122016 Turner_Goblin
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SVOD,Kids Content,Global

Hopster Faces Big Rivals In Kids

Hopster, a 30-month-old SVOD service for preschoolers, is starting to deepen its footprint overseas.

The UK-based startup announced its first local-language apps (for France and Iceland) in the second half of 2015, after negotiating international rights for its licensed programming across 100 territories earlier in the year.

In April, the company also unwrapped its first distribution deal in Asia, with Malaysian telco Maxis. Hopster joins other OTT bundles on Maxis, from the likes of ErosNow, Iflix and Viu, as the telco pushes data usage on its platform.

Following a two-month free trial, Maxis’s subs can access Hopster’s English-language videos and educational games for RM10 (US$2.6) per month.

Hopster’s founder and CEO, Viacom alumnus Nicholas Walters, wants to push further. More distribution deals can raise Hopster’s profile, while extra content and features can bolster the app’s appeal and differentiate it from other, often larger players.

“We raised our Series A in 2014,” Walters said, speaking at this year’s APOS conference in Bali.

“We’ve seen really good growth since then, so we’ll be looking to invest against that growth,” he added. “I’d expect to have some stuff to announce in the not-too-distant future.”

Hopster’s first funding round was led by Astro-backed Sandbox Partners – a strategic investor specializing in digital media and education. Hopster also landed some seed funding in 2014, after making its debut at the end of 2013.

Over that time however, large OTT aggregators such as Netflix and YouTube, as well as more specialized local and international services, have been building out their own kids offerings.

Parents and children have more options than ever.

GROWTH AND COMPETITION

Like other startups, Hopster has limited resources for product development and marketing, relying on word-of-mouth and distribution deals to get the word out as its product expands.

The Asian offering will remain in English for the foreseeable future, catering to demand for English-language learning.

At the same time, Hopster’s home market is becoming increasingly crowded.

In March, the UK’s pay-TV leader Sky unveiled Sky Kids as a free app for its subscribers, while free-to-air major BBC launched BBC iPlayer Kids as a free online offering in April.

At the end of 2015, the UK also became the first global market for DisneyLife, a direct-to-consumer play offering online video, music and books for £9.99 (US$15.2) per month.

Hopster costs less, at £3.99 (US$6.1) per month, but more than freemium rival PlayKids, a Latin American service rolling out globally, including in the UK at £2.99 (US$4.5) per month for its paid tier.

Hopster has room to grow, Walters contended, arguing that its slant towards learning and interactivity helps it stand out.

“Of course you will have other people investing in this space, but this space is huge,” he remarked. “When I see people like Disney following us into this space with DisneyLife, I find that validating.”

Hopster currently licenses its songs and videos but makes its own educational games, which are linked to videos as well as a learning curriculum that sits underneath the platform.

The games account for around 30% of time spent on the platform, a proportion that has steadily risen since launch, Walters noted.

“That’s a very different experience from Netflix,” he said.

Hopster’s CEO is also eying self-produced short-form content  in areas such as songs and educational video  as one of the next areas for investment and differentiation as he seeks to increase the paid base.

“That kind of content is performing really well,” Walters said.

“I think it proves in a digital environment you can range more widely. You can do different things you couldn’t do in a linear environment.”

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