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Why Children’s Programming Is The New Front Line In The Streaming Battle

By Yvonne Villarreal, Los Angeles Times (TNS)

Children’s programming might have just become the new front line in the subscription battle between Netflix, and other major streaming services to boost subscriber numbers.

The services have gotten the most publicity from critically acclaimed original content aimed at adults such as “Orange Is the New Black” and “Transparent.” Their strategy aimed at attracting younger viewers, though, is now getting more awareness.

The newfound attention is largely the result of HBO’s recent announcement that it has struck a deal to be the first-run home of “Sesame Street” on its streaming and cable services. The deal helped underscore the importance of cementing a grip in children’s programming in a universe being disrupted by changing viewing habits and cable TV cord-cutting.

It’s no wonder: U.S. digital video penetration among children ages 11 and under is expected to jump to 74 percent by 2019 from 68 percent in 2013, according to research firm EMarketer. At stake will be millions of dollars in subscription fees for streaming services that have the best offerings.

“As a single person or a couple, you might be more willing to drop your streaming subscription for a while until you see more content you’re interested in,” said Piper Jaffray analyst Mike Olson. “But if you have kids who are watching a lot of content, there’s no way you’re going to drop it. And in effect, children’s content reduces churn, which ultimately positively impacts revenue.”

One reason why children are a target audience is because they are natural binge-watchers, prone to viewing the same episode over and over. Parents, who once sat their kids down in front of DVDs, are discovering that streaming services offer more varied programming and are more convenient in a pinch.

About 20 percent of TV content (both acquired programming and originals) on Netflix and Amazon is aimed at children, according to SNL Kagan data from October 2014. Hulu, which has only dipped a toe in creating originals for kids, has a smaller slice of the pie with just 5 percent of its library consisting of licensed children’s shows.

Netflix jumped headfirst into children’s programming in 2011, and it has since proved to be a popular destination for kids — at least anecdotally. About half its U.S. audience, or about 20 million subscribers, is watching children’s TV shows and movies on a regular basis every week, said Erik Barmack, Netflix’s vice president of global independent content.

He said 30 shows out of its slate of kids’ programming were viewed by at least 5 million people in 2014, though Barmack wouldn’t name the specific shows.

“We think we have a big lead in developing a big audience for … tent-pole kids’ programming,” Barmack said. “It’s early days still, though. So we’re really excited about our future.”

The service expanded its lineup of original children’s shows in June with the addition of four new animated series, including a co-production from Saban Brands and Cirque du Soleil Media about a character named Luna Petunia.

A portion of Netflix’s robust $3.2 billion programming budget for 2014 went to licensing movies and TV series from Walt Disney, Scholastic Media and other companies. Netflix also spent money on original content such as tween spy series “Project Mc2.”

Beginning next year, Netflix will have rights to Disney’s live-action and animated movies after they leave the theaters. And in 2018, it will launch the animated series based on Dr. Seuss’ “Green Eggs and Ham,” which counts Ellen DeGeneres as an executive producer.

Netflix also inked a deal with DreamWorks Animation for 300 hours of new shows based on past and recent franchises and characters. The most recent original animated children’s series under that deal is this month’s launch of “Dinotrux.”

Ted Sarandos, Netflix content chief, said during last month’s Television Critics Association media tour that the company’s interest in the younger audience is “important both from a behavior standpoint” because the platform is inherently amenable to the viewing habits of Generation Y and Z, but also from a brand-building position because “Kids will say, ‘Oh, I grew up watching Netflix.'”

In effect, the service wants to forge long-lasting relationships with future subscribers. And as the users get older, the platform’s algorithm adjusts accordingly — lending to its strategy of being a source of content for every age demographic.

Amazon, the second-biggest streaming service, has also upped the ante in its bid to lure young viewers by securing major deals.
The company struck a deal in 2014 with Viacom to license rights to Nickelodeon’s preschool shows. The deal, forged less than two months after Netflix’s own agreement with Viacom expired, is estimated to be worth several hundred million dollars and will make Amazon home to such shows as “Dora the Explorer” and “Go, Diego, Go!”

Amazon also utilizes the same pilot approach as it does with its original content aimed at adults — crowdsourcing pitches and using viewer input for what gets picked up to series. It entered the children’s programming sector last year with four series, including “Tumble Leaf” and “Gortimer Gibbon’s Life on Normal Street.” All four series were picked up this year for second seasons.

The service recently launched animated preschool series “Wishenpoof!,” and last month released six pilots for new children’s shows, including animated fare such as “Lily the Unicorn” and “Lost in Oz.”

Amazon works with an educational consultant to embed curriculum into its shows that encourages right- and left-brain-thinking, said Tara Sorensen, who heads the kids’ content division at Amazon Studios.

“What’s great about streaming services is kids aren’t tied to the linear broadcast,” Sorensen said. “We can encourage them to stop shows or rewind. Streaming and kids just makes perfect sense because we really put them in the driver’s seat.”

Hulu, as it steadily repositions itself as a major player in adult-skewing content, has taken a more streamlined approach with children’s programming.

The bulk of Hulu’s offerings on its Kid’s Section comes from licensing deals. Hulu, like Amazon, also has a streaming deal with Viacom that gives it access to some of Nickelodeon’s content, including older series such as “The Ren & Stimpy Show” and “Hey Arnold!.” Hulu, additionally, has a deal with Turner Broadcasting for rights to some of Cartoon Network’s library.

And this year the service inked a deal with Disney-ABC Television Group to secure exclusive subscription video-on-demand rights to Disney Junior’s popular animated series “Doc McStuffins” and “Bunnytown” and non-exclusive rights to all episodes of “Handy Manny.”

Last year it launched only one original series, “Doozers,” inspired by the popular characters from the classic Jim Henson series “Fraggle Rock.” Discussions about a renewal are underway. “As our offering grows, we’re certainly open to doing more originals,” said Craig Erwich, senior vice president and head of content for Hulu.

Naomi Hupert, senior research associate at the Center for Children and Technology, said it will be interesting to see how the children’s programming market continues to respond to shifting behaviors of young viewers.

“Kids are growing up straddling the computer, tablet and smartphone,” Hupert said. “All these technologies are relatively new, and how we see kids use them is still new. It can be sort of overwhelming to think where it can go from here, but we’re still in the beginning stages.”

Photo: “Project Mc2” follows four smart and science-skilled girls as they are recruited to join the spy organization, NOV8 (“Innovate”), and work together to save the day. (Photo courtesy Netflix/TNS)

AMC Plotting A ‘Mad Men’ Send-Off To Remember

By Yvonne Villarreal, Los Angeles Times (TNS)

It should come as no surprise that Mad Men, a drama about a 1960s advertising firm, has designed what it hopes to be an unforgettable send-off campaign.

The pioneering AMC series will launch its seventh and final season on April 5 — culminating in a swan song that probably will generate the kind of frenzied chatter last seen by its sister drama Breaking Bad in 2013.

To rally viewers as the end draws near, the network is promoting the final stretch of the drama with a multimillion-dollar marketing campaign. There’s even a black-tie ball at the Dorothy Chandler Pavilion for its premiere.

“This show changed our network, period,” AMC President and General Manager Charlie Collier told The Times. “This show means something as our first, and we wanted the send-off to reflect that.”

The drama, created by Matt Weiner and produced by Lionsgate, made its debut in 2007. Despite undersized ratings, it was praised by critics and would go on to ingratiate itself into the zeitgeist — spawning countless analyses and even a reference by President Obama during last year’s State of the Union address. It became part of the disruptive basic-cable troop that demonstrated good shows with a lasting effect were not limited to broadcast and premium cable.

And as the first breakthrough drama for AMC, once a repository for classic movie reruns, it helped the network establish itself as a destination for high-quality content, paving the way for such shows as The Walking Dead, Breaking Bad and Better Call Saul.

In place of a thank-you note for the drama that’s been crucial to its rise, AMC is getting creative.

A major component of the goodbye was a 60-second retrospective commercial that aired during the Academy Awards. It was a minute of airtime that didn’t come cheap, probably costing the network as much as $3.5 million for the time — slightly more than the average cost to produce one episode of Mad Men.

It’s just a fraction of the send-off that is sizing up to be more elaborate than that of Breaking Bad.

A smattering of Mad Men testimonials — from the likes of Bryan Cranston and, even, Keith Olbermann — have rolled out on the network during commercial breaks for The Walking Dead and Better Call Saul. A drip-drop of promotional images have hit the Internet and will adorn billboards, bus sides and telephone kiosks.

In a nod to its mark on popular culture, it will join the permanent collection at the Smithsonian National Museum of American History next month — with Don Draper’s gray suit, fedora, and bar cart slated to be on display. Numerous other events at major cultural institutions in New York and Los Angeles will also take place.

There will also be an art installation outside the Time-Life building in Manhattan — the building that served as the fictional home of Sterling Cooper & Partners.

Linda Schupack, executive vice president of marketing for AMC, said the campaign adheres to the idea of it being the end of an era in more ways than one: The characters of Mad Men are moving on from the 1960s, while viewers are saying goodbye to a drama that helped usher in the new golden age of TV.

“We have been thinking about this for a very, very long time,” she said. “The only way to go pay tribute to a show that is unlike any other is to go out big.”

Of course, the cable network — a unit of AMC Networks Inc. — is hoping the big-budget drama goes out big in other ways.

At its peak in Season 5, the drama averaged 4.16 million viewers — about one-fifth of what NCIS, the top broadcast drama in total viewers that year, garnered. Despite Mad Men‘s modest audience, the network has seen an uptick in advertising revenue thanks in part to the upscale audience the drama attracts with its patient, highbrow storytelling.

AMC’s ad revenue for 2014 — which included the first half of its final season — was $469 million, up 7 percent from the previous year, according to SNL Kagan, an industry consulting firm. To be clear, Mad Men isn’t responsible for it all, but the show does command higher ad rates than some broadcast network programs with larger audiences.

“It’s the kind of buzz-worthy programming advertisers are looking for,” said Darcy Bowe, a vice president at advertising giant Starcom USA. “Media buyers knew they were going to get a certain caliber of audience when buying time on Mad Men.”

As such, the last seven episodes of the period drama are expected to nab top-dollar advertising rates for cable television among marketers trying to align themselves with Don Draper and his Madison Avenue cohorts before it ends. Its final beat is likely to produce the highest revenue in the show’s run.

The cable network refused to sell time for the final episode of Mad Men to advertisers during last year’s upfront sales. Instead, it wanted to save the episode to boost the price closer to air time.

A 30-second spot in the final episode is currently commanding $400,000, and is expected to approach $500,000. For perspective, a “big hit” on a broadcast network might fetch around $200,000 to $300,000.

However, with its hallmark series on its way out, AMC is losing another breakout hit. This has stirred some concern on Wall Street, according to Bank of America/Merrill Lynch analyst Bryan Goldberg.

“The focus amongst analysts about AMC’s ability to continue to launch compelling programming in an economically appealing way was of concern, primarily last year because that was the year they were going to see the financial impact of not having a marquee show on the air,” he said, referring to Breaking Bad.

Since Mad Men‘s debut, AMC has launched 10 original scripted dramas — to mixed results. Last year’s new entrants, Turn and Halt and Catch Fire, have yet to establish themselves as cultural touchstones.

The Breaking Bad spin-off, Better Call Saul, had a promising launch last month. The show’s opening episode was seen by 6.9 million viewers, and a cable-debut high of 4.4 million adults 18 to 49. The Monday night launch left analysts more comfortable with the idea that AMC can move past Mad Men on good economic footing. And, of course, the network is home to The Walking Dead, the No. 1 show on all of television among the advertiser-preferred demographic of adults 18 to 49.

“Certainly they are trying not only to replicate the success of previous years but to build from that success,” said Amy Yong, an analyst at Macquarie. “And they are trying to expand into a new night, which is a risky thing. Monday audiences are different from Sunday audiences. But the outlook, so far, is good.”

That is crucial when considering that cable networks rely heavily on programming fees paid by cable and satellite providers. Quality programming with ardent fan bases allows cable networks like AMC to bump up the fees they charge.

AMC, which reaches about 96 million homes, charged providers an average of 38 cents a month for each subscriber in 2014, up 9 percent from 2013. The increases in these so-called affiliate fees, as well as sales of its programming to video on demand services, led research firm MoffettNathanson to substantially increase its revenue estimates for AMC Networks this year.

AMC Networks should generate nearly $2.6 billion in revenue, a 17.4 percent increase over 2014 levels, according to the research firm’s estimate.

It’s the kind of outlook that Don Draper might celebrate over an old fashioned.

For Weiner, the notoriously secretive creator at the helm of Mad Men, the celebration is in looking back as the network moves forward.

“It was exciting to be at the start of something where there were no rules and where everyone had an optimistic attitude despite limited resources and a seemingly impenetrable marketplace,” he said by email. “We’re all still processing the fact that it worked out.”

(c)2015 Los Angeles Times, Distributed by Tribune Content Agency, LLC

Image: YouTube

Tracy Morgan More Responsive In Wake Of Accident, Publicist Says

By Yvonne Villarreal, Los Angeles Times

Comedian Tracy Morgan remained in critical condition in a New Jersey hospital Sunday with broken ribs, a broken leg and a broken nose, his publicist said, following a six-vehicle chain-reaction wreck that killed one of Morgan’s friends and mentors.

Morgan underwent surgery on his leg at Robert Wood Johnson University Hospital in New Brunswick, N.J., according to a statement from Morgan’s publicist, Lewis Kay, who added that the former “30 Rock” and “Saturday Night Live” star was more responsive on Sunday.

“We expect him to remain in the hospital for several weeks,” Kay said. “His family is tremendously overwhelmed and appreciative of the outpouring of love and support from his fans.”

Morgan was hospitalized after his chauffeured limousine van, also carrying comedians Ardie Fuqua and Harris Stanton, was struck from behind early Saturday by a Wal-Mart truck, New Jersey police said. Another passenger, comedian James “Jimmy Mack” McNair, died in the crash.

The Georgia-based driver of the truck, Kevin Roper, 35, has been charged with one count of death by auto and four counts of assault by auto, the prosecutor’s office of Middlesex County, N.J., said. Roper turned himself in Saturday evening and posted $50,000 bail, New Jersey state trooper Greg Williams said.

Williams said there was no initial indication that alcohol or drugs played a factor, but the crash remained under investigation.

The National Transportation Safety Board will work with New Jersey State Police to investigate if any elements of the crash are related to commercial trucking and limousine safety, such as vehicle maintenance and drug and alcohol testing of drivers, said NTSB spokesman Keith Holloway.

“At this point, we are just gathering factual information,” Holloway said. “We have not proposed any action.”

Photo via Flickr