The Hub Joins A Crowded Playground

Hasbro-Discovery venture chasing $1.6B kids ad market

By Marisa Guthrie -- Broadcasting & Cable, 10/4/2010 12:01:00 AM

Do kids need more television to watch? Executives at Discovery and Hasbro are banking that there are still underserved little ones despite the panoply of kid-targeted video content.

“There actually isn’t too much for them,” counters Margaret Loesch, president and CEO of new kids network The Hub. “That’s an adult perception; why do you need another kids channel? But there are 40 or 50 channels appealing to adults 18-49. Why should there only be a half-dozen or fewer targeted at kids?”

The Hub, a 50-50 joint venture between Discovery and toy giant Hasbro, launches Oct. 10 into a crowded kids space that includes ratings and revenue leader Nickelodeon, Cartoon Network, and Disney Channel and Disney XD.

And next year, another new player enters the fray when Disney Junior replaces the moribund SOAPnet. Although The Hub will inherit more than 60 million subscribers from the network it is replacing, Discovery Kids, it will nevertheless have a considerably smaller reach than Nickelodeon’s 86 million households or Cartoon Network’s 91 million.

The new network has signed more than 50 advertisers including toy and game manufacturers, movie studios, and household-goods and pharmaceutical companies. But The Hub will nevertheless start off with a tiny slice of the estimated $1.6 billion kid-targeted ad pie.

Viacom’s Nickelodeon and Nick at Nite are on track to collect more than $1 billion in ad revenue this year, according to SNL Kagan, while estimates for Turner’s Cartoon and Disney X\D are $375 million and $125 million, respectively. Ad revenue estimates for Discovery Kids, the network The Hub will replace, are a modest $13 million.

The Hub will target kids age 6-12, and Loesch sees considerable white space among 6-9-year-olds as networks including Disney Channel and Disney XD have gone older, and Disney Junior and PBS Kids Sprout are targeting preschoolers. The network’s Hasbro legacy brands including My Little Pony, Strawberry Shortcake, Transformers and GI Joe, as well as Discovery franchises such as Meerkat Manor, will give The Hub a head start on awareness meters.

“They’re targeting both groups; the parent and the child. To kids, it’s new and to parents, particularly mothers, it’s nostalgic,” notes Brad Adgate, senior VP of research at Horizon Media. “When you consider that you have all of this concern about the type of media children are exposed to, and all this co-viewing going on, this might work to their advantage.”

But the network’s Hasbro parentage also requires a fine balance—with Madison Avenue as well as the creative community. Shows featuring Hasbro characters will account for 25% of the programming, and the commercial load will be kept below the FCC-allowed 12 minutes per hour Monday to Friday.

Loesch says the network has signed up the majority of big-name kids advertisers, but admits that there has been resistance from “a couple of” toy companies; she declined to say which ones. “It’s not the Hasbro channel,” she says. “The industry recognizes that we have to be open for business. We can’t show any favoritism. We have to buy shows from everybody. We have to take advertising from everybody. We have to be sort of like Switzerland.”

E-mail comments to mguthrie@nbmedia.com and follow her on Twitter: @MarisaGuthrie