Viacom's Nickelodeon Acquires Sparkler in Pivot Toward Education

(Bloomberg) -- Nickelodeon wants to turn kids’ living rooms into classrooms.

The Viacom Inc.-owned kids’ network has acquired the learning app Sparkler and plans to fold it into Noggin, a video service for preschoolers. Kristen Kane, the co-founder of Sparkler, will now oversee Noggin, which combines a catalog of more than 1,500 episodes of shows like “Paw Patrol” and “Peppa Pig” with play-as-you-go learning challenges involving popular Nick characters.

The companies didn’t disclose terms. The acquisition is a sign of Nick’s growing confidence and investment in Noggin, which has about 2.5 million subscribers.

“This app all of a sudden over the last year is growing like a weed,” said Brian Robbins, the president of Nickelodeon.

Robbins, a successful actor, producer and entrepreneur, hesitated when Viacom Chief Executive Officer Bob Bakish asked him to take over Nickelodeon. While Nick is still the most-watched kids’ TV network in the U.S., viewership of kids’ TV has been in decline for the better part of a decade -- hurt by a new generation of youngsters watching YouTube and Netflix instead of traditional cable and satellite.

Revived Brand

But he saw opportunities to capitalize on its animation studio and live events -- and he saw an underappreciated asset in Noggin. Viacom co-founded Noggin as a cable network in 1999, an offshoot of its popular Nickelodeon channel aimed at younger kids. After turning Noggin into Nick Jr., it revived the brand in 2015 as the name of an online-only service for kids.

Noggin is one of Viacom’s earliest efforts to gain a foothold in the booming market for online video. But it has been something of an afterthought for the past few years, seldom discussed as a huge growth opportunity for a company that has reported declining sales. Netflix Inc. and Amazon.com Inc., meanwhile, invested billions of dollars in kids’ programming to lock in a new generation of families.

That all changed when Viacom began selling the service via Amazon’s channels store. Its domestic subscriber base has more than tripled over the past year. Deals with international pay-TV providers like Telefonica SA have provided a further 1.9 million customers, Robbins said.

Robbins has no intention to compete head-to-head with Netflix and Amazon in entertainment, an expensive proposition. Instead, he wants to further establish Noggin as an app parents can trust -- a productive use of screen time that also entertains. He also intends to expand the service’s target audience to include kids as old as 8, from the current range of 2 to 4.

Sparkler allows parents to measure a child’s early-stage educational development, and it delivers personalized coaching to reach certain goals. Kane used to work for New York City’s Department of Education and News Corp.’s former Amplify digital education unit.

“When handing a kid a device, it feels really good to know that they are getting more out of the experience than just watching,” Robbins said. “Ramping up the education -- and the benefits of that -- I think will make Noggin explode.”

To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III

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