Building a HIT portfolio

As the entire industry tracked Thomas the Tank Engine's recent move to HIT Entertainment, many questioned what impact the company's rapid growth will have on the rest of the industry and what new challenges it will encounter en route to preschool platinum status. KidScreen's Advisory Panel puts in its two cents...
September 1, 2002

As the entire industry tracked Thomas the Tank Engine’s recent move to HIT Entertainment, many questioned what impact the company’s rapid growth will have on the rest of the industry and what new challenges it will encounter en route to preschool platinum status. KidScreen’s Advisory Panel puts in its two cents…

Christian Davin, president, Alphanim

One should not be scared of HIT-Gullane’s growth in the kids industry as there is room for plenty of players, and talent is spread wide. Broadcasters and heads of children’s programming consider quality of shows over corporate density. In a way, the mammoth size of HIT-Gullane will help to strengthen awareness for kids programming as a major genre. Of course, HIT-Gullane must remember that the bigger you are, the more difficult it becomes to run the ship. Congratulations–and happy sailing!

Ken Faier, VP of production, distribution and licensing, AAC Kids

I think that HIT’s strategy is bang on. It has successfully transformed itself into a multi-platform player that manages brands. As its infrastructure expands, HIT will have to keep sight of what got it to where it is now–great creative (which drives brands). If HIT protects that and continues to professionalize its marketing and licensing operations, it should be able to manage that growth, but it will have to be careful as to how many brands it manages. As for [the impact on] independent companies, I think that it is sometimes healthy for the industry to have consolidation. Creativity always comes from the independent community, and that is the best strategy for survival.

David Ferguson, COO and president of core activities, TV-Loonland

In the area of preschool, size is not important. There is nothing stopping any company or even an individual from creating the next Thomas the Tank Engine or Teletubbies. In fact, broadcasters are always looking for new and better programs. Even if some of the HIT properties are strong, they will have a challenging time keeping these shows in broadcast schedules year after year, and this will be key. Nobody controls creativity, and creativity is the springboard for the next preschool success story.

Robby London, executive VP of creative affairs, DIC Entertainment

It can be a challenge for smaller companies to compete with the giants in terms of marketplace clout, deep pockets and economies of scale. However, independents can make fast and opportunistic decisions unimpeded by the regulatory restrictions of publicly-traded companies, as well as avoiding excessive overhead and moving under the radar.

I think the challenges HIT faces now include maintaining quality and efficiency in the face of a larger asset base to manage, and making a smooth transition in which the corporate cultures are melded seamlessly.

Theresa Plummer-Andrews, head of acquisitions and co-productions, CBBC

HIT’s acquisitions of the Pingu franchise, Lyrick and now Gullane are great coups for the company and its shareholders. After being held to ransom by large North American studios and organizations for so many years, it is delightful for us Brits to see a U.K. company becoming so successful. There is the concern that HIT will become one of those huge organizations in which the right hand doesn’t talk to the left hand, getting bogged down in its own largeness. HIT has survived because it has personal contact with all of its clients, and it is up to the present management to ensure that this approach is not lost in a faceless empire.

Jonathan Peel, chairman, Millimages UK

HIT has always bought established franchises, but there are not many of these available. Establishing a new international hot property takes time and investment–so most companies are safe for now. In general, what HIT is doing is good for the industry, provided that one or two other companies can emulate its success. And who knows whether some mega-conglomerate is eyeing HIT!

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