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Technology

The Year of Living Digitally

1/13/2006 7:00 PM Eastern

After years of struggling to gain distribution and recognition, a number of kids networks on digital tiers are hoping to finally come of age in 2006. “Two years ago [when we began planning our future], we said 2006 was going to be our year,” says Dea Perez, Discovery Kids vice president of programming. This year, the movie Strange Days at Blake Holsey High and other “higher-profile original programming will take us to the next level.”

Discovery Kids is hardly alone in its emphasis on original programming. Nicktoons Networks is debuting its first-ever original content this quarter, and will have a schedule that is 75% exclusive. That comes at a time when its sister services Noggin and The N boosted their ratings considerably through original fare, and are gunning to continue that trend.

But producing a growth spurt in audiences isn’t child’s play. Most of the digital networks have limited distribution and programming budgets and only a few — notably Noggin/The N, Nicktoons Network and Toon Disney — are rated by Nielsen Media Research. That makes it very difficult to sell advertising or even track how well programming is performing.

What’s more, all face a very crowded media playground. “It’s not like the old days when kids came home from school and plopped down in front of the TV set,” says Dolores Morris, vice president of HBO Family. “Today, they come home and turn on the computer or play a video game. You have to lure them back to television.”

Strategies for accomplishing that vary widely, from original programming and VOD to alliances with broadcasters and operators who can boost a network’s promotional and distribution clout. Most networks agree that sharply defined brands and programming strategies are crucial.

“When everyone in this industry started launching digital networks several years ago, we were all talking about repurposing and giving audiences access to library content that they hadn’t seen for a long time,” Nickelodeon Digital Television executive vice president and general manager Tom Ascheim says. “But we all miscalculated in a basic way. What viewers really wanted was great television. You have to create distinct brands that work.”

One way to stand out from the pack, is original programming, says Ascheim. He points to the ratings success that Noggin and its companion service The N have seen. Thanks to shows like Jack’s Big Music Show, Noggin saw an overall 24% bounce in viewers in 2005 over 2004. And aided by Degrassi: The Next Generation and Instant Star, The N saw its teen audience jump by 35% last year.

Ascheim is now hoping that original fare will have a similar impact on Nicktoons Network, which was relaunched in September 2005 with a new name, logo and on-air look.

To differentiate the channel from Nickelodeon, the amount of programming that is exclusive to the channel has been increased to about 75% today and in the first quarter of 2006 it will launch its first original shows: Skyland, Kappa Mikey and Shuriken School.

“You can’t build a brand by treating a digital channel as a kind of garbage bin for your library product,” Ascheim says. “You have to give them something that they can’t get anywhere else.”

The strategy seems to be paying off. Among its target audience of kids 2 to 11, Nicktoons Network’s ratings have increased every quarter since the fourth quarter of 2004, and fourth-quarter 2005 ratings were up 43% from a year ago.

Original programming also plays an important role at Discovery Kids, which is putting more emphasis on creating higher profile, more expensive original fare, says Perez. Besides Strange Days, which will bow in late January, it has on tap Year on Earth, a special featuring three high-school kids traveling to eight locations around the world.

Discovery Kids benefits greatly from its deal to program NBC’s Saturday-morning block. Among the benefits: “Being on NBC is now allowing us to fund better original programming,” Perez says.

Alliances are also crucial for PBS Kids Sprout, the newest kids digital network to launch. The channel, a joint venture between PBS, Comcast Corp., HIT Entertainment and Sesame Workshop, features some of the best-known icons in the preschool genre: including Barney, Teletubbies, Bob the Builder and the Sesame Street characters.

“It has made us the gold standard for preschool programming and clearly differentiated us from everyone else,” PBS Kids Sprout president and general manager Sandy Wax says.

While Sprout isn’t rated, Wax reports that their VOD product was viewed 50 million times on Comcast systems between April and the end of 2005. And viewers spent an average of 28 minutes watching shows, which typically run about 30 minutes.

Alliances will also be important for the PBS Kids Go! Channel, when it launches next fall. The network, which targets the kindergarten to third-grade set, will get crucial distribution support from a deal between the Association of Public Television Stations (APTS) and the National Cable & Telecommunications Association. That deal gives local public stations carriage for up to four digital networks on NCTA members’ systems, serving about 80% of all cable households.

While it is much too early to announce a specific programming slate, PBS senior vice president of brand management Lesli Rotenberg says original fare, English- and Spanish-language content and alternative media, such as the Internet and mobile, will play a big role. “It’s all about developing content for the next generation of kids,” she says. “We want to be there for them on any media.”

Boomerang has not chosen to dive into original programming and continues to rely heavily on Time Warner Cable’s library of over 14,000 cartoons, which includes some of the best known characters in the history of animation.

Senior vice president of business operations Mark Norman says Boomerang, which reaches about 20 million homes, also added Cartoon Network original Two Stupid Dogs and this January it will launch Dexter’s Laboratory.

Boomerang isn’t rated, but Norman argues that the strength of its brand and programming strategy can be seen from VOD data. While Boomerang offers fewer hours, its VOD programming currently gets about as many views as product from Cartoon Network and Adult Swim.

September