Sitting still is not an option in the kids biz. Success demands frenetic searching for the next big money maker and in the last few years the education market has piqued the interest of more than a few entertainment companies.

With governments around the world placing education on top of their lists-in rhetoric at least-parents concerned about giving their kids an edge, and the furious development of new technologies with the potential to shake up the classroom, the timing couldn’t be better.

Today’s educational landscape bears little resemblance to its earlier days. Huge media outlet Pearson (which recently added the international reference publisher Dorling Kindersley to its slate of previously-acquired publishers) recently inked an agreement with AOL to develop a relationship whereby Pearson Education (formed in November 1998) would become the preferred supplier of educational content and on-line learning tools. In another deal, Scholastic will buy Grolier from Lagardere for US$400 million. The addition of the Connecticut-based kids reference books publisher to its entourage gives Scholastic a stronger presence in school libraries and boosts its on-line customer base. And then there are the old stalwarts such as the BBC that has been part of the British educational landscape for over 70 years, but has chosen to update its image and mandate with a name change from BBC Education to BBC Factual & Learning. ‘Education was looked upon in market terms as being a bit of an unattractive name,’ says Martin Mulloy, director of BBC English Language Teaching and BBC Languages. ‘Learning allowed a wider definition and a slightly more accessible feel to it.’

That move to accessibility, not just by the BBC, but by the industry as a whole, is helping to open the doors to new players. ‘There are companies that can come from nowhere in the space of a couple of years and become major educational players because they are taking advantage of new delivery systems,’ says Mulloy.

In the U.K.; which boasts a US$63-billion education market, the Department for Education and Employment is putting US$2.7 billion into school equipment and digital content, with a goal of 100% e-mail and Web access by 2002. Also, US$158 million will be awarded this month for the creation of interactive curriculum. In addition to the 1,000 hours of school programs BBC and C4 air each year, the BBC plans to create a multimedia curriculum and supplied one of the three trial services tested earlier this year. Channel 4 also has big education market plans, with a US$395-million investment earmarked over five years to achieve them. On-line action, such as its Homework High on-line help service, is central to C4’s strategy. (In September, Channel 4 Schools becomes 4 Learning.)

According to an International Data Corporation report, the educational software market in the year 2000 should ring in US$4.1 billion in sales for schools and US$2.1 billion for the consumer market worldwide. These are impressive numbers, but the challenge lies in reaching schools around the world with affordable and useful technology. ‘If you can find technological delivery systems to provide learning solutions for the kids,’ says Mulloy, as well as ‘wide ranging curriculum-based content solutions of the highest quality and, of course, do the one other thing that is critical: provide work solutions for the teacher, then it’s potentially magical because it has not happened before.’

While the Web has the potential to be a bigger player in the education market, given funding cuts and the slow adoption of computers in the classroom, teachers say more traditional materials are currently relied upon.

But, in the last few years, the delivery of education is no longer the strict purview of ministries of education, rather it has morphed into an entertainment vehicle defined by the much-disparaged term ‘edutainment.’ which signifies a loosening up of the kind of material deemed educationally worthy.

Noggin is extending its reach and visibility for its brand and shows via the school system, and has just sent out 50,000 free kits to fourth grade teachers in the U.S. as part of a Noggin-inspired literacy program tied into its Ghostwriter series. ‘It’s designed for teachers to include in their ongoing language arts curriculum. But it’s entertaining,’ says GM Tom Ascheim. ‘It gives kids a set of guideposts on how to write a story.’ Ascheim points out that Noggin was careful to make sure they were providing something that really fit into the teachers’ curricular needs. ‘They are really offended by people who are coming in just trying to market their wares via the captive students.’

Any successes Noggin and its like competitors may have at the school level will be hard earned. Ericka Markman, VP of the year-old school publishing division of National Geographic says: ‘[Teachers] simply don’t have enough time in their day to do everything. So when they are purchasing material for use in the classroom, they often don’t have time to evaluate it. They need to rely on a track record and a strong reputation for good instructional content. A company that is known as being an entertainment company is going to have to work extra hard to overcome some built-in hesitancy.’

Success, though, has been found by kids entertainment providers. The education arm of the much-embattled Canadian production house Cinar accounted for US$23 million or 50% of total revenues for its last reported quarter before trading was stopped on its stock.

Cinar chose acquisition as a way to gain entry to the education market. In August 1997, the company bought American publishing house Carson-Dellosa in a US$40.5 million deal, in July 1998 made the US$18 million purchase of High Reach Learning, a North Carolina-based producer and distributor of educational products, Israel-based multimedia publisher Edusoft was picked up in February 1999 for US$40.2 million and in March, Twin Sisters Productions was bought for US$9 million.

The move into education was a natural step, says Steve Carson, president of Cinar Education and Carson-Dellosa Education. For kids 12 and under, Cinar’s main entertainment demo, U.S. sales of education product is US$10 billion a year, including US$2.6 billion in publishing sales, US$1 billion in software and US$2.6 billion in school supplies. Carson says the purchase of a long-established company such as Carson-Dellosa (since 1976) gave Cinar instant recognition. ‘In our marketplace, I don’t believe that many people recognize us as a group as Cinar Education. We’re really looked at as individual companies,’ says Carson. Which seems to act in its favor in terms of the stigma of an entertainment provider entering into the classroom. ‘I don’t think teachers in the elementary classrooms react very well to highly commercialized product lines,’ he adds. But he admits that Carson-Dellosa has launched products based on the Cinar Entertainment series Wimzie’s House and The Busy World of Richard Scarry for kindergarten to grade eight. As for how they will be accepted it’s too early to tell.

On the other end of the spectrum, Hit is taking its first foray with an educationally-branded product slow. The Magic Key is a collaboration between Hit, Oxford University Press and the BBC based on a series of books called the Oxford Reading Tree, considered one of the U.K.’s most successful reading schemes for primary grade children. It will launch at MIPCOM and will air on Children’s BBC as well as BBC Schools television. ‘This is us dipping our toe in the water,’ says Hit’s director of co-production and acquisitions, Peter Curtis. ‘Our objective was to come up with a series that would cultivate literacy and really help children to develop an ear for language in an accessible and entertaining way.’

One of the upsides of winning your way into the inner edumarket circle, is the relative stability of the market versus TV. Before taking over NG’s education division early last year, Markman was VP of business development for children’s programming at National Geographic. She points out that children’s TV is totally hit or miss, where a small number of shows generate the bulk of the income. The school market, she says, is on a much more even keel. ‘It’s far less risky if you do it the right way. Whereas in the television arena, you can do everything right and [not succeed] or do everything wrong and have a hit.’ With the school market, she says, ‘there isn’t such a disparity.’