Property values, broadcast quality

Chairman and CEO of the house that Pokémon built, Al Kahn and 4Kids Entertainment will be busy this fall with three new properties on major U.S. television networks. Yu-Gi-Oh takes the card collecting trend a step further as the protagonist, Yugi, defeats rivals by becoming the Game King. Tama and Friends follows a group of cats and dogs on various adventures. Cubix, which launched in August, features a world full of robots.

PLAYTHINGS caught up with Kahn at 4Kids' Yu-Gi-Oh introduction at Licensing Show and, most recently, as the company set to debut Tama in syndication on September 15. 4Kids has topped Fortune's list of America's fastest growing companies for the last two years. Kahn attributed 4Kids' recently released second quarter results, down from a year ago, to the "transition of Pokémon from a worldwide fad into a worldwide brand."

Describe the state of the licensing industry.

Al Kahn: 'Fair' would be an appropriate comment. There's nothing driving it at this time. When you have something driving it, that helps everybody.

Something will rear its head; something will kick in. I'd be surprised if nothing did.

How does the sluggish economy affect licensing and merchandising?

AK: If you have a hot property, it's not a problem. Retailers are being very conservative. They're not buying as deep than (they would) if the economy were a little bit stronger.

Is the amount of time it takes to bring a top Japanese property to the United States getting shorter?

AK: There's still a wait-and-see approach to what's selling in Japan. Once there is a confirmation, the time to bring over a property is diminished. The time frame is also determined by the network schedules.

More people are focused on (Japan) and watching it, so it's harder to sneak something by.

How much larger is the window for TV-based merchandise than film-based merchandise?

AK: The difference is whether or not kids get enough time to see something and get into it. If a film doesn't prove itself in the first weekend, it loses screens. With TV, you have a chance to build an audience.

When you see movies made for (such high) budgets…they're made for as broad an audience as possible. That may compromise things you would do if you were to aim (only) at kids. On Saturday mornings, we can concentrate on what motivates kids and don't have to worry about adults.

Ultimately, kids get into the story or they don't. It's cool, or it's not.

4Kids is debuting several new properties this fall. Is this a case of taking a shotgun approach to the market?

AK: We're ramping up. This will be a defining year for 4Kids Entertainment. We have plans for these kinds of introductions moving forward in 2002, 2003. We're working on a law of averages. Like a batting average, you hit some and miss some. We hope to continue the momentum from our successful properties by introducing new concepts on a regular basis. We'd like to do two or three each year, but not if they don't meet our criteria.

We look for properties:

• that will sell product, that attract to ages that will support product—typically 3- to 12-year-olds.
• represent play patterns. If you show play patterns on TV and kids like it, they want to emulate it and you can sell it to them.
• (in which) the actual subject matter has been proven to be successful previously.

As we identify appropriate properties, we want multiple opportunities for multiple targets. You don't want to put your eggs in one basket. Yu-Gi-Oh is a powerful property for boys 10 and up. Tama is aimed more at girls 3 to 8. You try not to cannibalize the other things you're doing.