PARAMOUNT WILL BUILD FAMILY AND KIDS' BRANDS

DAN ALAIMO

HOLLYWOOD -- Paramount Home Video will build up its children's and family brands in 1997 in an effort to gain more shelf space and market share in supermarkets and other stores, said Jack Kanne, executive vice president of sales and marketing.

The focal point of the studio's efforts is the direct-to-sell-through release of "Harriet the Spy" March 11, using the theatrical movie to spearhead the Nickelodeon brand of children's videos. "Harriet" is the first feature film from Nickelodeon and it will be tied in through a $5 mail-in rebate to the "Rugrats" line of children's videos. Both Paramount and the Nickelodeon cable network are units of Viacom, New York.

Other video brands that will get Paramount's attention during the next year will be "Peanuts," "The Adventures of Corduroy," "The Oz Kids Collection" and "Paramount Family Favorites," Kanne told SN in an exclusive interview.

"For supermarkets, this means there will be more opportunities to get involved with more brands of products that will draw more consumers into their stores," he said. The Nickelodeon brand is strong enough to deserve its own section in supermarket sell-through sections, he said.

"We think it is well on its way to becoming as strong a brand as Disney is in terms of credibility with parents. So we see grocery stores dedicating Nickelodeon sections in 1997, as they do with Disney. We think it is going to be that strong for them," said Kanne.

"Because 'Harriet' is a high-profile theatrical release it allows us to kick off the year for Nickelodeon in a great way, and there will be a lot more to come. I think you are going to hear an awful lot about 'Rugrats.' Hopefully, there will be a lot of opportunities specifically for grocers to tie in consumer food products with 'Rugrats.' We are going to be doing more and more things like that in 1997 and 1998," said Kanne.

One item will be Kraft Macaroni and Cheese in the shape of "Rugrats" characters, and there also is a fruit snack product. "I believe there will be more and more 'Rugrats' licensed products in the grocery arena during the next year," said Michael Arkin, senior vice president of marketing for Paramount Home Video.

" 'Rugrats' is probably Nickelodeon's leading franchise and they have a huge list of licenses," he said.

Paramount has not been as active as other studios in doing cross promotions with packaged goods and other products commonly found in supermarkets. This will change in the year ahead, Kanne said. "We are going to be more and more aggressive with cross promotions," he said.

"You will see some major cross promotions coming out of this studio in 1997," said Arkin. "It's an idea that we are going to be very aggressive in moving forward, and not just with our children's brands, but with our rental and sell-through titles, as well," he said.

In the sometimes fluid world of video street dates, "cross promotions are hard to pull off. It's the timing. You shift a release date by a month and the deal falls apart. We've come real close with some major cross promotions a number of times, but in 1997, I think our successes will be evident to everybody," said Arkin.

He would not divulge any specific plans, except to say the studio is working on a cross-promotional partnership aimed at the summer release of additional "Rugrats" titles.

Nickelodeon has strong brand awareness among its target audience of children aged six to 11, said Arkin. "Although the channel itself only has 70% penetration in U.S. households, it has 95% awareness among kids," he said.

"A title like 'Harriet the Spy' allows us to pull through a lot of the other Nickelodeon products. We are planning on offering merchandisers that incorporate 'Harriet the Spy' and 'Rugrats,' " he said.

A five-month-long marketing program will support the promotion. The campaign started in November and will run through April 1997. It includes a consumer advertising campaign, a $5 mail-in rebate with the purchase of "Harriet" and a "Rugrats" video, and free on-pack decoder pens.

"Harriet" will have a suggested retail price of $19.95 and a minimum advertised price of $13.99. It will also have a 70-day pay-per-view window and will be offered in both orange clamshell and slipsleeve packaging. The nine "Rugrats" titles involved in the program will have a suggested retail price of $12.95 each.

Consumer advertising is expected to generate over 75 million impressions with a 5.6 frequency rate. The campaign will use broadcast and cable television, as well as national print ads.

The promotion is timed for Easter gift-giving and to follow the title that is expected to be the biggest one of the spring -- Disney's "Hunchback of Notre Dame" -- by a week. "We think the timing is perfect" to draw customer traffic into retail outlets, said Kanne.

"With Disney's power behind a title like 'Hunchback,' and then we come out with a 'Harriet,' that will combine for three to five weeks of intense traffic," he said. While January and February are starting off slowly in terms of major sell-through releases, "there will be plenty of product," said Kanne. "You've got some $100 million box office movies coming and some pretty substantial secondary titles," particularly rental movies like "Phenomenon."

Starting in March and in the months following, the sell-through parade will continue to be strong. "There are a lot of movies that opened theatrically in November and December that will fill up the March through June period. So we will see, but we know that there is an awful lot of product," said Kanne.

"As for supermarkets, there are nine feature films that came out between Thanksgiving and Christmas that are female demographic, love story type movies," he said. ["Jerry Maguire" and "The Evening Star" are two examples.] "I think that helps the grocery industry because of the predominantly female customer base," he said.

Another key line for Paramount's children's and family sales efforts is "Peanuts." The studio is putting eight titles out in an Easter promotion, including "It's the Easter Beagle, Charlie Brown," packaged in yellow clamshell packaging and being released Feb. 18. Other lines include "The Adventures of Corduroy" and "The Oz Kids Collection."

"Starting in the last half of 1996 and continuing into 1997, we have made a significant effort to try to come up with more market share and shelf space for children's and family products. Now we can franchise the entire 'Peanuts' line and the entire Nickelodeon video line, as well as some other brand names like 'Corduroy' and the 'Oz Kids,' " said Kanne.

Establishing strong brands of children's and family products is the key to making sales in supermarkets, Kanne said. "When the consumer walks into the store, because there is so much children's product to choose from, they will probably be more focused on brand names and icons that they are familiar with.

"Branding is going to be the key in a lot of video categories going forward because there is so much to choose from," he said. An example of what Paramount is doing to brand its extensive catalog offerings is the Paramount Family Favorites label, he said.

"The mainstay of our sell-through business is our regular day-in and day-out catalog, especially our $14.95 line. We are coming off 1996, which was the largest catalog year that we have ever had, and we are going to be as aggressive as we ever have," said Kanne. "Video is a day-in and day-out business now. It is not as seasonal as it was 10 years ago," he said.

Kanne sees the trend of more supermarkets getting aggressively involved in the sell-through business continuing in 1997. "Not only with the major titles that they are stepping up and supporting, but also with deeper catalog. We see grocery stores getting more and more involved in merchandising and marketing the repromoted titles -- movies that came out for rental and are repriced to sell-through. They are offering a bigger breadth and I think that is encouraging for the industry," he said.

One catalog trend that is translating into major sell-through events is the anniversary of classic movies, or series of movies. This year will be the 25th anniversary of "The Godfather" and the 20th anniversary of "Saturday Night Fever," Kanne noted. "There are more opportunities for grocers to take advantage of those promotions and get involved with those anniversaries," he said.