Silvergate steps in via CCTV tie-up

Leading British media company Silvergate Media Ltd, producer of popular animation series such as Octonauts and Peter Rabbit, will collaborate with CCTV, China's State-owned national broadcaster, to produce and market the fifth season of Octonauts.

Silvergate will also sell its licensed toys and consumer products in China.

William Astor, chairman and co-founder of Silvergate, told China Daily during his visit to CCTV in Beijing that the agreement is that Silvergate will provide the script and music and produce content, while CCTV's animation company will work on animation.

Jointly, they will broadcast the new season in China and elsewhere.

Silvergate claimed it is CCTV's first co-production of a preschool animation series with a Western media company.

The project will entail a $10-million investment. Each partner will contribute 50 percent of the investment. They will spilt television sales worldwide.

"The new edition will add more unique marine life from China such as the Chinese dolphins," said Astor.

Much of the writing will be done at Silvergate offices in London and New York.

The previous seasons of Octonauts were broadcast by CCTV nearly two years ago and were believed to have been watched by more than 1.8 billion viewers, said Astor.

The Octonauts are an eight-member team of adventure heroes who dive into action whenever there is underwater trouble. First broadcast on CBeebies in the United Kingdom in October 2010, Octonauts is aired in more than 100 countries by channels such as on Disney Jr. in the United States, ABC in Australia, TF1 in France and Super RTL in Germany. It is also one of the fastest-growing kids channels on YouTube with more than 150 million hits.

"What makes it unique are the characters - including a cat and a polar bear - that could become any nationalities, and work well with preschool children anywhere in the world," he said. "You can translate the characters and stories into part of the culture where it is broadcast."

He sees two ways to work with CCTV. "CCTV can help us make programs that we can translate for Chinese television while we can help sell them to the rest of the world without changing anything but making them more international."

Silvergate's another preschool product, Peter Rabbit, which is also broadcast on CCTV, has iconic English-speaking characters, and hence is considered worthy of being made part of school curricula to help children learn English.

Astor said it is possible to convert Chinese animated stories into television series and movies and sell them to the world. To do that, it is important to first identify the factors that make the books, stories and comics concerned successful, and then take the best of it for use in television. "You don't change it, You edit it so it becomes more understandable to the global audience."

Aston sees China as a market for making motion pictures with its Peter Rabbit or Octonauts properties.

The licensed toys market, derived from Silvergate-owned animated characters, is providing immense opportunities in China, he said.

He also said Fisher-Price has developed a full range of consumer goods based on the Octonauts characters, offering products at lower prices in China compared with those available in the US.

Animated consumer products have dominated toy store shelves for long. For instance, Walt Disney's new release Star Wars: The Force Awakens is a big hit at Toys "R" Us outlets in the US. In China, Walt Disney sells 38 licensed products per second. Its total revenue from consumer goods is $2 billion per year.

The competitive advantage that brands like Thomas & Friends, Lego and Transformers have is they are embedded in animation character appearances, said Clover Wei, senior associate with Euromonitor International.

Such products give consumers a psychological connection with animation characters, she said. "Licensing is an effective tool to market toys to consumers. Under most circumstances, consumers tend to buy products resembling animated characters they recognize."

Leading multinational companies such as Mattel China Inc and Hasbro Trading (China) Co Ltd benefit from consumers' preference for licensed toys. Both companies are under multiple licensing agreements that allow them to build product portfolios covering several markets for traditional toys and games.

For example, Disney movie Frozen was screened at cinemas in 2014. Its key character, Princess Elsa, enjoyed a positive image, and was highly appreciated by not only children but their parents. Later, sales of Elsa dolls and Elsa role-play dresses soared.

The success of Elsa contrasts with Mattel's deteriorating sales of Barbie dolls. Mattel needs to find a new sales engine, according to Euromonitor.

Licensed toys will remain competitive compared to ordinary toys. The success of Frozen signals the great potential that licensed toys can harness if they hit the market after a movie impresses audiences.