CTW finds its cable outlet: a venture with Nickelodeon

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In a partnership that aims to position educational children’s programs at the forefront
of the digital cable movement, Viacom’s Nickelodeon cable network and Children’s
Television Workshop last week announced plans to launch a new network for kids, to be
called Noggin.

The long-anticipated channel will feature programs from each partner’s library,
including old episodes of the venerable Sesame Street, to serve both preschoolers
and school-aged children. Early plans call for it to run without commercials, drawing
revenues solely from cable-operator fees.

“In an era when many television networks have abandoned their responsibility to do
more than just entertain, we are extremely proud to be joining with the long-standing
leader in kids’ educational programming, CTW, to bring Noggin to life,” said Herb
Scannell, president of Nickelodeon. “We hope to make learning cool, through

For decades, PBS has been the “only lonely outpost of education programming,”
said David Britt, CTW president. “We think there’s room for more, and it will be
valuable to all of our audiences to have a bigger critical mass of educational programming
as a response to the explosion of entertainment programs in the last 10 years.”

PBS retains exclusive rights to new episodes of Sesame Street through a
four-year renewal agreement announced in February. The deal foreshadowed CTW’s plans for a
cable venture by releasing the extensive Sesame Street library for DBS and digital
cable distribution.

During renewal talks, CTW “made it clear that they wanted to try to find a spot
for their library in the digital cable universe,” said Tom Epstein, PBS spokesman.
“We agreed to make that part of the understanding.”

“In our calculations, it was best for us to ensure a long-term arrangement for new
episodes,” he added. “It’s a better financial arrangement than we’ve
historically gotten since we no longer have the library tied up.”

Nevertheless, the advent of a cable channel built with PBS’s signature preschool series
is another in a series of disappointments to public TV as the kidvid landscape shifts to
accommodate demands for better children’s programs, and as commercial providers position
themselves for the digital transition.

Late last year PBS lost another kidvid powerhouse, Scholastic’s Magic School Bus,
to Fox TV, which begins airing the series this fall.

“The world is changing quite rapidly with so many choices for producers to take
their projects to,” commented Epstein. “This requires a strategic reevaluation
by us as well as everyone else in the game.”

A flagship digital channel

Due to scarce channel capacity on analog cable systems, Noggin will become available
first through DBS providers and on cable systems that offer digital tiers of services.

“We are expecting to start with relatively modest numbers and see good, steady
solid growth,” said Britt. How quickly the channel gains subscribers will “be
reflective of how fast the digital conversion takes place. I hope we will be able to drive

Noggin will be introduced at the National Cable Television Association trade show in
Atlanta this week. It will be marketed as the flagship channel of a “suite” of
new digital offerings from Viacom’s MTV Networks, which include Nickelodeon, VH-1 and MTV.
Nick will announce additional channels shortly.

CTW and Nick are 50/50 owners in the venture, and the nonprofit Workshop is a
“cash investor alongside Nick,” continued Britt. He declined to discuss dollar
amounts, which are likely to change anyway, he said. The New York Times said the
partners together would invest $75 million to $100 million over four years–a range Britt
said was a “fair number.”

“We’re also making available, on a licensed basis, a significant amount of our
library of programs–Sesame Street, Cro, Ghostwriter, 3-2-1 Contact and Electric
–that have been in the vault for a while.”

Nickelodeon’s popular preschool series, Blues Clues, will run on the new
channel, as will Gullah Gullah Island and Nick News. The venture includes a
major web site. Both partners plan to eventually contribute original programs, and to
acquire shows from outside producers.

“Dawn of the digital age”

CTW announced plans to establish an educational cable service in 1995–in the midst of
Republican attacks on public broadcasting. At the time, children’s TV activist Peggy
Charren compared the move to a “rat leaving … a sinking ship.”

But the move can also be seen as inevitable when potentially viable new distribution options become available to a mission-oriented producer.

“This is an effort we have been at for a long time,” said Britt. “We’ve
had some tough times” and encountered many barriers. “The economics of cable are
so prohibitive.”

A major factor propelling the venture forward now is “a feeling on the industry’s
part that this is the dawn of the digital age,” opening an opportunity to “try
to capture and get in, even though the threshold is down the road.”

The partnership with Nick was also critical. The popular children’s
network–“number one with kids”–shares CTW’s values and commitment to quality,
Britt said, as well as an interest in “doing something truly educational that we
could be comfortable with.”

CTW hopes to continue to have a good relationship with PBS, he added. “Public TV
and Sesame Street grew up together, and, like all long-time partners, it’s easy to
take each other for granted.” Over the long run, CTW’s venture into cable will help
“build an even better and stronger relationship with public television than we had

Details of exactly how Sesame Street material will appear on Noggin have yet to
be determined. When those decisions are made, CTW will seek to ensure that the
“educational value of the materials we’ve produced are there and coherently
present,” Britt said, and that the programs that do appear are “fundamentally
different from the first-run product that is exclusive on PBS.”

“What’s cool”

Children’s TV experts offered mixed reactions to the deal last week.

“This is a wonderful marriage of two companies that understand children’s TV is an
evolving medium” and recognize the “need to be innovative and risk-taking,”
said David Kleeman, executive director of the American Center for Children’s Television.

Rather than viewing Noggin as competition for PBS, Kleeman sees it as “adding
options to children and families” and “keeping pressure on public broadcasting
to be innovators.” If PBS can “keep pulling the pack behind them to compete for
how well we serve children, that’s a great service,” Kleeman added. “What’s cool
is that we’re not just competing for numbers. We’re competing for quality.”

Although Charren no longer objects to CTW’s strategy as “jumping ship,” she
questioned how long Noggin will remain commercial-free, and the implications of running
ads with programs that originated on PBS.

“I see a very big problem that some creepy politician will wave this deal around
and say, ‘We don’t need public broadcasting,'” she cautioned. “They’ll add to it
the BBC and Discovery deal and say, ‘See–the marketplace is working.'” What that politician won’t mention is that public broadcasting “took the risks to create something that is
the underpinning of this deal.'”

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