How does a preschool property break through?

With an ever-broader array of preschool programming available through online, streaming and other services along with traditional broadcast and cable TV, how does something gain enough consumer connection to support a consumer products licensing program?

For the time being, broadcast and cable TV remain the main conduits for delivering programming such as Paw Patrol, Peppa Pig and PJ Masks that can be turned into licensed products. Shows that gain traction, as evidenced by ratings and other readily available data, make their way onto store shelves and e-commerce sites – mostly by the time their second season is airing.  But Amazon, Netflix, YouTube, Hulu and other services have been rapidly expanding their libraries of children’s programming, and the pace of the marketplace has picked up.

The increasing number of new preschool programs available across multiple platforms, along with licensees’ and retailers’ desire to jump on a hit, has quickened the speed at which products tied to them are available at retail, says Jamie Uitdenhowen of Toys R Us. While previously toys stemming from a preschool series traditionally didn’t arrive on retail shelves until many months after a program’s debut, the gap has been shortened in some cases to three months to quickly capitalize on popularity, he says.

The streaming services still have work to do in promoting their children’s content, say industry observers. Amazon took a step toward raising the profile of its kids programming in taking a booth at Licensing Expo in May and Netflix recently hired former World Wrestling Entertainment licensing executive Jess Richardson as its new Director of Licensing.

“The service still have to sell” the children’s programming to their own subscribers “because I am not sure how many them are aware yet that this is being offered,” says JJ Ahearn of Licensing Street, which has worked with several preschool properties. Unlike its adult fare, in preschool programming “Netflix hasn’t created something yet where you have to go to them to see it, and that’s key for licensing.”

A key barrier so far for creating a consumer products program from a streamed series:  the services don’t release the kind of viewership data that has long been used by broadcasters and rights holders to convince licensees and retailers to come on board. For the time being that “skews the playing field in of brands on broadcast and cable TV” since the streaming services “only offer sweeping statements about the number of households that receive their service,” says Rob Corney of UK agent Bulldog Licensing.

“Broadcast and cable will still lead the way” in supplying content for licensing for now because “it is a consistent and steady drum beat,” says Ahearn, whose firm represents Daniel Tiger’s Neighborhood. “SVOD will happen, but right now what we hear from retailers is that they would rather chase than lead.”

Says Entertainment One’s Joan Grasso, whose company has produced such hits as Peppa Pig and PJ Masks: “While audiences are increasingly consuming content from a variety of platforms, and brand awareness continues to build thanks to the likes of YouTube, broadcast and cable TV are still leading the way in terms of full-fledged consumer products programs and those traditional platforms continue to be the focus for eOne’s preschool brands.”

Yet shows such as Beat Bugs, the Australian-Canadian production which has been available in the U.S. only via Netflix, have been able to secure product distribution without ratings, relying instead on measurables such as the number of website views it gets and social media buzz across multiple platforms, including Facebook, which is popular with parents, says Rebekah Belzer of Centa IP, which represents Beat Bugs for licensing.

“We have seen success in properties that are available only via a streaming service,” says Uitdenhowen of Toys R Us, noting that the retailer had strong sales of DreamWorks’ Dinotrux after it débuted on Netflix in 2015. But he also brings the equation back to its core. “Regardless of where consumers sees a property for the first time – whether its streamed content or a blockbuster hit – it must have the right mix of meaningful storytelling and characters that children can relate to in order to be successful.”

So far, retailer exclusivity has been an important chip for streamed series. Toys R Us had an exclusive on Dinotrux when it launched, and Target and Tesco have exclusivity in their home markets for the launch of Beat Bugs.

For the most part, companies are awaiting a streaming service preschool series to provide a break out hit the way Angry Birds jump started licensing for products tied to mobile games.

“There are things that are percolating in the next 6-9 months and we will see if that means anything,” says Derrick Baca of Hybrid Apparel, which licenses several preschool properties. “Everyone wants to jump on the Netflix train, but there isn’t a whole lot of meat there yet in terms of what they are doing for their” children’s content.

The basics of licensing a preschool property remain the same as always. “”There are certain rules to the game in that you want to see that [it] has good buzz and traction; much depends on where it airs, how long has it been in promotion and if it is merchandisable,” says Licensing Street’s Ahearn.

Preschool properties are faced with having to win over a dual audience – children and their parents – whether it’s online, broadcast or cable. Parents are the gatekeepers, and having them connect with a property means it will be downloaded to a smartphone or tablet or put on a TV, says Out of the Blue’s Samantha Freeman, whose company co-produces Daniel Tiger’s Neighborhood with the Fred Rogers Co.

“Just because a show gets a lot of eyeballs and is being aired a lot times, it doesn’t mean it will become a big licensing hit,” says Freeman. Building a successful program depends on “whether kids are emotionally engaging with a show’s characters. Preschoolers need to emotionally connect with a series, but you also have to get the consent of the parents to put it on a device.”

Among recent developments:

• Product carrying the Beat Bugs license, having gained shelf space in the U.S. at Target in June, is moving into international markets. Tesco will launch sales in the UK in October, to be followed by distribution expanding into Australia and Canada, both late this year, says Centa IP’s Belzer, whose firm represents the property for producers Grace: A Storytelling Company and Thunderbird Entertainment. The Beatles-inspired animated series, which launched with 26 episodes on Netflix in 2016, revolves around the lives of five bug-like children who live in a backyard. Each episode is tied to a Beatles song. It debuted with 25 items at Target for a six-month exclusive that includes bedding, toys, apparel footwear, throws and other items. The program has so far attracted 28 licensees. Beat Bugs also is available on Nick Jr. in Australia and will launch on the Canadian Broadcasting Corp. (CBC) in January.  It will be available to other U.S. networks starting in mid-2018. Centa IP also is developing a style guide for Grace’s “Motown Magic” series that takes an approach similar to Beat Bugs, but with Motown tunes. The series is scheduled to air on Netflix in spring 2018 with 52, 11-minute episodes. Centa is taking booth space to highlight both properties at Brand Licensing Europe.
• Amazon is moving “very aggressively” to license out its children’s programming (Inside Licensing May 22). Among these is Creative Galaxy, a series that originally launched on Amazon in 2013, but didn’t pick up licensing until a second season aired three years later. Sales of Creative Galaxy licensed products, along with those from other Amazon series, have so far largely been limited to Amazon itself. Sales of Arty’s Tool Belt activity sets tied to the series have been “pretty modest” so far, says Doug Cass of licensee Kahootz. He says the item is “gaining strength, but retailers aren’t jumping on it yet,” in noting that only a small number of specialty retailers, in addition to Amazon, are carrying the product. “I think if Amazon promotes it this fall that may change things,” but any success will likely come mainly though Amazon’s own sales channel. For reasons of competitive reality, other major retailers are skittish about taking on an Amazon-based property.
• Emerging children’s programming service Pocket.watch hired licensing veteran Stone Newman recently as Chief Revenue Officer with an eye toward starting a consumer products licensing program. Pocket.watch will both develop  its own programming and work with content producers on other services such as YouTube to bring their series into licensing, sponsorships and opportunities, says Newman Pocket.watch signed an agreement earlier this year with HobbyKidsTV, which operates 10 channels on YouTube, and hopes to have some licensed products available in 2018, says Newman. The company also is targeting having 1,000 hours of Pocket.watch videos available across five owned and operated YouTube channels by year-end. To fund the effort, Pocket.watch raised $6 million earlier this year from investors that include CBS CEO Leslie Moonves and movie producer Jon Landau.

Contacts:

Bulldog Licensing, Rob Corney, Managing Dir., +44 20 8325 5455, robc@bulldog-licensing.com

Centa IP. Rebekah Belzer, VP Sales and Licensing, 310-403-0026,   rebekah.belzer@centaip.com

Entertainment One, Joan Grasso, VP Licensing North America, 212-353-8800 x5219, JGrasso@entonegroup.com

Hybrid Apparel, Derrick Baca, EVP Global Licensing, 714-947-8347, dbaca@hybridapparel.com

Kahootz Toys, Doug Cass, VP Sales and Marketing, 734-222-9798, doug@kahootztoys.com

Licensing Street, JJ Ahearn, Managing Dir., 212-359-9571, jj@licensingstreet.com

Out of the Blue, Samantha Freeman, Managing Dir., 212-764-0266 x333, samantha@outofthebluenyc.com

Pocket.watch, Stone Newman, Chief Revenue Officer, 424-298-8234,  stone@pocket.watch

Toys R Us, Jamie Uitdenhowen, VP General Business Mgr., 973-617-3500; Jamie.Uitdenhowen@toysrus.com