licensing

NEW YORK, NY: FEBRUARY 16, 2016—My favorite parts of Toy Fair are invariably the far aisles on the main floor upstairs and the downstairs exhibits. That’s where many of the start-ups and smaller players are and where you get a sense of the ideas that are propelling toy inventors and designers.

Here are my idiosyncratic impressions after two days walking the show at the Javits Center, with a few added comments based on a recent spate of store visits.

Star Wars isn’t disappearing any time soon. Sphero will have competition for its BB-8 later this year when Spin Master brings out its own version of the robot. The creator of the Spin Master BB-8, Thomas Tretter, was doing the product demos, happily admitting he “gets paid to do what he did as a kid.” Also via Spin Master, Air Hogs will have an expanded Star Wars line.

But SW was ubiquitous, if anything moreso than even last year and eclipsing even the strongest of the strong. Manufacturers uniformly report that Star Wars is still going gangbusters, and many are still developing new assortments. Marvel is Marvel, DC is DC, and they’re next in line. I was surprised not to see more new Minions on the boards, as retail is still going strong with that as well. Universal’s Secret Life of Pets clearly has momentum, though, with Spin Master’s Best Friend Max wobbly-walking dog from that upcoming film a candidate for next Christmas’s must-have toy (Elmo beware). Commonwealth and Spin Master are also working Angry Birds in anticipation of that film.

The expansion of Melissa & Doug, once exclusive to specialty toy retail, is nothing short of astounding. The company used to eschew licensing, but has some Disney and other properties. However, unlike LEGO, which reinvented itself (and came back from the walking dead) through licensing, Melissa & Doug hews true to its origins even if distribution has expanded to mass, education stores, and more.

JoyLabz had perhaps the oddest display among the robotics/electronics startups: Makey Makey was demonstrated using a piece of tin foil folded on a table, with hand-written marker instructions, and five bananas with connector leads in them hooked up to a laptop. Touch the foil with one hand and use the other hand to hit the bananas (“it could be anything conductive; we just used bananas,” the demonstrator noted, though their sales materials feature bananas too), and you get music from the laptop. The kit can also be used to make game controllers, instruments, and “inventions.”

There’s really no breakout company in robotics. If I were a buyer, I’d be hard pressed to decide who to go with — both whether they have the wherewithal to deliver, and what might make the product stand out. Most seem to create different lighting or noise patterns from generic component parts, and there’s little guidance for what you can do further. As a group, they’re coming of age, but they’re not there yet.

Among the more traditional science kits, Smart Lab used licensed Star Wars and Disney Princess to distinguish itself. Based on retail visits as well as the show, Smithsonian and National Geographic are dominating this sector at specialty, in book stores, and at mass.

3Doodler and Creopop are among several companies offering handheld 3D printer pens. 3Doodler has had an adult version on the market at $99; the new child version is $49. Different colors of instant-hardening plastic are available. Using the pens requires pretty serious fine motor skills; not clear to me exactly who the market will be for kids versions. 3D printers are also rapidly coming down in price to where they might have potential as consumer items, but again, the killer app that could transform them from “having potential” to “must have” has yet to surface.

A year or two ago formable sand products for home and school were relatively high end, sold by Brookstone initially; the variety is expanding rapidly now under a variety of names (Kinetic Sand from Spin Master, but Magic Sand, Aqua Sand) — in colors (including glow-in-the-dark from Sands Alive), packaging, and price.

Zing’s StikBot Studio — a toy-size green screen with little characters you can use to create your own stop motion animated videos — expanded its one-year-old line with a more extensive “Pro” kit. Zing also has Wet Head, which is a hat with a little reservoir for water and stick plugs coming out. It’s essentially “Russian roulette with water,” as a demonstrator put it — the hat is filled with water, players spin a wheel to indicate which plug to pull out, and eventually one of the pulled plugs releases the water.

AzIAm Girlz yoga dolls, which first shipped this past December, is growing its line.

There’s growing availability of sophisticated tool sets. New at the show this year was Toydriver from the “smart screw specialists.” Toydriver is a mini powered screw driver designed for the small screws used in children’s toys but also for small hands. Sidenote: Toys R Us carries an extensive line of Home Depot-branded tools and child-sized workbenches and the like that are truly standout.

On the gardening front, Triumph Plant has been doing a beautiful job with Crayola for a number of years. There’s a My First Plant series, and a Color A Plant Pot kit. And they’re re-introducing a Charlie Brown tree to go with their Charlie Brown Grow a Pumpkin kit; the tree had been around for a few years, but the company wasn’t able to get the seeds for the last two years. Triumph’s Jim Johansen also said the company has licensed the Garden State Parkway for a wildflowers line. It’s an outgrowth of Lady Bird Johnson’s highway beautification program and could be expanded to cover other states’ highway wildflower programs.

Morphmallow’s Spaghetti Headz hair accessories remind me of the coiled shoe laces that were a fad for a couple of years. Generic versions of Spaghetti Headz have been on the market at $9.99 list for about two years; Morphmallow, exhibiting at Toy Fair for the first time, is now adding licenses including Care Bears, Garfield, Betty Boop, and the upcoming Steven Spielberg film The BFG selling at $12.49. Target is tweens to young teens, with the designs with feathers at the end appealing to the older end of the spectrum.

Capson and Zoofy, to name just two, are outfitting caps (brand name Brick Brick) and backpacks, respectively, with boards that work with Lego and other similarly sized building blocks as well as with miniature versions so kids can customize their look. Capson had the Disney logo, an As logo, and a Hello Kitty image to show what you can do, but was quick to say they don’t license those images, “they’re just to demonstrate what someone can do.” In fact, they don’t even sell blocks — those are user-supplied. Zoofy used generic designs to illustrate the potential on its backpacks.

Pinbox 3000 is likely typical of many toy startups these days: They used a Kickstarter campaign to raise the $15,000 they needed to make the diecuts they needed for the first run of their cardboard “pinball machines” which are blanks. The examples they showed demonstrate how you can draw or photograph your own backgrounds, use discarded toys or household objects, and so forth to create your own game. Make, an online magazine (makezine.com) wrote about the product last July and started selling it. That sent them back for a second run. They’ve also developed special education and library market versions. The basic kit is $49.95; a large “double kit” is $89.95.

Speaking of make your own: Yottoy, which is both a publisher and makes plush and collectibles with licenses for Babar, Madeline, and others, signed on as an Eloise licensee about a week before Toy Fair. A beautiful lunch kit was hand painted to get it on display in time, VP creative director Peter Doodeheefver showed me proudly. Sales of licensed Madeline merchandise benefited enormously from a museum exhibit at the New York Historical Society, as did sales of Paddington goods with release of the Paddington Bear movie. Next up for them is The Little Prince movie; but Yottoy typically has these properties long-term; the movie and museum shows are bonus opportunities.

Not a toy per se, but a fun product: Fan Hands (company and product name) — special gloves designed to make a loud clap when at a sports event. Marc Jones, President/CEO and inventor of the gloves, has had the patent since 2013 and has been selling a generic version. But if this isn’t a product designed for licensing… Jones has a relationship with CLC for another product line he developed; he’s looking to expand that to Fan Hands, and to add MLB and NHL “to start.” NFL, he says, is too complex and too expensive to deal with starting out.

Colorforms and Highlights are two children’s brands that have been largely dormant for a number of years. Both are re-establishing their reach through licensing programs the results of which were in evidence at Toy Fair this year and should be more in evidence at retail over the next 12 months. Colorforms is owned by Out of the Blue; Highlights is independently owned.

The success of eOne’s Peppa Pig — which itself is expanding its licensee roster through U.S. master licensee JazWares — is prompting a small surge in other pig properties. Not that pigs haven’t always been popular, but this year sees the addition of Pass the Pigs dice from Winning Moves, among others. Note to Warner Bros.: Is it time for a Porky comeback?

That’s all folks!

Ira Mayer, former publisher and executive editor of The Licensing Letter, conducts competitive research and consults for marketers; takes clients on retail tours; and offers courses on licensing through colleges and universities. You can contact him by clicking on the “Contact” button above left.

NEW YORK; JANUARY 27, 2016 — Coca-Cola’s new “Taste the Feeling” ad campaign “will be focused more on the functional and emotional benefits of Coke the product” rather than the loftier brand equity-rooted celebration of the brand’s “role as a social facilitator and symbol of peace, love, friendship and brotherhood” of the prior “Open Happiness” campaign.

That’s Stuart Elliott’s take in his MediaVillage column this morning. Elliott wrote The New York Times advertising column for 23 years, and has been contributing to Jack Myers’ MediaVillage for just under a year (and it’s great to have his voice back!).

One of my favorite licensed Coke products, from Coolgear.

From a licensing perspective, the question is how that new theme will manifest itself in merchandise, and while not mentioning licensing per se, Elliott indirectly addresses the key to a sound licensing program as well as a good ad campaign: emotional resonance.

Elliott wonders “if ads that play up what’s inside the bottle will overlook the specialness of the bottle and the other unique qualities and attributes of Coca-Cola that have contributed to its status as perhaps the world’s best-known (and most-liked) brand. . . . A thirst quencher, yes, but also an intrinsic element of American popular culture and a symbol of American life.”

Licensed Coke products reflect that, and Elliott couldn’t do better than singling out, as he does, the shape of the bottle, vintage ads, the Coca-Cola Santa, and other advertising slogans, as well as songs and movies where Coke has played a starring role. Not to mention the polar bears.

As I told the students in my Branding & Licensing class at LIU Post this week (part of a Branding & Licensing minor inaugurated by the university with LIMA and Beanstalk’s Michael Stone last semester), Coke’s is a classic case study in how licensing can support a core brand. Relative to revenue, licensing is a rounding error at Coke, albeit a highly profitable one. With licensing under the guidance of Kate Dwyer in Atlanta for almost seven years now, Coke tastes that feeling just fine.

Ira Mayer, former publisher and executive editor of The Licensing Letter, conducts competitive research and consults for companies in the licensing business; you can contact him by clicking on the “Contact” button above left.

In the decade following the release of the original Star Wars movie in 1977 the licensing business overall grew more than 10 times, from $4.9 billion in retail sales that year to $54 billion in 1986, according to The Licensing Letter Databook.

Star Wars is credited as the catalyst for much of that growth — certainly in the entertainment sector, but across the rest of the licensing business as well. In recent years, worldwide retail sales of merchandise based on the Star Wars characters and imagery has hovered in the vicinity of $2 billion annually.

So as the rollout of new Star Wars merchandise begins this Friday, with a new movie coming in December, what are the prospects for Star Wars sales now?

A widely reported bullish analysis of Disney’s stock by Macquarie Securities analyst Tim Nollen puts the number at $5 billion in the first year following release of the movie (which is a funny time to start counting, since the merchandise is going on sale more than three months before the movie comes out). Good forecast or is Nollen building unrealistic expectations for investors?

“Star Wars is on a whole other level from anything we’ve ever done,” Dynomighty’s Sydney Pham told me at the NY NOW gift show in New York recently. Dynomighty makes Tyvek wallets, passport holders, and other accessories, and festooned its booth with Star Wars displays.

“We started pre-selling the classic images a month before the [mid-August] show; we’ll have new images from the movie for the spring. But even the classic images are outselling all of the best-sellers we’ve had for eight years,” Pham said.

That’s pretty strong language. Joyce Washnik, editor of Giftbeat, a newsletter for the gift industry, sees Star Wars crossing all retail channels, including specialty gift stores which, traditionally, might not touch a pop culture phenomenon such as Star Wars because so much merchandise is available at Walmart, Target, and everywhere else.

Still, Washnik says, gift stores had a great run with Frozen and she sees Star Wars following in those footsteps. Frozen did just shy of $1 billion in retail sales of consumer products in its first year following release, based on my analysis of various Disney statements over the past few months. And that was for a property no one had ever heard of and for which Disney probably could have done more had the studio, retailers, and manufacturers anticipated the immediate success of the movie. (Not being able to anticipate that is why movies and merchandising are art not science, thank you.) In the case of Frozen, the licensing program had to be revved up quickly in response to the movie’s wildfire takeoff; needless to say, Disney knew what to do.

For perspective, Mickey Mouse and Hello Kitty do a little less than $4 billion each in retail sales of licensed merchandise annually, worldwide. Disney Princess and Winnie the Pooh are just below $3 billion each, and Cars and Star Wars have done about $2 billion each. Note that all but one of those — Hello Kitty — are owned by Disney.

If the new Star Wars movie bombs, which seems unlikely, Disney will still have built momentum and had three months to sell the goods. That’s analogous to most fast food promotions which end before the movie opens…just in case.

Nollen writes that Star Wars “could generate $5 billion in consumer merchandise sales in its first year of release…[and] this would easily net Disney about $500 million in licensing and retail revenue.”

Using the loosest of calculations, $5 billion — which is greater than the value of the entire licensing business pre-Star Wars! — would be $2.5 billion at wholesale. Since royalties are mostly calculated on wholesale, and the rule-of-thumb for rough estimates across all categories is a 10% royalty rate, that’s $250 million net to Disney. Even if the royalty is higher (likely), it’s still not going to come to $500 million. But $250 million? Even Mickey wouldn’t sneeze at that.

Good forecast or unrealistic expectation? As Robert Browning wrote, “Ah, but a man’s reach should exceed his grasp, Or what’s a heaven for?” Written for Star Wars, no?

There were quite a few new character properties exhibited at Licensing Expo in Las Vegas early in June. And while the drumbeat in recent years has been how difficult it is for anything new to penetrate the market — in particular to get on the shelf at retail — a number of attendees commented to me this year that there was a sense that “the market is more secure, and therefore more open to considering something new.”

Most attention, of course, focuses on “new” from Disney/Marvel/Star Wars, Nickelodeon, Warner, Turner, spinoffs, reboots, and so on. But here are some notes on two of the odder newbies, a new digital hit (Bethany Mota; more on digital properties in an upcoming post), collaborations, distribution strategies, and more.

Will the newbies be back next year? Stay tuned.

Opportunistic Anime. John Prine and the late singer/songwriter extraordinaire Steve Goodman set out to write the perfect country and western song by including every country song cliché they could, including mama, trains, trucks, prison, and being drunk. The result was “You Never Even Call Me By My Name,” which was a country hit for David Allen Coe in 1975. I don’t know if the folks at Genco, part of the Daisuki Anime Consortium Japan, have heard the song or would get the joke (most of the clichés are bunched up in one final verse), but they were at Licensing Expo concept-testing Sushi Ninja, who “fight with evil Monsters for justice every day.” While they fight largely over silly things, there are only three episodes so far. Not sure it’s really for kids, or whether the humor can hold up over a full season, but so far it’s pretty funny in a SpongeBob-by sort of way.

Flush Here. Jim and Dan Chianese are brother podiatrists in Blacksburg, VA, and Charleston, WV, respectively. They are also the inventors, if you will, of Toilet Babies, a line of five (so far) “characters” that reside in Kalimapoo. You probably get the idea already. If not, go to their website. Each character has his own backstory — and yes, they are all male.

Toilet Babies characters include Lincoln’s Log and Spooky Dooky, among others, at $12.99 each. Bowl not included.

The brothers sourced 2000 of each character in China, have interest from a distributor for Japan, thought the line would appeal to 3-8 year-olds but have found the range is more 18-40 (in part, no doubt, because the only way to purchase them is online via credit card or PayPal), and exhibited at Toy Fair West and Licensing Expo in search of unloading the concept (sorry) on licensees. “We’re doctors, and we figured we’d follow the motto we follow in our practices: ‘What you don’t know, ship out.’ That’s where licensing comes in.” Contact: dnjcollectibles@gmail.com.

Learning to Fly on the Fly. When Aeropostale decided to launch an exclusive line around digital celebrity Bethany Mota, it was “two months from agreement to stores,” early in December 2013, in order to make the holidays, says the retailer’s Scott Birnbaum. Aeropostale is making 8-12 deliveries a year on the line, and when Mota makes live appearances (25 “meetups” so far, attracting 2500-3000 each, on average), she has to change outfits several times because the stores sell out instantly of whatever she wears.

Making Lemonade Out of… Animaccord VP of Licensing Vladimir Gorbulya, representing the popular Russian property Masha and the Bear, which launches dubbed in English in the U.S. on Netflix this August, says they “don’t want to crowd the market with episodes.” They have 51 short-form episodes of the core series (it would take three to fill a half-hour U.S. slot on broadcast or cable). There are two spinoffs: Masha’s Tales and Masha’s Scary Tales. The program already has a strong YouTube following in the U.S. European toy chain Hamleys features Masha in a store-in-store concept in Russia; next up will be Italy. (The property does not show up on Hamleys’ English-language website.) Animaccord issues 2-3 stylebooks annually to keep the property fresh.

Sound the Trumpets. Signage at the Fox booth at Licensing Expo heralds Ice Age having amassed $1.4 billion in merchandise sales (cumulatively, worldwide), with 2.5 million books in print. . . .Fox figuratively threw its trademark searchlight on exclusive retail and design collaborations including Simpsons x Joyrich, Simpsons x MAC, Home Alone x Rook, and others in signage adorning the outer walls of its booth. . . .Authentic Brands Group (ABG) hardly needed more than the giant TV over the entrance to its booth, what with a running loop of images featuring properties it owns and represents, including Muhammad Ali, Marilyn Monroe, Michael Jackson, and Elvis Presley.

Nice Touch. Kudos to Advanstar for adding a “character parade” the opening day of the show. Several dozen characters wound their way slowly through the aisles, making for plenty of smiles and some neat once-in-a-lifetime photo ops. On their own, The Minions were especially popular at Universal’s booth, while the Teletubbies made an appearance at the LIMA Awards festivities.

The character parade made for some strange bedfellows.

LIMA General Counsel Greg Battersby and mystery guests at the LIMA Awards ceremony.

Your humble reporter befriends the Minions.

Call it what you will — retro, vintage, nostalgia, classic, evergreen — the “everything old is new again” refrain has been perennially popular in licensing. But just using old images, or original packaging, is NOT the name of the game:

• Look at how Nick updated the Teenage Mutant Ninja Turtles and Saban the Power Rangers — and the huge success they’ve enjoyed on air and in consumer products. (I estimate that the Turtles exceeded $1 billion at retail worldwide in 2014, while the Power Rangers continued their upward swing to in excess of $350 million worldwide.)
• Nintendo’s Mario Bros., Bandai/Namco’s Pac-Man, and other video game companies are stressing pixilated images in their style guides. These are true to their origins but have the added benefit of playing off the popularity of styles popularized via LEGO and Minecraft, as my colleague Karen Raugust points out.
• “Throwback jerseys” are made of contemporary fabrics. “The Mick’s” throwback comes “equipped with Majestic’s amazing Cool Base technology to keep you cool and dry whenever it heats up!”
• Archival art, whether Fuller Brush, the Smithsonian Library’s Seed Catalog Collection, or the Saturday Evening Post seek to wed “nostalgia with innovation,” as Fuller Brush says in its promotional literature. As do we all.

More from Licensing Expo in coming days.

New or recently new exhibitors at BookExpo America, the book publishing tradeshow in New York City this week, are using plush, handbags, and other items to differentiate their books in the competitive children’s and YA aisles. Some is licensed, or (hopefully, from the view of the authors and designers) will be. And some prefer to maintain control. (See my previous post for a report on artists at Surtex and the National Stationery Show similarly wanting to maintain control.)

Much of what we saw this week is being manufactured for show display only, as a test, or in small quantities the authors sell on their own websites.

Louisiana-based author Lance Olsen and illustrator Thomas Perry were showcasing their “Sharky Marky” preschool book with a plush shark in a plush car, both of which they fabricated for the show. The website also features coloring book sheets that can be downloaded. They had a sign that they’re looking for a literary agent and/or publisher, and they’re amenable to licensing. Distribution is primarily via Barnes & Noble and amazon, plus a handful of stores in Louisiana.

Author/illustrator/designer Christopher Straub had similarly beautiful 9” plush for his books, “Albert the Confused Manatee” and “Rocky the Confused Platypus.” Indeed, the level of detail in the plush was striking, making the book characters seem a little plain by comparison.

Straub told me he had to have the fabric for the platypus made to his specifications because he couldn’t find something the right color that had as good a feel as the fabric for the manatee, and he is concerned about continuity in the look and feel of the characters.

Straub sells his books ($17.99 MSRP) and the plush ($22.00 MSRP) on his website, and estimates he’s shipped about 2500 books from his home office over the last six months.

Author/illustrator Karen Kilpatrick, based in Florida, is working with licensing business pro Joan Packard Luks to build on her series of learning books based on her Pumpkinheads characters. The books are self-published for the moment, with Baker & Taylor and other traditional distributors making them available as well. An app has just launched, and Luks says animation is in the works, as well as formally licensed merchandise.

BeautyLand Couture is an online retailer offering beauty items from hair appliances to HBA to candy sticks, as well as handbags and apparel for young teens.

The book tie-in? A YA series built around a character named Madison K., an 18-year-old fashionista with positive morals and work ethic created by author and BeautyLand Couture founder Nina Kaplan. A third book in the Madison K. series launched at the show, as did some new Kaplan-designed merchandise.

Of course there were plenty of licensing business standbys at the show:

Disney Publishing had a relatively modest booth.

Candlewick Press is using the inside of the dust jackets to create coloring posters for Peppa Pig and other titles, and is doing book + novelty packs for Peppa, including “Love Game” for the upcoming Valentine’s Day. (Candlewick shares U.S. book rights for Peppa Pig with Scholastic — different formats for each.)

Bendon and Parragon had their wide assortments of licensed titles.

Plenty of Star Wars and Star Trek, as well.

And there were a handful of very creative book-based companies that sell their own very unique merchandise. Two standouts:

• I continue to be impressed by Litographs, which designs shirts, prints, and other goods in designs composed of all the words in the book in teeny tiny type.
• New to the show this year (but in business for two years), is Obvious State, which creates art out of quotes, titles, and other book-based sources.

Both companies handle their own manufacturing, but their designs are certainly licensable for categories beyond those they make or source themselves.

Contacts:

Nina Kaplan, mkblcbeauty@gmail.com; 267-644-6119

Karen Kilpatrick, Karen@pumpkinheads.com; 954-309-3640

Joan Packard Luks, joan@serenatagroup.com; 201-224-2190

Lance Olsen, olsenimages@gmail.com; 504-919-0082

Christopher Straub, info@christopherstraub.com; 612-387-4488