ANIMATION WORLD MAGAZINE - ISSUE 5.7 - OCTOBER 2000

Give Us Your Money: 4Kids Entertainment Attains Poké-Momentum
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Capitalizing on its expertise in marketing video game merchandise, 4Kids has signed Perfect Dark, a top-selling video game from Rare Limited to an agreement to represent that property's merchandising rights. According to Kahn, 4Kids is in negotiations on a new Perfect Dark television series and has had "a lot of interest" from movie studios on Perfect Dark.

While the role of animation in Perfect Dark properties remains to be seen, in a move that may change the face of American animation, 4Kids will look to Japan to supply new exports to the US and Europe. Kahn calls the Japanese the world's "preeminent suppliers of children's entertainment," and he intends to exploit successful Japanese shows beyond Pokémon.

Team Rocket: Meowth, James and Jesse of Pokémon. © Warner Bros. No other uses are permitted without the prior written consent of owner. Use of the material in violation of the foregoing may result in civil and/or criminal penalties.

4Kids is using its Pokémon profits to enter the game of internationalizing children's entertainment. The belief that good products can be developed or retooled and updated for children across national boundaries is driving 4Kids to find shows with a successful pedigree and introduce them into new marketplaces.

4Kids has purchased the rights to Tama and Friends, a show with over two decades of popularity in Japan and previewed the "completely re-imagined" series at the company's annual stockholder meeting in May. The show's simple, cute character designs seem to be a perfect follow-up to Pokémon for a younger audience. "The demand for [Tama and Friends] has been exciting, and we want to treat it with the kind of respect it deserves so we are delaying production until September of 2001."

Expect to see other Japanese animation programs on North American television, as well, says Kahn. "We are looking at all the most wonderful Japanese concepts that have been successful over time in Japan and we are very close to a number of [agreements] on those. These are some of the most exciting and successful properties in the history of Japanese animation."

At press time, the identities of the new anime properties are still confidential while contract negotiations continue.

In an attempt to produce some of its own properties, 4Kids Productions is collaborating with Korean partner Daiwon to produce 26 episodes of Cubix, a new CGI series set to debut on the Kids' WB! mid-season schedule. Anticipation is high for this show, which features animation quality that Kahn describes as "equal to Toy Story."

Cubix. © 2000 Warner Bros. All Rights Reserved. Permission is hereby granted to reproduce this photograph for publicity, promotion or advetising connected with the program depicted herein and for no other purpose.

The show takes place in Bubble Town, 2040, where robots are ubiquitous. Everyone on Earth owns a robot, which can be programmed to be good or evil, according to the tendencies of its human master. A boy named Bobby discovers Cubix, a one-of-a-kind prototype in a junkyard and the two become fast friends. What makes Cubix unique is that aliens have hidden a special energy force inside of him, giving him extraordinary powers. The show will feature two running, intertwining plot devices: Bobby and Cubix battling the show's villains, Dr. K and Charles IV, and the aliens' quest to reclaim their lost power supply inside of Cubix. Kahn says that 4Kids is "hopeful that Cubix can be a very, very exciting and very, very profitable show and license."

Donna Friedman, Senior Vice President of Kids' WB!, says, "Cubix is a big idea that has big possibilities. Its distinctive CGI look combined with the network's core ingredients of high adventure, humor and heart make it a perfect fit for Kids' WB!"

The Cubix segment presented at the 4Kids annual shareholders meeting was impressive, featuring engaging animation, plenty of anime-style mecha and a techno soundtrack. After the presentation, Kahn declared the company's intention to launch Cubix in Japan to "hit them with their own strategy."

Pokémon continues to stand strong, expanding into new territories. © 2000 Warner Bros. All Rights Reserved. Permission is hereby granted to reproduce this photograph for publicity, promotion or advetising connected with the program depicted herein and for no other purpose.

A Volatile Problem
While Pokémon remains hot and the strategy moving forward seems sound, not everything is rosy at 4Kids. The excitement over Pokémon sent the company's stock soaring to over $93 a share in November 1999, from less than $2 only a year earlier. The panic buying that boosted the stock gave the company increased notoriety, but it also set shareholders up for a crushing downfall. Since November 1999, shares of 4Kids have plummeted to about $20 per share, a 78% decline in price and an $876 million decline in the company's market capitalization. Short sellers, traders who sell stock they don't own in an effort to buy it at a lower price and profit from the decline, have targeted 4Kids in droves, believing that when Pokémon slows, the company's prospects will dry up. Kahn, the largest holder of 4Kids stock is open about his disappointment in the stock price's recent stagnation. Says Kahn, "My one disappointment is the decline in our share price notwithstanding our outstanding financial results."

At the annual meeting, Kahn allowed his anger to show over losing an estimated $70 million in personal net worth as 4Kids' stock price declined from its highs, lashing out at whom he described as "professional short-sellers" targeting 4Kids' stock and calling the company's shares a "screaming buy."

The future for 4Kids looks bright, but its volatile stock is a nagging concern for the company. However, the creation of two new 4Kids divisions, Technology4Kids, which creates electronic children's products and Websites4Kids, a developer of Internet entertainment sites such as girlsgymnastics.com, seem to further indicate that efforts to diversify away from Pokémon dependence are progressing.

Animation will never be the same, thanks to 4Kids and its efforts with Pokémon. There have been Japanese imports airing on American television since the 1960s, but Pokémon has opened the world's eyes to Japanese animation in ways never conceived. If 4Kids is correct in predicting that large corporations of the 21st century will increasingly rely on licensing children's entertainment to attract future customers, we will be witness to a changing landscape for animation, a globalization that reshapes the relationships between development, production, licensing and media placement. Lauded as a profit machine or vilified as poisonous to a competitive, creative, entertainment market, the Pokémon model for children's animation might be here to stay.

Brett Rogers is a freelance writer and law student based in Baltimore.

 

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