The Marketing Genius Strikes Back

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The golden rule

In early 1998, shortly before Teletubbies took off, Handleman upped its investment in itsy bitsy to 75%. That meant that, although he maintained voting control, Viselman was no longer itsy bitsy's majority owner. But he now had more cash to invest, and his first goal was to start producing his own programming. In June 1999, itsy bitsy purchased the rights to the Eloise children's books, beating out major Hollywood studios.

Viselman had big plans for Eloise: an animated children's series, a prime-time series, a series of feature films that was to debut in the summer of 2002. To kick things off, he threw a launch party at the Plaza Hotel. Fifteen hundred guests attended. Joan Rivers was the master of ceremonies. "We took over the hotel," he says. "We had it awash in pink lights. We had 10,000 roses flown in from South America colored Eloise pink. We knew that if we were going to be players in Hollywood that that event was the one that we were going to solidify ourselves with. That event was the company's shining moment."

By January 2000, itsy bitsy was no longer itsy bitsy; it had 65 employees in six offices worldwide and was becoming a full-fledged children's entertainment company. A series, It's itsy bitsy Time, had premiered on the Fox Family Network in September 1999. NiNi's Treehouse, a television show that blended live action and animation and was geared to five- and six-year-olds, had launched on the Learning Channel in 2000. With the planned release of Eloise, The itsy bitsy Entertainment Company was well on its way to achieving Viselman's dream. "Everything was going extraordinarily well," he muses, "and then everything fell apart."

The end came swiftly in the summer of 2001. With litigation still pending at presstime, neither Handleman nor Viselman will discuss what led to their messy and emotional split. At the time, though, industry insiders speculated that Viselman's over-the-top spending had rattled the more conservative Handleman -- the classic tension between the entrepreneur and his backers. "Kenny is not a corporate guy," says one observer who admires what Viselman has achieved. "And he kind of felt like, 'You know what, you guys bought into my company, but you bought me. And you've got to believe in me and stop bugging me.' That was his attitude."

That summer The Licensing Letter reported that, near the end, Viselman had signed a deal -- "under duress" -- giving Handleman voting control of itsy bitsy stock. According to the trade publication, Viselman claimed that Handleman had threatened not to pay itsy bitsy's suppliers, which would have effectively sunk the company. Viselman's lawyer now says, "Handleman claims that he quit and he is claiming he was pushed out." Having parted company with Viselman, Handleman is not eager to discuss the feud publicly. A Handleman spokesman says, "We've moved on since then and have nothing to say at this time." The Handleman spokesman did confirm, however, that the company has since sold off most itsy bitsy properties or folded them into existing corporate operations.

Ultimately, one observer who followed the saga closely suggests, it may have been as simple as this: "Kenny neglected to follow the Golden Rule, which is that the man with the gold makes the rules."

A message from Lifetime

When Viselman lost itsy bitsy, he says now, he felt as if he'd lost more than just a creative outlet. Like many entrepreneurs, he had come to think of his company as his child. "I wallowed in the mire for a number of months," he says. "I was seriously damaged."

But once again, he found inspiration on the tube, in this case a made-for-TV movie starring Jaclyn Smith on the Lifetime television network. At a moment when Smith fears she is ruined, she seeks solace and comfort from a clergyman. "And the guy says to her, 'The Lord doesn't give you anything heavier than you're able to carry," Viselman recounts. "As a Jew, I had never heard that expression before, but apparently that's a big one in the church. I swear to you, when I heard that message in that Lifetime movie, that moment was the defining moment that changed my whole way. I was like, 'Okay, I've made it this far. What else have you got for me?' And I slowly started picking myself up out of the bed."

In October 2001, he founded Kenn Viselman presents ... with plans, first, for Li'l Pet Hospital. It was not a wholly original concept. A company based in the U.K. has been marketing a toy line called Animal Hospital since the mid 1990s. "At first you say, 'Gee, who really needs another line of plush animals?" asks John Eyler, chairman of Toys "R" Us. "But what was really different about Li'l Pet Hospital was the positioning, the way that they look right at you. It's an entirely different posing of these pets."

Viselman has since hired 12 employees, most of whom work on a contract basis. Originally, he planned to license the toys out to a manufacturer, but, he says, "I did not get the deal that I wanted when I wanted it." Consequently, he is producing Pet Hospital on his own at a plant in the Far East. In so doing, the risks are greater -- among them, inventory accumulation if the products don't sell. But the potential rewards are also greater. As the manufacturer, Kenn Viselman presents ... can garner significantly more than what a typical licensor would (some estimates suggest that Viselman's take could be as much as 30% of what the toys sell for at retail). Furthermore, Viselman answers to no one and maintains total control of the product's rollout.

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