Despite some high profile releases last year with the Rugrats and Prince of Egypt soundtracks, the love child of the kids products spectrum-the audio category-is running frighteningly behind at retail.

According to the Recording Industry Association of America’s 1998 Consumer Profile of the sound recording industry (which accounts for US$13.7 billion in sales), children’s music lies at the bottom of the list, capturing only 0.4% of the market and grossing US$55 million. That figure, which is down from sales of US$110 million in `97, is dwarfed by the more popular kid categories of toys (US$21 billion) and video games (US$6.2 billion).

RIAA’s numbers seem to jibe with the experience of Scott Levin, director of marketing for the Musicland Group-parent company to over 600 Sam Goody, 70 Media Play, 160 On Cue and 60 Musicland stores. For the chains, Levin says kids audio counts for only a small portion of its overall sales and ‘it’s probably down-trending slightly due to the impact that the mass merchants have had on the overall children’s business-and that includes video, audio and apparel licensed products.’

Mall-based mass merchants like Wal-Mart, Kmart and Target have provided a much better venue for the kids music distribcos to sell their wares, mainly because parents of small children are more likely to frequent these ubiquitous chains, says Carol Lee, VP of Kid Rhino.

What about toy stores? One would imagine that if you want kids music, then you should head to a place that specializes in kids. For the moment that doesn’t seem to hold true, at least not for Play Co. Toys and Entertainment, a 25-store specialty toy chain with an educational bent, based in southern California. For Play Co., kids audio counts for less than 1% of its total sales. But according to Rich Brady, the chain’s president, the category’s profit margins of 35% to 55% make it a much more attractive sale than most toys.

So why aren’t kids tuning in to music products that are created specifically for them? Between video games, the Internet and music videos, plain, old, unadorned audio seems, like vinyl, a little old fashioned. ‘There are just other products in the entertainment skew that end up taking some of the space,’ says Wendy Moss, VP of marketing for Sony Wonder.

Another variable negatively affecting sales has been the age compression phenomenon.’When it comes to music, today’s kids are very sophisticated. They define music as `N Sync, Hanson and Backstreet Boys,’ says Michael Bessolo, VP of marketing for Walt Disney Records. Based on that observation, last March, WDR released Radio Disney Kid Jams, an album that features musicians like the Backstreet Boys, James Brown and Hanson, as well as original compositions from Disney kids films. In May, the company also released the soundtrack to the film Tarzan, which included tunes penned by Phil Collins and teen heartthrobs `N Sync. Other companies, such as Sony Wonder, are taking a slightly different tack to combat the problem. SW got contemporary artists like Steven Tyler from the rock group Aerosmith, Celine Dion, Jimmy Buffet and Gloria Estefan to sing kids songs for the Elmo tribute album Elmopalooza, which turned out to be one of its biggest-selling titles ever. Together with the Elmopalooza videos, the CD and audio cassettes sold one million units, according to Sony Wonder.

Though Kid Rhino generally doesn’t use name artists on its albums, KR’s Lee agrees with the strategy. ‘Obviously, the broader your appeal, the stronger your numbers are going to be,’ says Lee. Fortunately for KR, Teletubbies: The Album proved to be a hit with an unexpected demographic-club-going young adults. The company also found that this demo had an affinity for its Scooby Doo’s Snack Tracks, which contains Scooby Doo theme songs and a club-mix version that samples snippets of dialogue from some of the episodes.

While most of the key players claim to be doing well in their respective niches, this year, WDR, Kid Rhino and Sony Wonder have all dropped their number of releases from last year. The reason each company cites for doing so is the same: they don’t want to spread themselves too thin, and instead, want to spend more time and money they believe each recording requires to break through in a cluttered marketplace.

TRU moves into licensed toy exclusives

by Simon Ashdown

First and foremost, Toys `R’ Us is known as a toy retailer. And while producing private-label product has always been part of the Paramus, New Jersey-based company’s business plan, creating licensed merchandise has not. That may be about to change.

TRU recently inked a two-year licensing deal with Viacom Consumer Products, giving it the exclusive rights to produce an 11 1/2-inch fashion doll based on lead character Sabrina from the Viacom-produced, live-action show Sabrina the Teenage Witch. Construction of the doll will be handled by TRU’s product development division, which will also create a small number of related accessories, such as a pocketbook and a figure modeled on Sabrina’s feline companion, Salem the Cat, both of which will be sold along with the doll.

The exclusive nature of the Viacom deal is similar to a handful of other licensing agreements TRU has signed in the last year, all of which are designed to give the retailer a proprietary advantage over competitors.

‘For us, these kinds of licensing opportunities allow us to take an ownership position, and afford us the chance of becoming a shopping destination for kids and adults who are fans of those shows,’ says Michael Tabakin,director of sales, promotions and licensing at Toys `R’ Us.

This year, TRU’s exclusive licensing agreements include deals with the World Wrestling Federation and toy train manufacturer Lionel Trains. Though he says there are more deals in the works, Tabakin doesn’t envision TRU’s entrance into the creation of licensed toys to account for a major part of the retailer’s business. ‘We just started examining niche opportunities for creating licensed toys. We’re not looking to hurt our supply chains at all,’ says Tabakin.

Ursala Moran, an analyst who follows TRU for New York City-based Sanford C. Bernstein, says that scenario is unlikely to happen. ‘I don’t see TRU coming up with a product that would be so successful that it would have an impact on their purchases of licensed product from major toy manufacturers,’ says Moran. She sees the retailer’s attempt to differentiate itself through licensed product exclusives as a positive, yet modest step in keeping pace with its largest competitor, Wal-Mart, which, in terms of sales, overtook TRU last year as the largest toy retailer in the U.S., according to the NPD Group.

The Sabrina Fashion Doll will be advertised in the Toys `R’ Us fall catalog, and will be available at its stores sometime in the fourth quarter of 1999. A retail price for the doll has yet to be finalized.

The word from BookExpo `99

by Simon Ashdown

We may be living in the digital age, but judging by the volume of titles pubcos were plugging at this year’s edition of BookExpo America, the printed word is far from being an anachronism. Below is a sampling of new books publishers have lined up for their summer and fall release skeds.

* In June, Scholastic goes medieval with the release of Elizabeth 1: Red Rose at the House of Tudor (US$10.95). Scholastic will back it up with Cleopatra VII: Daughter of the Nile (US$10.95) in September, to be followed by four new titles in 2000.This is the first title in its new Royal Diary Collection, which follows the same format as the semi-autobiographical Dear America series. Following the initial release, two new titles from the collection will be shipped out on a bimonthly basis. In July, Scholastic is releasing Search for Senna and Land of Loss (US$4.50 each), the first books from Animorphs author K.A. Applegate’s new sci-fi series Everworld, likely to be another franchise-launching endeavor. July is the month Scholastic will put out Pokémon #1: I Choose You! and Pokémon #2: Island of the Giant Pokémon (US$4.50 each), which starting in September will be followed by the monthly release of one new chapter title. Scholastic will also publish The Official Pokémon Handbook (US$9.99), perfect for the die-hard collector. The company is getting back to basics with a new series of Babysitters Club books. The rejigged books, to be retitled as Baby-sitters Club Friends Forever, will focus on the series’ four original characters and will launch with a special title in July called Everything Changes (US$4.50). They will be followed by a new BCFF title every other month thereafter. In July, Scholastic also charges ahead with the third title from author/illustrator Dav Pilkey’s Captain Underpants saga, entitled Captain Underpants & the Invasion of the Incredibly Naughty Cafeteria Ladies from Outer Space (and the Subsequent Assault of the Equally Evil Lunchroom Zombie Nerds), which will retail for US$3.99 PB and US$16.99 HC.

* S&S imprint Simon Spotlight will unleash four Catdog paperback titles in July, including CatDog Trivia Book, CatDog Joke Book (US$2.99 each), CatDog Catcher and CatDog’s Big Idea (US$3.99 each). In September, Simon Spotlight will also release Blue’s Big Pajama Party, a paper-over-board storybook (US$9.99) and Good Night Blue, a super-chubby book (US$4.99).

* This October, HarperCollins ChildrensBooks will publish a trade paperback picture book entitled Rolie Polie Olie (US$15.95), to be based on the Nelvana-produced kids series of the same name.