Thursday, February 26, 2015, 11:15 AM ET|Posted by Will Richmond
Yesterday Viacom announced Noggin, a new $5.99/month ad-free, mobile-centric OTT service for preschoolers that will launch on March 5th. Viacom said that Noggin's content will be solely library-based, making it distinct from what's already available on-air on Nick Jr. Noggin will include programs such as "Blue's Clues," "Little Bear" and "Ni Hao, Kari-lan," plus others. In addition to the OTT offering, Viacom said it's talking to pay-TV operators about Noggin being a premium offer for authenticated subscribers.
Noggin is the latest response by TV networks to the dramatic market changes currently playing out. As I recently described, disruption has been particularly acute in the kids' space, where kids' cable TV networks' ratings are plunging as OTT services have avidly built out their kids offerings. Just since writing that piece 2 weeks ago, YouTube has launched a kids-focused app, Netflix has added 5 new kids series and Amazon has renewed 4 others, all amping up the pressure on kids TV networks even further.
In this context, Viacom's move to better compete with OTT services looks like an imperative. But the looming question for Noggin - and for other impending OTT services - remains just how willing consumers will be to sign up? All of these new OTT services - Noggin, Sling TV, CBS All Access, HBO OTT and others to come - are creating new choices for consumers, but also lots of new complexity. At this point, it is completely unknown how target consumers will react.
For example, despite all the talk of cord-cutting, last October I asserted that the proliferation of subscription OTT services might actually be a good thing for pay-TV, helping to reinforce the simplicity of its value proposition and all-in-one price, especially as TV Everywhere rolls out. Generally speaking, consumers like to make as few decisions as possible, and with each new OTT service that comes to market, consumers could well be inclined to cry "Uncle" and just stick with a few larger services that do a great job aggregating content.
That's clearly what services like Netflix, Amazon and Hulu are banking on. They're methodically pursuing both licensed and original entertainment content, for both kids and adults, and offering it all for one simple low price with a compelling user experience. As a result, when Noggin and others come to market, the bar has already been set extremely high. Budget-minded parents will need to decide - with so much kids' content already available, do I REALLY need to pay for even more?
All of this is part of a fascinating dynamic playing out in today's TV business. Linear ratings are declining, viewers' behaviors are changing, advertisers are shifting their spending and technology choices are exploding. The result is incumbents scrambling to experiment with new business models and figure out (quickly!) what works and what doesn't. We are truly in a time of massive experimentation, with the consumers' preferences still to be understood.