Hollywood shouldn’t feel too sorry for itself that its homevideo divisions aren’t pumping out as much coin as they used to. That’s because its consumer products arms are picking up the slack.
Consumers who may have held back on buying everything from T-shirts to toys featuring their favorite movies, TV shows or characters are showing signs they’re willing to shell out more money than ever for licensed products.
The major entertainment players are eager to go after those bucks and will roll out the red carpet for retailers at the Licensing Intl. Expo, which kicks off Tuesday and runs through Thursday in Las Vegas. Event attracts more than 500 exhibitors.
Like many sectors of the entertainment industry, the recession hit the licensing biz pretty hard, with many companies opting to hold back on unleashing a blitz of products in stores.
Last year alone, Disney, Hollywood’s biggest earner from licensing with $27 billion in sales, lost $3 billion.
But this year, the licensing show’s 30th anniversary, is showing renewed signs of life.
Even before the show began, the Walt Disney Co. last week chalked up “Toy Story 3” as its biggest mover of merchandise this year, with $2.4 billion in sales expected around the pic that bows June 18, surpassing the $2 billion a year in sales “Cars” has been generating since 2006.
“We have the right products and properties and are growing as the consumer comes back,” said Andy Mooney, chairman of Disney Consumer Products.
The company’s strategy was one of “build it and they will come, and early results show consumers already are.”
Similarly excited about the success of Fox’s “Glee,” 20th Century Fox Licensing & Merchandising will roll out about 100 products from books to bedding during the summer to satiate fans’ appetite for the series until new episodes return in the fall.
The division also is hoping to turn “Avatar” into a lifestyle brand with home goods and other products, now that it’s the biggest B.O. earner of all time.
They’re the latest examples of how, with homevideo revenue declining, Hollywood is eyeing licensed products as a way to boost bottomlines:
- Studios are brokering more exclusive product deals with retailers including Walmart, Toys “R” Us and Target, which will give properties more exposure by building stores-within-stores. This is similar to what Walmart did with DreamWorks Animation’s “How to Train Your Dragon” this summer. In addition to selling more wares at a premium price, the boutiques help tubthump a title before it unspools in theaters or bows on TV.
“Toy Story 3” product is being similarly pushed via boutiques built within 1,300 Toys “R” Us outlets.
- New pics like the Easter-themed “Hop,” from Universal next year, are enabling studios to broker seasonal pacts with retailers outside the traditional Christmas holiday to create tie-ins and generate sales from movie-related merch like Easter baskets. Halloween and Valentine’s Day are also being eyed.
- The majors are counting on licensees to help launch untested franchises by flooding the market with new wares. Warner Bros.’ “Green Lantern,” for example, has a handful of licensing partners making apparel and action figures, but when the superhero makes his bigscreen bow next summer, the studio will have more than 100 companies supporting the pic with product.
- Licensing is reviving older brands like “Mighty Morphin Power Rangers,” “Voltron: Defender of the Universe,” “ThunderCats” and “Teenage Mutant Ninja Turtles,” which will all receive more heat with the launch of new TV shows and movies. Hasbro’s “Transformers” and “G.I. Joe” enjoyed a bump in sales because of their films.
Warner Bros. Consumer Products, which typically earns $6 billion a year, hopes to fuel sales of “Looney Tunes” merch through the introduction of a new series of 3D-animated shorts that will play in theaters, beginning with “Cats & Dogs: The Revenge of Kitty Galore,”
July 30, Cartoon Networks’ new “The Looney Tunes Show,” a concert series, theme park attractions, mall-based play centers, and and healthy lifestyle initatives.
Licensing is also helping companies like Disney go after the boys’ market. The Mouse House has traditionally targeted younger girls with its successful Princess and Fairies lines (Disney Princess is the top brand worldwide for girls 2-6 with $4 billion in global sales). But with the acquisition of Marvel, Disney XD shows like “Phineas and Ferb,” and films like “Tron: Legacy” and reboots of “The Black Hole” and “20,000 Leagues Under the Sea” will enable it to go after young boys. Marvel’s licensing biz has traditionally generated nearly $5 billion a year in sales.
Thanks to Marvel and its lineup of caped crusaders, along with major pushes for “Winnie the Pooh” and a “Cars” sequel, the Mouse House is hoping its consumer products division will grow to $50 billion over the next five to seven years.
- The international market is growing considerably for studios as the global box office continues to increase. That’s especially true for library fare, with Universal upping its worldwide licensing efforts. Woody Woodpecker has proved a hot property for the studio in Brazil, for example.
- While consumers may be buying fewer DVDs, especially older titles, studios are ramping up licensing efforts to mint money from their libraries. Paramount has successfully introduced limited runs of apparel, kitchen ware and collectibles around “Top Gun,” “The Warriors,” “Godfather,” “Grease” and “Breakfast at Tiffany’s.” The successful reboot of “Star Trek” helped the studio revive interest in all-things related to the franchise.
Universal had done the same around “Curious George” and “Jurassic Park”; its classic monsters like Dracula and Frankenstein; and even “The Big Lebowski.”
After 10 years, strong sales of “Lebowski” products like bowling bags and White Russian mixing kits “continue to amaze me,” said Universal Partnerships and Licensing prexy Stephanie Sperber.
The online and mobile gaming markets are also providing studios with new outlets to generate revenue, with “Scarface” licensed as accessories that can be downloaded for Zynga’s “Mafia Wars,” a popular Facebook game.
“During the recession, people wanted things that were familiar to them and library product did really well for us,” Sperber said. Licensing is “where libraries come to play for studios,” she adds. “It’s an annuity that studios can creatively leverage for year-round revenue.”
Naturally, this year, a slew of sequels and tentpole fare will also be on hand, including Par’s “Transformers 2,” “Mission: Impossible IV,” “Rango” and “The Adventures of Tintin: Secret of the Unicorn”; Fox’s “Rio” and “X-Men: First Class”; Disney’s fourth “Pirates of the Caribbean”; Marvel’s “Thor” and “The First Avenger: Captain America”; DreamWorks Animation’s “Kung Fu Panda” sequel; U’s fifth “Fast and the Furious” pic, “Stretch Armstrong,” “Battleship” and “Cowboys & Aliens,” a co-production with DreamWorks, to name a few.