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Is Streaming Undermining Family, Kids' Program Disc Sales?

1 Feb, 2012 By: Erik Gruenwedel

Netflix will have exclusive access to DreamWorks Animation titles such as 'Kung Fu Panda 2' in 2013.

Amidst the ongoing assault on DVD and Blu-ray Disc sellthrough by low-cost rental and subscription video-on-demand, it’s been widely believed that children’s movies and TV shows on disc were immune to evolving technology and resulting “99-cent” consumer mindset.

Indeed, both DreamWorks Animation and Walt Disney Studios have throughout the years steadfastly declared (haltingly) that key family titles remained prime sellthrough products (in the face of surging rentals) since the discs are viewed by the intended audience repeatedly in the home and in the car. In short, children-themed DVDs are considered toys as well as video entertainment.

But in the world of smartphones, tablets and related portable media devices, children- and family-themed movies have become target No. 1 by Netflix, cable operators and pay-TV channel HBO seeking to entice subscribers via ubiquitous access of programming through the Internet, according to BTIG Research analyst Richard Greenfield.

Netflix recently updated its family and children's streaming user interface (“Just for Kids”) domestically and in Latin America. Netflix currently offers seven seasons of “Sesame Street,” with 35% of the venerable series’ viewers accessing the show on devices other than the television, according to a recent paidContent.org story. In fact, 85% of Sesame Street’s digital audience is former viewers of the TV show.

And it bears repeating that Netflix will have exclusive access to DreamWorks Animation’s new and catalog titles beginning in 2013.

“Subscription streaming is not just replacing DVD buying; it is negatively impacting movie rentals, as well as traditional kids TV viewing,” Greenfield wrote in Jan. 31 post.

Meanwhile, an emerging conduit for digital access of family and children’s programming is HBO — the pay-TV channel primarily known for its very adult content. The Time Warner-owned company has increased family and kids' fare to its acclaimed HBO Go platform, which allows authenticated viewers the ability to view programming from various consumer electronics devices.

Greenfield cited a Jan. 23 tweet from Time Warner Cable, which touted kids' and family fare on HBO Go. It also underscored the cable operator’s support of the pay-TV channel’s TV Everywhere platform.

Finally, Starz Digital Media recently launched an app that enables preschoolers to interact with mini episodes based on the “Chuggington” CG-animated TV series on the iPad, iPhone and iPod Touch. “Chuggington” airs on the Disney Junior channel geared toward children from the age of 2 to 7.

David Katz, VP of Starz Media, said advances in interactive educational video allow parents to supplant the television as a means of stimulating young children. He said the advent of educational games with social and entertainment components are supplemental to preschool DVDs.

“These things are great for the car; they are so easy for kids to use,” Katz said.

Ryan Heller, senior manager with Starz Media, said the market for packaged media always will exist, but for younger parents immersed in the digital age and familiar with smartphones, tablets, downloading and streaming, the apps are a logical next step. Heller said the apps offer a portable shorter entertainment experience to a parent grocery shopping who needs to entertain their 3-year-old for five minutes.

“This is supplemental [to DVD],” he said.


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