Is The Nickelodeon OTT Service Bad for Animation?

Nickelodeon is launching an OTT service. Yes, basically it’s like Netflix, but just for Nickelodeon shows. That should be an awesome announcement, right? Well, in theory, yes, it should. However the reality is different. Nickelodeon is a major producer of animation in the US, and by launching an OTT service, it endangers the future of the artform.

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The current mania surrounding over the top (OTT) services makes me concerned. We’ve long been told that a la carte cable was not in the best interests of the consumer. The logic was that the most popular channels that everyone subscribed to, subsidised the niche channels that would not be sustainable on their own. Now it would appear that logic is flying out the window, as OTT services aim to replace traditional cable and satellite as the preferred method of broadcasting content. While Nickelodeon is not the first to announce the service, they are the first from a major media conglomerate that is based on a mainstream channel and not, like HBO, one with specialised content on a premium channel.

So why would this be bad for animation? Surely it’s a good thing, no? Isn’t the ability to stream Nick’s shows without purchasing and paying for a cable subscription a move in the right direction? Well yes, it is. However while there are some obvious benefits, there are also some potential pitfalls as well.

For starters, Nickelodeon’s animated shows are available on services such as Amazon Prime and Hulu. These services aggregate their content from multiple providers, and provide massive libraries of content as a result. Now shows can, and do, move between services. For example Netflix lost the rights to Viacom shows but they remained on Amazon.

Where the new OTT service will differ from those is that it will also provide access to new content in addition to library titles. That’s a huge plus, and has been the sore spot for audiences of all ages as long as streaming has been popular. File sharing of older shows has dropped dramatically as access to them has conversely been made easy and affordable.

Now for the bad news. While the OTT service will have many benefits, there is an inherent danger in what is known as creating content ‘silos’. The practise, essentially confines content to one or a few services such that it is ‘siloed’ within them and otherwise unavailable to consumers who are not subscribers.

The practise is already a problem to some extent. While content is roughly equivalent across Netflix, Amazon, and Hulu, there are some shows and films that are only available on one of the three. Consequently there is a rising need to subscribe to all three to reduce the likelihood that you cannot access a particular show or film.

Now imagine that such silos exist not just for the largest libraries, but for each network or media company. Want to watch a Viacom show? You need their OTT service. Disney? Check, there’s too. These services claim to charge far below current cable fees, but by the time you cough up even $5 for more than five or six OTT services, you start to get awful close to the cost of basic cable and satellite.

As far as animated content goes, it has the potentially drastic effect of pushing it even further into the niche corners of the entertainment industry that it already occupies. Many consumers discover animated content while channel surfing. With OTTs, they have to actively seek it out instead. There is a reason why anime suddenly exploded in North America, and it’s because it was able to get in front of plenty of cable channel eyeballs that would never have discovered it otherwise.

Imagine a world where animated content has been ‘siloed’ into niche OTT services that are struggling on a dwindling subscriber base. You could argue that platforms such as Crunchyroll are a pseud0-OTT service (with other elements), and while they’re undoubtedly growing today, that may not always be the case.

The bright spot in all of this, is YouTube. Although that site has its own problems, at least access is equal to all the content on the service. What will be interesting to watch is whether younger viewers will make a significant shift to YouTube or whether they are happy to use the individual OTT services.

8 Comments on “Is The Nickelodeon OTT Service Bad for Animation?

  1. This is a thought that’s been in the back of my head for a while now, but now you’ve just brought it to the front. It sounds amazing that all of these networks are now starting their own streaming services, but now the downside of everything being in different places and behind different paywalls is coming up.

    Of course, running their own services is more attractive to the networks than using an aggregate service like one of the Big Three (Netflix, Hulu Plus, Amazon) because it’s direct money without a middleman, very beneficial to the content maker.

    That will be a whole different struggle in itself. I think the key here will be promotion. How can you convince people that your content is the best? This is where traditional TV will benefit the bigger players as a way to promote their stuff while making some nice advertising revenue on the side. The more grassroots players will probably continue to use YouTube and hopefully begin to expand onto the Big Three services whenever they feel ready to invest in it.

    • Those are great points.

      If there was any doubt as to why Netflix was sprinting to get as much content and as many subscribers as they could, now we all know why. They need the leverage when it comes to library titles. They’re not too badly worried about the new stuff; it isn’t what people are watching, and in any case, they produce their own original stuff.

      I’m curious to see what becomes of independent players. YouTube is squeezing them out, so whether they can maintain any success on that platform is to be determined.

      • That is true, Netflix has the strength in numbers and definitely the most power in this field, however the networks are likely, in increasing numbers, moving to find that going it alone without a middleman might be more enticing and dare I say more profitable, unless Netflix sells out house and home to get these producers back.

        People pay $7.99-8.99 a month for Netflix. How much of that is going to Netflix to keep their people employed and keep their stuff running and how much of that is going to the content owners? Contrast a service like CBS All-Access, $6 and it all goes to CBS or their partners.

        The “silo” solution sounds better to the producers, whereas the aggregate solution is better for the consumers. Thus the technology that was believed to finally work out the division between the wants of the consumers and the networks is instead setting us back to square one.

        I’d be interested to see how exactly you say YT is killing the independents. I’ve heard about how people were getting nothing from ads, and also all the copyright banter, but I’m not really informed on how far-reaching the issue is. I’d like you to tell me more about that.

        There are other platforms out there for the independents; Dailymotion, Vimeo, Newgrounds (if people still use that), and my personal favorite, DeviantArt. I have seen some absolutely amazing concepts by dA members that I’m sure would look right at home on TV, and DeviantArt itself, though not known as a video-sharing site, does have video capabilities, as well as an advertising system for its community. Many pros in the industry also have dA accounts and have racked up large followings. If I was in the industry today, I’d definitely scout DeviantArt for my next big hit.

        • The issue with YouTube is that the days of the independent being able to make a good go of things on their own are over. For the longest time, as long as you had great content, you could build a little empire for yourself and monetize it too.

          The shift over the last few years has started to heavily favour the so-called multi-channel networks (MCNs). With their large subscriber bases, they offer creators a ready-made audience in return for a split of the ad profits.

          That sounds good until you realise that as viewing numbers of MCNs go up, actual independent channels go down (only so many hours in the day, etc.)

          With new rules in place that encourage regular content creation as opposed to quality content creation, that does put animator’s on the back foot so to speak. If you are not part of an MCN, the likelihood that you can successfully exploit your content is diminished.

          All this isn’t to say that independent creators are doomed, just pointing out that the cards are being stacked against them in favour of the large players; which is in deference to the original reason that YouTube was created.

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  3. “Now for the bad news. While the OTT service will have many benefits,
    there is an inherent danger in what is known as creating content
    ‘silos’. The practise, essentially confines content to one or a few
    services such that it is ‘siloed’ within them and otherwise unavailable
    to consumers who are not subscribers.”

    That’s not necessarily the case. Even if you don’t have a particular network, you can still watch that network’s shows online.

    Case in point: When I switched from Cox to AT&T U-verse last year, we lost access to the Hallmark Channel (which I frankly don’t give a damn about, but my mom and aunt LOVED that saccharine crap). All the main shows they wanted to see could still be streamed on Amazon Instant Video, even the premiering new episodes as they came out. There are no “subscriptions” to AIV; you only need your free account, then you can buy whatever shows/episodes you want.

    • It isn’t that it’s true today, but that it COULD be true in the foreseeable future. Networks have a vested interest in keeping shows on their own service because they collect a far greater share of the subscription revenue than when their content is on Netflix, Amazon, etc. My knowledge of ‘fresh’ content is that it’s done on a case by case basis, and there is no guarantee of shows being released on Amazon as soon as they are broadcast.

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