Television channels are increasingly bullish on the cartoon character-led licensing and merchandising business, as it is larger than the entire organised toy industry in the country.

According to industry estimates, cartoon character-led merchandise and licensing business is roughly Rs 350 crore (Rs 3.5 billion), while the organised toy market is estimated to be Rs 150 crore (Rs 1.5 billion).

Even the advertising revenue generated by cartoon channels is estimated to be around Rs 110 crore (Rs 1.1 billion).

With organised retail booming in the country, channels targeting kids such as Disney, Cartoon Network, Nick and Pogo are gearing up with consumer products targeted towards children.

According to Jiggy George, licensing director, Cartoon Network Enterprises India and South Asia, "When we ventured into licensing in 2001, we were well aware that the retail market in the country was at a nascent stage."

The emergence of malls and the growing organised retail sector in the coming years will provide channels with the opportunity to further strengthen their merchandising arms. "The merchandising business is expected to grow at 15 per cent, year after year," added George.

Cartoon Network Enterprises, the global branding and licensing wing of the channel, has over the years increased its product line from 350 to 800. Even distribution has gone up to 3,000 outlets across 30 cities from 2,000 outlets across 20 cities.

Last year, Cartoon Network Enterprises had introduced home videos under its sister channel's banner, Pogo. In addition, Cartoon Network is all set to launch theme parks under both its channels - Pogo theme park in Delhi and Cartoon Network theme park in Noida.

To be sure, Cartoon Network is not the only one. Said Roshini Bakshi, director, Disney Consumer Products (India), "India is still in its nascent stage with character-based products mainly targeted towards kids (aged below 10 or 14). We have a long way to go to reach the global standards where character-based products are a hot property with adults as well in the form of collectibles.

"There is a huge potential in the market, given that organised retail in the country is on an upswing. Recognising the difference in tastes and preferences of the teen audience, we have included new offerings such as Disney Jeans - a range of non-branded stylish and cool apparels for kids in our portfolio of products."

The business segment of The Walt Disney Company, Disney Consumer Products, has had a presence in the country for over 10 years with over 55 licensee relationships across various categories and has recently launched speciality stores - Disney Artist Stores and Disney Jeans Stores.

Merchandising serves as an opportunity for channels to let their viewers experience the brand, thereby making it brand stronger and increasing brand loyalty.

"Cartoon characters obtain an iconic status in the minds of children and, given their age, children take pride in watching their favourite characters outside the television realm. Also, it is observed that they are willing to pay a price to touch and feel the character," said Sandeep Dahiya, director, communications and consumer products, MTV Networks India.

He further added that Nick's merchandising initiative with Bombay Dyeing received an overwhelming response with Nick's character-based bed linen being sold out within 3 months of its launch in 2005. Consequently, the channel is expected to launch consumer products in 8 to 10 categories this year.

Will the success of the merchandise translate into high TVRs (Television Rating Points) for the show or the channel?

Explains Bakshi, "Toys or any products based on characters seen on TV allow the consumer to own and interact with one's favourite characters in an off-air environment. What you see on TV excites you to play with a character and this interaction makes you want to follow the stories on TV with a stronger affinity. Both the medium help in reaching out and capturing the audience.  Therefore, yes, generating excitement on the ground with toys and other products helps in sustaining high viewership for the channel and vice versa."