There will soon be a channel for every baby born in Israel. That’s how producer and soon-to-be broadcaster Alona Abt describes the crazy expansion of boutique channels in this small Middle Eastern country.

A respected but struggling producer of children’s programming, Abt decided that the only way she could grow in the local market was to ‘cross to the other side.’ And now is her chance. The Israeli market has been cracked wide open with the disbanding of the ICP cable consortium and the creation of the direct-to-broadcast satellite Yes, which is expected to be licensed in upcoming months.

Abt has pooled finances with the Tel Aviv studio Memad, and secured cable distribution on Matav for a new preschool channel called Zebra (Israeli cable stations are currently in court fighting for a 10-year extension on their current licenses. A surprise ruling may upset Zebra’s plans). Nonetheless, Abt is selectively purchasing programming around the world, including signing deals for Toronto-based Radical Sheep’s The Big Comfy Couch and U.K. prodco Cosgrove Hall’s The Animal Shelf. Abt is also in negotiations with Mega TV, a distribution and broadcasting entity run by Ziv Sidi, who is based in New York. The company also appointed Israel Dori, former chief financial office of the commercial station Keshet Broadcasting as CEO of Mega TV Israel.

Like Abt, Sidi says: ‘We read the map four years ago and knew the trend wasn’t programming. We knew the market was heading towards Internet uplinks and digital broadcasting.’ Mega Entertainment produces animated shorts, runs a satellite station in the Czech Republic, and is now packaging nine programming blocks and channels for sale in Israel. One of the branded channels to be offered to providers is Mega Kids, which includes Mega-produced programming such as Peter & Din (26 x five minutes) and Bug Off/Buzz Off (26 x one minute), as well as co-pros like Grimm’s Fairy Tales (49 half hours with Japan’s Nippon Animation). If Yes is licensed, Mega TV hopes to sell one of its programming blocks to the satellite server as well.

The future launch of Zebra, the advent of a new children’s satellite channel, and the possible launch of a Fox Kids Network spells bad news for Noga Communications, which is currently operating the only children’s channel on cable. In order to stave off competition, Ananai Com (a 50% owner of Noga) has signed a deal to become the representative of the Nickelodeon Channel in Israel. Ehud Miron, CEO of Ananai Com, recently announced that he has also obtained the rights to produce a localized two-hour insert for the feed of MTV Europe into Israel.

Noga is only one of the companies buying and hoarding packages in fear of the future proliferation of channels. Under threat by the new DBS group, cable operators Golden Nets and Tevel laid down unprecedented amounts of cash to secure large American catalogs. Warner Bros. received a reported US$70 million for a six-year output deal with the dynamic cable duo-a huge leap from the US$3 million per year the American conglom normally recoups in the Israeli market.

The corporate triad that currently runs the commercial channel is also buying libraries just in case its license to operate Israel’s sole commercial terrestrial station is revoked at the end of 2003.

‘The distributors are sitting in hotel rooms in Tel Aviv and [the broadcasters] make the pilgrimage to secure software,’ says Katriel Schoery, director general of the Israel Film Fund. He’s furious that the broadcasters are willing to shell out extraordinary amounts of cash for foreign product, and are unwilling to spend any money on indigenous fare. Sidi, whose company has been producing and distributing programming for nine years, believes the Israeli market can’t justify these huge acquisitions, and predicts the industry will soon go bust. Already Israel’s public broadcaster Channel 1 is under threat of extinction.

Despite competition from the big business, Abt remains confident that her Zebra channel will stay afloat. ‘Noga, Fox Kids and the new DBS channel are competing head-on by targeting tweens-the seven- to 14-year-olds,’ she says. She has removed herself from the fierce bidding war, and is carefully cherry-picking her way through quality independent shows.

It’s too early to say who will eventually come out on top in the Israeli kids market. As they say in Hebrew: ‘Azet baligan!’ Roughly translated: ‘It’s a mess!’