DIC’s Andy Heyward

By Anna Carugati

January 2007

2006 was an important year
for DIC Entertainment. Besides building on its business as a brand management
company, with renowned properties such as Strawberry Shortcake, Madeline and Classic Trolls,
the company has also accumulated one of the largest libraries of animation with
approximately 2,800 half hours of programming. DIC’s titles include some of the
most recognizable children’s brands: Inspector Gadget, Horseland, Sabrina the Animated Series, Where on Earth Is Carmen Sandiego?, Sonic the Hedgehog, Super Mario Bros., Care Bears and Trollz. But the
biggest development has been the block of programming DIC supplies to CBS’s
Saturday morning schedule in partnership with AOL, KOL Secret Slumber Party
on CBS.

DIC’s chairman and CEO,
Andy Heyward, talks to TV Kids
about the future of his company.

TV KIDS:
Nowadays, children have so many entertainment sources to choose from. In
today’s environment, does it take longer for a TV show to catch on with kids?

HEYWARD: When
I first started in the business, I was a writer at Hanna-Barbera and there were
three networks, ABC, CBS and NBC, and you could put on the Smurfs or Scooby-Doo and get a 60 share and they would be instantly known and entrenched
in the culture. Today all the networks—ABC, NBC, CBS, FOX, The CW, and
Disney Channel, Nickelodeon, Cartoon Network, HBO Family and on and
on—those are all dividing up the television pie. In addition to them,
you’ve got new media dividing up the pie: cell phones, PDAs and iPods. Kids are
multitasking and doing so many different things at the same time. They are
voracious consumers of media and all of this reflects itself in the
fragmentation and cannibalization of the audience. The same pie is getting
divided into many, many pieces.

TV KIDS: How is
the KOL Secret Slumber Party on
CBS block doing?

HEYWARD: It
is going well. Our business isn’t just putting shows on television anymore. We
are developing brands, placing them on TV and home entertainment and at the
same time, putting them out into consumer products.

On CBS we have six
half-hour shows and we launched four new brands: CAKE, Horseland, Madeline and Slumber
Party Girls. For all of these
shows we now have active consumer-products programs in place with toy
companies.

TV KIDS: At
what point did you decide that DIC wouldn’t just be producing and distributing
shows but would be managing brands instead?

HEYWARD: It
evolved over the last couple of years. The days when you produced a show and
had a business—those days are gone and won’t come back. And people who
say they do it are just not in step with what is going on. When we produced The
Real Ghostbusters for ABC some 15 years ago, we got $350,000 per
half-hour episode. We’d make a profit on the program and if we sold it
internationally we’d get a little extra there. Today you can’t even remotely
pay for the cost of a program from the network license fee—it’s
impossible. You have to start thinking about all these other things, which
previously were ancillary businesses, but now are driving the business: toys,
publishing, home entertainment, video games, music, etcetera.

TV KIDS: How
have you organized the company to accommodate this shift in your business?

HEYWARD: The
largest part of the company right now is our consumer-products division under
the auspices of Nancy Fowler. She’s our head of global sales, which encompasses
tele­vision, home entertainment and consumer products.

TV KIDS: What
are some of your new properties?

HEYWARD: I’m
excited this year because we have a number of properties that are not competing
with each other. They are all in different categories. Horseland, for example, comes from an online community
called Horseland.com and you have horses and you have girls. We’ve done a
licensing deal with Thinkway Toys, which did the Buzz Lightyear toys, among
other things. They are a very forward-thinking electronic-toy group. Horseland is aimed at girls of a certain age and a certain
type of play pattern. It’s about everything to do with horses.

Then we have another
product called CAKE, which is
based on a live-action show. It’s a show within a show. It’s about a young girl
named Cake who is the host of a local access television show inside of her
sitcom and she teaches kids various arts and crafts—how to make things
with items from around the house and how to be creative. This is something new.
It’s not about dolls and action figures. This is a completely different play
pattern, as it is about arts and crafts and do it yourself. A major retailer in
the U.S. will be selling CAKE
merchandise.

For the younger girls we
have Madeline, which is a
classic character. We want to relaunch that brand and we’ll announce a couple
of toy companies soon.

And we have Slumber Party Girls. It’s a live-action musical group that we did in partnership with
Geffen Records and Ron Fair [the chairman of Geffen Records], one of the
foremost music producers in the world today, working with Mary J. Blige to
Black Eyed Peas and all stuff in between. We created this act, five 16-year-old
girls. They do the interstitials, they sing, they act, they dance, and we’ll be
doing a movie with them.

TV KIDS: How
are international buyers reacting to some of these shows?

HEYWARD: Very
well. We’ve had strong reaction to Horseland, and Madeline has already been sold internationally. We took Slumber Party Girls to MIPCOM and there was good response there as
well.

TV KIDS: When
you are approaching international buyers with these shows, just to say they are
airing on CBS—that’s important, isn’t it?

HEYWARD:
Absolutely. There are only a handful of venues where you can say I can
guarantee 100-percent distribution on full-power VHS stations in the U.S., the
largest market in the world. CBS is one of them. There is no cable operator
that can do that.

TV KIDS: In
some countries, the dedicated children’s channels have taken over the
children’s business from the broadcast networks. Is broadcast television still
a good home for kids’ programming?

HEYWARD: Absolutely.
I would say cable has taken over the business in the U.S., if you look at
Nickelodeon having 50 percent of all the gross rating points and dollars that
are spent on television. But on the other hand, all the advertisers are looking
for alternatives. They don’t want to be in a state of bondage to a couple of
broadcasters, and when you have a network that covers 100 percent of U.S. TV
households, that is a very valuable argument.

TV KIDS: How
important are websites, cell phones and other new media to the children’s
business today?

HEYWARD: They
are all part of it. To get something launched these days, you have to come at
it from television, from the Internet and cell phones and anything that lends
itself to the property.

TV KIDS: What
are your priorities for next year?

HEYWARD:
Certainly the CBS block. We are going to have an important announcement in the
new-media area shortly. And we will also have an announcement to make in
international distribution. We want to help further the brands of Horseland and CAKE. We acquired Copyright Promotion [a pan-European licensing agency
that represents the licensing rights to a range of companies including
DreamWorks Animation, MGM, Marvel, Sony, Twentieth Century Fox and Viacom]. We
are going to do more and more with them.

TV KIDS: How
much do you need to keep in the development pipeline these days?

HEYWARD: We’re
not about loading more content onto the train to make the train go faster. We
don’t need to have 25 shows in development. We are trying to have a couple of
strong brands and add them into the mix. We might add two new brands to the CBS
block—maybe three, if we like what we see.