KIDS’ PROGRAMMING LEADS DIGITAL TV CHARGE

Whether using terrestrial, satellite or cable delivery systems, American-based or international, networks targeting children continue to play pivotal role in helping define digital market realities in addition to being important driving force behind digital penetration, observers said.

Susan Ross, gen. mgr.-children’s entertainment, Corus Entertainment, calls it “kidfluence. They're the ones leading the charge -- they are the ones telling their parents, ‘We've got to get this game platform, we've got to get high-speed access.’ They're hooking up the equipment, too.” Ross said through research conducted at Corus “we know kids are the first in line for interactive and to take pleasure out of it.”

John Morris, vp-International TV & Video, HIT Entertainment, said: “By definition, with kids’ programming, we're speaking to people who have no problems with the technology.” More importantly for business, today’s children are tomorrow’s parents, he said: “And they will be very familiar with computers and the concept of interactivity.”

Connection between kids and advancing technology is nothing new. Broadcasters and programmers for children’s entertainment have been producing content for several years that integrates online and offline media. Internet offers unique instant feedback, which in turn is invaluable for designing content to which kids can relate, officials said. But while main obstacle for kids’ providers is to develop appropriate content suited to online IT component, digital TV channels face much broader challenges.

As with any growing venture, success of digital channels for kids has created new array of problems that all broadcasters will face soon. Despite growing public acceptance and appetite for digital, both domestically and globally, in U.K., for example, there are 23 kids’ networks now competing. Conversion to digital marketplace remains multilayered proposition filled with glorious potential tempered by unanswered political, legal, creative and consumer questions, officials said.

Morris said longtime clients that still were transmitting in analog were “increasingly, as a matter of course, at contract stage saying, ‘Oh, and by the way, we want digital rights as well as all the other rights we've had. And guess what? We don’t want to pay for them.’ They say, ‘All we're doing, guys, is preparing for it. We don’t get any more license fees or public service funding for this, so we can’t offer you any more.'” Morris said commercial channels were less aggressive “because they tend to be a little more short-term about things. But when they do come on to it, they also say, ‘We know we're not operating in digital yet, but we will be operating in it and guess what? We can’t get any more ad revenue so therefore we can’t offer you any more money for it.’

Because of that, Corus’s Ross said it was not that easy for start-ups: “That’s a tough one because, of course, as new channels, digital channels have small distribution. You're not bringing in revenues that an analog channel would, so you look for bit of a break out of the gate until you're up on your feet so the license fee negotiation becomes challenging… It’s a hard one and we're all kind of making it up as we go along.”

Reality is, as market place gets ever more crowded, it becomes harder and harder for newcomers to attract audiences, observers said, and how many digital channels any market ultimately can bear is great unknown, but importance of brand awareness is clear. “So something like Discovery Kids becomes a slam-dunk as far as explaining to the audience what it is,” Ross said. “But if there’s a channel out there that’s trying to get carriage that has no brand recognition - - what’s the positioning? So from the distributors’ perspective it becomes too complex. I think that’s certainly going to be part of the decisionmaking.”