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Sequels big for merchandising, backed by marketing

This article was corrected on June 15, 2003.

NEW YORK — For merchandising mavens nowadays, a Hollywood blockbuster doesn’t routinely translate into a retail smash. But they love a sequel. A lot.

Case in point: Disney-Pixar’s “Finding Nemo,” which is a sensation at the box office, having grossed $158 million domestically heading into its third weekend of release.

It’s “a great movie,” says Marvel chief operating officer Bill Jemas. “But that has nothing to do with consumer buying habits.

However, he adds, “The sequel will be big for merchandising. ‘Nemo’ wasn’t a property; now it is.”

Indeed, familiar properties have merchandising execs smiling. A string of hot releases — from “Spider-Man” to “Scooby-Doo,” “Harry Potter” to “The Lord of the Rings” and “X2” to “2 Fast 2 Furious” — are either sequels or have sequels on the way.

Sequel mania has cast a rosy glow over the battered licensing and merchandising arena, a cutthroat biz squeezed of late by a soft economy, shrinking shelf space and antsy retailers burned in recent years by pics such as “Godzilla” and “Star Wars: Episode 1 — The Phantom Menace.”

“Frankly, it’s a big boost,” says Dan Romanelli, prexy of Warner Bros. Worldwide Consumer Products. “A sequel to a successful franchise is key to keeping the brand out there.”

Sequels are generally event pics backed by massive studio marketing. Retailers like those. And they really like a big release based on a previous hit.

“If you’re talking an ideal world, I’d prefer a movie (sequel) every three years with an animated TV series in between. Otherwise, a movie every two years. I would love a Batman movie every three or four years,” Romanelli says.

“I’d like a movie every year and half,” says Tim Rothwell, senior exec VP of Universal Consumer Products.

Still, all sequels aren’t automatic slam-dunks for plush dolls and action figures. A licensing campaign must be well engineered and fine-tuned, with the right size and mix of products — and they can’t mimic the original go-round, execs say.

Universal had virtually no licensing for “The Fast and the Furious,” but it shifted into high gear for “2 Fast.” U dove into car culture, creating a lifestyle brand, hawking wheel rims, hi-fi sets, neon lights and a drag racing series.

Merchandising partners Sony and Marvel ramped up the number of licensees for the “Spider-Man” sequel to 300 from 200, says Al Ovadia, senior veep of Sony Pictures Consumer Products. And Jemas is preparing a major push for a second “Daredevil.” “We think it’s made the transition from comic book” to bigscreen, he says.

Warners, though, has scaled back licensing deals for the third Harry Potter pic after a high-profile product glut last year.

Sometimes “less is more,” Romanelli says. “You want to avoid ubiquity. You want to make sure products in stores sell through.”

If the sequel flow continues, there could be an embarrassment of riches. “We can’t push more than two or three movies a year without being challenged by retailers,” Romanelli says. “They ask us, you have two movies in July, which one do you want us to support?”

For now, there seems to be enough wealth to spread.

Rothwell says his division has generated more than $1 billion in retail sales in the past year. Total entertainment licensing rose some 4% to a whopping $42 billion in 2002, according to stats from trade group LIMA, after being stagnant for several years.

Spidey gets lots of the credit. “People have said ‘Spider-Man’ helped bring back movie licensing,” says Ovadia.

Romanelli agrees: “‘Spider-Man’ helped our whole superhero line. Success is contagious.”

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