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Babes In the Marketplace

The Toyt Industry Takes Over
Saturday Morning Cartoons

by Susan Pearson

First there was Strawberry Shortcake, then came a family of squeezable bears known as Care Bears, and finally there was He-Man - the strongest man in the universe. Together these trademarked characters and their manufacturers have transformed Saturday morning cartoons and children's after-school programs into a sales bazaar. Once the most regulated of television's time slots, children's television has been cut wide open by the Reagan administration and the toy industry has moved in to take advantage of the windfall.

Increasingly, major toy companies are joining forces with production houses and television stations to give their latest toys starring roles in television series. Eight of the 20 top selling toys for June, 1987, are toy lines which were developed simultaneously with or prior to their corresponding television specials or series. They include G.I. Joe, Alf, Transformers, Cabbage Patch Kids, Silverhawks and Pound Puppies.

These shows, a more subtle marketing technique than the traditional one-minute commercial, are prompting a new wave of prime time children's shows and increasing the competition in the already competitive $12.5 billion toy industry.

At first glance this type of programming appears relatively harmless; the animated "Real American Heroes" extol the virtues of good triumphing over evil and the "Cabbage Patch Kids" promote wholesome, if syrupy, behavior.

But the shows, called program-length commercials by their detractors, have raised the ire of both parents and those concerned with the quality of children's television.

It is like replacing all the children's books in public libraries with toy catalogs, says Peggy Charren, president of Action For Children's Television (ACT).

"This is a major abuse of the public interest standard," says Dr. William Dietz, a pediatrician at the New England Medical Center and an associate of the American Academy of Pediatrics. "Television for children, more than [for] anybody else, is designed to market products and not enrich their lives."

Children's rights groups, including ACT, the American Academy of Pediatrics and the National Coalition for Television Violence, are heading up the opposition. Together, they have launched a campaign to protect small children from the barrage of commercialized programming brought about by broadcasting deregulation.

"This country's broadcasters and the Federal Communications Commission (FCC) should be ashamed of themselves for exploiting children in this fashion," said Charren, in testimony before a congressional hearing on children's programming in July.

But the toy industry maintains that the line between ads and programs is clear, or at least as clear as it ever was. After all, Mickey Mouse products were derived from the "Mickey Mouse Club." The industry claims that its latest foray into the world of children's television is an attempt at diversifying not advertising. Says Jim Pisors of Tonka Toys, "We are moving into the entertainment industry."

Although Jodi Levin of the Toy Manufacturers Association says basing shows on toys "is a very effective marketing technique," spokespeople from Mattel and Tonka deny any connection between a manufacturer's profits and the popularity of "kidvid," as children's programming is often called.

Critics say no matter what they are called, the bottom line is the same. "A commercial is a production designed to sell," says Dr. Dietz. "A program about a toy is designed to sell the toy and [is] therefore a commercial."

Indeed, in their own trade publications, toy manufacturers tout the important connections between marketing the toy and marketing the program. An ad in Toy & Hobby World for Pound Puppies by Tonka Toys reads "Every one irresistible. And every one backed by major promotions, a Saturday morning network series and the premiere of a major motion picture." Tonka doesn't stop here. Another ad for Maple Town toys reads "To show our commitment, we're giving it unprecedented support, including its own 65-part syndicated series and a blockbuster national promotion campaign."

Another ad in Toy & Hobby about Mattel's He-Man sums it all up: "In fact, what you're about to see in 1987 is going to make He-Man the man of the hour. And Masters of the Universe the brand to watch."

The ad continues "And our daily television show will keep He-Man running strong." In summary: "It's all a simple show business formula. You create a fabulous cast of characters starring the most powerful man in the universe,' a timeless story of good versus evil, support them with a strong marketing program, and you don't have to be on Broadway to know this 'show' is a hit."

Although toy manufacturers say the difference between shows designated as legitimate entertainment and those designated as program-length commercials is subtle, critics say when advertising or marketing expenditures include provisions for television programs, the shows are being designed to sell toys. Some of the most familiar examples of these connections include "G.I. Joe: A Real American Hero" produced by Sunbow Productions, a wholly-owned subsidiary of Hasbro's ad agency, Griffin Bacal, and "Captain Power and the Soldiers of the Future" distributed by Mattel Television Syndication, which is owned by Mattel Corporation.

Freda Thyden of the FCC defends the move by the Commission to deregulate children's television to allow program-length commercials, on the grounds that the distinction between shows where the toy is the basis for the show and programs where the show spurs the development of toys is too arbitrary.

"It's no different if the show is entertaining to the child," she says. "If the show is entertaining the Commission is not concerned [if the toy came first or second]."

In true Reaganese, Thyden says the marketplace will have to determine "the set up of children's programming." Thyden says parents concerned about the over-commercialization of children's programming should be mini-regulators. "Remove the TV from your house or keep on top of your kids," she advises.

The FCC's prescription for dealing with interactive toys, an extension of program-length commercials, is less bold. Interactive toys are held by the viewer and a "game" is played in conjunction with a designated segment of a program. The premise of the interactive toy is similar to a video game; the significant difference is that when these high-priced toys are pointed at the television screen they in essence use the airwaves to score points.

So far, although several toy companies are moving to market such shows, interactive toys have not received the outright approval that regular program-length commercials have received from the FCC.

Both Mattel and World Events, which have interactive children's shows set to make their U.S. debut this fall, plan to market their interactive products and shows to a worldwide market. "Satellite and cable," says Charren, "have made this an international problem."

Mattel will market "Captain Power and the Soldier of the Future" mainly to Japan and Western Europe. While World Events' "Saber Rider and the Star Sheriffs" will be marketed to at least 20 Third World countries. And Susan Kalishman of World Events said they sell the show to Hong Kong, Malaysia, Brunei, Taiwan, Thailand, Philippines, Turkey, Botswana, and in Central and South American countries. Producers acknowledge, of course, that orders for the show's highpriced interactive toys may be low in some countries.

Until Reagan came to power, children's television, though containing its bothersome share of one-minute commercials, was considered somewhat sheltered from the ad man's machinations. In 1969, in a landmark case on children's television, the sanctity of Saturday morning fare seemed assured. A complaint was filed against ABC for airing the infamous "Hot Wheels" program based on Mattel's toy line. As the first example of a program based on a toy, the "Hot Wheels" show was designated by the FCC as a 30-minute commercial and not a children's program; the ruling reinforced the public interest responsibility of broadcasters and dashed the hopes of those who saw "Hot Wheels" as the wave of the future.

In 1974 the FCC's "Children's Television Policy Statement and Report" designated children as a special audience with programming needs different from adults. Guidelines for commercial time were also established. During prime-time slots 9.5 minutes of commercial time was permitted and non-prime time slots were allowed a maximum of 12 minutes of commercial time. Broadcasters were required to show a clear separation between program content and commercial messages. Television for the most vulnerable segment of society was to teach counting, the alphabet, and other basic skills, but not become the vehicle for product promotion.

Then in 1980, Ronald Reagan was elected. He appointed Mark Fowler to head the FCC and a furious deregulation campaign began. Fowler did not support the "Hot Wheels" ruling and toy companies responded by testing the waters with program length commercials.

In 1984, the FCC eliminated commercial guidelines for children's television, ending the last barriers to program-length commercials. "We will rescind our policy banning program length commercials," stated the report. "We believe that the existing regulatory scheme is no longer necessary to assure operation in the public interest."

Since the 1984 report did not mention children's television, the National Association of Broadcasters (NAB) asked for clarification and ACT asked for a reconsideration. The FCC denied ACT's request but responded to the NAB's request for clarification by stating that:

"Elimination of the policy is consistent with [the] Commission's general de-emphasis regarding quantitative guidelines engendered in the [ 1984] Report and Order. Moreover, the Commission has consistently noted the importance of advertising as a support mechanism for the presentation of children's programming."

A dissenting member of the FCC staff says confidentially that "as long as [toy manufacturers and producers of children's television shows] can make a claim with a straight face that they put out the show for the purpose of entertainment or information and not for exploitation [or] profit-making," the programs can be broadcast as shows and not advertisements.

All hope is not lost though. A surprising development in the Reagan era occurred on June 26, 1987, when a U.S. Court of Appeals acted on an ACT lawsuit and ordered the FCC to review its 1984 decision. "Without explanation the Commission has suddenly embraced an unthinkable bureaucratic conclusion that the market did in fact operate to restrain the commercial content of children's television," noted the decision. The court then mandated the Commission to explain its sudden change of heart.

If the FCC reinstates commercial limits, a regeneration of children's television may be in sight, but toy companies say they aren't worried about the possibility of having to change marketing strategies in mid-stream. With Reagan at the helm, they say, shows based on toys are a safe bet.

Profits in Toyland

The three basic methods that are used to get shows on the air, says Jodi Levin of the Toy Manufacturers Association, are:


The most controversial arrangement is profit-sharing. Under this arrangement the toy company offers a television station that airs its show a cut in the profits from licensed products based on characters in the show. The most widely publicized case of profit sharing was when Telepictures offered to share in the profits of licensing agreements from ThunderCats to independents stations in 1983. Although some stations considered the arrangement unethical, approximately 45 agreed to the terms.

According to Freda Thyden of the Federal Communications Commission, profit- sharing is a "mechanism to get more kidvid on TV." It is a "way to encourage broadcasters to take a chance on a new program," she says.

There have been very few cases of direct profit-sharing documented, many agreements allow both stations and toy companies to profit from hit shows that spur toy sales. ABC/Capital Cities developed a special called ""The Kingdom Chums" and put the Adrienne Weiss Corporation on retainer to create and license products based on the characters of the show. But Adrienne Weiss of Adrienne Weiss Corporation said it technically wasn't profit-sharing since it wasn't a toy company soliciting a broadcaster but a broadcaster soliciting a company to license products. "Profits are a very specific word in the industry," she said.

Barter Agreements

Another way these shows are introduced is by arranging bartering time with stations. A station receives a show free of charge and the distributor, syndicator or toy company receives free advertising time to sell or to use. Some toy companies won't advertise the product portrayed in the program in commercial spots within the program because of ethical considerations. John Weems, vice president of Mattel Entertainment, says it "is a corporate policy that they don't advertise the same character toys that are in a show or adjacent to it." According to Edmund Rosenthal of Television/Radio Age, in 1986 $80 million of advertising money was at stake for those who sold time in the children's television bartering business.

Pay and Play

A station can also pay for the show and then sell advertising time during the show. Sometimes the toy company is willing to pay a production house to produce the show and distribute it. Then production or distribution houses can sell the show.

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