Techie tykes get wired
Major media companies eye booming babies
The showbiz congloms are learning new ways of playing with these tech-savvy tots ... but is everybody playing nice?
Major media companies including Viacom, Time Warner and, of course, Disney have committed well over $1 billion during the past two years on thousands of casual games and "virtual worlds" that are the moppet answer to MySpace, as well as offering the opportunity for kids to set up their first email accounts before they lose their baby teeth.
Profits and growth of traditional film and TV operations are hitting a plateau, so content-rich congloms are seeking new revenue sources, and the sites offer potential for great growth through a mix of advertising and subscriptions. But they are also key marketing tools as the majors plan to populate these Web worlds with their most important characters -- think Tinkerbell, SpongeBob and Ben 10 -- as a way of keeping these now-aging franchises relevant to Generation Z and beyond.
"Given the changes in the ways families entertain themselves," Disney prexy and CEO Robert Iger told shareholders at the company's annual meeting in March, "we feel that building these safe, entertaining and immersive environments is a huge priority of our company."
The companies are optimistic about the long-range impact on the bottom line. The question is: What will be the long-range impact on kids?
Parents have a hard enough time policing what their kids access on the Internet. Disney and Nickelodeon-branded virtual worlds might sound like comforting oases of good, clean fun in a world where graphic porn sites are just a click away.
On the other hand, the seemingly limitless marketing and promo potential that these sites offer their parent companies is cause for concern over just how hard a sell kids are receiving while they're playing with their toon avatars and pretending to be Disney princesses and fairies. It brings to mind, somewhat ominously, the Jesuits' maxim: "Give me the child until he is seven and I will give you the man."
"It is something that all parents need to pay close attention to. This is media aimed at kids that is interactive, targeted, and very personal," says Liz Perle, editor in chief of Common Sense Media, the San Francisco-based kids media advocacy org.
"It's very accessible for kids without much of a screening process available between you and the child, unless you are really involved in your child's online life. You wouldn't put your child in a car, hand him the keys and say 'See ya.' You should definitely not do that with the Internet, either," Perle adds.
Two-thirds of parents don't think the Internet teaches their kids how to communicate, according to a recent survey of 695 adults with children under 18 commissioned by Common Sense Media. Some 70% of parents said they discourage their kids from using social network sites (though the survey did not get specific about kid-centric sites); and 78% of parents discourage kids from posting pictures or messages to a blog or website.
Perle notes that there are plenty of pluses to the boom in Web entertainment aimed at small fry. The interactive components of many games help kids hone certain cognitive and critical thinking skills, certainly more so than the passive viewing experience of most old-fashioned kidvid. Digital literacy, i.e. how to communicate in a non-face-to-face setting and how use basic Internet and computer applications, are also something every 21st-century kid needs to master, Perle says.
From Hollywood's perspective, the kidvid Web boom is the first organic-to-the-Web businesses built up nearly from scratch by the mainstream entertainment biz. If showbiz's institutional giants missed out on the first and second waves of game-changing Internet killer apps like Facebook, YouTube and Napster, the majors are now investing heavily in making sure they don't miss the boat with the next generation.
These online kid magnets -- aimed at children 5-11, and in some cases, even younger -- go well beyond streaming a TV show or movie trailer online in harnessing the interactive, community and limitless-content attributes that make the Internet a distinct medium unto itself.
Consider:
- The Mouse House surprised the biz last year by cutting a deal worth up to $700 million to buy the ultrapopular kids' virtual world Club Penguin -- a squeaky-clean 3-D world where kids can play games and interact with other members. Disney also is investing big bucks and R&D time into building numerous other virtual worlds already live or in the works based on gold-plated franchises like "Pirates of the Caribbean," "Cars" and its Disney Fairies merchandising juggernaut.
- Viacom's Nickelodeon kids and family group has nearly a dozen game-oriented websites that trade on the marquee value of "SpongeBob SquarePants," "Dora the Explorer" and "The Backyardigans," among other kid magnets. Conglom spent $160 million for online community Neopets -- where kids can visit and play with their own custom-built virtual pets. Viacom has committed to spend at least $100 million this year and in 2009 on Web gaming initiatives, with much that coin devoted to the younger set.
- Time Warner's Cartoon Network website is more focused on touting its hundreds of game options than it is on the cabler's program lineup. Cartoon Net also has recently launched a social network for young gamers and it is building a "World of Warcraft"-style multiple-player online game that combines all of its top characters. Warner Bros. has devoted tens of millions to the development of a virtual animation world, dubbed "T-Works," populated by classic Termite Terrace characters, though the long-delayed project has been plagued with technical and creative problems.
As these initiatives indicate, there's nothing more valuable to a media company looking to hook consumers on their brands than being front and center at the places where they hang out. Hollywood has had a mixed track record doing that with teens and young adults online. Though News Corp. now owns MySpace, it hasn't done much integration of its Fox properties into the social network or turned the site into a larger offline brand. MySpace's fast-growing competitor, Facebook, meanwhile, is entirely independent of showbiz.
But Hollywood is finding that younger kids don't connect through unbounded personal expression, as on Facebook, but in the same way they do offline -- by having something to do. "The greatest insight we've gained in our research is that gaming is social networking for kids," says Cyma Zarghami, prexy of Viacom's Nickelodeon Kids and Family Group.
In other words, while teens relate online by listing their favorite music, movies and TV shows and posting photos, kids need the digital equivalent of monkey bars and slides to have fun.
"The reason why playgrounds exist is that's how kids relate to each other," says Club Penguin topper Lane Merrifield. "Originally, we called ourselves a virtual playground."
Club Penguin boasts a simple 3-D environment where kids can explore a virtual Antarctic city with their own penguin character, chat with other players in a highly controlled interface -- no cursing or trading phone numbers -- and play games integrated into the world. The Canuck startup grew from nothing in late 2005 to more than 12 million activated users last year when Disney bought it. Some 700,000 of them pay $6 per month to personalize their avatar and its igloo.
In cases like Club Penguin and Viacom's NeoPets, media congloms are simply buying into popular online hangouts. But they're also rushing to create their own virtual worlds and branded casual games that put "Pirates of the Caribbean" or "Naruto" front and center in the places where kids play and connect online.
Luckily for these congloms, tots take the same attitude to online gaming as they do to selecting underwear and lunch boxes: Give us the characters we love.
"Kids want to play the TV show, but the 18-34 audience wants something more original," says Paul Condolora, Cartoon Network head of new media. He notes that all of the games on CartoonNetwork.com are based on existing properties, while all the games on the older-skewing AdultSwim.com are original.
That presents a big opportunity for companies like Nickelodeon, which boasts a huge library of 5,000-plus casual games on its own site and on subsids including AddictingGames.com and Shockwave.com. First and foremost, of course, congloms aim to make money from their games via display ads and sponsorships. However, while it's growing fast, that money is still paltry compared with the coin from traditional revenue outlets like TV ads and DVD sales.
There's a larger purpose in the fact that Nickelodeon sites are full of games based on every one of its properties, from helping the Naked Bros. Band recycle to helping the "Fairly OddParents'" Timmy avoid a haircut to racing with SpongeBob SquarePants.
"Games related to our shows can make our consumers connect emotionally with the properties, and to that end, they do more to build the brand equity," Zarghami notes.
Disney is taking that same philosophy to its growing suite of virtual worlds. If Nickelodeon is the leader in casual games, the Mouse House has established itself at the top of the pack for Club Penguin-type properties that combine online community with gameplay.
The Fairies virtual world, which launches later this year, may be the perfect example. Called Pixie Hollow, it's designed to tie in to Disney's quartet of direct-to-DVD "Tinkerbell" pics, which will come out every holiday season starting this year. In this way, and many others, these 24/7 online theme parks are a marketers' dream.
"We're going to build out the world to connect to each of the DVD movies," explains Steve Parkis, head of Disney Online Studios, which builds the Mouse's internally developed game and virtual worlds.
These digital communities aren't only drawing from properties in the physical world. They're also starting to expand into it. Disney, for instance, is launching a line of bracelets along with the Fairies world that players can connect in the real world and will, when plugged into a computer, make them friends in Pixie Hollow. Nickelodeon is launching a line of plush toys that give players special codes to use in a NeoPets game called KeyQuest.
Ultimately, the goal is the same as it has always been: to wrap kids in a seamless world of media and merchandise that keep then enamored with Hollywood brands. Consider it the digital equivalent of Disneyland, still the gold-standard for that kind of infectious branding in a real-world setting.
But with online gaming and virtual worlds, there's an added opportunity to create and monetize not only the products kids consume, but the tools they use to connect with one another, no matter where in the world they might be.
"Gaming and community is ultimately one experience for our audience," say Disney Online exec veep Paul Yanover, who notes that the Mouse House is redesigning even its corporate website to focus even more intensely on casual games, interactive video and virtual worlds.
The Disney aura gives parents a sense of comfort, but one question that comes up in surveys about this uncharted territory is the value-system that all of this online gaming and virtual-world touring is developing in kids.
Parents should never forget that most of these sites are money-making ventures, and the behavior they encourage -- like Club Penguin allowing kids to play games that allow them to build up "money points" that can be used to decorate their igloos -- is driven by commercial rather than altruistic impulses, Common Sense Media's Perle says.
Scholarly institutions such as the Pew Research Center are only now starting to get a handle on how the Internet is changing culture and social norms for adults and older teens. The idea of kids becoming drawn into virtual worlds targeted to them is wholly uncharted territory for sociologists and child development.
"It's the world's largest experiment, with no controls, and it's going on in real time with our kids," Perle says.
