With a precipitous decline in TV commissioning, kids execs have been on the lookout for alternate strategies to stay afloat until the market recovers—and the movie business has emerged as a worthy wager. After all, feature films have been a bright spot over the past year, with players at all levels reaping rewards.

On the big screen, there was Flow, an indie feature that beat out big studio contenders to win the 2025 Oscar for Best Animated Feature. But it wasn’t alone: Inside Out 2 (pictured), Despicable Me 4, Wicked and Moana 2 all landed in 2024’s list of top-five US domestic grossers.

Moana 2 outperformed its predecessor to become the third-highest grossing film of 2024

In fact, PG-rated pics accounted for roughly 34% of all stateside box-office ticket sales in 2024, according to The Numbers online database—the first time they have surpassed 30% since the platform began compiling data in 1995.

On the streaming front, acquired third-party films are currently generating the best ROI for Netflix. A March 2025 Ampere Analysis study estimated their cost-per-view at US$0.12—which is less than original features (US$0.13), and far below licensed (US$0.55) and original (US$0.68) TV series. The same report also found that kids & family movies have the best shelf life when it comes to viewership, averaging twice as many views as other genres even a year after release.

“I think we’ve largely dispelled any belief that kids are not interested in a theatrical experience,” says Spin Master Entertainment president Jennifer Dodge. Even preschool films, which might seem to have a more limited audience, are seeing more greenlights. Consider DreamWorks Animation’s Gabby’s Dollhouse: The Movie (September 2025); Kiri and Lou Rarararara! from New Zealand’s Stretchy (March 2026); and, of course, Ludo Studio’s Bluey feature (slated for 2027).

The growing trend of preschool series heading to the movies is one that Dodge strongly credits to the PAW Patrol IP leaping onto celluloid with lucrative results—and in a shaky post-pandemic landscape at that. PAW Patrol: The Movie (2021) earned US$151.4 million on a budget of US$26 million, despite a simultaneous theatrical-streaming release. And its sequel, The Mighty Movie (2023), grossed US$205 million against a price tag of US$30 million. This franchise has proven to be so successful on the big screen that Spin Master got underway on its upcoming PAW Patrol: The Dino Movie threequel even before the second film had hit theaters.

Encouraging market conditions
To take advantage of the demand for more unique family-viewing options at the box office, Australia’s Like A Photon Creative has begun prioritizing a theatrical-first strategy for all of its films. “People want fun, premium-quality family content at cinemas all year round, and this can’t always be serviced by the big studios,” says co-founder Kristen Souvlis, noting that LAPC sells its films into roughly 150 territories on average. “It’s hard to fill a variety of territorial broadcasters’ needs with one show. [But] from the film perspective, we’re generally selling to sales agents, who have a broad mandate for multiple territories.”

Buoyed by a slate deal with Universal Content Group that has been in place since 2019, LAPC has increased its film budget from US$1.8 million (AUS$3 million) to US$6 million (AUS$10 million) for all of its IPs except Tales from Sanctuary City, with roughly 50% of the financing coming from incentives and rebates, according to co-founder Nadine Bates. When Australia axed its kids TV content quotas in 2020, the Brisbane-based studio responded with a conscious shift to the film world, where it was relatively faster and easier to secure financing and “get the per-minute cost from fewer sources than television,” explains Souvlis. From its slate of 10 planned features, LAPC kicked off this strategy by releasing three films from its Tales from Sanctuary City franchise—The Wishmas Tree (2020), Combat Wombat (2020) and Daisy Quokka: World’s Scariest Animal (2021). Next to hit Australian theaters were 2024’s The Sloth Lane and Combat Wombat: Back 2 Back, followed by The Lost Tiger in February 2025.

Like A Photon Creative’s Tales From Sanctuary City franchise has spawned films like Combat Wombat: Back 2 Back

It’s still a puzzle getting the financing to work in the case of features—that hasn’t changed. But the big-screen opportunities are there for those who have run into walls on the TV front and can thread the feature- funding needle.

“Getting presales has become very difficult, leaving a hole in the kids TV financing picture,” says Andrew Fitzpatrick, who started his entertainment career setting up financing for animated movies, but has more recently worked in kids TV for many years as chairman of distributor Monster Entertainment (Noodle and Bun). Last fall, Fitzpatrick returned to his roots to launch Outfoxed! Films after producer/director Paul Bolger pitched him a same-name CG-animated film treatment. Production on Outfoxed—which follows a family of city-dwelling foxes who visit the country-side—kicks off this year.

Fitzpatrick was able to cover the movie’s US$8.6-million budget with the help of co-producers Walking The Dog (Belgium) and Doghouse Films (Luxembourg), along with incentives like Screen Ireland’s tax credit, which increased from 32% to 40% last year in response to hard times in the industry. Under a robust financing plan, each co-pro partner should ideally kick in a similar percentage of the big-screen budget, Fitzpatrick recommends, as this tends to make it easier to get a minimum guarantee for a film versus a TV show. He adds that TV buyers usually go through a much longer approval process compared to their film counterparts, who habitually sign deals more speedily at markets, spurred on by movie distributors keen to secure regional rights.

In addition, feature films often offer longtail opportunities in alternative markets ranging from in-flight entertainment to museums. Canada’s Sinking Ship Entertainment explored the latter in 2023 when it premiered a new cut of Dino Dana: The Movie exclusively in museums and science centers. The licenses for the museum market typically range from six to 12 months, says Sinking Ship’s head of sales and distribution Kate Sanagan. “[This additional market] extended the lifecycle of the film well beyond what we’d typically see in a theatrical or streaming release.” Designed to appeal to families and school groups, this ancillary educational distribution program mines Dino Dana‘s STEM themes while also diversifying the IP’s revenue stream. “Some museums have kept the film in rotation for years, and that kind of sustained visibility and engagement is rare in today’s fast-moving content landscape.”

But the ultimate treasure trove for many companies is the consumer products windfall that film releases often generate. “Movies [helped] elevate the PAW Patrol franchise through high-profile promotions in areas like quick-service restaurants (Burger King) and plush and accessories (Build- A-Bear),” says Paramount Global’s EVP of consumer products and experiences Jamie Drew, who also points to additional film-derived category opportunities like costumes and publishing.

Creative refresh and other factors
A film release is what Dodge calls the “big franchise moment” for any IP looking to grow—especially once audiences have already become familiar with a world and its characters on the small screen. For Spin Master, PAW Patrol specials were a crucial stepping stone between 11-minute episodes and feature-length theatrical releases, getting kids to used to longer stories while also providing the company’s entertainment team with a solid testing ground for longer content strategies.

While Toronto’s Guru Studio continued to work on the PAW Patrol series, Spin Master recruited Montreal-based theatrical specialist Mikros Animation for all of the PAW Patrol films in order to tap into a more cinematic animation pipeline—one that gives the pups a more detailed look to differentiate them from their TV iterations. Creatively, the films provide a canvas to dive deeper into the backstory of a character (Chase in the first film, Skye in the second), while also trading the humble Adventure Bay setting for a big city with skyscrapers and subways that would naturally lead to more action sequences.

In a fresh swing into the live-action format, Spin Master is also taking the popular anime property Bakugan to the big screen for the first time, with writer/director Brad Peyton (San Andreas) attached to this film project. Banking on an established TV hit or a beloved kids book for a movie adaptation is one thing. But with an abundance of film-fueled optimism, Spin Master is now also bullish about using its movie slate as a playground for brand-new storytelling—the studio has been quietly developing a feature film based on an original IP that was originally pitched as a series, says Dodge.

For a series that’s transitioning to film, it’s key to have a unique storytelling hook that justifies the change. For example, the upcoming Gabby’s Dollhouse movie came about as a result of asking what’s next in the playbook to increase awareness and sustain success for the brand, which has already built up a considerable presence in TV, digital, consumer products and live tours. The hook that DreamWorks Animation came up with for Gabby’s Dollhouse: The Movie was to include live-action segments of the protagonist leaving her home for the first time—which is a big departure from the series, where she only moves within her bedroom/dollhouse world. Such tweaks by Spin Master and DreamWorks help to build excitement for a film’s release, making it a can’t-miss event for fans. There’s also an opportunity to challenge kids with more emotional material than might be typical in a TV series, where episodes tend to operate within a tried-and-true template.

Another fresh-take strategy for features based on kids series is to introduce some fandom-fueling lore. This will likely be the case for prequel movie Kiri and Lou Rarararara!, a one-hour pic exploring how the two leads of the BAFTA-nominated stop-motion toon Kiri and Lou first met.

“We’d made 104 episodes of [the show], but we weren’t done with the storytelling, and we also saw an opportunity to utilize public film finance for a kids audience [that is] underserved in New Zealand film,” says Fiona Copland, a producer at Stretchy, Kiri and Lou‘s production banner. She notes that her team spent five years developing the project and raising financing, during which time the animators relocated to a space at University of Canterbury’s Koawa Creative Technologies precinct in a partnership that was announced last October. “We’re talking with the university about [developing] digital games and play equipment,” Copland teases, highlighting the other creative expansions that can accompany a film project. “It’s fun to be doing these things in a creative, independent way, with collaborators who are less affected by the market downturn.”

The cinematic road ahead
Beyond the box office, Netflix has made a strong case for the viewership value of animation and family movies on streamers. Looking to get in on the action, Future Today-owned AVOD Happy Kids is plotting a new strategy to become more of a co-viewing destination rather than a kid-only one—and buying more movies will play an important role in achieving that goal, says SVP of kids & family David Di Lorenzo.

“Whether they’re animated or live-action, movies [encourage] families to sit down and watch content together,” he says. “I think that’s an important piece of our business [going forward] in terms of extending beyond the zero to 12 audience and bringing the family together for a viewing experience.”

This story originally appeared in Kidscreen’s Q2 2025 magazine issue.