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License to draw money issued in merchandising

DIC Entertainment has partnered with apparel designer and clothing manufacturer Guess? to produce 65 half-hours of animation created to identify a new Wild Guess label of children’s clothing and toys.

The show is not yet on the air, nor has a network committed to it. “When we saw the drawings, we all got excited by the design concept,” says DIC president Andy Hayward.

“When we decided to pursue it as a cartoon, we walked away in order to stay focused on telling good stories with interesting characters. Only when we had that did we go back to Guess.”

In the jungle of ‘toon merchandising — a very real land — the appearance of the merchandising tail wagging the cartoon dog is raising eyebrows. Some cartoon creators and producers deny it, claiming artistic purity. But most see licensing as a fiscal fact of life — the only way to survive in an era of declining broadcast license fees.

In today’s retail marketplace the TV merchandise includes everything from fast-food premiums and promotions to interactive computer games. On an average, licensing accounts for at least 25% of a show’s income, but in some cases it can underwrite the entire show.

There are those who are proud of their trips to market, choosing to view themselves as marketing pioneers electronically stretching the envelope in a medium where this year’s Winter Olympics became the fodder for Nancy Kerrigan’s Campbell Soup, Reebok and Disneyland commercials.

The reality is that the licensing and merchandising of toys, clothing, school supplies, fast foods, etc., has become a “revenue stream” that equals and often exceeds the TV income.

“At Universal we look at a property for its potential value for all of our divisions,” says Jeff Segal, president of MCA/Family Entertainment & Universal Cartoon Studios. “We have a theme park in Hollywood and in Florida. Oftentimes we license characters to appear in the theme parks. We look at our own programming with the hope that those shows, if successful, will develop into properties that would be exploitable in our theme parks.

“First and foremost,” Segal emphasizes, “we’re here to produce entertainment. That’s what the artists and writers want to do.”

Says Gary Krisel, president of Walt Disney TV Animation and a former VP of character merchandise licensing at Disney: “Our mandate from the time Michael Eisner came is very clearly that the tail is not going to wag the dog. All of our decisions are made purely on ‘does this make for strong entertainment?’

“Some shows have very little merchandising potential. And others have tremendous merchandising potential. We have another division that no matter what’s made in this company, if there’s a licensing potential, they’re going to find it and exploit it. They’re probably the best in the world at doing that.”

At other companies, the lineage is even more direct. Claster Television started with “Romper Room,” became one of the largest developers and distributors of children’s programming, and now syndicates “Transformers Generation 2,””G.I. Joe,””Muppet Babies,””Maxie’s World” and “Conan the Adventurer”– all titles familiar to parents and grandparents being tugged by small hands through toy store aisles. Claster is now a wholly owned subsid of Hasbro Industries, the world’s largest toy company.

Because children are impressionable, cartoons and Saturday morning programming often take criticism for what has become general entertainment industry practice.

Off the record, one major licensing executive insists “Batman Returns” was almost completely underwritten by Warner Bros.’ merchandising department. “In the end, the movie did tremendously in box office. But the merchandising was one of the primary reasons to enter into that second film, because of the revenue created by the first.”

Toy presence

At Universal, the toy boys sat in on the preliminary script conferences for “Jurassic Park” and NBC’s “seaQuest DSV.”

An insider says Amblin, for one, contractually separates merchandising from film and TV income, receiving their piece of the ancillary action from first dollar, whether or not the show or film itself goes into profit.

MCA’s Segal: “We own a huge record company and our ability to spin off music from our shows into albums for kids is very successful. Of course we look at that.

“We have publishing interests with the Putnam group, and we like to develop properties that can be published by our companies. We have an interest in Harvey Comics. We like to have shows that have comic-book potential. Frankly, because license fees have declined — in many cases precipitously — and since we bear the deficit burdens on shows, we have to look to the ancillary markets to break even and turn a profit. You really don’t make a profit in the production of 13 half-hours of programming.”

Pure toons

Gabor Csupo, who animated “The Simpsons” for three seasons and now is exec producer of “Duckman” on USA Network, takes the purist approach.

“When we create a new show or (are) thinking to option a property, we’re not going to say, ‘Well, would this work on T-shirts or coffee mugs?’ We’re not interested. We only want to know if we can tell a great funny story with it. The rest comes automatically. But of course, licensing will help the show. Because the more the character is around, the more people will tune back. It’s a cycle. But we would never start out by judging if a property’s merchandisable or not.”

Michael Frith is exec VP for Jim Henson Prods. and exec producer of “Dog City ,” which combines traditional animation with Muppet fuzzy-wuzzies that could gambol directly from the Fox Children’s Network into Toys R Us.

“Jim was very clear and very strong that this is not a licensing organization. We are an entertainment company, and if there is appropriate licensing we can do to support the company and help to support the project, that’s fine.

That does not drive what we do at all. It’s sometimes frustrating for our licensing department, but that’s the case.”

For the DIC-Guess? co-venture “Rimba’s Island,” Joy Tashjian, DIC Merchandising president, notes: “This is the first time I know of where a designer and a studio have partnered to create an entertainment/fashion brand. We started this as a product, and then we went into programming. Usually you go programming into product. The animals that appear in the show will appear on apparel, lunch kits, undergarments, a line of stationery, plush animals and activity toys.

There are probably close to 150 items that will be coming out bearing the Wild Guess-Rimba’s Island logos.”

But it is all founded on a great mystery and gamble. As DIC’s Tashjian points out, “No one really knows what a child will gravitate to.”

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