But just because they're not pretty, it doesn't mean they're not appealing. When the Butt-Ugly Martians TV show premiered in Britain in February, its audience share peaked at 31.4% in the first week. Created by U.K. children's entertainment company Just Group, these extraterrestrial misfits — who came to Earth, befriended three teenagers, and now help fight other aliens — have kids' imaginations firmly in their sights. "They can grow bigger when they're fighting," marvels Rowan Moody, 6, of London. Even adults can see the show's appeal. "It's goodies and baddies, but not quite in the usual way," says Ben Green, commercial director for a chain of Toymaster stores in England's East Midlands, who has a vested interest: his stores are poised to benefit from their first round of Butt-Ugly merchandise. "We see it as being a good performer over the longer term."
The money to be made from children's TV programs has as much to do with the product on store shelves as with the product on the small screen. Children love a good story, and licensed merchandise connected with that story is big business. Last year more than 36% of sales in Britain's $2.5 billion toy market were of licensed toy characters, up 4% from 1999. HIT Entertainment, the U.K. company that created the preschool favorite Bob the Builder, estimates that the four-digited animated handyman has generated $140 million in British retail sales of related toys and other merchandise since his launch in 1999. "It's a matter of the right image at the right time," says Mike Broadfield, Just Group's head of consumer products. "You go out and create the demand. Once the ball starts to roll, you have to manage the success."
The company hopes the Butt-Ugly Martians' appeal will foster a Pokémon-like craze. It has already lined up 50 licensees, including Hasbro, which is making B.U.M. toys, and the food concern Heinz, set to deliver Butt-Ugly pasta. Videos and figurines are already available; come September, larger action dolls will hit the stores. The strategy is global — the B.U.M.s will be charging into Europe in the autumn. And in June the Martians, who have American accents, will make their TV debut in the all-important U.S. market.
But kids' business is not child's play. "Launching a lot of different variants does not necessarily help a brand," says Nicky Parkinson, U.K. managing director of children's TV channel Nickelodeon. "The more you launch, the more you can kill it." Others say that kids see through any programming based on a slick marketing idea and not much else. "People have come to me with the bed linen designed before they've thought about the main characters," sighs Kate Fawkes, a consultant to HIT Entertainment who oversaw the development of Bob the Builder and is now working on a TV series based on Angelina Ballerina, a dancing mouse. "You have to make the best show you can and then see what happens. If it's funny and it's got charm then you have a chance, but even then it's not a slam dunk."
Nor does success necessarily go on forever. HIT itself raised eyebrows recently when it paid $275 million for Lyrick, owner of Barney the dinosaur, the purple Mesozoic character that seems to have overstayed his welcome in the marketplace. Last year Germany's EM.TV bought the late Jim Henson's Muppet empire as part of a whopping $680 million deal, mainly to take advantage of the brand. Now, as EM.TV attempts to rid itself of debt, Kermit and Miss Piggy could be sold again — though some analysts say the Henson stable may fetch less than half EM.TV's original outlay.
The B.U.M.s. are doing fine for now. While the first series cost a reported $7 million to make, Just Group already has deals worth $8 million in licensing fees either concluded or in final negotiations. But success is not a given: the Butt-Uglies' key target group is boys aged five to nine, those particularly vulnerable to the vagaries of playground peer pressure that can destroy fads in the space of a morning recess. Even the company forecasts a window of only 18 months to two years in which the TV show must make its mark in order to milk the Butt-Ugly name. That's the reality thing.