Nick, Sonic, Nick Jr/Teen Nick and Nick HD – the channels that make up the Kids Cluster of Viacom18 - have seen ad sales revenue grow by 40% in the last year. Nina Elavia Jaipuria, Executive Vice President & Business Head – Kids Cluster, Viacom18, says the focus is on building the newly rebranded Sonic into a strong second channel and capturing the slot of largest kids network in India
BY SIMRAN SABHERWAL
A fabulous run” is how Nina Elavia Jaipuria, Executive Vice President & Business Head – Kids Cluster, Viacom18 Media Private Limited, describes the performance of the Nickelodeon franchise over the last year. Sure enough, the flagship channel, Nick, has been the No. 1 kids channel since August 2014 while the action/adventure channel Sonic has seen significant growth, particularly after strengthening its distribution and increasing its presence on DTH platforms. Along with Nick Jr and Nick HD (which currently reaches 4 to 5 million subscribers), the Nickelodeon franchise today commands a market-share of 30%, making it the second biggest kids network after Turner.
Over the last two years, the Nickelodeon franchise has seen a 3X EBITA growth with 40% growth seen in ad sales revenue and 34% in total revenue (which includes ER Growth + Non FCT optimization + subscription revenue + ancillary revenue) in FY16. In FY15, ad sales revenue grew by 33% and total revenues grew by 21%. Says Jaipuria, “This growth has come from rate increases and in effect, we have doubled our rates in two years. We focused on getting rates we deserved and actually had brands off air for a while because we didn’t want to succumb to a lower rate.” Subscription revenues have grown by a healthy 10-15%. From an overall perspective, Jaipuria says, “We are now a vertical that contributes to Viacom 18’s profitability in a fairly major way. No. 1 franchise with profits is where we want to be.”
With revenues from kids-specific advertisers and non-kids advertisers now evenly split, categories such as e-commerce, automobiles, lifestyle, edible oils, insurance in addition to consumer products/durables and FMCGs have made their presence felt on the channel. The increased trend of having nonkid advertisers, says Jaipuria, can be attributed to the pester-power of kids and co-viewership where the secondary audience is also targeted, particularly in single TV homes. Advertisers such as Boost, Colgate, McCain, Horlicks have also bet big on brand integrations and these innovations now contribute to 10% of the total ad sales pie.
Licensing is another segment that is growing at a fast pace and brands such as Boost, Mother Dairy, Britannia, Prataap Snacks (makers of Yellow Diamond Rings) have partnered on licensing deals. While merchandising is still a small segment, it has grown by 65% with products now in 40 categories, up from 25 earlier. Though revenue is small so far, Elavia sees huge potential in this category and expects revenues from this stream to touch double digits this year.
As a category, while the kids genre continues to be a large one, with a 6% share of total urban+ rural (U+R) viewership and 8% share of total urban viewership (CS4+), the category remains under-indexed, garnering just 3% of the total advertising pie. However, on a positive note, Jaipuria says the revenues are growing and positioned in the right trajectory.
CONTENT IS KING
“The secret of our success lies in the fact that the network created and focused on local content, thus ensuring that the Intellectual Property (IP) was also retained by the network. The CGI animated series, Motu Patlu, started this trend and was followed by Pakdam Pakdai and Shiva, launched in November 2015. This is in addition to popular international content such as Ninja Hattori, Shaun the Sheep, etc., which helped build a repertoire of strong characters. Says Jaipuria, “Along with the local content, it’s the depth and width of our content. It’s not about depending on one single character but having many more characters that rule the hearts of kids. We produce a lot of original content every year at a very great pace, that keeps our library robust and healthy and offering that back to the kids has got us to where we are.” Jaipuria also adds that the average viewer’s time spent on the channel is between 90-100 minutes in a day and the network has the highest reach in the category. However, a major challenge is the cost of producing animated content - about Rs 25-30 lakh - as against Rs 6-8 lakh for a fiction episode. Another big trend picking up pace is movies.
A clear mandate looking ahead is to be the largest kids network by building Sonic as a strong second channel. According to Jaipuria, “Turner has a very strong second channel, Pogo. While Nick is the leader, we really need a very strong No. 2 channel and this is where we want to grow Sonic.” The strategy to achieve this has been to recently rebrand Sonic - launched in 2011 - and move the popular character Shiva completely out of Nick and onto Sonic. Looking at content, comedy will be the core with different avatars of the comedy genre being explored, adds Jaipuria. While new episodes of the network’s favourite shows will soon be on air, the network also plans to launch its fourth made-in-India animated series later this year.