Parents, hide your credit cards: kids cable TV channel Nickelodeon is unveiling a direct-to-consumer digital subscription service next month. Viacom CEO Philippe Dauman alluded to the launch of the new service during an earnings call with analysts Thursday morning, saying that it would be live in March. Further details, including the service’s name, would be announced in February during upfront presentations with advertisers.
“They would not want me to take away their thunder.” Dauman said.
The move is the latest step in the rapid evolution of television, in which everybody from content providers like HBO to broadcasters like CBS are looking to bypass cable bundles and connect directly with consumers. The belief here is that there is significant audience that will never subscribe to a traditional cable TV bundle, an audience Dish Network is attempting to reach with its Sling TV web TV service.
It's the latest in a string of recent experiments for the kid-facing channel, which saw the release of a Nick Jr. app on iTunes, and a foray into sports-oriented shows. Both those moves could be counted as successes: Nick’s nightly sports bloc drove healthy gains in its key demographics and the Nick Jr. app, Dauman told analysts Thursday, has hit the top of the iTunes Store charts three separate times since its release.
“We are seeing good demand,” Dauman said. “There is no better way to reach engaged audiences for toys, for movies, for electronics, for financial services aimed at young people, there’s no better way to reach them than on our network.”
Though its television brands, which include Comedy Central, MTV, CMT, Spike, BET and VH1, all have strong digital presences, Nickelodeon is the first brand Viacom has attempted to break out into a subscription offering. It's possible Viacom decided to move with Nickelodeon first because of the appetite for it -- children's programming has been one of the key drivers of subscription video streaming offerings, with both Netflix and Amazon having launched kids-only services recently.
In the fourth quarter of 2014, operating income for Viacom's media networks declined slightly from the same period last year, from $1.104 billion to $1.094 billion, due mostly to rising expenses.