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Digital Directions: Indies Follow Majors' Lead

Karen Raugust reports that despite the wide gap in budgets and resources, independent animation houses can learn from the major media companies' digital/new media activities.

Conglomerates are active in new media, and distribution of content over broadband channels has been an area of emphasis. Cartoon Network New Media will target boys 8-14 with its new MMOG next spring. © &  2007 Cartoon Network.

In the last year and a half, the big entertainment conglomerates have become very active in the new-media space, testing initiatives and even creating revenue-generating businesses. While independent animators and small animation studios don't have the resources of the big players, they share the same goal: to position themselves to succeed in the digital realm. And they can learn from the major studios' early new-media experiments.

Each of the studios' digital strategies is unique, but all have similar marketing and financial objectives. "The various new and emerging digital technologies allow distributors to substantially increase the value of content to end users," says Matthew Glotzer, Twentieth Century Fox's svp, digital media. "The past 12 to 18 months has been a period of successful experimentation for the industry as a whole, and this will continue, but we're also at the point where real businesses are ready to emerge."

At MTV Networks, digital initiatives serve a business need by generating ad sales and direct revenue streams, according to Steve Youngwood, evp of digital for Nickelodeon/MTVN Kids and Family Group. "It's also a marketing platform for us," he adds, "which we use in convergence with TV, our magazine or even our hotels."

Broadband Initiatives

Distribution of content over broadband channels has been one area of industry-wide emphasis, although each entertainment company has approached the segment in its own way.

"Our focus has been to translate the brand interactively through gaming," says Paul Condolora, svp/gm, Cartoon Network New Media. Over the last five years, he says, this strategy has not only brought the network more viewers, but has created a very engaged audience.

The company's demographic sweet spot is kids 6-11, but, as time goes on, more of its games target younger and older audiences. For example, its new massively multiplayer online game (MMOG), which will debut next spring, targets boys 8-14. Developed in partnership with Korean developer Grigon Ent., the game is the studio's first MMOG and will be free to download, with add-ons available by subscription or micro-transaction. It will feature various Cartoon Network characters, with which players, through their avatars, will be able to interact.

MTV Networks' broadband strategy also has had a heavy emphasis on gaming, with hundreds of free games among the content available on its Nickelodeon-branded sites, including, and The company also has acquired third-party gaming sites including, for teen boys; Neopets, a casual MMOG for teens; and Shockwave, a gaming site targeted mainly toward women.

Nickelodeon upgraded its broadband video player at Turbonick 2.0 offers continuous video streaming, applications for content mash-ups, customized playlists and gaming. © Nickelodeon Digital Media.

In addition to their broader gaming initiatives, the studios and networks often create one-off online gaming events as a way to promote film and TV releases. DreamWorks Animation partnered with Mark Burnett Prods. and AOL for The Flushed Away Underground Adventure, an online gaming site consisting of 24 individual games. Released prior to the theatrical premiere of Flushed Away, the venture marked the first time DreamWorks had created original animation specifically for an online game. Prizes and rewards were offered for game play; sponsors included Kohl's and Sara Lee.

Of course, gaming is not the only area of activity in the broadband space. On the video side, Nickelodeon upgraded its broadband video player at, Turbonick 2.0, in October 2006. Turbonick offers continuous video streaming, applications for content mash-ups, customized playlists, and other features, as well as gaming.

In 2006, Cartoon Network added video to its broadband mix, launching two video-on-demand (VOD) channels: Toonami Jetstream, for action and anime content, and Cartoon Network Video, for comedy. Toonami Jetstream, a joint venture with VIZ Media, offers free-on-demand, full-length episodes and delivered more than 9.5 million video streams in its first month of operation. Content includes episodes shown on the network, as well as Japanese series not available on U.S. television.

The Walt Disney Internet Group, which oversees Disney Online, released an updated version of its Disney Connection broadband entertainment destination in May 2007. Available through certain Internet providers, Disney Connection features single and multiplayer games and targeted entertainment channels for various demographic segments. Users can access premium subscription services, such as Disney Game Kingdom Online and Playhouse Disney Preschool Time Online; view full-length episodes from the Disney Channel, Toon Disney and Playhouse Disney; create playlists; and customize online channels from Disney game, video, music and chat content. Other broadband initiatives include the MMOGs Toontown Online, for families, and Pirates of the Caribbean Online, among many others. All told, there are 45 Disney-branded websites throughout the world.

CN has added video to its broadband mix, launching VOD channels like Toonami Jetstream. With its action and anime content, Toonami Jetstream offers free-on-demand, full-length episodes. © &  2007 Cartoon Network.

In addition to maintaining their own destinations, the big entertainment companies often join with outside partners to distribute content on third-party sites. In 2006, Sony Pictures Home Ent. signed an agreement with GUBA, an entertainment site and video-sharing community, to make feature films available for purchase or rental. The plan was to start with 100 movies and expand to 500 within a year.

Meanwhile, News Corp. and NBC Universal joined with Comcast to enable distribution of their content on and The two studios had recently partnered in a venture to distribute online video content; by combining their resources they are able to provide thousands of hours of TV and movie content from two film studios and over a dozen networks. This content is distributed over AOL, MSN, Yahoo! and MySpace. Separately, Fox Interactive Media and Twentieth Century Fox partnered in 2006 to offer download-to-own movies, direct-to-video productions and current and library TV shows on Fox-owned sites including IGN and MySpace.

Time Warner has done several deals for distribution of content from its various divisions, including WB Television Group and Warner Bros. Studios. In May 2007, for instance, it announced a deal with Joost, a broadcast-quality Internet TV service, to distribute programming through two ad-supported, branded channels, WBTV: Sci-Fi Fix and WBTV: Before They Were Mega Stars.

Community Components

One increasingly common facet of any broadband initiative is social networking, an umbrella term that includes activities such as chatting, interacting via avatars, personalization, and posting user-generated content.

MTVN's Nicktropolis, which launched in January 2007 and is linked to, features many such components. Users can interact with other kids or with Nickelodeon characters in real time and create personalized 3D-animated rooms, as well as watch videos, play games and explore Nick-branded and property-branded environments. Youngwood describes the site as a "cross between gaming, video and social networking for kids" and reports that it generated almost four million registered users in four months. MTVN also has incorporated UGC and social networking features into its other sites as well; the new version of Turbonick integrates gaming and personalization, and traffic has grown in triple-digit percentages over the last year.

MTVNs Nicktropolis is a cross between gaming, video and social networking for kids. Launched earlier this year, it generated almost four million registered users in four months. © Nickelodeon Digital Media.

"In a TV world, you create content and provide the experience for your audience," explains Youngwood. "What we've learned is that in digital, it's about putting your audience first and creating platforms for them to be the creators and programmers."

MTVN introduced a new, convergent user-generated content platform in February called Nickelodeon's ME:TV, which marries Turbonick and the Nickelodeon network. Kids can upload their own content online (and rate others' posts), and the best of that is featured on-air during a prim-time show, during which viewers can participate by phone, in studio or on

Other current projects involving UGC and social networking include Cartoon Network's new MMOG, a subscription-based service that Condolora says has a heavy social aspect to it. In addition, Cartoon Network is launching Mini-Match, an online enterprise that combines gaming, chat and other social networking features. Meanwhile, Disney has recently begun offering customized channels on's Disney XD service; the first celebrity version was by Corbin Bleu, star of the network's hit movie High School Musical.

And, at Twentieth Century Fox, Fox Digital Media has a relationship for content distribution with the social networking site MySpace, owned by the Fox Interactive Media division. "Social networking and community-building tools are now critical features of any platform offering," Glotzer reports.

While it's becoming standard to provide interactive and on-demand programming via broadband platforms, it should be noted that TV-based video-on-demand undertakings are still in the early stages. Cartoon Network has been in the TV-based VOD market since 2002 or so, and is seeing double or triple-digit growth rates each year in its monthly viewership. "It's a matter of finding the right programming mix to maximize the audience," explains Condolora.

Sony Pictures Television and Starz Media partnered in 2006 to allow Starz to distribute 500 Sony movies, including Stuart Little, on its broadband service, Vongo, and through subscription VOD, as well as on its linear channels. And, Time Warner announced VOD deals in Germany and Hong Kong in 2007.

Paul Condolora of Cartoon Network New Media says its focus has been to translate the brand interactively through gaming.

Growth in Mobile

Distribution of content over mobile phones is a more recent focus than broadband for most studios, but it's starting to become an important business for many of them.

Cartoon Network has focused on mobile video, both clips from existing shows and original content based on its characters. It produced 75 original mobile episodes last year and expects to complete about the same number in 2007. It even was nominated for a broadband Emmy for a short based on The Grim Adventures of Billy & Mandy. (The network has released 15 games for the mobile platform as well.)

Disney has been an active player in the mobile market. This past May, it announced a deal with Sprint to offer full-length episodes of Disney Channel and ABC content over three branded channels, representing the first multi-brand mobile initiative for the studio. Episodes, which include animated fare such as Kim Possible, become available on mobile VOD the day after their TV premiere.

Other of Disney's many mobile announcements have included a deal with Cingular for ringtones, graphics, games and multimedia messaging based on The Incredibles and Disney classic characters; a pact with Reliance Mobile for video shorts, 3D animation, wallpapers, ringtones, games and comic strips in India; development of Kingdom Hearts mobile, one of the industry's first 3D games; and creation of a Pirates of the Caribbean game, one of the first cross-carrier multi-player games in the mobile space. Disney, which distributes mobile content in 40 countries through 80 carriers and distributors, has two game development subsidiaries: mDisney Studios for content based on in-house brands, and Starwave Mobile for content based on third-party properties.

Disney has a deal with Sprint to offer full-length episodes of its content over three channels. Kim Possible will be available on mobile VOD the day after its TV premiere. © Disney Television Animation.

Nickelodeon's activities in the mobile space include Nick Mobile, a subscription service that includes video clips from Nickelodeon and Nick Jr., on Sprint PCS and Verizon Wireless, and a recent deal with kajeet, a pay-as-you-go service for tweens. At Sony, mobile ventures have included games based on properties ranging from Spider-Man 3 to game shows from Sony Pictures Television. And at News Corp., which got its start with American Idol text voting through Fox Mobile, has a controlling interest in Jamba, a leading mobile game and content developer, and offers content based on 24 (an original mobisodic series called 24: Conspiracy) and The Simpsons, as well as a MySpace Mobile store.

Warner Bros. Digital Distribution began releasing WB Ent. content for download through 20 models of Nokia phones in 2006, starting in Europe and Asia, including promotional and for-pay offerings based on Looney Tunes, Hanna-Barbera and DC Comics content, as well as films and TV shows. And NBC Universal partnered with MobiTV in early 2007 to make full-length episodes available over U.S. wireless carriers in five ad-supported channels; it also teamed with MediaFLO this year for two channels of NBC Universal television news and entertainment content.

These are just a few of the mobile initiatives announced in recent months. In addition, the studios are distributing content over other types of handheld devices, especially video MP3 players. Many have created podcasts for distribution over iTunes and other sites, as well as selling clips, full TV episodes and films through the iTunes Music Store. Some of this content is exclusive: Warner Bros. Home Ent. Group included the never-before-seen pilot episode of Aquaman as part of its deal with iTunes for library content, such as episodes of The Flintstones and The Jetsons.

Steve Youngwood of Nickelodeon/MTVN Kids and Family Group tries to coordinate across the company. If a new company video player is built, all brands can use it and then layer their personality on top of it.

"iTunes and other platforms are great ways to distribute our content," Youngwood says. "We are committed to distributing our content on all platforms to superserve our audiences."

Online/Offline Integration

Most of the big entertainment companies have named executives in the last year and a half or so to oversee their new media activities and coordinate multiple divisions, so that their diverse digital ventures support overall corporate goals.

Twentieth Century Fox's situation is representative. "Really, it's a collaboration," says Glotzer. "Fox Digital Media is a centralized group that works with all of the film/television studio and broadcast/cable network business units to develop company-wide strategies for distribution of the content. Our goal is to be a clearinghouse for the various activities, and help these units realize growth in digital media."

MTVN is divided into three areas -- entertainment, music and kids/families -- and there is centralization within each when it comes to digital initiatives. Youngwood oversees digital for kids/family, "but we link in with everyone because we are all trying to grow the same amount of equity," he says. "We try to coordinate across the company. For example, if we as a company build a video player, all brands can use it and then layer their personality on top of it. Another example is partnerships. For our partnership with Verizon's V Cast, we approached the discussion as a company to represent all brands. Then the creative and execution is done on a brand level."

Although most digital activity is intended to support a company's brands and drive traffic to its film and television properties, there have been some initiatives for the digital space only. Cartoon Network's strategy, for example, makes on-air and off-air integration a priority, but it also oversees some digital-only initiatives. "We take the source material from the network and translate it to the interactive space," Condolora says.

The network launches three to five shows each year, and premieres a dedicated website for each of them about six to eight weeks before the airdate. The focus is usually a large game where the company can introduce the show's characters to the online audience, adding a level each week to maintain interest and keep people coming back. "We can build awareness and affinity for the show pre-air," Condolora says, "and hopefully translate that into appointment viewing."

At Nickelodeon, all of its digital destinations have a link into television in some capacity, reports Youngwood. Theyve been a leader in multiplatform events like Kids Choice, where kids vote online and on mobile. © Nickelodeon.

At Nickelodeon, "all of our digital destinations have a link into television in some capacity," Youngwood says. "We've been a leader in multiplatform events like SpongeBob's Best Day Ever, or Kids' Choice, where kids vote online and on mobile, or our latest convergence daypart, ME:TV, where kids can submit user-generated content for our air." In January, Nickelodeon launched an online comicbook for Avatar, which unfolded in a four-week online gaming event and was supported by an on-air sweeps. Players who watched the show on Nickelodeon received cheat codes to open exclusive online shorts based on the property.

MTVN and Nickelodeon are starting to bring digital-origin properties to air as well. Nickelodeon will debut Neopets mini-shows this month as a series of interstitials that will introduce the Nickelodeon audience to the Neopets brand.

On-air/digital integration is important when it comes to ad sales, as well as from a marketing standpoint. "As a company, we're working across all platforms: broadband, mobile, multichannel networks, etc., and we consider all manners of business model: rental, subscription, sell-through (download-to-own), and of course ad-supported," Glotzer explains. "Sell-through and ad-supported have been the most active at this stage, but the others could emerge around the right content offering."

He continues, "Our ad-supported streaming activities to date have been designed to complement the linear television experience, and our ad sales teams across the broadcast and cable networks are focused on addressing the demands for cross-platform packages from clients. Even our sell-through offerings have included callouts to our on-air schedule so that when consumers purchase content online, they are informed about how and when to catch new episodes on air.

"At the same time, we are experimenting with production specifically for new media," Glotzer adds, "where the content will not (initially) appear on air, but rather online. Some of this is derivative of our existing linear television properties, some is wholly original."

MTVN and Nickelodeon are bringing digital-origin properties to air as well. Nickelodeon will debut Neopets mini-shows this month as a series of interstitials. © Nickelodeon Digital Media.

Examples of integration abound at all the entertainment companies. Disney Channel, Disney Online and Walt Disney Records announced in May that they would launch a virtual Disney Channel concert series on Disney XD, a feature of Disney Online, including concerts by Hannah Montana, the Cheetah girls and the cast of High School Musical. Also in May, Time Warner announced that its subsidiary New Line Records would release the official soundtrack of the New Line movie Hairspray in July, coinciding with the film premiere; prior to that release, the first single became available for digital download in May and audio and video ringtones in June.

As for original digital production, Time Warner formed Studio 2.0 in September of last year under the auspices of its Warner Bros. Television Group, to produce content for broadband and mobile. The venture works in close association with Warner Bros. Digital Distribution and Time Warner Global Marketing. Similarly, NBC Universal launched NBC Universal Digital Studios in 2005 to create online and mobile video content. One of its hits has been The Easter Bunny Hates You, which spurred more than five million streams without marketing support.

While the major entertainment companies are taking the lead in the digital space, there is room for independent animators as well, despite their relative lack of resources. "Animation is already playing an important role in the development of original properties for the web," Glotzer says. "Aesthetically, it just works very well for the medium. So there's a lot of opportunity here, even for small, independent shops."

On the other hand, there are challenges. "The animation technologies and processes that will win are those that can get the job done most efficiently," Glotzer continues. "Most of these `made-for-broadband' productions are going out a little ahead of the market, and the budgets will be set appropriately. The key is to gain a foothold in this space now and drive growth as the market matures."

Karen Raugust is a Minneapolis-based freelance business writer specializing in animation, publishing, licensing and art. She is the author of The Licensing Business Handbook (EPM Communications).