Montgomery turned to Fox and Saban, who are partners in the Fox Kids Network. "They got the deal," he says, "because they moved faster than any of their competitors." The Fox Kids Network was already airing the animated "Casper" TV series, providing a convenient cross-promotional tie-in.
Saban, which made its name with the Mighty Morphin Power Rangers, guaranteed Montgomery creative approval over script, casting and marketing decisions. But of equal importance to Montgomery, Saban committed to releasing its "Casper" video in the fall, so it would be available for back-to-school purchases and on the shelves in time for Halloween, which is, after Christmas, the biggest mass-merchandise holiday.
"It isn't often that one of the hottest worldwide franchises becomes available, so we stepped up to the plate big-time," Saban Chairman Haim Saban says. "We've created special effects and animation that are equal to those in the theatrical release. When we showed [a rough cut of the film] to the Wal-Mart people, we got a standing ovation. . . . I'm betting we're going to sell at least 10 million videos worldwide."
That tally would rival the numbers Disney achieved for its most recent Aladdin direct-to-video sequel, "King of Thieves," which shipped 10.5 million videos last year.
Fox has never made a direct-to-video film, but its video distribution network is second only to Disney's.
"We see 'Casper' as a great franchise and a great way for us to get into the DTV business," says Jeffrey Yapp, worldwide president of Fox Home Video. "With the 'Star Wars' films and 'Independence Day,' we've proven we can market and sell any product in the retail business."
Fox is paying a steep price for its entry into the direct-to-video arena. Sources say the company's deal gives Harvey an equal share of the first-dollar gross from video revenues, an enviable deal normally awarded only to the likes of Steven Spielberg and a handful of superstar performers.
So did Universal made a strategic blunder by allowing Fox-Saban to obtain Casper's direct-to-video franchise? Some video experts say it's unlikely that a family of four would pay more than $32 to see a feature film (plus parking and popcorn) if they've bought a $12.95 video sequel first.
If this fall's video release gets a poor reception from consumers, it might jeopardize Universal's plans to make a big-budget theatrical sequel and potentially damage the entire franchise. On the other hand, if the video does well, Universal could reap the benefits, because it will gain valuable commercial momentum.