The union is finally fully up and running.

As early as two years ago, when it felt as though anyone owning the DVD rights to a carrot could make a reasonable return on their investment, the "Orphan Annie" of this digital goldmine was kids' programming. The reason was simple enough: The hardware was expensive and DVD players took pride-of-place in the living room where adults were entertained. The hand-me-down recycled video was relocated to the kids bedroom, forcing purveyors of programming for tots to continue issuing their wares on tape. Now, the dramatic drop in the cost of hardware has changed all this, and if confirmation of this is required, look no further than the raft of deals being announced between the owners of major kids characters and Hollywood studios to produce straight-to-DVD movies featuring these characters.

In 2005, the sector will see a slew of such movies hitting the streets. Mattel and Miramax have partnered to produce a series of straight-to-DVD movies based on Mattel girls property My Scene, while boys can turn to Paramount and Hasbro, who have teamed up to produce a series of movies based on Hasbro brands G.I. Joe, Tonka, Transformer, Secret Central, Candyland, Weebles and Dud Masters. Classic Media recently released a digitally remastered version of canine hit Lassie. Holiday favorites like Frosty the Snowman and Santa Clause is Coming to Town continue to spread yuletide cheer via DVD. At the same time, McDonald's and Warner Bros. have united in a pact to release a quarterly series of half-hour DVDs featuring the iconic Ronald McDonald, while Marvel and Lions Gate have teamed up to produce a series of eight movies, some in 2-D and some in 3-D, all based on Marvel characters. DVD producer and distributor image Entertainment has teamed with comic book publisher Dark Horse Entertainment to produce genre movies, to be distributed straight to DVD.

The reduction of hardware costs is certainly one reason for a sudden enthusiasm for kids' DVD, but there are others. Mike Bousquette, president Mattel Inc, said, "Mattel has already established strong characters, product lines and Web presence from My Scene," adding, "this partnership with Miramax compliments our position as leader in girls' lifestyle brands and fills a gap in the current home entertainment market for older girls."

Debbie Haag, senior director of marketing, Girls' Brands at Mattel, said that another reason for her company's involvement in the deal with Miramax is that, "girls are growing up faster and spending a portion of their time and money on non-toy items, such as cosmetics, CDs and DVDs. As a result, Mattel wants to expand its brands into lifestyle brands." Adding, "By developing additional rich content and lifestyle offerings, we'll keep girls engaged in the My Scene line longer."

The deal between Mattel and Miramax follows the successful release of shorter My Scene DVDs, Jammin' in Jamaica in Spring 2004 and Masquerade Madness, in the fall of that year, both of which were released as in-package DVD giveaways with the toy line and have been sold to Nickelodeon in the U.S.

Mattel rival, Hasbro, is also getting in on the act with the announcement by Jane Ritson-Parson, president of Hasbro Properties Group, of a deal with Paramount to develop and distribute straight-to-DVD movies based on Hasbro properties. Announcing the deal, which will see G.I. Joe: Valor Versus Venom and Tough Truck Adventures: The Biggest Show on Wheels launched in September, with Transformers: Energon and the Secret Central movie, Have You Heard? following a month later and DVD movies based on Hasbro properties Candyland, Weebles and Duel Masters slated for a fall '05 release, Ritson-Parson said, "this new relationship with Paramount is an exciting way for us to develop rich fantasies for new and classic brands."

Expansion of the brand is another key attraction to Hasbro, said Bryony Bower, vice president of marketing, Hasbro Properties Group. "This agreement," explained Bouyer, "further builds on Hasbro's strategy of expanding our core brands through a variety of consumer product and entertainment platforms, which she said "will allow us to provide consumers with an exciting way to continue the legendary sagas of properties such as Transformers and G.I. Joe."

Whereas Michael Arkin, senior vice president marketing, Paramount Home Entertainment, domestic, Hasbro's partners in the deal, said that the studio was attracted to this deal "because Hasbro is a world leader in toy manufacturing and is the owner of a number of iconic brands," adding, "Hasbro, as a company, has produced a number of toys and games that have truly shaped childhood, and this deal allows for the production of TV movies that will shape childhoods of the future."

Attempting to alter the shape of kids in the present, McDonald's is planning to produce a series of half-hour DVDs that will be released in 2005, distributed by Warner Bros. The series will feature Ronald McDonald and his pals attempting to encourage children to adopt a more active lifestyle. The DVDs, which will offer bonus interactivities and will be produced in multiple languages, will receive a simultaneous, worldwide release, but they will not be available in any McDonald's outlet. A spokesperson for McDonald's said, "instead we will offer promotional incentives in-store, and work with Warner Home Video to create marketing campaigns designed to drive consumers to traditional DVD stores to buy the programming, which is expected to retail at $10 per DVD."

Warner's senior vp, DVD marketing, Mike Saska said that the studio would not have become involved if the DVDs were only available at McDonald's outlets. "It was important to Warner," said Saska, "to support traditional retailers," adding, "we will, however, make sure that the DVDs are available in every retail outlet within walking distance of a McDonald's," insisting, "Warner will promote the McDonald's DVDs as if they were versions of a new theatrical release, targeting families with kids aged three to 12."

Put all of these deals together, and it starts to look like the "digital Orphan Annie" has finally found her Daddy Warbucks.