a result, DTT penetration is severely restricted. However with a more progressive rollout underway, Andrews is confident that ABC Kids will grow rapidly. ‘We are hoping that in the future, ABC Kids will be retransmitted by cable and satellite companies-just like they retransmit the ABC and commercial networks (Seven, Nine and Ten) now,’ she explains.

There are suggestions that the national broadcaster has signed a deal with Optus for cable distribution of ABC Kids, which would add hundreds of thousands of subs to the few thousand currently able to receive the channel digitally.

This expanded reach would be good news for the ABC’s licensing and merchandising partners, who will be able to further reinforce their own brands in the children’s television market. Andrews comments: ‘The ABC is the leader in kids television in Australia, and distributors are being supportive of our new venture.’

Other industry sources are not so convinced. According to one, the global distribution market is hardly enamored with the trifling sum of US$100 per half hour said to be on offer from ABC Kids. Under such circumstances, it’s highly likely that the diginet will be fed back catalogs rather than new programs.

Admittedly, the public broadcaster is wholly funded by the government with no extracurricular revenue opportunities, making it difficult to compete with the commercial networks for pick-ups. The plummeting value of the Australian dollar also hasn’t helped matters. But despite suffering from a lack of funding, Andrews appears unfazed. She emphasizes the ABC’s strong reputation for quality kids programming in Australia, and that it is the only commercial-free terrestrial channel.

Nevertheless, the launch has left rivals bewildered. Nickelodeon Australia GM Ian Fairweather’s response ranges from ‘incredulous’ to ‘what on earth for?’ He asks: ‘Why do they feel compelled to do a dedicated kids channel on digital when resources are so scarce and they will reach only a handful of kids? For the last four or five years since pay TV was introduced in Australia, kids have been very well-served.’

He continues: ‘From a commercial point of view, I feel the same as my colleagues in the U.K. We are the leading channel among five- to 12-year-olds and we’ve spent a lot of resources building that up. We are really very unhappy [about the launch].’ Nick UK has been one of the most vocal opponents of the BBC’s proposals to launch digital children’s channels, claiming it is wrong for TV license fees to be used to fund these initiatives and that it would create an unfair playing field within the industry. In Australia, there are similarly raised eyebrows about the use of taxpayers’ money to launch a channel few people will be able to watch.

The five free-to-air channels in Australia are being broadcast in digital without interruption. However, the three commercial channels have been held back by the government from the use of multiple channels until 2008 (quashing any plans they may have had to launch their own kids channels) and are restricted to multi-view options-but not so for the ABC and ethnic channel SBS. Beyond the kids offering, the ABC is also considering thematic digital channels devoted to the arts, science and religion.