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Nickelodeon expands beyond its TV roots

Channel now offers games, clothing, videos
/ Source: Reuters

Nickelodeon, the Viacom Inc. childrens’ cable network known for Dora the Explorer and Blue’s Clues, said it is expanding beyond its television roots with video games, a clothing line and baby videos not tied to its popular TV shows.

The network is increasingly bypassing its tried-and-true route of basing all of its merchandising on proven TV programs and movies and increasingly banking on the Nickelodeon name alone.

“There are only so many hours in the network day; it’s constraining,” said Jeffrey Dunn, president of Nickelodeon Enterprises, the unit spearheading the campaign. “At some point, you reach the limit of what you can do there.”

These ancillary businesses have become an important part of Nickelodeon’s marketing mix as well as a major revenue stream for parent company Viacom.

Nickelodeon Enterprises -- made up of consumer products, Web sites, publishing and recreation -- is expected to bring in $3.9 billion in retail sales in 2004, up 11 percent from last year. Viacom’s overall revenue for 2003 was $26.6 billion.

“Nickelodeon has done a better job than most of the cable networks in terms of establishing a brand identity of its own,” said Robert Passikoff, president of Brand Keys, a New York-based marketing consultant. “They need to be clear on their brand values to avoid the ’Field of Dreams’ syndrome --if you build it they may not necessarily buy it.”

Games, clothes, videosThrough a partnership with video game manufacturer THQ Inc.  Nickelodeon last year had already created Tak and the Power of Juju, a video game geared toward older children ages 8-12.

“Tak has been terrific for us as a franchise,” said Peter Dille, senior vice president of worldwide marketing for THQ. ”To date, it’s sold more than a million units. We’re preparing actively to launch Tak 2.”

Nickelodeon had expected to sell a million copies of Tak in a year, and it hit that level within six months. The sequel to the video game will be released Oct. 14, and a Tak television show is now in the works.

Since Tak -- a shaman apprentice who fights evil -- the company has been ramping up the program.

Nickelodeon has introduced a fall line of clothing for preteens called everGirl, as well as a companion Web site --http://www.evergirl.com -- based on a fictional group of friends with different styles. It is being sold exclusively at mid-priced department store Kohl’s Corp.

Curious Buddies, a line of developmental videos teaching basic developmental skills that competes with Walt Disney Co.’s popular Baby Einstein products, was launched in September. Nickelodeon is also opening a hotel in Orlando, Florida, next year under the Holiday Inn banner.

“Their biggest challenge is making it a good product to begin with; that’s where so many companies lose it,” said Britt Beemer, head of America’s Research Group, which surveys consumers on shopping habits and other trends. “Co-branded merchandise has to support the product, not make up for it.”