Tentpole merchandise battle heats up

Tie-in glut leads to fight for consumer attention

From “Madagascar: Escape 2 Africa” to “Transformers 2,” bigscreen releases through 2009 include a lineup of arguably dynamic properties. But from a licensing perspective, an array of market trends will play a huge role in the fortunes of upcoming campaigns.

“You cannot get the longevity out of a merchandising program for a theatrical film like you used to,” says industry veteran Lisa Streff, VP of domestic consumer products at DIC. “It’s very in-and-out.”

With more movies than ever poised to hit screens — and exponentially more products associated with them reaching store shelves — one of the biggest challenges for studio licensors is managing campaign time. With only a four- to six-week window to make a splash, licensing programs can often seem like glorified promotional opportunities.

“As a property owner, you have to be very precise,” Streff says. “You have to find exactly the right time and the right fit.”

One case in point: Fox’s “Ice Age 3.” Though the studio’s previous installments have been among “our most successful film franchises in recent years,” says exec VP of licensing and merchandising Elie Dekel, that box office victory has yet to be fully realized in related consumer-product sales.

This time around, the movie — complemented by a cross-category licensing program — will be released in potentially more lucrative July rather than March, as in the past.

Still, come July, store shelves will be packed with merchandise from established product lines (Hasbro’s “Transformers 2,” CBS’ “Star Trek XI”) and yet-to-be-proven new properties (Disney’s “Up,” Universal’s “Land of the Lost”).

Regardless of the property, entertainment licensors may find it increasingly difficult to generate retail — and consumer — commitment.

“Licensing is built on emotion and identification and passion: You say, ‘This is going to be a great movie,’ and you want to own part of it,” explains Marty Brochstein, executive editor of the Licensing Letter. “With so many things coming at the consumer one after another … it becomes a mind-share game.”

More than ever, studio executives say, key words when planning licensing programs are “innovation” and “engagement.”

Especially in a challenged economic environment, it’s essential to put “innovative, creative products in the marketplace,” says Brad Globe, president of Warner Bros. worldwide consumer products: “products that aren’t just about playing off the hype of the movie, but also have some really cool, inherent value (themselves).”

Across the board, that translates to an expanded focus on interactive toys and other technology-embedded products that enable consumers to actively engage with properties beyond the theater.

While 2007 was a rocky year for the licensing business overall — North American retail sales of entertainment/character licensing saw a 4% decline to $12.2 billion, according to the Licensing Letter — the videogame and software category continues to grow.

“Electronics and technology is becoming such a big part of our lives that it transcends to everything we’re doing,” says Lisa Licht, g.m. of Hasbro’s entertainment and licensing division.

In addition to vidgames for summer releases including “Transformers 2” and “G.I. Joe,” that means forays into mobile, online and other immersive technologies.

At Disney, too, the bulk of the studio’s investment from a consumer-products standpoint is in its videogame division, says Jessi Dunne, Disney Consumer Products exec VP of global licensing. Along with traditional vidgames, Disney this fall will launch lines that blend physical and virtual-world merchandise (a la Webkinz) to support properties including Club Penguin, Fairies and “Cars.”

In addition, studios are teaming with TV partners to launch animated spinoffs of popular properties.

“It’s really about how to continue to pulse the content out there and keep the franchise alive in between the three years that it takes to make a film,” says Kerry Phelan, head of worldwide consumer products at DreamWorks Animation.

Of course traditional consumer products are part of the equation, Phelan adds. But DreamWorks has also partnered with Nickelodeon to launch a Madagascar penguins-themed spinoff following its sequel this coming November, “Madagascar: Escape 2 Africa.”

Staying relevant

Similarly, Warner will follow its July 18 “The Dark Knight” with “Batman: The Brave and the Bold” on Cartoon Network; and in spring of next year, Marvel will launch “Wolverine and the X-Men,” “a family-friendly interpretation” of its May 2009 bigscreen release “X-Men Origins: Wolverine,” on Nicktoons.

According to Paul Gitter, president of consumer products for North America for Marvel, the main roles of the initiative are “to keep properties top of mind of retailers, and keep retailers purchasing the merchandise.”

Studios, too, are focusing more keenly on working with retail and licensing partners in smarter, more strategic ways.

According to Gitter, “It’s taking a look at a T-shirt and saying, ‘How do we change the rules of the game?’ ”

For Universal, that means teaming with toymaker NECA to create a line of magic-inspired, fashion-forward girls’ accessories to complement its Feb 6 animated adventure, “Coraline.” For other studios, it means experimenting with new categories altogether.

“Pet toys is definitely a growing category,” says Darren Kyman, Paramount Licensing’s exec director of marketing and retail development.

To that end, Par, for the first time “in a big way,” is capitalizing on consumers’ canine obsessions, partnering with Jakks Pacific to create a line of pet toys and accessories for its upcoming release, “Hotel for Dogs.”

But smarter strategies need not be limited to traditional categories: In spring 2009 — following the November release of “Harry Potter and the Half-Blood Prince,” the franchise’s sixth installment — Warner Bros. will launch a traveling Potter exhibit; at the end of 2009, a permanent Potter attraction is set to open at Universal’s Islands of Adventure.

Still, “even if you take the merchandising opportunity for all the right reasons,” not all the big bets will make it, says longtime marketing consultant Gary Caplan. Be it due to economic or environmental concerns, the threat of recalls or a decline in retail outlets, “Nobody bats 1,000 on licensing and merchandising.”

That means everyone — studios and their licensing and retail partners alike — has to learn to better manage risks.

“You plan as eloquently as possible,” says Travis Rutherford, exec VP of MGM consumer products, “and hope for the best that the content you’re basing your licensing program on is connecting with the audience.”

TIP SHEET

What: Licensing Intl. Expo 2008

Where: Javits Convention Center, New York City

When: Today thru Thursday

Who: Consumer products divisions from all the major studios will be there, as will their big merchandising partners.

Web: licensingexpo.com

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