Atight TV market and the emergence of cheaper production technology is making direct-to-video a more attractive platform for moving a toy from the store aisle to the small screen these days. And the success of Mattel’s Barbie as Rapunzel (2002) and Barbie in the Nutcracker – which was the number-two best-selling children’s video in 2001 – makes the option even more appealing.

‘[Toy companies] are realizing the challenges of getting a series on TV in this marketplace, and that’s led them to look at DTV feature-length product,’ says Rick Mischel, president and COO of Vancouver, Canada-based studio Mainframe Entertainment, which produced the first two Barbie movies for Mattel. A third, Barbie of Swan Lake, is in the works for a fall release. In Mischel’s opinion, DTV simply offers a better business model for toycos. A DVD based on a premier brand like Barbie, he says, can become profitable on its own much earlier than ‘when you’re doing a series, which basically relies on licensing and merchandising revenue to create profits.’

In addition to Barbie of Swan Lake, this fall will see the release of Create TV & Film/Miramax’s feature-length DTV Bionicle: Mask of Light, based on Lego’s mega-hit Bionicle toy line. And Hasbro is bundling four short-format features based on Play-Doh, Tonka, G.I. Joe and My Little Pony with core products this year. For example, Play-Doh Presents Doh-Doh Island Adventures (Bix Pix Entertainment) will be available in Doh-Doh Island toy packages this fall.

While Hasbro isn’t abandoning TV by any stretch, the DTV/product combo gives the company greater distribution control over its toy-based media. ‘[DTV] is an interesting way for us to put the fantasy that we’ve been developing directly into our consumer’s hands,’ says Carol Monroe, VP and executive producer at the Hasbro Properties Group.

Though HPG president Jane Ritson-Parsons hasn’t ruled out developing TV shows for the toyco’s brands in the future, direct-to-video makes the most sense for these properties at this stage. In the case of My Little Pony, the half-hour DVD, which SD Entertainment is producing, is just one plank of Hasbro’s relaunch strategy for the ’80s brand. The property’s re-introduction will also involve new toys, a book series and a theatrical feature set for release this summer. Beyond advancing the fantasy of its properties, Hasbro’s DTV/product bundle offers added value for consumers who are purchasing its new toy lines, a strategy that rival toyco Mattel is also pursuing. Its Mainframe-produced Hot Wheels DVDs were packaged with Hot Wheels toy product this past February.

Aside from greater distribution control, inexpensive production technology like Flash and a drop in 3-D production costs also have toycos gravitating towards DTV, says Morris Berger, executive VP of business development at Newark, New Jersey-based Digital Production Solutions.

‘In the past, toycos have said they’d love to have a CGI film based on their toy, but have been scared off by the cost because they read that DreamWorks spent US$60 million on Shrek. Well, now you can do a [feature-length movie] for US$5 million to $US8 million,’ claims Berger.

Though Berger says production costs vary depending on the complexity of the project, DPS is able to offer 3-D animation at 2-D prices. The savings come primarily from the company’s virtual global animation studio (run on the high-speed networks of its telcom parent company IDT), which allows it to subcontract production work to more than 2,500 animators around the world.

Though DPS (which did some CGI service work on Toronto, Canada-based CCI Entertainment’s Monster By Mistake) has yet to land any toy clients, it is heavily courting the industry and is in discussions on projects with several toy companies.

But there is a downside for prodcos loading up on toy-based DTV work, says Marie-Christine Dufour, executive VP of distribution and licensing for Montreal, Canada’s CinéGroupe, which is in final negotiations to produce a DTV film based on MGA’s doll line Bratz.

Since most of these projects are service work, producers aren’t able to participate in long-term ancillary revenues, nor are they able to promote their brands to the same extent they would on a co-pro. Says Dufour: ‘You have to look at [DTV work] strategically – what exposure can it give you? How can it show your company’s versatility? It’s a question of product mix, but it doesn’t hurt to have a mix of more stable revenue sources.’