licensing and merchandising

LEGO once derided licensing, saying it would never move away from its core generic, unadulterated building set business. But new thinking was needed amid hard times not so many years ago, and the Star Wars license turned the company around.

Star Wars was truly just the beginning of LEGO’s licensing, and it is licensing that has made the company one of the top global toy manufacturers. Recently, I asked a cousin’s 8-year-old daughter which LEGO sets she has. (I’d been tipped off that she was heavy into Star Wars.) “I’d rather tell you which ones I’d like to get,” she replied, and proceeded to rattle off 19 sets – all of them Harry Potter – before scrunching her nose. “There are 21 I want. Which two am I forgetting?”

Certainly Angry Birds did a lot for Commonwealth Toys a few years ago. And now it will be interesting to see how Germany’s Schleich will fare. Schleich’s core business is upmarket plastic figurines of prehistoric animals, generic knights, wild life, and farm life. They tend to be sold in specialty toy stores.

Years ago, the company licensed Smurfs, and its success led Schleich to license extensively. The company had severe financial difficulties and swore off licensing, except for continuing its Smurfs relationship. It tried developing its own fantasy property, Bayala, that it hoped to license out into other categories (the property still exists, but I’m not sure much ever got licensed). And now the company’s Toy Fair presence was dominated by its new DC Comics (specifically Justice League) and Peanuts licenses. The people at the booth, who are from Schleich’s North Carolina-based U.S. distribution operation, weren’t familiar with the company history but, noted Soren Philip Hjorth, who is president of Schleich USA, “This isn’t that company.”

Licensed products weren’t an easy sell to the consumer on the original Jurassic Park movie. “A dinosaur is a dinosaur” is what people said at the time, or as one licensee of the upcoming sequel, Jurassic World (this June), puts it, “Dinosaurs are universal.” (No pun intended relative to the film’s distributor, Universal Studios.) This one’s also not so lovable and cuddly, at least based on the trailer. That’s usually not a positive indicator for licensing but can mean boffo at the box office, as Variety used to say.

Will Marvel step up its co-branding? Allow more flexible use of its characters? They already co-brand with Mattel’s Matchbox; will they do the same with Hasbro’s Transformers?

You could argue that Transformers are already their own characters with their own personalities (so to speak). But Hasbro’s Super Hero Mashers line lets kids take Transformers, Marvel, Jurassic World, Star Wars, and other figurines apart to mix and match body parts, outfits, and weapons.

Will other studios allow similar use? Kids always took their toys apart anyway – in this case, is Hasbro just facilitating a play pattern that hasn’t been officially recognized before?

Not all toys are packaged with clear advice what age they’re for, and often for good reason: Aging toys up and down continues to be a trend.

Sometimes it works – Transformers have collectibles for adults, a main line for kids, and a third line for preschoolers. Hasbro is using that as a model for My Little Pony.

The question that every toy company takes into account before aging down: Will they lose their core audience when baby brother or baby sister starts playing with the same characters?

“Storage” – as in ways to tote your toys around – has always been an adjunct to multi-part toys. I remember my sister’s Ginny doll and its film star trunk carrying case in which different outfits traveled on hangers, with room for the doll itself as well.

Storage containers that have been more utilitarian are taking on more style again, with some toy companies making their own cases, and others such as LEGO and Hasbro, licensing others to do so.

I think there are opportunities to create home display items for adult and kid toy collectors, too. Mattel’s Matchbox had a clear half-tube on a wall that displayed probably a couple of hundred Matchbox cars. It was decoration for the booth – but could be equally at home…at home.

I bet a lot of dads who still have their collections would love that idea. So might kids who dump their cars or action figures in a box anyway. This way they’d be able to see them.

Licensed Minions products will be everywhere in advance of the July 2015 release date for the Despicable Me spinoff, right in time for the all-important back-to-school season. The question for licensees and retailers is whether the Frozen short that Disney is releasing in front of Cinderella next month, and the complementary marketing the Disney machine will undertake until the next full-length feature, will keep Frozen dominant right through to the next movie or whether Minions can steal share of market the way Frozen did from Barbie, American Girl, and just about every other doll on the market in 2014.

In “Building a Bridge to the Eighteenth Century,” the late Neil Postman, an NYU professor who founded the Media Ecology program (essentially the sociology, anthropology, and psychology of media as it applies to education) drew on the philosophers of the Enlightenment to map an approach to technology in the 21^st century.

“If we’re going to make technology education part of the curriculum,” he wrote, “its goal must be to teach students to use technology rather than to be used by it. . . .They must know how a technology’s use affects the society in which they live, as well as their own personal lives. This is something we did not do with television, and, I fear, we are not now doing with computer technology.”

I thought of Neil’s work when I came across toy business consultant/blogger Richard Gottlieb’s recent quote in The New York Times — “The toy industry is essentially a 19^th-century industry desperately trying to break into the 21^st.” Richard was commenting on the ouster of Mattel CEO Bryan Stockton; in his blog, Richard expands on that in reasoned and sane manner – just the sort of thing lacking in most analyses of public beheadings.

There’s a second level at which Neil’s insistence on looking at history in order to map the future is relevant: Part of Mattel and arch-rival Hasbro’s problems in recent years has been their inability to find a balance between traditional toys/games and technology.

JAKKS Pacific has struggled in recent years, but its Elsa and other Disney lines (including the aged-down Princess for toddlers), and the acquisition of Halloween costume company Disguise, have helped the company turn around. Today it is credited as one of the smaller, nimbler toy companies that get on-trend and into the stores faster than the majors. (Of course, one bad season can end that reputation all too quickly.) Count Bridge Direct and Spin Master among that group of smaller/nimbler toy companies, as well. Interestingly, none of these companies is heavily leveraged in technology-based toys. But all are facing off with Activision, LeapFrog, Apple, and other digital/online entertainment providers, as much as with each other.

With DreamWorks having looked at acquiring Hasbro late last year, followed by rumors that Disney would do so, a change of CEOs and restructuring at Mattel are hardly the last word on changes afoot in the toy business.

What does history instruct? Whether it’s traditional toys/games, or tech-based, the constants are play patterns and stories. The delivery mechanism may change, but those core characteristics don’t.

© 2015 Ira Mayer.

The New York teams shop in the Macy’s flagship store in Herald Square, which appears to be a Lids shop-in-shop, has installed instant embroidering and heat transfer machines at the register for personalizing caps (mostly New Era Yankees), t-shirts (Reebok and Nike), and jerseys (Majestic). A salesman even offered to embroider the cap I was wearing. Embroidery adds about $10 to the cost of the item (most of the merchandise was 15%-25% off), with an extra $1-$2 each for additional designs such as stars. The salesman said most of the people going for personalization are tourists, and estimated that 65%-70% of those customers add a name to the items they purchase.

Nickelodeon has about 100 new SKUs of SpongeBob merchandise in conjunction with “The SpongeBob Movie: Sponge Out of Water,” due February 6^th. Nick’s Manuel Torres, SVP Global Toys and Publishing, estimates there are about 2500 SKUs for the entire SpongeBob line worldwide.

Coming off a soft year preceding the movie release, the company is hoping for a 2-3 time bump in merchandise sales this year over last, including international promotions.

Among the more unusual items added to the lineup for the movie: Scented pens, pencils, and markers, available at Justice stores, and a SpongeBob Movie Projection Watch being sold for $10 by Avon. The watch features changeable faces which can be projected out the side of the watch.

Two-thirds of self-identified sports fans display team memorabilia in their homes, according to Gladiator GarageWorks. One quarter (26%) display memorabilia in the living room, 10% in the garage, and 8% in the yard. The Whirlpool-owned company markets pre-assembled and ready-to-assemble garage and storage systems.