SpongeBob SquarePants, Paw Patrol to the Rescue for Foxtel

Australia - The end of HBO's hit drama Game of Thrones may have come at a difficult time for Foxtel. But as the pay television provider confronts its financial challenges, it can at least still rely on the enduring appeal of SpongeBob SquarePants and his Nickelodeon stable-mates like Paw Patrol.

Foxtel owns 35 per cent of a joint venture with US media giant Viacom's children's brand, Nickelodeon, which has continued to prosper in a media landscape where subscription TV is being turned on its head by video streaming.

Nickelodeon Australia Management Pty Ltd reported a profit of $26.7 million for the year ending September 30, 2018 - up from $25.9 million - on revenue totalling $45 million, documents obtained by The Sydney Morning Herald and The Age show.

The joint venture has paid distributions totalling $53 million (AU) to its venture partners, Foxtel and Nickelodeon’s parent Viacom, over the past two financial years.

More Nick: Nickelodeon Australia and New Zealand to Premiere 'SpongeBob's Big Birthday Blowout' on Saturday 13th July 2019!

The venture encapsulates all of Nickelodeon’s businesses in Australia including pay TV, merchandising, events like SLIME CUP and Crash the Bash with cricket's Big Bash League, and licensing deals with hotels and theme parks like SeaWorld, where it has a Nickelodeon Land theme park.

Ben Richardson, Senior Vice President (SVP) and General Manager (GM) of Viacom International Media Networks (VIMN) Australia and New Zealand, says the company's ambition is to go everywhere its audience is. Photo: Dominic Lorrimer.

“Obviously kids and families are a hugely important demographic to Foxtel but … they don’t create their own content or brands," Ben Richardson, the head of Viacom’s operations in Australia and New Zealand, tells The Sydney Morning Herald.

"We're a house of many brands and we just want to capture, from birth onwards, that journey."

Pay TV is the source of most of the Nickelodeon joint venture's earnings, but Mr Richardson said it does not define the future focus of the business.

"Our intention and ambition is that we have to be everywhere were our audience is," says Richardson. This means following the company's under 39 year old demographic to the epicentre of digital disruption.

YouTube and Instagram are old territory for Nickelodeon and Viacom brands that range from Paw Patrol - the top pre-school brand, which gives its licensed merchandise a big impact in retail - to MTV, Comedy Central and South Park.

Its next frontiers are gaming platform Twitch, short form video app Tik Tok, and messaging app Discord.

"That's the game," says Richardson of the constant challenge to work out which platforms its audience is jumping to - and how to monetise it.

“The revenue streams are increasingly diverse when it comes to digital platforms," he says.

On social media platforms, one noticeable trend is advertisers seeking "brand safety" by integrating with a branded presence.

"Brand safety concerns have made advertisers more cautious more targeted," says Richardson.

"We’re seeing increased interest from clients wanting to advertise within our branded YouTube space ... that’s something that is really starting to find some momentum this year."

But the big money remains with Foxtel and other subscription platforms.

“Our first exclusive window is always going to sit within that pay window,” he says.

The expansion of streaming opportunities merely expands the windowing options for the company which began with the question of "how long do you wait before it comes out on VHS?’ and goes into big box retail," says Richardson.

More Nick: Nickelodeon Australia and New Zealand to Premiere SLIME CUP 2019 on Monday 1st July 2019!

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