Kartoon Studios Inc. and AETH Entertainment have announced the creation of TaleSphere Studios, a joint venture that will focus on producing live‑action films for youth and family audiences. The first feature under the new banner is “Real Santa,” a movie adaptation of William Hazelgrove’s bestselling novel, with Hazelgrove and Allan Grafman, President and CEO of All Media Ventures, serving as executive producers.
The partnership is designed to combine Kartoon’s deep library of intellectual property and its robust distribution network—including the Kartoon Channel! streaming platform—with AETH’s proven ability to produce high‑quality live‑action content at a lower cost. By leveraging AETH’s recent acquisition of Cartel Pictures’ assets, the venture gains access to additional production facilities and a broader catalog of titles, positioning TaleSphere to capture the growing share of family‑film revenue that accounted for nearly one in three U.S. releases earning over $100 million in 2024.
Kartoon’s financial trajectory underscores the strategic importance of the deal. Revenue fell from $44.1 million in 2023 to $32.6 million in 2024, while the company posted a $20.7 million loss in 2024. Q1 2025 revenue rose 56.4% to $9.5 million, and Kartoon has set a goal of achieving profitability by year‑end 2025. The joint venture is expected to accelerate the company’s content pipeline, generate new revenue streams, and help meet that profitability target. AETH, meanwhile, has produced more than 150 films, including “Christmas with the Campbells” (2022) and “Looking Through Water” (2025), demonstrating a track record of efficient, high‑volume production that should support TaleSphere’s growth ambitions.
Andy Heyward, CEO of Kartoon, said the partnership “aligns with our commitment to positive, youth‑focused content and expands our reach beyond animation.” Carla Woods, co‑founder of AETH, added that the collaboration “leverages our complementary strengths to bring bold, inspiring live‑action features to families worldwide.” Their comments highlight the strategic fit and the confidence that both companies have in the venture’s potential.
The family‑film market is a tailwind for the new studio. In 2024, family and children’s titles generated almost 33% of U.S. releases that earned over $100 million, up from 20% in 2022. By entering this segment, TaleSphere Studios positions itself to tap into a high‑margin, high‑growth niche that can help Kartoon accelerate its path to profitability and broaden its audience base beyond its traditional animation core.
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