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Kids' Market Is Growing by Leaps and Bounds

14 Apr, 2005 By: Judith McCourt

Children's programming may have been the last to migrate to DVD, but now it's fueling much of the category's remaining growth.

The overall value of the children's and family video market is estimated at about $2.7 billion, or 17 percent of the $15.9 billion consumers spent buying videos, chiefly DVDs, in 2004, according to Home Media Research. By 2007, projections are the children's video market will account for 28 percent of total home video sales, according to industry analysts.

One reason for this projected growth is that the United States is in the middle of a mini “baby boom.” The U.S. Census Bureau forecasts that by 2020 there will be more than 60 million children under the age of 14 living in the United States, a 9 percent increase. Another is that today's children are increasingly plugged in. PlayStations may be primarily game machines, but they've effectively added a DVD player, as well. Meanwhile, “Barney in the backseat” has become a catch phrase to describe the mushrooming mobile DVD market, which again revolves around kids.

Nontheatrical big
The biggest growth engine in the children's DVD market is nontheatrical fare — either pulled off TV or created especially for video. This engine is fueled by Buena Vista Home Entertainment's enormously successful direct-to-video sequels to theatrical hits such as The Lion King and Aladdin, as well as branded TV (Nickelodeon, PBS Kids) and toy (Mattel's Barbie) lines.

Indeed, sales of nontheatrical children's DVDs are on track to surge from 11 million units in 2003 to 51 million units in 2007, according to Glenn Ross, who heads Universal Studios Home Entertainment's new Family Productions division, formed last month to acquire and develop children's programming for DVD release.

For years, Universal has been mining its “Land Before Time” franchise with yearly direct-to-video sequels to the 1988 Steven Spielberg hit, but now plans on significantly expanding its footprint.

“Studios have all come to realize that to grow just off theatrical product is limiting, because you can only release so many theatrical films a year,” Ross recently told USA Today. “So one of the places to grow is in direct-to-video product, particularly for kids.”

Much of the growth in the children's nontheatrical market is coming from “edutainment” offerings that combine entertainment with learning — and are aimed at the very young infant-to-preschool market. Buena Vista, for example, has built a big business with its “Baby Einstein” and “Winnie the Pooh” lines.

“This August, we will release the first DVD in our all-new ‘Little Einsteins' franchise,” said marketing VP Lori MacPherson.

Paramount Home Entertainment also is a big player in both the children's nontheatrical market and the burgeoning edutainment subcategory. Fueled by its top-rated TV show, DVD sales for “Dora the Explorer” have grown a whopping 80 percent in the past year.

“Dora is our superstar for 2005,” said Paramount domestic home entertainment president Meagan Burrows. “We've sold $250 million worth of her videos over the past four years and have five brand-new releases planned for this year.” Factor in “SpongeBob SquarePants” and other popular Nickelodeon properties and Paramount's partnership with the network (both are owned by Viacom) now generates more than $1 billion in home video sales a year.

The power of TV
Universal's Ross said children are more inclined to watch the same shows over and over again, which makes parents more willing to buy instead of rent. On top of that, TV spreads awareness, with many top-rated shows becoming top-selling DVDs.

“And much of this product is evergreen,” Ross said. “Every four or five years, you have a new crop of kids, plus you've got parents purchasing things for their children that they knew as children. Care Bears is back, Strawberry Shortcake is back — it's cultural anthropology we're dealing with.”

HIT Entertainment's Jamie Cygielman agrees. One of HIT's top-selling DVD properties is “Thomas and Friends,” based on the line of children's books launched in 1945 by the Rev. W. Awdry. Thomas the Tank Engine and his fellow animated train engines have been strong video sellers for years, but it wasn't until Thomas migrated to PBS last September that DVD sales really took off.

This year, to celebrate Thomas' 60th anniversary, HIT is packaging all “Thomas and Friends” DVDs with collectable gold, silver and bronze toy engines. Next up: a collection of TV episodes, Songs From the Station, coming in May, followed in September with the feature-length Calling All Engines, created especially for video.

“It's a huge business for us,” Cygielman said of HIT, whose other children's properties include Bob the Builder, The Wiggles and Barney. “Once kids have one video, they want more.”

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