Broadcaster spending on children’s programming has remained flat over the past five years while the home entertainment market overall has declined; nevertheless, the leading players have significantly increased revenue by leveraging their children’s brands worldwide, according to research from Screen Digest.
The report, “The Business of Children’s Television,” examines the international market for children’s TV, finding that the cutting of expenditures and the leveraging of intellectual property rights have resulted impressive revenue growth:
At the same time, the number of children’s channels has grown: There are now 14 full-time children’s channels in the USA, 17 in France and the UK, and nine in Germany, according to the report:
The report shows that the value of broadcaster investment has remained virtually unchanged over the last five years, decreasingly slightly from 1.1 billion euros in 2002 to 1 billion euros in 2006.
Additional findings from the report:
- The UK, Germany, and North America have seen a decline in spend compared with Belgium, Italy and Spain, which have enjoyed a moderate increase in expenditure.
- Broadcasters now rarely provide more than a minority of production budgets, leaving producers to raise the remainder from co-production and presales or to shoulder the burden themselves.
- The home entertainment market for children’s TV programs has also declined, from 1.2 billion euros in 2002 to 911 million euros in 2006.
- Sales of the pre-school genre in particular have suffered from a combination of lower prices, the withdrawal of the VHS format and the growing availability of round-the-clock children’s TV channels.
- Companies that are less reliant on broadcaster commissions and acquisitions have fared better than those that operate on a more conventional independent-production model.
- Despite the decline in TV budgets, the companies that have got their strategies right and launched their properties in a global market are flourishing, including include Rainbow, Chorion, Alphanim, BKN International and DIC Entertainment.
- The market is dominated by the “Big Three” companies: Walt Disney, Nickelodeon and Cartoon Network. Between them, they accounted for two-thirds of the $9 billion in revenues reported by the top 25 companies in 2006.
- Public broadcasters remain committed to the children’s genre, increasing their investment and in many countries operating children-only channels delivered via cable, satellite or digital. In particular, the BBC, France TV, Rai and TVE have all increased their spending in the last five years.
- There were 110 thematic children-only channels in Europe 2006, compared with just three in 1985, 22 in North America and 10 in Australia and New Zealand.
- In markets like France and the UK, themed channels already account for the majority of viewing by children.
- Themed channels have made the most impact in the USA and Canada, where they have become much larger investors in the children’s genre than generalist broadcasters.
“Broadcasters view the children’s audience as one of the least rewarding in terms of advertising revenue; the threat of, and in some countries, the actual introduction of restrictions on advertising to children has further reduced income. However our research shows that despite the tough environment, producers can make money,” said Tim Westcott, the author of the report.
“Children’s programming – particularly animation – travels well and has a longer shelf-life than other genres like drama and factual programming. The ancillary revenues for hit children’s properties can also make it a highly profitable business.”
About the report: “The Business of Children’s Television,” now in its third edition, focuses on the industry in Western Europe, North America, Australia and New Zealand. Comprehensive data includes spending on originated and acquired children’s programs, together with the value of the home entertainment market and of licensing. The report also details hours of children’s programs transmitted over the last five years, the number of theme channels, and viewing by the children’s audience.