Just as children’s software companies are making moves to break into TV, print and other areas of the kids business, producers of on-line content for kids are testing the waters.

Last month, Headbone Interactive exhibited at NATPE for the first time. The Seattle, Washington-based creator of CD-ROMs and the Headbone Zone Web site has opened Headbone Television. Its mandate is to develop television series featuring Headbone’s original characters-namely, Elroy, Iz and Auggie-and newcomers. Six concepts are developed, and will be targeted primarily at kids age eight to 12. The company will also fulfill service work.

What Headbone offers that is unique, says Scott Hudson, creative director and head of television at Headbone Interactive, is a new production model that ties programming on television with content on the Internet. For example, by checking out the show’s Web site, kids could play educational games, like building a skateboard to race through a steeple-chase course, that are based on events in an episode. ‘Because kids really want that interactive, responsive experience [of the Internet], there’s a real opportunity for us to integrate things in a way that’s really effective,’ says Hudson. ‘And it doesn’t cannibalize the TV audience; it just builds on the franchise that begins [on television].’

Another edge is an in-house, digital animation process that comes into play as soon as storyboards are completed and gives the animator control over the video and audio tracks, as well as access to an archive of images. ‘It’s going to be faster and more cost-efficient,’ says Hudson.

Why TV? It’s been part of Headbone’s plan since day one, says Hudson. ‘That’s where the kids are.’

The company is in discussions with networks, cable channels and studios that have standing deals with a network or channel. ‘We’re looking for a strategic partnership,’ says Hudson.

AOL Studios has already brought one of its properties to television in an animated holiday special, The Online Adventures of Ozzie the Elf, that aired December 13 on ABC. The half-hour show drew about four million viewers and garnered a higher rating for ABC than it typically receives in the 8 p.m. Saturday time slot. ABC owns the rights for three years.

‘I think it’s the first-ever time any on-line property has been turned into a major television franchise,’ says Charlie Fink, senior vice president and chief creative officer at Dulles, Virginia-based AOL Studios.

Ozzie originated as an elf character named Ernie that launched in 1996 on an AOL area called Santa’s Home Page, where Ernie posted news from the North Pole.

Adapting Ernie for TV involved more than a name change, says Tom Turpin, president and CEO of Will Vinton Studios, which produced the show. (The H. Beale Company is also a partner in the show.) The character underwent a ‘recreation’ that consisted of changing his look and expanding the story that had begun in his on-line letters.

AOL Studios hopes that this new Ozzie will grow as a property. During the holiday season, he also debuted in his first book, How I Put Santa Online, from Boulevard Books, and his television presence will make him more marketable to licensees for the 1998 holiday season. ‘Now that we know the quality of the show and the appeal of the show, we want to be strategic about exploiting it,’ says Fink.

Despite Ozzie’s successful cross-over, we’re not likely to hear many similar stories in the future. As Fink points out, the number of companies creating original content for the Internet is small. Will Vinton Studios’ Turpin believes that it’s more likely that on-line producers will use characters from film and television to broaden their audiences.