JuniorNet
Web venture raises revenues, questionsOriginally published in Current, July 17, 2000
By Karen Everhart Bedford
Public TV stations have a new opportunity to share revenues earned by an aspiring multimedia provider of ad-free children's content — but can they participate without compromising their editorial integrity and noncommercial values?
Nascent partnerships between children's online service provider JuniorNet and some public TV licensees recently drew fire from leading children's TV advocate Peggy Charren, who says the agreement is not appropriate for public television. Charren denounced the partnership in Broadcasting & Cable. "I don't think it's clean," she said. "They're going into the business of advertising." The project also was scrutinized in a Wall Street Journal article last month that described the deal as a "sign of public broadcasting's growing commercial ties."
Partners in the project say there's no threat to their editorial integrity. Though JuniorNet Corp. is developing a television show about computers for five-to-ten year-olds, which will be offered free to public TV, the show's broadcast agreement is separate from the marketing partnership. Contrary to recent reports, stations won't be paid to carry the program. For JuniorNet, the alliance with public TV — and its reputation for quality — is a key element of its new marketing strategy. Stations that agree to market and promote JuniorNet within their communities will receive a share of subscription revenues and equity in the company. Station executives who crafted the partnership say it's an important new business model consistent with public television's mission. "We think the partners in this JuniorNet are first-rate," said Rod Bates, g.m. of Nebraska ETV. The partnership "makes available additional programs and services at no cost to taxpayers," he added. "We've got to look for ways to develop programming in the digital environment that are sustainable."
Different comfort-levels
Nebraska ETV, South Carolina ETV and Maryland PTV are JuniorNet's partners in the marketing deal, through a new limited partnership, PTV VisionWorks. JuniorNet subsidiary Lancit Media, producers of the PBS children's series Reading Rainbow and Puzzle Place, is developing the new daily half-hour children's show for release next spring [earlier story, November 1999]. A new season of Reading Rainbow also may be produced with JuniorNet funding.
JuniorNet launched last March as an advertising-free and safe online learning environment for children. It features interactive content from leading children's publishers such as Highlights for Children, Ranger Rick (from the National Wildlife Federation), Sports Illustrated for Kids, Weekly Reader, Zillions (from Consumer Reports), and Jim Henson's Bear in the Big Blue House, a preschool series on the Disney Channel. The service uses a hybrid CD-ROM/Internet technology to quickly deliver imagery and sounds while protecting children from the Web's nasty elements.
The company plans to offer JuniorNet to schools at no cost, building demand for parents to buy home subscriptions for their children that cost $9.95 per month. The service doesn't provide basic Internet access — it's supplementary — and subscribers must have Internet access to be able to use JuniorNet. Five public TV licensees — the three PTV VisionWorks partners plus KCET in Los Angeles and WNED in Buffalo — have already helped test JuniorNet in local schools. A second-phase of testing this fall with about 20 public TV licensees precedes the full roll-out early next year.
"We think it is a great product," said Mitch Aiken, director of education for KCET, who coordinated JuniorNet testing in a Los Angeles elementary school early this year. "I sat in on the debriefing with teachers and could see that they really thought it was worthwhile." KCET has not yet decided whether it will participate in the full JuniorNet venture, he said.
Stations that agree to market JuniorNet will be compensated in two ways. If a new subscriber recruited by a station maintains that sub for one year, the station receives $9.95 — the cost of a month's subscription. Each station also will receive warrants issued by JuniorNet that can be converted into stock in the company. The number of households in a station's market will determine how many warrants in JuniorNet it receives.
The agreement allows stations flexibility to promote JuniorNet in ways that make them "comfortable" and are "appropriate to their station culture," said Cecily Truett, president of Lancit. Stations can run ads in program guides, plug JuniorNet on web sites, send direct mail to their members, or offer subscriptions as a pledge premium, according to several sources.
"Somebody else's stuff"
"I think this isn't in keeping with their mission," says Charren, an outspoken critic of commercial broadcasters and advocate for children's television since the late 1960s. Stations will be promoting a service that's "only available to parents with money" and "reinforces a gap between rich and poor."
"PBS has a lot of sites that are child-related and are free" on PBS Online, Charren continues. "If it leads kids to TV, it leads them to PBS programs. I don't see why it's a terrific idea to start leading kids to different sites with nothing to do with their system. They're promoting somebody else's stuff." Charren acknowledges public broadcasting's need to "get creative on income," but adds, "I think this one steps over the line."
Stations that agree to market JuniorNet and gain a share in its revenues would compromise their editorial integrity if they also opted to air the JuniorNet TV show, according to Charren. To broadcast a show that stations have a financial interest in promoting is "self-serving" and injects an "unacceptable" level of commercialism in program decision-making.
"If the system doesn't watch out for these kinds of traps, they're going to put themselves out of business," she continues. "If you can't distinguish between public broadcasting and the commercial world, then there's no reason to fund public broadcasting."
Jim Naureckas, editor of Fairness and Accuracy in Reporting's magazine Extra!, agrees that the JuniorNet venture threatens noncommercialism in public broadcasting's services to children, a value that FAIR recently editorialized is seriously compromised by current practices. "This gives these PBS stations a financial stake in the success of this company, and that is going to lead to some pretty serious conflicts of interest, I would think."
"The basic problem that PBS has is that they have become so attached to commercial methods of fundraising, that they are no longer able to explain to people why it is that noncommercial broadcasting is a good idea," he adds. "Over the years they've traveled so far down the slippery slope, with what they call sponsorship and underwriting and various financial deals with commercial producers, that they find it difficult to say there's a problem with corporate underwriting or marketing to children. To point out those things would be self-indicting at this point."
PBS is not a participant in the JuniorNet venture, although it is negotiating an agreement to distribute a new, possibly fully funded season of Reading Rainbow, a series produced by Lancit and co-owned by Nebraska ETV and WNED in Buffalo. PBS has "sensitivities" regarding JuniorNet's proposed sponsorship of Reading Rainbow, explains Bates. "This is an issue we've got to work through."
Bates and others leading the JuniorNet venture say that the agreement is in line with existing private-public partnerships within the field. Truett pointed to the Stores of Knowledge with commercial ties to local stations, PBS's practice of sharing revenues generated from its children's series, and the books, toys and videotapes that stations offer as pledge premiums.
"In this case, stations are afforded opportunities to own equity in a product that they help make popular," says Bates. "If the dollars go back into producing additional programming and services for the educational community, it's a good thing."
Bates wants public TV to hold more equity in programs that it airs and makes popular, such as Magic School Bus and Sesame Street, which now air on other channels. "We're seeing others profit from our bandwidth that was used to create these popular series. Why shouldn't we benefit from that?"
"Any programming coming out of JuniorNet or Lancit has to meet the strict requirements of the FCC and our stricter guidelines," says Rob Shuman, president of Maryland PTV. "If it's too closely tied [to JuniorNet's online service] or the characters are all the same, then we won't run it."
Online venture adds its brand to revived ‘Reading Rainbow’
Originally published in Current, Nov. 15, 1999
By Karen Everhart Bedford
JuniorNet, a privately owned online service for children, is offering public TV stations free programs, a new source of revenue, and a stake in its expansion as a multimedia brand for kids that supports learning.
Lancit Media, co-producer of Reading Rainbow and Puzzle Place acquired by JuniorNet Corp. in April [1999], is leading the pitch to public TV stations, and will produce the television content, including new episodes of the reading program. Sandy Welch, former PBS executive v.p. of learning services, has signed on to the effort, joining Lancit as senior v.p. of television distribution.
Welch emphatically denied that the availability of Reading Rainbow would be tied to stations' participation as a JuniorNet partner, but Rod Bates, head of RR co-producer Nebraska Educational Telecommunications, said the question is still under discussion.
"These are truly exciting programs that you will want to broadcast and promote," said Welch on Nov. 2 during a presentation at the National Educational Telecommunications Association (NETA) Conference in Albuquerque. JuniorNet's online service "makes learning fun for kids, and is responsive to the concerns of parents and teachers."
JuniorNet is an advertising-free online service, fenced off from most of the Internet, for kids aged 3-12 that delivers interactive content from established children's publishers as Highlights for Children, Weekly Reader, Ranger Rick, Zillions and Sports Illustrated for Children. Jim Henson's Bear in the Big Blue House, a Disney series for preschoolers, began providing content to JuniorNet this fall. "It's really designed to help improve kids' literacy skills with fun and entertaining interactive content," all of which is created by JuniorNet, explained Welch.
The service uses a hybrid CD-ROM/Internet technology to quickly deliver rich imagery and sounds while protecting kids from online predators and nasty web sites. JuniorNet is marketed to parents as a safe and affordable online environment where their kids can play and learn. The monthly fee is $9.95 for a family of up to four children. Users must have an IBM-compatible computer with a CD-ROM drive and modem that operates on Windows 95 or 98, and subscribe to a separate Internet service provider (ISP).
The company was founded in 1996 by Alan Rothenberg, a Boston-based entrepreneur and father of three, and launched its service to families this March. In April, RCN Corp., one of the nation's largest ISPs, invested $22 million in JuniorNet and transferred its ownership of Lancit Media to the online service. With investments from other venture capitalists, the total value of the deal, including the transfer of Lancit, was $70 million. (RCN itself has attracted major investment. Microsoft cofounder Paul Allen put $1.65 million in the company last month.)
In addition to Lancit Media, Reading Rainbow is the most immediate beneficiary of JuniorNet's interest in the public TV. New episodes of the series, which has languished from PBS's waning interest and the loss of Kellogg as its underwriter, will be produced with funding from JuniorNet, and offered free to public TV stations. The series has a strong constituency among teachers, and its high production values and strong educational content make it a signature program of public TV. "It's an opportunity to breathe new life into Reading Rainbow," said Rod Bates, whose Nebraska network is one of three state networks leading JuniorNet's partnership with public TV. He said that many details of the plan have yet to be worked out — including PBS's continued role as Reading Rainbow's distributor. But the offer to stations is basically this: Reading Rainbow and other JuniorNet-backed series in development will be offered free to public TV stations as a co-branded service, JuniorNet TV, next fall.
JuniorNet also wants public TV stations' help in the education market. Stations can also deliver the service to schools for free, and receive training and marketing support to assist these efforts. In exchange, stations that promote JuniorNet, and generate home subscriptions, would receive equity in JuniorNet and a share of home subscription revenues.
In talks with station executives in Albuquerque, Welch and Truett emphasized that promo agreements will stay within FCC guidelines and be tailored to stations' sensibilities about what works in their markets. "This is a new business, and we are asking you all to help us figure out how to serve the audience best," said Welch, during a well-attended evening demo.
"The dilemma I face is the migration of signature programs to our commercial competitors," said Bates, referring to the recent losses of Magic School Bus, Bill Nye and old episodes of Sesame Street to competing children's channels. "We want to keep it on PBS," which would be "beneficial to everyone concerned." Bates and JuniorNet representatives will meet with PBS this month to discuss their relationship.
"There are a lot of things to iron out," acknowledged Bates. "You never know what issues this will raise or what sensibilities people will have, but if we can get to the end of this, it will be a remarkable model for public TV stations to look at."
Web page posted July 22, 2000
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