Looking to grow its 9% market share and widen its distribution reach in the U.S. kids non-theatrical video market, New York’s HIT Entertainment cut a massive licensing deal with Beverly Hills, California’s Fox Home Entertainment this February. It sees the studio take over marketing and distribution of the prodco’s entire library come this fall. And with the likes of Bob the Builder, Thomas & Friends and Fraggle Rock onboard, Fox is making an aggressive move into a kids space that’s currently dominated by Disney and Nickelodeon/Paramount.

‘We have the bandwidth and desire to increase our share of the kids market,’ Steve Feldstein, senior VP of marketing communications at Twentieth Century Fox Home Entertainment, says. In the same month as the agreement with HIT, Fox also picked up BBC Worldwide’s Little Robots, which airs on Cartoon Network’s Tickle U block, for a seven year term. Video offerings will hit retail shelves in the second half of 2006, and Feldstein isn’t ruling out other high-profile kid vid acquisitions in the coming months.

Despite notions that the burgeoning digital video download market is making its presence felt on kids DVD sales, Feldstein begs to differ. The US$24 billion home entertainment business is not ‘going out the window for 99-cent downloads,’ he says. And the company’s calculating ways to retail digital sell-through and DVD versions day-and-date with each other as one way to offset the impact of downloading. The partners will also be working closely together on marketing plans.

This deal means HIT’s properties will see a significant distribution boost to more than 70,000 retail storefronts across North America. It’s no secret the IP house’s video division had met with some retail challenges in recent years. While the size of the U.S. team remains the same, HIT has reallocated staff who were working on the distribution side. LC