TORONTO – The folks at Teletoon spent a long time thinking about how to bring its older cartoons back to life in a new channel.
The animation station originally received a category two digital license for Teletoon Retro in 2000 and have been expected, off and on, to launch the channel every fall since then. It was thought to be a slam-dunk of a channel because who hasn’t heard of Bugs Bunny, Scooby-Doo and the Flintstones?
But back in 2001, digital television penetration was minuscule among Canadians and while dozens of channels did launch that fall in order to stake their claim, it’s taken years and tens of millions of dollars spent in order for them to begin make money – and many still haven’t. The digital world was a
nd is different. A-la-carte packaging was offered, just a handful were must-carries, meaning carriers have refused carriage to some, and items like placement, packaging and marketing were all more difficult. For many, the results have been less than desirable.
That wasn’t a business model that appealed to Teletoon’s long-time president Len Cochrane and the channel’s owners, which at the time was a consortium of Astral Media, Corus Entertainment and a few animation producers.
The current owners (Astral and Corus own it 50-50) are broadcasters and the new business model Teletoon Retro will launch with is a departure from most of its digital counterparts.
Most digi-nets earn 80-to-90 percent of their revenue from carriage fees paid by subscribers through their cable companies. While some have been able, through serving very focused niches or finally earning enough eyeballs to sell decent chunks of ad time, for the vast majority, subscription fees are the lifeblood.
"It’s very difficult to make money that way as a stand alone channel," Cochrane told Cartt.ca in an interview. "You have to have two streams (of revenue)."
So, Teletoon Retro is offering itself free for a year, going to six cents ($0.06) per subscriber per month for the next two and then dropping (!!??) to five cents for the final three years. "Over the next three years there will be a lot more digital boxes out there and we’ll be able to afford to reduce the price," explained Cochrane. "We think we have a model that’s good for (distributors), good for subscribers and good for us." 
The catch, of course, is that Teletoon Retro wants to be on digital basic, available to all digital television customers, if it is going to offer those terms to carriers.
Bell ExpressVu has already agreed to offer the channel to all of its nearly two million English-language customers (this is a correction as a prior version of this story said it would be offered to all BEV customers), and "we’re in discussions with all the other major players," added Cochrane. That means the new digi-net will launch with well over two million subscribers. It’s pushing the new channel all this month airing the Bugs Bunny and Tweety Show every evening at 7:30 on the main network (which has over 7.2 million subscribers).
The channel will also offer itself up the old way too, for 35-cents a sub and a three month free preview, if a distributor doesn’t want it on digital basic.
"We turned the usual model upside down," added Cochrane, who says that advertisers are still far more interested in numbers of eyeballs than anything else. Launching the usual way would yield very low subscriber numbers "and with 100,000 or 200,000 subscribers, it’s difficult to get the ad agencies’ attention," said Cochrane.
So far, the agencies are intrigued because the programming lineup is full of established hits (The Jetsons, Rocky and Bullwinkle, Superfriends, Fat Albert and Tom & Jerry) that the target audience – the 25 to 49 crowd, many of whom will watch with their own kids – will recall fondly. "The opportunities for co-viewing will be amazing," he added. (It’s also got The Raccoons and Rocket Robin Hood as its Canadian content).
"This lets you be a kid again," said Cochrane.
