There is a fair chance you will never have heard of Iggle Piggle, unless you are under four years old - in which case, well done for reading the business pages of The Times, you are obviously set for great things - or you are the parent of a toddler.

Piggle is the blue creature who appears on the BBC children's television show In the Night Garden, or ITNG for those in the know. Dancing Iggle Piggle, a gyrating doll, (RRP £34) was, according to sources on the shop floor of Hamleys, last Christmas's bestselling toy.

In his short life - he is about a year old - Piggle has made his creator, Anne Wood, the former teacher who was the brains behind Teletubbies, another smash with pre-schoolers, a fortune in merchandising profits. Teletubbies is estimated to have been a £500 million franchise, and ITNG could genarate double that. Piggle's success highlights the marketing power of a regular TV slot. ITNG is watched by an estimated 500,000 toddlers and parents every day. Even though most of his fans are illiterate, have not yet mastered how to talk and earn nothing, Piggle himself has generated revenues of at least £12 million. The merchandising operation is run by BBC Worldwide, the commercial arm of the corporation, and Ragdoll, the company Ms Wood set up with her business partner Andrew Davenport. The two groups have a multitude of licences in place with manufacturers and distributors of products that range from the dancing dolls to DVDs and books.

With some estimates suggesting that ITNG will eventually be worth £1 billion, the BBC is at pains to point out that it earns royalties only from the products spun off from a television series. Still, Iggle Piggle looks like a handy money-spinner. His first DVD, In The Night Garden - Who's Here?, sold more than 60,000 during its first week of release in September. That made it the bestselling pre-school release since, yes, Teletubbies. The three DVDs now in the market have shifted 500,000 units. A magazine - remember, most viewers can't read - was launched in the same month and sold 120,000 copies. ITNG remains the favourite programme for the under fours, beating Bob the Builder, Thomas and Lazytown. The series has also seen off the best that America's media giants have to offer, leaving Disney's big kids title, High School Musical, in its wake. ITNG accounted for all four of the UK's bestselling soft toys in the past month.

And to judge from Ms Wood's past creations, the franchise will enjoy a long run. Teletubbies is ten years old and is still being shown in 120 countries. Children's programmes from the 1970s still feature on mainstream networks. Iggle Piggle is here to stay and almost certainly headed to India.

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