Scholastic Prods, is taking Hollywood to school.

With two high-profile features on the way at Columbia Pictures (“The Baby-Sitters Club”) and Paramount Pictures (“The Indian in the Cupboard”), Scholastic is priming to become a top producer of children’s fare in a market that’s begging for it. And its parent company – a leading publisher of children’s books, classroom and professional magazines, and software in the U.S., Canada, the United Kingdom, Australia and New Zealand – is pledging synergistic support that will translate into lucrative niche marketing dollars.

“We want to make feature films for young audiences,” says Jane Startz, executive vice president of Scholastic Prods. “We think we can do it probably better than anyone else.”

Startz is heading up the nascent feature division of the production company. Though the unit was announced a year ago, executives at the massive book and magazine firm have been reluctant to discuss their plans. Now, she says, they have something to talk about. “We have 16 projects in a development slate right now,” says Startz. “We want to really nurture every film, make sure it’s done well and gets personal care.” Startz and Scholastic Prods, president Martin Keltz say the company could produce as many as three pix a year.

For Scholastic, the biggest plus may be its formidable marketing capabilities through its 75-year-old big brother divisions. Its books, magazines and software practically have a direct pipeline to U.S. youth. According to Scholastic’s figures, more than 23 million students, 450,000 teachers in 80,000 elementary and secondary schools nationwide read one or more of the 200 million copies of 27 magazines that Scholastic distributes each school year. The company also hawks more than 125 million books through book clubs, fairs, retail trade stores and catalogs to schools. Scholastic software division boasts more than 124 educational titles.

Then there is a laundry list of TV programs that Scholastic Prods, has produced, including the hit series “Charles in Charge,” the animated series “The Magic School Bus” and network and pay cable specials. Scholastic is even considering a start-up educational cable TV network, which would be used as a classroom aid for elementary school teachers during the day and a homework helper for students at night.

Lisa Henson, Columbia Pictures president, calls Scholastic a solid production company that has major marketing clout. “Jane Startz is very smart,” she says. “She’s actually had this plan for several years.”

Scholastic’s massive support infrastructure will provide what amounts to a plethora of free advertising and promotions in many of its publications for all of its film releases.

Marc Abraham, president of production at Beacon Pictures, which is co-financing one of the features, “The Baby-Sitters Club,” says that’s like money in the bank. “They have the most bona fide, sanctioned pipeline to kids of a certain age of any organization in America,” he says.

Naysayers have charged that by marketing pix through educational materials Scholastic would be exploiting kids, not teaching them.

But Abraham disagrees. “I don’t think they are exploiting children to sell movies,” he says. “The reason that America has given the Good Housekeeping seal of approval is that Scholastic has been primarily a really strong educational vessel. Most of the advertising and promotion in terms of the movies won’t come directly into the school, but through the products that the students eventually choose to buy.”

Hollywood has always kept an eye on the children’s pix market, though only recently has it prospered. But kids are a moving tar get. Last year’s “The Pagemaster,” produced by Turner Pictures Worldwide and distribbed by 20th Century Fox, had all the right elements – live action, animation, star turn voices and even Macaulay Culkin. Despite a mega-marketing campaign, the pic has earned only $12 million. But, sources say, the film should reap benefits on homevideo.

In its freshman year, Scholastic’s two projects already have garnered solid buzz. “The Indian in the Cupboard,” carrying a healthy $45 million budget, is being co-financed by Columbia and Paramount in an unusual deal. The studios are sharing in the production costs and splitting rights both internationally and domestically. The project is derived from a popular book by Lynne Reid Banks from the Scholastic publishing division.

Scholastic’s Startz produces, along with the Hollywood production team of Kathleen Kennedy and Frank Marshall. Typically bullish in brokering their producing deal, Scholastic retained certain “proprietary” homevid rights for sales through its book clubs and magazines.

But the Gotham-based firm’s biggest coup may be found in a tiny $6.5 million feature called “The Baby-Sitters Club.” The film is based on a series of books by Ann Martin for preadolescent girls that has sold more than 100 million copies worldwide.

Columbia and Beacon Pictures are financing “Club,” and Startz is again producing for Scholastic. Inside Columbia, execs are counting on the pic as a major hit for a relatively minimal expense.

Keltz says this time the company negotiated for merchandising and licensing rights, largely because it had already taken advantage of those rights after the books became popular and HBO did a 13-episode TV series of the books.

“There was a merchandising and licensing reality around ‘The Baby-Sitters Club’ that existed long before the movie,” Keltz says.

Another plum for Scholastic is its bank of children’s writers, who are only now starting to think of their properties as filmic. “We have very strong and long-lasting relationships with all the major writers of books in this market,” says Startz. “They are very eager to work with us and to develop properties with us.”

But she adds that Scholastic is also looking for scripts from Hollywood writers interested in family fare.

She describes a typical Scholastic project as emphasizing positive values. “They show characters growing and developing, what it means to be a friend, or family, areas of magic, curiosity, wonder and hope,” she says. “We’re not looking for action and adventure.”

The production house, which has offices in Greenwich Village, has no immediate plans to set up shop with any studios. “We’re not looking for a housekeeping deal,” Startz says. “We have money if we want to develop scripts through Scholastic.”

Startz won’t reveal what kind of money Scholastic is willing to pony up, but the company has deep pockets. Scholastic’s book and magazine publishing, video and software and international divisions earned total revenues of $552.3 million in 1993 with profits of $28.1 million. Analysts’ estimates for 1994 figures are $631.6 million in revenues and $32.9 million in profits (a 17% rise).

Analyst Ed Hatch of UBS Securities agrees that Scholastic has no need for outside funding. “They are in the favorable position of controlling the copyright and generating the royalties and letting the studios take the risk,” says Hatch.

And Startz says that’s not likely to change. Scholastic is not interested in plunging into the distribution side, save a tiny interest in homevideo for its book clubs.

Meanwhile, Scholastic has garnered a trophy case full of awards for its TV efforts, picking up Emmys, CableAces, Cine Gold Eagles, Ollies and Gemini Awards. Now all that’s needed are some Oscars.

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