Nickelodeon explores virtual worlds

LOS ANGELES (Hollywood Reporter) - Nickelodeon is building a virtual world in a bid to increase revenue in the real world.

Characters from Nickelodeon's "SpongeBob SquarePants" are seen in an undated handout image. REUTERS/PRNewsFoto/Nickelodeon

The company is expected to announce Thursday that it is developing an entire virtual world, involving games, avatars and a strong social-networking component, based on network hit “SpongeBob SquarePants.”

Nick also is expected to announce that it is developing Monkey World, a social-networking and massive multiplayer game based on an original concept and not tied to any of its existing franchises.

The network also will announce that it will increase the interactivity on its Neopets site through a new virtual world called World of Neopia, and will add a paid tier to Nicktropolis, the overarching virtual world that’s divided into sections based on Nick television shows and other properties. SpongeBob, Monkey World and Neopia also will have paid tiers when they launch next year.

Nicktropolis currently averages about 1.5 million visitors per month, and executives said the paid tier will preserve that traffic by charging only for additional features like personalization. The company declined to disclose pricing details for the new tier or say what it might charge for various virtual words, though it’s likely that pay tiers could be a key part of its revenue strategy.

The announcements, timed to the Virtual Worlds Conference this week in Manhattan, amount to a digital development slate for a company that is trying to establish itself as a digital heavyweight. Nick hopes to use these worlds not just as a marketing platform but as a separate business, generating revenue from subscriptions as well as in-world advertising.

The company is in an eyeballs race with Disney, which through acquisition Club Penguin and assets like Toontown Online also targets youngsters with virtual worlds. Penguin charges for subscriptions as well.

Steve Youngwood, executive vp digital media at Nickelodeon/MTVN Kids and Family Group, acknowledged that TV networks have found it difficult to create properties from scratch, as the company was attempting to do with Monkey World.

“Now a virtual world is putting its foot out there as another viable medium, not just to extend brands but to create brands,” he said.

Neopets, which Viacom acquired several years ago, has been one of the Web’s biggest success stories among the tween demo, boasting 45 million registered users.

Another Viacom division, Paramount Digital Entertainment (PDE), also is expanding its presence in virtual worlds, announcing deals to bring its VooZoo application -- which are short clips from its vast film library -- to MTV’s own vMTV and Makena Technologies’ and vMTV members will now be able to send each other three- to five-second video clips called “voohoos” from films including “The Godfather,” “Beverly Hills Cop” and “Footloose.”

Each clip will cost about $1. There will be an icon on each clip that will allow users to click through to a site to actually buy the DVD of the film.

“It’s taken a while for many to understand why younger people were going to virtual worlds and that they were willing to pay for virtual goods,” said Derek Broes, senior vp new business development at PDE. “But now that we have that understanding, we’re going to continue to push is that direction.”

Earlier this week, PDE announced the launch of VooZoo Mobile, bringing voohoos to cell phones.

Reuters/Hollywood Reporter