Cannes: In early news from mip-tv, Alliance Atlantis Communications has signed an exclusive merchandising deal with Toronto-based Custom Casuals Group to produce a funky, fashion-forward line of apparel for its new series Drop the Beat.

The branded line, which includes everything from vests and hats to hockey jerseys and polar fleece jackets, will be carried on the Web at the webstorecompany.com and the Drop the Beat website (dropthebeat.com), which can be accessed on tv while watching the show.

‘As the show expands,’ says Sharon Capotosto, vp of licensing and merchandising at aac, ‘we’ll expand the merchandising effort in the territories, probably using local merchandisers.’

Drop the Beat, a fully interactive tv series created with ExtendMedia, is an aac/Back Alley coprod broadcast on cbc.

aac is developing a new media plan for My Best Friend is an Alien, to be launched with the series’ second season in the fall. In addition to developing its website, enhanced interactive components are likely to be added. Equally as likely is another partnership with ExtendMedia, in which aac holds an interest.

Earth Final Conflict is another series undergoing interactive consideration. It is less certain, however, that ExtendMedia will partner on this one as aac has been shopping around the market for other potential partners.

aac intends to develop all its future projects with interactive components, but because the Bell New Media Fund is such a vital piece of the financing puzzle for such elaborate projects as Drop the Beat, the extent to which any of the projects down the pipeline will be expanded remains uncertain.

In other news, aac and Germany’s TV Loonland have entered into a $110-million production, distribution, merchandising, home video and new media agreement, significantly expanding the AAC Kids division.

Under the terms of the deal, the two companies will cofinance and distribute up to nine series within the next three years, starting with The Famous Jett Jackson iii, My Best Friend is an Alien ii and a new animated series in development, Yvon of the Yukon.

The two companies will also coproduce a handful of animated properties and focus their attention on making each program interactive. They will both invest in the development of a branded Web portal that will eventually house the web sites of all their joint projects.

aac will also license to tvl rights to certain existing children’s tv programs from its library for an additional $20 million.

tvl holds distribution rights in Europe, including merchandising and new media, while aac holds all other rights worldwide.

Over at the Sullivan Entertainment booth, the action series Super Hero has been presold to bbc for early 2001. Spun off from the two-hour movie of the same name, the 13-part, live-action series is among a handful of mip-launched properties, including: pr, a 13-part, half-hour comedy series; Anne the Animated Series; and the movie A Day in the Life, sold to TMN-The Movie Network in Canada.

Halifax-based Cochran Entertainment is just days away from completing the construction of an actual, full-sized Theodore Tugboat. The tug will sail up and down the East Coast, making appearances at such venues as the New York Licensing Show in June. The boat has also been named the mascot of the National Safe Boating Committee.

While in the past Cochran would rent out blowup versions of the series’ character to broadcasters, like pbs, for events, it will soon offer the option of the real, live boat.

Seville Pictures, formerly Behaviour, formerly Malofilm, has sold Associated Producers’ doc series Scandals Then & Now to tlc in the u.s. The six-part, one-hour series, for which Seville financed foreign rights, compares contemporary scandals to those of the turn of the century.

Citytv has finalized a deal to license 10 u.s. network mows from Carlton America, a Carlton International subsidiary. The movies were produced for abc, cbs, nbc and Fox.