Kid Zone

One partner brings name recognition, the other brings the brand names of the toys it has sold for generations but will also add up to viewers in the highly competitive children’s television market. The result of the partnership will come in October when The Hub, a joint venture between Discovery Communications Inc. and Hasbro Inc. begins airing its programs geared for the 6 year to 12 year old demographic. While Discovery and Hasbro could have gone elsewhere with their offices and post-production facilities, the companies chose to locate in Burbank and add to that city’s already large entertainment and media employment base. “It is about the neighborhood,” said Fred Poston, the vice president of operations. “It is in line with what we are doing with this specific business.” The Hub will replace Discovery Kids, a channel that began airing in 1996. While seen as successful by Discovery executives, the channel was an uneasy fit with the core programs the network offered and there was an opinion a children’s channel could be done better and have more of an impact. Toy maker Hasbro then entered the picture and a deal was struck for Discovery to sell off half of Discovery Kids for $300 million and for the two companies to make their partnership a new network merging their strengths. The division of labor at The Hub has Discovery handling advertising, distribution and other operational requirements; Hasbro will provide studio-produced programming. A year ago, the Rhode Island-based company opened its Hasbro Studios also in the same Hollywood Way building with The Hub. The studios will produce shows based on Hasbro brands including “Transformers,” “G.I. Joe,” “Romper Room,” and the “Game of Life.” Entertainment industry veteran Stephen Davis was tapped to head up the new studios. The Hasbro connection gives the new network a leg up over Discover Kids, which didn’t have a lot of money put into it and failed to develop any marquee programs. The Hub will certainly need all the help it can get in a market dominated by The Disney Channel and Nickelodeon. The network will be welcome as another outlet by show creators and advertisers trying to reach the children’s market. The network also becomes Hasbro’s way of no longer defining itself just as a toy company, said Gigi Johnson, executive director of the Maremel Institute, a research center on entertainment, technology and society. Revenue streams The thinking of the two partners may be to develop shows whose characters in turn can be used in merchandising to bring in additional money along with advertising dollars and licensing fees, said Derek Baine, a cable networks senior analyst with SNL Kagan. “Nickelodeon has been successful at that; at creating franchises that are turned into feature films and toys that develop a third revenue stream,” Baine said. By locating in Burbank, The Hub joins its rivals who both have high-profile buildings in the city’s media district. Add in the Cartoon Network with a studio on Third Street in downtown and Burbank has more than its share of the children’s media market. While other locations had been considered where to put The Hub, including in Studio City, Burbank won out because of the preference to put the channel in the middle of the entertainment industry and creators of children and family programming, Poston said. City perks What also didn’t hurt was the business-friendly environment where the city does not collect an income tax or gross receipts sales tax. One last piece of the puzzle was the presence of the creative minds needed to develop new programming. “It is easier to hire that exemplary talent,” said Mary Hamzoian, the city’s economic development manager. Since the April 2009 announcement that Discovery and Hasbro joined forces, The Hub has mostly flown under the radar. That changed a few weeks ago when the network hired out an entire hotel ballroom during Comic-Con to promote itself. Johnson, who has headed up two video-on-demand children’s channels herself, is excited to see what direction the network will take, what Hasbro-branded programs will succeed, and how The Hub will distance itself from Nickelodeon and The Disney Channel. Children have a lot more entertainment options and the days of advertisers being able to grab eyeballs during Saturday morning cartoons are over. Discovery Kids struggled to find an audience but The Hub doesn’t have to find itself in the same position if the right choices are made by the two partners, Johnson said. “Is this adding Hasbro magic, the Hasbro brand or just adding capital from Hasbro?” she asked.