Kids' formats grow up to be big business.

While kids' finished TV product has long been a staple in the international marketplace, a more recent trend has been an increased interest in buying kids' formats. Even though Sesame Street has sold its format around the world for years, the trend now spans all genres of children's programming--not just educational series--and all demos. The increased competition among TV broadcasters coupled with rising production costs, have resulted in a growing market for such ready-made programs that are already proven ratings winners elsewhere.

"We've seen more of an appetite for a diversity of programs," observed Emmanuelle Namiech, head of Kids at Granada International. "Obviously, animation remains in high demand, but we're also being asked for formats for kids, which is fairly new."

Among the shows that Granada has sold as formats are the adventure game Jungle Run and a science show called Big Bang. Some companies have also bought adult formats and adapted them for a kids audience.

But the drawback for some markets is cost, said Namiech: "What's difficult is that it remains an expensive area for kids' producers. So if you have a kids' slot and you can acquire a 52-episode animation series, it will cost you significantly less than if you have to commission it. Buying the format isn't going to be expensive, but making the local version is. It's a balance between what you can afford to produce and satisfying your local audience. So the major networks are in a better position, rather than some upstart. The same is true by territory--the bigger territories will be in a better position to acquire formats than emerging markets."

However, the appetite for local or "home grown" programming is causing many broadcasters to bite the financial bullet. Steve Kent, executive vice president, International Production at Sony Pictures Television International, noted, "We've seen a shift over the last few years [amongst broadcasters] from buying canned programming, primarily, from the U.S., into wanting to do local programming. And it extends not just in the major markets; all the smaller markets want to do that also. The problem is, when you get into smaller and smaller places, there's just not the critical mass to do an original show in terms of being able to afford it."

But Ted Riley, managing director of Alliance Atlantis Distribution, believes that, "Europe has started learning how to produce locally. I always like to say that the rest of the world is catching up to what Canada has been doing for years. We've always had to cobble together four or five different funding sources to get our productions off the ground. The European markets have learned the combination of subsidies and licensing. And they've now got the economic wherewithal to put together shows with strong production values."

Naomi Joseph, general manager of Worldwide Drama at FremantleMedia, pointed out that the smaller European markets have markedly different economic models than the U.S. or Canada. "In Europe, we don't have sponsored programming, where you only get a certain amount of funding from the broadcaster and then you deficit fund."

Instead, Joseph explained, the funding comes directly from the country. "We make shows with local budgets for the local markets and are on par with the local production companies. And what they get in return for hiring us is the expertise that they don't have in making shows. Many of these markets are very young in terms of television production but if you put on a locally produced show, it is always loved by the people and that's always going to be a winner."

And when the local programming is based on a format, it is inherently cost effective, given that the development has already been done.

Besides a desire for local programming, there's another practical reason for the increased interest in kids' formats. Broadcasters the world over are learning what kidcasters have long known--there's a lot of ancillary revenue to be had through merchandizing associated with children's programming. As 4Kids Entertainment chairman Al Kahn said, "There's not enough money in the actual production/distribution chain without having the ancillary rights kick in. Kids' formats are coming up, especially as they involve merchandising possibilities."

Namiech concurred: "The last couple of years, we saw a very high demand for a lot of preschool programming, like Pokoyo, from major broadcasters and more commercial channels, probably linked to the interest in making a program work on-air and off-air with all the exploitation of ancillary rights and potential for merchandizing."

The interest in formats is also tied to a relative cooling of the animation market. "As you're looking around, there hasn't been an animated hit in a while," observed Disney Channel International president, Rich Ross. "I think the market is starting to appreciate kids' [TV] getting older."

While animation remains the primary foundation of kids' television, live-action series aimed at tweens and teens have increasingly come into their own in recent years, particularly in the reality and live action genre. While animation isn't format-friendly, game/competition shows like Discovery Kids' Endurance or MarVista's Surprise[ It's Edible Incredible[ are, and those shows' distributors plan to take full advantage of the format opportunities recently made available to them.

Again, much is based on the bottom line. While animation remains pricey because of its inherent labor-intensive production process, kids' game shows can be produced for a fraction of the cost, meaning both the buyer and the seller of the format win.