Lionsgate joins the HIT parade

5:00 AM PST 03/25/2008 by Thomas K. Arnold, AP

Studio adds family fare with vid distribution deal

Lionsgate fortified its core home entertainment business and vast library Monday by securing multiyear distribution rights to HIT Entertainment's portfolio of family product.

Such HIT properties as Thomas the Tank Engine, Barney, Angelina Ballerina and Bob the Builder had been distributed by 20th Century Fox Home Entertainment since 2006. It is estimated that HIT DVD sales generate about $125 million in consumer spending each year.

Lionsgate will start distributing HIT's slate of home entertainment releases in May. "Thomas and the Great Discovery," the brand's first feature-length direct-to-video movie in three years, will be one of the first titles released, bowing in September.

Lionsgate president Steve Beeks called HIT "one of the most treasured jewels in our family entertainment crown." He said the addition of the line will make Lionsgate the No. 3 distributor of nontheatrical family home entertainment programming, with a projected market share of 15%, up from its current 9%.

The deal also covers electronic sell-through.

Lionsgate's other family properties include Scholastic's "Clifford the Big Red Dog," American Greetings' "The Care Bears," MGA's "Bratz" line and Marvel Animated Features.

U.K.-based HIT was founded in 1989 as a third-party distributor of children's product. The company launched with 60 episodes of "Alvin and the Chipmunks." Eight years later, HIT set up its own model animation studio, HOT Animation, whose first project was "Bob the Builder."

"Barney" came to HIT via the 2001 acquisition of Lyrick Studios, while "Thomas" came to the company a year later when Lionsgate acquired Gullane Entertainment.

HIT was sold by founder and chairman Peter Orton in 2005 to private-equity firm Apax Partners for €489 million. A year later, HIT entered into a sales, marketing and distribution deal with Fox Home Entertainment.
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