KidsCo, a joint venture owned by NBCUniversal and Corus Entertainment, is now broadcasting from Corus Quay in Toronto. The channel also unveiled a new, refreshed on-air look developed by Corus, which will be complemented by original, new content, and a new website.

KidsCo’s 2013 re-launch promo reel

Recently, KidsCo licensed a slate of fresh content from Nelvana including Beyblade, Grossology, Rolie Polie Olie, Jacob Two-Two and Babar to further bolster the channel’s 2013 schedule. KidsCo has also acquired the rights to widely-acclaimed shows My Place and Shelldon and has commissioned NBCUniversal’s Matchbox Pictures to produce Zuzu and the Supernuffs.

Hendrik McDermott, Managing Director of KidsCo TV, shares with us what are some of the changes viewers can expect this year. _________________________________________________________

Q: Maybe we can start with a couple of changes that KidsCo has recently gone through.

A: Let’s start with November of 2011. The Board of Directors decided at the time to make a management change and so they put me in. The mandate really was to sort our shareholding. We had previously three minority shareholders – that was NBCUniversal; Nelvana, which is owned by Corus Entertainment; and Cookie Jar. All three of those partners had different agendas for what they wanted to accomplish in the kids space and those weren’t always looking in the same direction. So it became clear that a change in the ownership structure was necessary for the channel to continue. It also was clear to me at least that Cookie Jar is focused primarily on selling content – they are not really a channel operator and so they were looking to exit.

On the NBC side, we knew that for KidsCo to continue to grow, it required a control in shareholder. Corus Entertainment has always been very strong partners committed to KidsCo. So between us, we were both interested in increasing our stakes. So in the period from November 2011 to May 2012, I was negotiating with the various stakeholders and we agreed to a deal on May 15, 2012, where the equity changed hands. What has happened effectively is Cookie Jar has exited the business on the equity side. They continue to license content to Kidsco so we have a pipeline of content from them. And NBC has taken a controlling share in KidsCo. What that means is we have control over the company, and we also manage the company from our London headquarters. Corus Entertainment has also acquired more equity – they increased their stake to 49% – so it’s a 51% to 49% joint venture. As part of that, they have committed more to the channel through capital and increased presence for the channel – that means an increase in content coming from them or renewed commitment to running their content. So we have a direct link to their content pipeline now.

On top of that, they have a brand new technical facility in Toronto and we’ve announced that. We’re in the midst of moving right now actually – our technical capability’s there. Really what that means is consolidating all of the suppliers who provide us technical services into one. They have a brand new state-of-the-art facility there which will increase the quality of our channel on the technical side and it will allows us to introduce new dynamic graphics. And so we’ve also invested in a new on-air look for the channel, which we are going to deploy in early-2013. And so that’s part of our integration and migration with Corus. At that point, we’ll have a brand new channel coming out of the facility there.

On top of graphics, we’ve invested in content as well because 2012 has been a year of restructuring – it’s sort of the way to put it – to realign our strategic focus and we spent the last three or four months investing in content. So some of that we’ve brought to air already. We’ve introduced a show called My Place from Australia. We’re also bringing to air next week a show called Shelldon, a HIT entertainment production. That would be deployed globally for us and we’ve dubbed that into all 18 of our languages. And on top of that we have a considerable amount of content coming from Corus Entertainment for next year. And we will be expecting to release the names of those titles shortly in a couple of weeks.

So really the focus for next year is an investment in dubbing. We look at Asia as being a growth market to us. We like to have our channels localised, children like to watch TV in their local language. So we’re renewing our commitment to dubbing, particularly in Asian languages. I think that the commitment you’ll see from early 2013 is a brand new channel with new content. Then throughout the year you’ll see an increased commitment to dubbing followed by further content in the pipeline.

Q: You are dubbing Shelldon in all 18 languages. Is that a strategy moving forward?

A: No matter where we are in the world, children like to watch content in their local language. It’s very expensive to dub content but we feel especially for flagship shows, that the equipment to dub is there. People can see that we are investing in the channel and it shows we are here for the long term and we’re not just investing in content for a quick flash-in-the-pan. So we really think localisation is what is required for kids television and we really want to increase our commitment in the future.

 

Q: Would multiple language versions make it easier to then bring the channel to a new territories?

A: Yes we’ve done that already this year, I’ll give you an example – we entered Malaysia for the first time this year and from Q1, once we’ve launched our channel next year, we’ll be broadcasting in Malaysian for the first time. Shelldon is being dubbed into Malaysian; that will be our launch programme and then we expect to continue to launch more in Malaysian throughout the year. So that’s a very good example of the dubbing commitment which open more doors.

 

Q: Which Asian territories are you looking at launching in come 2013?

A: So I think there’s plenty of room now for us to grow in Malaysia. Indonesia we see as a growth market as well. We’ve had a lot of meetings today regarding the Philippines. It seems like no matter which territory you’re in here there’s growth to be had. It’s not just necessarily from acquiring new customers but also those customers are growing. So pay-TV is growing in general in this whole region so I think it’s not right to single out specific territories.

 

Q: The kids programming space is getting increasingly crowded in Asia. Where are you able to carve out a space for KidsCo?

A: We find in the world of kids television that there are a variety of different brands that target different segments of the market. We focus on what we call “mid-kid”, which are boys and girls aged 6-10. You have a lot of channels that are older-skewing looking for the 12 plus market and you also have dedicated pre-school channels. While we have a pre-school block on our channel, we like to focus on kids 6-10 and I think one of the key differentiators for us is that we source a diverse content – so we are not just an outlet for a Hollywood studio but we like to source a diverse variety of content both in terms of the animation style; so 2D, 3D and all that kind of stuff; as well as from a variety of places around the world. So it’s truly a diverse mix of content.

And I think one of the key things we find especially when we speak with our affiliate partners around the world is that we offer safe and non-violent content, and that’s something we are very true to and stick to all the time. Some of our competitors are really showing stuff that children might enjoy watching but their parents a bit concerned about; and there is a lot of violence on TV. And so we are very interested in offering a very safe environment for children so that you as a father can leave your child in front of the TV and know that they are not going to be watching certain things. So we take that commitment very seriously and that infiltrates our acquisition strategy as well. We ensure everything we bring to air is in a safe environment.

 

Q: In your deals with Cookie Jar and Corus, are these direct acquisitions or do you have co-production deals as well?

A: At the moment we’re acquiring content from them. We are doing our own production right now with Matchbox Pictures in Australia. We’re starting to venture into original programming. The obvious advantages of that are you own your own intellectual property, you can do whatever you want and if you look at any type of channel around the world, having your own content can play a key role in that kind of strategy. So that’s something we want to venture into more but it’s a very difficult and risky proposition to just jump in and be spending money all over the place.

So we’ve invested now in a show called Zuzu and the Supernuffs, which we are expecting delivery in Q2 of 2013.

 

Q: Let’s talk about multi-screens. Are you finding ways to bring your content across multi-screens and in what form?

A: We see multi-screens as an important part of any offering. What we’re focused on is a product we are developing called “My KidsCo”. This is what we like to call “the personalisation of television”. So it’s a customisable linear channel; this is a product that can sit in the set-top box or on an iPad or on another tablet. And the way it works is when you switch it on, be it on a set-top box or a tablet, it begins playing like a normal television channel will. But the difference is you can interact with the channel. As you’re watching the programming, you can vote on the content to say “I like it very much” or “I hate it, I hope you don’t have too many of those” (laughs). And you can also select what genres you like to watch – whether it’s live-action or animation or comedy. You can pause fast forward and rewind the programming.

And the more you interact with the channel – we work with a few suppliers and we have a technological solution in the background which is a learning engine – it figures out what you like and what you don’t like. So the content carries a lot of meta tags with it. So for example, just looking at the content line-up here, if you are boy or a girl, you’re going to lean towards different programming. So if you skim through this programme three of four times, it will start serving you more of this. And the idea is the more you interact with this, the more it will know what you want and the more it will serve you what you want. So ideally and ultimately you get a completely personalised television stream.

 

Q: Are you using that to collect data of our audience profile as well?

A: That data just gets fed into our learning engine. We don’t see that information.

So what that means is in the same household, you can have two viewers with completely different profiles. For example, a boy versus a girl or a 12-year-old versus a 10-year-old and they will have slightly different interests and this allows for the channel to be customised for those people. So that’s what we’ve been focusing our attention on in the last six months.

 

Q: What challenges do you foresee that children’s channels will face in the year ahead?

A: I think increased competitions is always a challenge, you can’t get away from this. It would be great if we were the only channel in the market! (laughs) We have to fight for viewers and we have to fight for customers and I think realistically, this is the biggest challenge right now because there is a certain amount of opportunity out there. Everyone’s budgets are being squeezed right now; we have to compete for the same pots of money that are decreasing. So we compete for viewers and customers, so that’s why we decide to cover this specific niche which we think will differentiate ourselves from the competitors.

 

Q: Will your main revenue stream be from subscription and is the channel commercial free?

A: At the moment we’re commercial-free and it’s one of the things we like to offer to our clients. It’s usually a value-add, it allows our pay-TV platform which we do business with to differentiate themselves from free television. We can offer, currently, a non-commercial channel which we think enhances the viewing experience for children.

 

Q: Are there certain milestones that you have set for yourself for the year ahead?

A: There’s no definitive milestone. The strategy for us next year is growth in markets that we’re already present. What we need to do is consolidate our presence in many territories and that stretches from Western Europe to Eastern Europe to Asia. There are different profiles in the different regions, in different markets. We really see the Asian market, in particular the languages we dub into, there’s further penetration for us into those territories; as well as, English language is tolerated in some countries here so that presents an opportunity for us to grow as well. We’re definitely moving towards subscriber growth, that’s what we’re looking for. That is an overall target, there’s no cap on that. We’d love it to grow as much as we can. We’ve done very well in some territories and we have further work to do in others. We certainly will focus a lot of our attention this year on the Asian market.

 

Q: Which are the territories that have done well?

A: We do quite well at the moment in Australia; recently we’ve signed a few more deals in Eastern Europe in Turkey. For us now, the challenge is – in those territories where we have a foothold here in Asia – is to continue to penetrate into those markets. And the way for us we think to do that is to show commitment to investment in the quality of the product we’re offering.