As more U.S. households buy computers and start using the Internet, a new crop of interactive-based licensed properties -- those beginning life as computer software, video games or Internet brands -- have entered the licensing arena. Their licensors look at publishing as a key category, since books help build brand awareness outside the interactive world.

While interactive properties, particularly video games, have made a splash in licensing over the years, most have been supported by popular television series that boosted awareness and drove sales of books and other licensed goods. In contrast, many recent interactive licenses are being merchandised on the strength of the software alone.

As the number of video game, computer and Internet users continues to grow, interactive brands and characters generate significant consumer awareness without the additional exposure of a television series or other entertainment vehicle. New software products are introduced each year and promoted heavily on television, in print and on the Web. This wide and ongoing exposure is attractive to publishers.

Game Characters Find a Home in Books

Troll introduced a how-to-draw title in spring 1999 featuring Crash Bandicoot, a video game character that appeals to boys six to 14. The book is one facet of Universal Studios Consumer Products' Crash licensing program, which was inspired by the game series' track record of 15 million units sold.

This fall, Scholastic launched the first two of six digest-size Rockett's World titles for girls 9-12. They are based on the character Rockett Movado, developed in CD-ROMs and over the Internet by a company called Purple Moon, now owned by Mattel. The Purple Moon Web site (www.purple-moon.com) has become one of the top girls' communities on the Internet, attracting more than a half million registered users.

Scholastic has also acquired rights to Knowledge Adventure's JumpStart brand, a top-selling educational software series for pre-kindergarten through elementary school-age children. Scholastic plans to launch a JumpStart line of pre-k through second grade readers and workbooks (its first foray into the latter category) in spring 2000. 'JumpStart was dominant and continues to dominate the CD-ROM market,' said Jean Feiwel, editor-in-chief and division v-p, Scholastic Book Group publisher, who noted that she had been a JumpStart consumer before her company was approached by Knowledge Adventure's licensing agents.

Many publishers also like interactive properties because children who use their computers or play video games regularly tend to relate to these characters much as they would to a television series. Earlier this year, Lyrick Publishing announced plans to release nine activity and storybook titles featuring three of Humongous Entertainment's software-based characters, including Freddistet Fish, Pajama Sam and Putt-Putt. The titles, for children 3-8, are expected to be available in fall 2000. Jerry Kapner, v-p of ancillary marketing and merchandising at Lancit Media Entertainment, licensing agent for Humongous, said, 'The emotional connection between the characters and the kids is as strong as I've seen in many years.'

Lyrick Studios' senior v-p of sales and marketing, Jeanne Olson, explained that Humongous's and Lyrick's parallel objectives were another factor that attracted Lyrick to Putt-Putt and his pals. 'They're a very good fit,' said Olson, pointing out that Lyrick's mission is to promote positive values and that the Humongous characters act as role models while encouraging problem-solving skills.

Some publishers find video game properties attractive because they appeal to teen and preteen boys, often a difficult demographic segment for publishers to reach. 'It's such a challenge to draw boys to books,' said Nancy Cushing-Jones, president of Universal Studios Publishing Rights and executive v-p, Universal Studios Consumer Products.

Establishing the Brand

Without an ongoing television series to expand awareness outside the interactive market, books play an important role in establishing a software-based brand-extension program. In fact, they are often one of the first licensed product categories granted. John Leonhardt, president of Panic Entertainment, the licensing agent for Yahoo!, said, 'The books will serve as a brand extension of Yahoo!, another way for people to experience the brand.' Yahoo!'s licensing effort includes six to eight reference books to be published by Byron Preiss and distributed by HarperCollins starting in March 2000.

'We take the responsibility of extending the brand into another market,' acknowledged Feiwel. 'We expect the partners to continue to promote the brand in their world, but we need to show that [the properties] can be extended and are worthy in their own right as books.'

'We sort of reinvented the [Rockett Movado] character as she would be in book form,' Feiwel continued, noting that feedback from the girls who frequent Purple Moon's Web site contributed to the character and narrative development. 'We tried to create a strong character voice and a world,' said Feiwel.

'It's an editorial challenge to create substantial story lines for these kinds of games that would satisfy a reader,' admitted Cushing-Jones. With video game properties especially, the reader and the game player are not automatically the same person, since reading and game play are very different activities. 'Editorially, you need to create the same kind of excitement in the book world that exists in the game world,' she added.

Despite the challenges, interactive properties and books usually make logical partners. 'Children's publishing is a natural extension of this medium because of the story lines, the play value and the fantasy, which are integral to the [software], as they are to the publishing,' said Kapner.

Susan Miller, president of Momentum Partners, who forged the JumpStart publishing alliance with Scholastic on behalf of Hamilton Projects, Knowledge Adventure's licensing agency at the time, noted that an educational software brand such as JumpStart lends itself to the workbook format: 'It was an opportunity to capitalize on the equity of the [JumpStart] program and really make [the books] interactive.'

'People love [a computer-based property] because of the interactivity,' said Olson at Lyrick. 'The challenge is to bring interactivity as much as possible into the books.'

Cross-Promotional Opportunities

Alliances that pair software or video game marketers with publishers open up opportunities for cross-promotional ventures. Licensors and publishers work closely on developing marketing programs, as they do on editorial and educational content.

Mattel and Scholastic, for example, plan to cross-market the Rockett book series with Mattel's new game releases. Book displays for Rockett's World carry a bendable doll supplied by Mattel, according to Feiwel; the games promote the books and vice versa. Similar activities are planned for the JumpStart series; the workbooks will advertise the software, while the CD-ROM boxes will include a $5 coupon offer for books.

Olson reported that Lyrick and Humongous are planning cross-promotions that will utilize Humongous's customer database. The partners also anticipate joint retail marketing programs to take advantage of the fact that Humongous and Lyrick (which sells video and audio products as well as books) already service many of the same retail channels.

The Internet also offers cross-marketing opportunities; Scholastic and Knowledge Adventure plan to link the two companies' Web sites in support of the JumpStart alliance, for example, while Yahoo! books will be promoted on the Yahoo! homepage.

The fact that several of these interactive properties have established licensing programs outside of publishing -- although usually limited compared to a television- or film-driven license -- creates the potential for cross-merchandising. Lancit Media has signed several toy and puzzle licensees and has an apparel deal pending for the Humongous characters. Universal Studios has allowed more than 20 licensees to market Crash Bandicoot apparel, collectibles, gifts, stationery and, especially, toys. Mattel is looking for new opportunities for the Purple Moon franchise, both within Mattel and through licensing ventures, according to Dana Henry, director of public relations for Mattel Media, the company's interactive division.

Although all of these properties are currently being licensed into publishing and other merchandise categories based solely on their track record in the interactive world, many are hoping to expand into traditional entertainment venues, especially television. Humongous Entertainment and Universal Consumer Products are among the licensers that expect to authorize future entertainment vehicles, although nothing has been announced yet.

Another interactive property slated to move into the entertainment world is Young Olympians, a video game concept expected to be released into the interactive and publishing markets in fall 2000, preceded by an Image Comics series in the spring. 'We purposely went into the design [of Young Olympians] trying to develop something that would be broad ranged,' said Les Pardew, CEO of Saffire, game developer and Young Olympians licensor. 'In our minds, they aren't different industries. It's all the entertainment industry.' Author Dave Wolverton, known for his work on tie-in titles for Star Wars: Episode 1, among others, is writing a series of five novels; negotiations with publishers are in the early stages.

Some licensors prefer to wait until their interactive properties gain exposure through traditional media before embarking on a licensing or publishing effort. For example, Lancit Media's parent company, JuniorNet, is developing a children's Internet service that will be launched later this year, with much of its content based on publishing-related brands such as Zillions, Ranger Rick and Reading Rainbow. A JuniorNet television series is also in development. According to Kapner, licensing and publishing activity will occur only after television distribution plans are set. 'To create a licensing program before the characters are part of the kids' lives is counterproductive,' Kapner explained, 'both in terms of service and merchandising.'

On the other hand, as noted, interactive properties are increasingly viewed as being strong enough to license on their own merit. 'Kids use [the computer] as an alternative way to entertain themselves,' said Olson. 'They don't necessarily see a difference between a TV screen and a computer screen.'

The interactive-based licensed properties that have made it into the book world to date are likely just the beginning. Some projects on the block for the near future: Sony plans to license Q*Bert, which was relaunched by Hasbro Interactive this fall; Hasbro Interactive is looking into licensing out its Atari trademark; Panic Entertainment is in discussions with Yahoo! about potentially licensing Yahooligans, Yahoo!'s children's brand extension; and Universal has signed four licensees for Spyro the Dragon, a video game that has sold two million units in less than a year, and hopes to introduce the character to the publishing market. This list should grow as interactive technologies become more and more a part of the lives of consumers of all ages.

Licensing Hotline

AN ARK FULL OF TOYS

David Kirk was a toy maker for 15 years before entering the world of children's books as the author/illustrator of Miss Spider's Tea Party and subsequent Miss Spider books. His love of toys, especially robots, inspired last spring's Nova's Ark. 'He's kind of like a Geppetto,' said Nicholas Callaway, president of Callaway & Kirk, which copublished Nova with Scholastic. 'Nova is a kind of digital Pinocchio.'

The toy connection has led to a licensing deal with St. Louis-based Trendmasters, which, starting this year, will produce a variety of playthings, including figurines, banks, activity sets, handheld electronics and more. 'Toys are built into the fabric of the book, so it's a logical extension,' Callaway explained.

Target is currently featuring Nova as its toy department icon in 1000 stores until the end of 1999; the character appears on in-store signage, in a 30-second 3-D animated commercial and in Target's toy catalogue, store magazine and circulars. Early next year, Kentucky Fried Chicken (KFC) will promote six Nova toy premiums (a total of three million units) in more than 3500 restaurants. Other licensing and entertainment plans are afoot.

More than 100,000 copies of Nova's Ark are in print; the second Nova book, The Garden of Elix, is scheduled for a fall 2000 release; at the same time, Scholastic will feature 150,000 Nova's Ark paperbacks in school book fair channels.

POTTER PRODUCTS AHEAD

Christopher Little, the London-based literary agent for J.K. Rowling, author of the Harry Potter books published in the U.S. by Scholastic, reports that 30-40 potential licensees per day are contacting his office, with the number totaling 'well into the thousands' over the last two months.

All licensing activity is currently on hold, but that should change soon. Warner Bros., which plans to produce a Harry Potter film, has an option for worldwide licensing rights, and Little called a deal 'imminent.' The books are currently published in 30 languages, and interest is universally high. 'It's quite extraordinary,' Little said. 'We've had the same reaction in Germany and Korea and Mexico and Portugal [as in the U.S. and U.K.].'

SMOOTH SAILING

Sailor Moon, the Japanese animation/comic book property, is experiencing something of a resurgence, with publishing a key component. Mixx Entertainment released an original YA novel, Sailor Moon: A Scout Is Born, in July and has sold more than 20,000 units in Barnes & Noble, Borders, Hastings, Tower and Hot Topic (a licensed product store), among others, as well as on its own Web site (www.tokyopop.com). Mixx released a second novel, ...The Power of Love, in August with an initial shipment of 10,000 and expects to introduce at least four new titles each season.

Sailor Moon gained fame in the U.S. a few years back with a high-profile syndicated television series and licensing program, but it disappeared quickly. 'We were the only ones hanging in with the Sailor Moon property when everyone else said it was dead,' said Stu Levy, CEO of Mixx Entertainment, which acquired the publishing and interactive rights from Japanese publisher Kodansha. (DIC Entertainment handles television and merchandising in the U.S. under license from the Japanese entertainment company T i.) Cartoon Network began airing the series in June 1998.

STORY TIME FOR NODDY

When the Noddy Web site went up last fall in conjunction with the debut of the PBS series based on Enid Blyton's stories (which have sold more than 200 million copies over the last 50 years), book-related activities were a big part of it.

This summer, the offerings expanded with the addition of Story Time, an interactive sound storybook, a full version of Blyton's Noddy and the Kite. After reading the story--or having it read to them by the online narrator--children can write up a book review; some of these are posted on the site (www.pbskids.org/noddy).

The Noddy site attracts 30,000-40,000 visitors a day, not including those that come in through America Online, which is thought to add about 20,000 more, according to Ken Ravitz, director of education for Outreach Extensions, creator of the site. He has seen an increase of about 20%-25% in visitors since Story Time appeared.

Michelle Miller, PBS Kids producer for PBS Online, said that new features such as Story Time are promoted on PBS Online's and PBS Kids' home pages, as well as via a listserv mailing list to 300,000 teachers. She pointed out that PBS Kids encourages its dozen affiliate sites to add unique features such as Story Time. Ravitz estimated that at least 35% of the site's visitors view its Book Nook area, which contains Story Time as well as a writing exercise, a book-making activity and a list of 100 children's book titles from a variety of publishers.

In other Noddy news, the Enid Blyton Company and the itsy bitsy Entertainment Company have signed Reader's Digest to publish novelty children's book formats in the U.S., U.K., France, Canada, New Zealand and Australia, with an option to expand into other countries. The first books are expected to be available in June 2000 and will be distributed by Simon & Schuster.

POWERPUFF POWER

The Powerpuff Girls, an original animated series that debuted on the Cartoon Network in November 1998, will make the move to bookstores in March 2000, in a line of licensed titles from Scholastic. Initial offerings will include two early chapter books, Powerpuff Professor and All Chalked Up, written by one of the show's writers, Amy Rogers, as well as the Powerpuff Girls Save the Day Sticker Book and Powerpuff Girls Ruff N' Tuff Tattoo Book. The agreement grew out of Scholastic's exclusive first-look option with Warner Bros. to turn its motion picture and television properties into children's books. That alliance began in January 1998 and has led to books based on Space Jam, Scooby-Doo and The Wild, Wild West.