Kids' TV: Can we sell it? Yes, we can

Bidders are falling over themselves to buy the British company behind Bob the Builder and other top children's TV characters. Cahal Milmo reports on the very grown-up battle for a £55bn market

To their millions of fans, Bob the Builder and Thomas the Tank Engine are the grinning embodiment of an animated utopia shaped by happy friends and the magic powers of modelling clay.

To their millions of fans, Bob the Builder and Thomas the Tank Engine are the grinning embodiment of an animated utopia shaped by happy friends and the magic powers of modelling clay.

But the harsh business reality behind the cosy televisual universe of Bob's builders yard and the rail network of Sodor Island was yesterday thrown into sharp relief when three suitors - including the owner of Clifford the Red Dog - stepped up their efforts to buy HIT Entertainment.

The British company, which owns the rights to a host of lucrative children's television brands including Bob the Builder and Thomas the Tank Engine, said it was investigating approaches from two new bidders days after announcing it had accepted a £489m takeover deal from a private equity firm.

The bidding battle highlights the fierce competition for a stake in the burgeoning industry focused on keeping youngsters entertained while sat in front of a television screen.

Latest estimates put the global market in children's DVDs and videos at £24bn a year. Toy sales, mainly spin-offs from television programmes, are worth an additional £31bn.

It is a trade in which Britain, with its host of small production companies dedicated to making hits from Bob the Builder to Noddy, has excelled. Last year, 20 of the 25 top selling children's programmes in the UK were made in Britain - overturning America's predominance in other entertainment sectors.

The success of dedicated children's channels, such as the BBC's digital offering, CBeebies, and private ventures such as Nickelodeon, has also boosted demand for high quality content.

Analysts said yesterday that it was therefore unsurprising that foreign buyers were now queuing for a share of the British success in the sector.

One senior financier with knowledge of the HIT negotiations said: "The model for this market has been proven over and again. You take a popular character, engage youngsters and wait for the money to roll in from allied sales of merchandise.

"The problem is securing that popular character - whether it is a Bob, Pooh, Noddy or Pingu. That is why HIT is a tempting target - they have a track record for producing characters that have an appeal in almost any country."

HIT Entertainment, set up with a £300,000investment by the entrepreneur Peter Orton, has scored a series of successes with brands such as Barney the Dinosaur and Angelina Ballerina. In 2003, it had revenues of £168m, of which less than 10 per cent came from sales to broadcasters, underlining the importance of merchandise in achieving profits.

The company announced last month it had agreed a £489m sale to Apax Partners. But yesterday it confirmed it had received rival approaches from Canadian media group, Lions Gate, which owns distribution rights for Care Bears and Clifford the Big Red Dog, and a third unnamed suitor, thought to be Classic Media, which has the rights to Lassie.

Bob the Builder



Age:

Six



How was he invented?

Advertising executive Keith Chapman dreamed up the idea of a lovable builder and his escapades in the world of construction as a bedtime story for his children.



Who owns him now?

The chirpy brickie is the jewel in the crown of HIT Entertainment, currently the subject of a £500m takeover battle. The company was founded by children's TV mogul Peter Orton in 1989 with £300,000. He stands to make £30m from any deal.



What's Bob worth?

Revenue from sales of the programmes and merchandise in 2003 was £32.5m. He is estimated to have sold more products worth more than £200m since his creation.



Where is he popular?

Across 200 countries, from Austria to Zambia and, crucially, America.



What does he do for a living?

After topping the music charts in 2001 with a song based on his catchphrase ("Can we fix it? Yes we can"), Bob has continued to put the material world to rights.



Controversy:

Clean-cut. But he did give bad-boy rapper Eminem a pasting in the battle for Christmas No 1.

Teletubbies



Age:

Eight



How were they invented?

Anne Wood, creative director of Ragdoll, and the writer Andrew Davenport wanted a format that would appeal to toddlers. And they found one, in spades.



Who owns them?

Tinky Winky, Dipsy, Laa Laa and Po are shared between Ragdoll, which owns the creative rights and all marketing rights in North America, and BBC Worldwide, which has the rights elsewhere.



What are they worth?

Ragdoll does not disclose its revenues from the Teletubbies, although it had a turnover of £7.3m last year.



Where are they popular?

Teletubbies are shown in 120 countries.



What do they do?

The Teletubbies spend their time tending to their plot and watching films on their navels. But for now, they'retaking a break.



Controversy:

From a debate about their toddleresque language, to claims that handbag-toting Tinky Winky is an "avowed homosexual", the Teletubbies have had their fair share of controversy.

Winnie the Pooh



Age:

79



How was he invented?

The Bear of Very Little Brain was created by A A Milne in 1926 and named after a stuffed bear owned by his son, Christopher Robin. Milne Jnr had in turn taken the name from a real bear in London Zoo.



Who owns him now?

In 1929, A A Milne sold the north American merchandising rights for just £700 to the promoter, Stephen Slesinger. Some 32 years later, Disney bought film and other rights and made a series of feature-length cartoons.



How much is he worth?

Pooh is a billionaire. Each year, Disney is estimated to make £1bn (£600m) from sales of Pooh merchandise.



Where is he popular?

Pooh has been translated into at least 60 languages, including Latin.



What does he do?

Still working. As well as a cartoon series, a new film is due for release this year.



Controversy:

Pooh has been the subject of one of the longest and most expensive lawsuits in entertainment history after Mr Slesinger's widow claimed she had been cheated out of merchandising rights. Disney won the case last year, saving itself £600m.

Mickey Mouse



Age:

77



How was he invented?

The geriatric mouse was designed by Walt Disney, on a train journey to Los Angeles with his wife, Lillian. He was all set to name his creation Mortimer Mouse, until Lillian suggested Mickey might be better.



Who owns him now?

He has remained firmly the property of the Disney corporation since his debut in Steamboat Willie in 1928.



How much does he earn?

An estimated £580m a year. Although not Disney's most valuable brand, Mickey still adorns productsfrom breakfast cereals to ice creams to toys.



Where is he popular?

Everywhere.



What does he do?

Despite his years, Mickey continues to work. Last year alone, he appeared in two feature-length animations.



Controversy:

Disney takes care to guard the mouse's reputation. However, debate still rages over whether he is actually married to his on-screen paramour, Minnie.

Postman Pat



Age:

24



How was he invented?

The red-haired postman was created by teacher John Cunliffe.



Who owns him now?

Pat is owned by Entertainment Rights, which also owns Basil Brush and He-Man.



What does he earn?

Last year, Entertainment Rights had a turnover of £25.5m and made profits of £7.9m.



Where is he popular?

The three Pat series can be seen in more than 100 countries.



What does he do?

Beside his routine deliveries, Pat faces daily dilemmas and obstacles, ranging from what to do with a magic Christmas tree to the Beast of Greendale.



Controversy:

None, apart from an encounter with a hungry goat in his third series.

Noddy



Age:

56



How was he invented?

The little wooden doll entered popular consciousness in 1949 with the publication of the first Toyland book by Enid Blyton. A year earlier, she had created Pip, a nature-loving woodland pixie currently tipped to be the next addition to burgeoning Noddy TV franchise.



Who owns him now?

After languishing forgotten for much of the 1980s, the rights to Noddy and other Blyton creations were bought in the early 1990s by the production house, Chorion, headed by the Labour peer, Waheed Alli. After initially offering its Blyton portfolio for sale for £30m, Chorion decided to retain the characters and make a new Noddy series itself.



What does he earn?

Along with Big Ears and other Toyland regulars such as the goblins Sly and Gobbo, Noddy is now Britain's most popular children's television character, accounting for much of Chorion's £45m global turnover from children's TV last year. The UK market for Noddy merchandise is worth £20m a year alone.



Where is he popular?

The 100-episode series of the new Noddy animation is shown in 130 countries and is the second most popular children's programme in France, where the character is know as Oui-Oui. Chorion announced plans last month to launch Noddy across the airwaves in the US, China and Japan.



What does he do?

Equipped with his aeroplane and self-aware car, Noddy makes his way around Toyland doing good deeds under the watchful gaze of Big Ears. He also teaches Japanese, Spanish and Mandarin Chinese on dedicated DVDs.



Controversy:

Apart from several unpleasant encounters with Sly and Dobbo, there is little on-screen difficulty. But Noddy and Chorion were forced last year to see off a takeover bid from Basil Brush and its owner, Entertainment Rights.

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