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Newbies pushed to market’s margins

Stores packed with familiar characters

Arriving with strong critical buzz and the Disney-Pixar legacy behind it, the box office outlook for “Ratatouille” looks particularly strong going into its June 29 bow.

Still, don’t expect the store shelves to be packed with plush rats and toy dish sets from the culinary-themed CGI pic — at least not yet.

“It’s a wonderful movie, but as with every Pixar film, the (retail) buyers will be under-bought initially, I can guarantee it,” says Andy Mooney, chairman of Disney Consumer Products, which is also overseeing a property that has managed to find ubiquity on store shelves this summer, “Pirates of the Caribbean.”

“These days, you have to be realistic when you’re setting up your strategy,” adds Sony Pictures Consumer Products senior VP Juli Boylan. Like Mooney, she is also handling one of the summer’s biggest merchandising splashes, “Spider-Man,” while trying to gain a toehold for a new property, “Surf’s Up.”

“We were selling ‘Surf’s Up’ at the same time we were selling ‘Spider-Man 3,’ and we were seeing how incredible it was going to be, how the animation was beautiful, and how it was definitely on trend; penguins are hot, and surfing is hot,” Boylan notes. “But we went into it knowing that retailers just don’t have the shelf space to take everything.”

Indeed, at least merchandising-wise, it’s tough to get a toehold for new entertainment properties and their characters these days, with the open-wide ethos extending itself to crowd store shelves with the latest sequels, and a consolidated cadre of mass-merchant retailers almost as risk-averse regarding new content and characters as the studios are.

And this summer, that challenge will get kicked up a notch, with store shelves packed with merchandise from a perfect storm of trequels that include “Shrek the Third,” “Spider-Man 3” and “Pirates of the Caribbean: At World’s End,” as well as evergreen toy brands like Bratz and Transformers that are reversing field and crossing over into the features realm.

This crowding means established tentpole-based product lines like Fantastic Four, which also has a sequel in the marketplace, could find themselves squeezed out in some cases.

New properties will find it even tougher.

“This summer is so overloaded with gigantic tentpole films with huge pre-awareness,” notes New Line licensing topper Dave Imhoff. “I think it will be very tough for companies who are trying to introduce properties that have no built-in awareness.”

“This year is about as tough as it’s ever been,” adds Mooney, who experiences the market from a variety of perspectives.

Mostly, his perspective is that of king — as in, it’s good to be one.

Disney produced $23 billion in merchandise sales last year, according to License Magazine, almost four times as much as the nearest competitor, driven in large part by classic evergreen properties like Mickey Mouse and Winnie the Pooh, as well as all the princesses and fairies fluttering about Walt’s vault.

Swag sales generated from current theatrical releases are the “icing on the cake,” Mooney says.

And with properties like “Pirates of the Caribbean,” that frosting can get thick, too.

Propelled by a third installment with brand-new characters, and infused with new product iterations (or “SKUs,” as they say in the retail biz), Pirates made a big splash this spring at Toys R Us — one of the biggest points of sale in the licensing game — where it was the subject of a huge in-store promotional push.

Meanwhile, a year after it made the theatrical rounds, the Pixar-made “Cars” is showing extraordinary wheels for Disney; Mooney expects it to generate $2 billion in merchandise sales this year.

Properties don’t get more “toyetic” than “Cars,” says industry veteran Ross Misher, CEO of global branding consultancy Brand Central, who notes that the licensed die-cast miniatures from the film fit perfectly with the “play pattern” for young boys.

However, despite this toyeticism, Disney initially couldn’t get industry titans Wal-Mart, Target and Toys R Us to commit to big “Cars” product orders. “We had an unbelievably strong product line, and we sold it aggressively at retail, but we never came close to optimizing the potential of the property,” Mooney recalls. “But the product we did get in the stores blasted off the shelf, and eventually they started to believe in the property.”

Fear and loathing in Bentonville

Critical buzz and box office perfs be damned, properties have to earn their elbow room on store shelves these days, with category buyers reluctant to put their jobs on the line for products they’re not sure about.

“Turnover is just dramatic,” says MGM licensing topper Travis Rutherford, describing the Darwinian world of mass-merchant category purchasing executives, who are often assessed each Monday morning as to whether what’s in their purview is up or down. “If you’re a buyer, you’re looking to maintain your velocity, and you don’t want to put in anything that’s not tried and true.”

As Kerry Phelan, head of worldwide consumer products for DreamWorks notes, even “Shrek” — another sequel-driven property that’s managed to secure a big retail presence this summer — had to start small when it kicked off six years ago.

“It’s a matter of proving yourself,” she explains. “You have to start with a smaller program and ramp it up as the film breaks.” With luck, she adds, retailers will be willing to expand a new property’s position in time to synergize it with the DVD release.

Of course, with the brick-and-mortar retail crowd as crowded as it is, studio merchandising divisions are gravitating to the long tail of the Internet.

DreamWorks Animation, for example, just established Shrek.com, an e-commerce site that delivers ogre lovers a broader selection of movie-based products than can be found in stores.

“We’ve watched Amazon continue to just grow and grow without any end in sight,” adds Richard Dickson, senior VP of marketing, media and entertainment for toy giant Mattel, who characterizes the Internet as a small but growing distribution point for licensed entertainment properties.

Certainly, few predict that the crowding at brick-and-mortar retail for licensed film properties will ease anytime soon.

According to Phelan, this crowding has been exacerbated over the last several years as more and more animated features have been cranked out.

Going forward, this crowding could be further intensified by an emerging trend of evergreen toy brands expanding their scope into movies and TV shows.

“We’re in negotiations on He-Man and a whole host of other properties (that could be turned into movies),” says Dickson, adding that movie situations for such classic Mattel brands as Hot Wheels and the Magic 8-Ball are also being considered right now. “We are not only being pursued, but we are pursuing the right opportunities.”

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