As interactive digital TV continues its push into European households, kid-centric networks are adopting new competitive strategies in an increasingly tight marketplace. Fox Kids Europe is hoping that melding its web and TV divisions will give it an edge. In July, the company relaunched its interactive gaming channel in the U.K., developing all of the net’s show- and character-based content in-house for the first time.

The original Fox Kids Play debuted on-air in December 2001 with interactive game programming developed by British producer Energis, which also secured a berth for the channel on British Sky Broadcasting, the U.K.’s largest digital provider with about seven million subscribers. But Energis went bankrupt last year, leaving Fox Kids Play homeless and spurring FKE’s desire to cut out the middleman in order to retain more revenues.

After spending just under a year setting up the in-house team and readying its lineup, FKE signed a new deal with the Telewest platform to go into roughly a million homes. But the loss of Sky’s incredible reach has meant that FKE competitors like Cartoon Network and Nickelodeon have surged ahead in the race to dominate this developing market. Patrick Healey, Fox Kids’ chief technology officer and head of production, believes Fox Kids Play will start climbing back as soon as new deals can be put together with both Sky and NTL (another U.K. digital platform with about 800,000 subscribers).

Meanwhile, the channel operates on a pay-per-play model, charging roughly US$0.80 a game to cover its bandwidth and development costs – far less than its adult-targeted colleague Play Jam, which commands US$2.50 to US$3.50 a game. These play fees are the chief potential revenue source for all interactive game channels, but Healey says FKE sees Fox Kids Play as a brand-building exercise rather than a moneymaker right now, and he’s reluctant to up his prices to a point where they are beyond kids’ means.

The project marks the first time that FKE’s on-line division (which runs 17 regional websites) has worked on interactive TV games, but the team used its expertise and access to the web to maximum advantage, testing new game concepts (such as Pig City Pigout Pizza, in which players must match side-by-side toppings to clear the screen and win) on-line before graduating them to an on-air existence.

FKE’s interactive TV team’s next move will be to add player-to-player interactivity to both its enhanced-TV concepts (event-style shows that require kid participation in the form of voting) and its competitive game channels. Also on deck for Fox Kids Play is an interactive game room where kids will be able to throw down the guantlet and challenge other kids to play against them. ‘There will even be pre-recorded taunts to make it more fun,’ Healey says.

Elsewhere, Fox Kids Play channels have attracted about two million subscribers on the CanalSatellite platform in France, and 25,000 on Golden Channels in Israel. On average, Healey estimates the channels pull in somewhere between 10% and 15% of kids in subscribing households. As far as further expansion into Europe goes, Healey says it all depends on how well digital TV catches on in each individual country. Italy and Spain look to be the most probable next targets since Sky is making inroads into those regions in the next year or two.