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Alliance Atlantis starts kids’ label

AAC Kids helping company diversify, displays commitment

TORONTO — Alliance Atlantis Television has launched a new children’s label, AAC Kids.

The addition is not a material change for the Toronto-based production company, which is already taking five kids series to Mipcom and has four more in production and development, but it formalizes the company’s oft-repeated commitment to increase its emphasis on animation and children’s programming.

“Brand is everything in this business, and we wanted to create another label inside the company,” said Ted Riley, president of Alliance Atlantis Television and head of the new division.

Higher margin

AAC Kids will be producing and acquiring children’s programming, which tends to be higher-margin than the primetime dramas with which Alliance Atlantis has been most closely associated in the past. It will also be able to tap into the lucrative merchandising and licensing end of the business, for which the company recently hired Sharon Capotosto as director of that area.

“Certainly it’s nice to see the company pursuing that strong-margin sector of the TV marketplace,” said Adam Shine, an analyst with CIBC Wood Gundy in Montreal. He noted that this was the natural next step in what he sees as an incremental change.

The company has upped its children’s production from 6-1/2 hours last year to 34 hours out of an expected 270 hours to be delivered in fiscal 2000.

Long track records

Pre-merger, both Alliance and Atlantis had dealings with animation and children’s programming. Atlantis made its name in the early ’80s with a number of children’s programs, including “Boys and Girls,” which won an Academy Award, and “The Olden Days Coat.”

In the mid-’90s Alliance held a one-third equity interest in the Vancouver-based animation company Mainframe Entertainment. Although the company has since lowered its stake to 7%, it still holds worldwide rights outside of U.S. to a number of existing productions as well as the right of first refusal on new projects for the next couple of years.

“Canada is a nexus for international co-productions, especially in the animation field, and we feel there are a lot of young companies who can use our services, our presale capacity and our co-production and packaging capacity,” said Riley. “We hope that that ability, plus our own ability to produce live action will produce the right alchemy in kids programming.”

Not that Nelvana and Cinar should be shaking in their boots just yet: AAC Kids is part of Alliance Atlantis’ much-needed diversification process, says Riley, with no plans to specialize exclusively on kids’ fare. “I don’t believe we’ll ever be as big as Cinar or Nelvana,” he said, “but there is definitely room for a well-financed vertically integrated niche player, and that’s what we aim to be.”