Channeling Asia's Kid Power
When Sony Pictures Entertainment (SNE ) rolled out its Japanese animation channel, Animax, in much of Asia in January, the company simply wanted to expand from its home base: It didn't expect a big hit. Six months later, Animax is the top-rated pay-TV channel in Indonesia and is catching on in Taiwan and India. "We knew Japanese animation would be popular across Asia," says Sony Pictures TV Asia CEO Todd Miller, "but we've been surprised at how well it has done."
Crash! Bang! Pow! Look out, Asia, here come the Powerpuff Girls, Astro Boy, and SpongeBob Square Pants. This year alone four children's channels have launched in the region -- Animax and Playhouse Disney (DIS ) across Asia, Nick Jr. in Australia, and a new Time Warner Inc. (TWX ) offering in India called Pogo. A fifth, Hungama, makes its debut in India in August. Those join four kids' channels -- Disney, Nickelodeon, Cartoon Network (TWX ), and Tooniverse -- already broadcasting in a half-dozen languages in the region. "Kids' programming is now an important part of our total TV revenue stream," says Sandie Lee, vice-president of StarHub, Singapore's cable operator.
The reason for the explosion: Cable and satellite operators from Seoul to Surabaya are looking to pull in new subscribers as competition heats up. A third of households with a TV set in Asia, excluding Japan -- 190 million in total -- subscribe to pay-TV, nearly double the number five years ago, when few viewers had a choice of operator. Now Hong Kong, Malaysia, and Indonesia boast two or more providers of pay-TV programming. "Competition is forcing existing operators to add value, and that means more niche programming like kids' channels," says Ian Diamond, vice-president of Turner Entertainment Network Asia. Media Partners Asia, a Hong Kong research house, estimates that programming providers took in some $2.7 billion from subscription fees and ad sales in developing Asia last year, up 18% from 2002. This year, ad revenue is expected to grow 15% while subscription income jumps 24%, Media Partners says.
The shift to digital technology is also driving the trend. Until late 2002, most pay-TV operators in the region used analog systems with a maximum of about 40 channels. Now many of them are rolling out digital networks that can handle three or four times as many signals, which is pushing up demand for all sorts of specialized programming. "With 100 channels you might want to have 10 children's channels and you might choose golf, tennis, and cricket as well," says Richard Cunningham, CEO of Nickelodeon Asia, a unit of Viacom International Inc (VIA ).
Some analysts fear the cartoon boom might not have legs because Asian kids don't have as much access to TV as their U.S. counterparts. American families usually have more than one TV -- which means the kids can be glued to the Cartoon Network in the den while Mom and Dad watch CSI: Miami in the living room. In Asia, few homes have more than one set, so parents may be less willing to let Junior click to cartoons while the big cricket match is on. Yet such concerns are tempered by cultural differences. Simon Twiston Davies, CEO of Cable & Satellite Broadcasters Association Asia, says middle-class children in Asia enjoy enough influence at home to watch almost anything they want.
To make sure kids keep coming back to their channels, the programming providers are starting to beef up their local offerings. This year, roughly 20% of the children's programming in Asia will be homemade, up from 10% four years ago. That trend is sure to continue, though much of what's offered will come from the same global giants that dominate the business today. In China, for example, Nickelodeon is buying programs from local production houses and has set up joint ventures to help train local programmers. And Disney recently hired local companies to create customized programming in a half-dozen Asian countries. For now, though, the content providers are doing just fine supplying Asian kids with the likes of SpongeBob and Powerpuff Girls -- and Asian children are happy to watch.
By Assif Shameen in Singapore