The total licensing industry in the US is estimated at $100 billion across all categories, including toys, apparel, footwear, house wares and home decor, back-to-school, etc. Character licensing, which greatly impacts the youth business, accounts for 46 per cent of total annual royalties. The Licensing Industry Merchandiser’s Association (LIMA) estimates that licensors collected $5.7 billion in US royalties in 2008.
The NPD Group reports that in Q4 2008, the European licence market was up by five per cent across the Total European Top Five Markets, a hopeful sign in a soft economy.
Entertainment Properties Energise Prospects for Toy Licensing
Entertainment provides toy makers with a distinct competitive edge and an abundance of new characters and entertainment properties gave the industry a virtual B-12 shot as licensed products rebounded from the effects of a challenged global economy.
One of the most influential exhibit areas at the Licensing Expo was dedicated to interactive entertainment, a market segment with tremendous growth potential as it relates to kids and young adults. Many toy companies have already embraced virtual worlds as a natural brand extension, and these will continue to prosper. Market research firm, eMarketer, estimates that by 2012, 50 per cent of kids online will use virtual worlds, and this still-evolving destination offers a host of new marketing dimensions.
One of 2008’s bright spots, the plush toy category, saw growth of 22 per cent in 2008 in the US because of its virtual world connections. Three brands that helped drive sales included Webkinz (Ganz), Neopets (JAKKS Pacific) and Club Penguin (Disney/JAKKS Pacific). With internet penetration and broadband connection in Europe growing steadily, these online alternatives are growing in popularity with kids. Huntik, represented by Big Bocca in Europe and the US, is being received well on both continents, with the highly anticipated Massively Multiplayer Online Game (MMOG) set for launch in fall 2009.
Family-friendly video games accounted for more than half of all game sales in 2008, according to the Entertainment Software Association and the NPD Group, making it the most popular genre. Looking ahead, game companies will heavily focus on online promotion to mirror the excitement and anticipation of an actual movie premiere. This approach to marketing is a template which toy makers might look to emulate as a way of building community and brand recognition. In fact, a few software manufacturers have entered the MMOG arena with offline toys, online worlds, and new MMOG models. Two new notable brands are Tracksters vehicles, with their online performance racing platform by 10 Vox Entertainment which will launch nationwide in the US throughout 2009, and Huntik’s new MMOG model, set to launch in Fall 2009, both in the US and Europe (managed by Big Bocca in cooperation with Upper Deck and Rainbow Productions).
Toymakers Play Licensor for Brands with Toy Roots
The licensing world isn’t all about blockbuster properties generated by the movie and entertainment studios. The major toy companies play licensor for evergreen brands with toy roots that compete on the same global scale as movie licenses. For example, Hasbro’s Transformer franchise started as toys but made the leap to the big screen; and a new agreement with Electronic Arts will continue to support its properties in the interactive area. Importantly, Hasbro’s landmark joint venture with Discovery Communications will include a television channel and online elements.
Mattel will raise the profile of its popular Hot Wheels brand with a complete new roster of licensing, promotional and distribution partners for apparel, role play, publishing and video games, inspired by the introduction of the original animated television series, Hot Wheels Battle Force 5. The new show will run domestically on Cartoon Network and in Canada on Teletoon. The show features a team of teenage drivers with five race cars who must work together to save the earth from intergalactic predators.
Mattel has been promoting Barbie with 50th anniversary celebrations since February where it had a major installment at the American International Toy Fair, followed by monthly events and unveilings across the globe. At press time, plans were in place for the Barbie Annual Collector’s Convention in Washington, DC, where loyal Barbie fans attend events, share their collections and review the eagerly anticipated holiday offerings in the Barbie 2009 and 2010 collector and nostalgic products collections.
At Disney, global sales of merchandise inspired by High School Musical and Hannah Montana grew more rapidly in 2008 than any other Disney franchise, including its Princess line. However, tween product sales have begun to soften in 2009 in the US, so Disney is turning back to its core brand strategy in 2010 and beyond, offering a variety of well-designed strategic programs for different ages and genders, ranging from infant to kid, to teen to young adult. The wildly successful Cars franchise reached $2.5 billion in sales in 2008 and is expected to retain its popularity in 2009 and 2010 with a series of five-minute teaser-type Cars Toons. The whimsical short episodes, developed by Pixar, are being shown on the Disney Channel to pave the way for the next Cars movie installment, slated for release in 2011. The revitalized Toy Story brand re-launches in 2009 with re-mastered and updated 3D theatre releases of Toy Story 1 and 2, building toward the release of the newest installment, Toy Story 3 which is scheduled for release in June 2010. A natural booster for the toy market, this film is highly anticipated by toy makers whose products will literally come to life on the big screen.
The influence of global entertainment companies cannot be underestimated. When Disney celebrates and promotes the tenth anniversary of Disney Princesses in 2010, awareness of the Princess mentality will drive more consumers to retail and encourage more retailers to stock up. This will most certainly improve sales for all related products that incorporate glitz, glamour, fantasy lifestyle and role play.
Breakthrough Creativity Signifies Kids Market Potential
A new crop of kid’s entertainment properties from around the globe generated buzz at the Licensing Expo signifying their market potential. Although this year’s show overflowed with creativity and inspiration, the following properties had a particularly fresh approach. These are the ones that broke new ground in some way, through animation technique, story line, or lifestyle branding. Some have had initial success in Europe and will make their US debut in 2009 or 2010. In addition to new properties, the diversity of licensees and licensors, some relative newcomers to the youth entertainment business made the hunt during the Licensing Show ever more dynamic.
This new animated pre-school TV series illuminates a girl’s love of role play and dressing up for different careers. Set for a 2010 release from the MoonScoop Group, Bandai has acquired the worldwide master toy licence.
Dive Ollie Dive
The popular PBS pre-school animated series from the MoonScoop Group is the official mascot for the United Nations Educational, Scientific and Cultural Organisation (UNESCO) as part of its new educational campaign to teach children about the importance and beauty of the world’s rich underwater cultural heritage.
This popular Scholastic book property with Italian origins is scheduled to make its small screen debut in fall 2009. MoonScoop manages the licence worldwide, except in Italy, where the licence is managed by Atlantyca.
GoGo Crazy Bones
Originally launched a decade ago, these fun, miniature collectible figures, with more than 160 characters, make this hot game ripe for a 2009 US market re-launch; Canada-based iToys is the master toy licensee. This brand is already a phenomenon in Europe, since its wildly successful fall 2008 launch in many European territories.
In US domestic test markets since February, Gormiti has been tracking above expectations. The number one Italian boys brand will have a fourth quarter US launch; Playmates is the US master toy licensee.
Kamen Rider Dragon Knight
Developed in Japan, this series for boys aged six to 11 combines martial arts, transformation and supernatural elements in boy’s action figures and in a live action TV format. Bandai manages the master toy licensing rights in the US.
Little Big Planet
The characters from the popular PlayStation game, a multiple award winner worldwide, will be developed into a toy line featuring SackBoy and SackGirl. Target Entertainment manages the licensing in the US.
Mike the Knight
The excitement and enchantment of medieval times comes alive in a new series for the pre-school set from Hit Entertainment, which recently expanded with a new movie division to develop its intellectual property into future theatrical releases.
This energetic new girls brand from Italy-based Rainbow Productions named Bandai as European master toy licensee, which already pre-sold related toys to more than 20 countries. The new property is an extension of the popular Winx franchise, represented in 120 countries worldwide.
One of this year’s show sponsors, attendees were treated with a Pucca emblazoned tote bag which provided instant notoriety. This Korean-born girls’ character pop-culture lifestyle brand was quickly snapped up by Warner Bros. with related products set to launch in 2010. 12 international and domestic U.S. licensees are already signed for this popular Korean brand.
A slew of adorable sushi-themed anime-inspired characters, this American Greetings property is aimed at four to eight year olds, and set for a 2010 launch. Big Time Toys nabbed the master toy licence.
A just-introduced UK property from Cbeebies fast-tracked its way to the top of the charts; these whimsical characters are sure to capture the hearts of many with their emotion-themed storyline. Fisher-Price has been named the master toy licensee for Europe, with US television rights still in negotiation.
Top European Licences
In Q4 2008, the European licensed products market was up by five per cent across the Total Europe 5 Markets, according to the NPD Group. Top properties across Europe (ranked on value/2008) included:
1. Thomas and Friends
2. Lego System
3. Star Wars
2. Littlest Petshop
2. Lego System
2. Disney Princess
3. Mickey & Friends
Exploring New Opportunities – Adults/Collectibles
In addition to new kids’ properties, there is exciting news in the adult/collectibles market, specifically targeting women. Mattel’s 50th anniversary program for its Barbie brand continues full steam ahead with a new suite at the Palms Hotel in Las Vegas based on over-the-top Malibu Barbie style. For a mere $4,000 per night, one can revel in the custom pink décor designed by Jonathan Adler and experience the fun fantasy of Barbie’s vacation getaway house.
Girl power also reigns supreme in the new 'Marvel for Her' property, which draws on Marvel’s amazing cache of female superheroes including She-Hulk, The Black Widow, Ms. Marvel, Shanna the She-Devil and others. Disguise holds the master licence. Eventually, select characters may filter down to the youth market.
The iconic TinTin property, originally from France, celebrates his 70th anniversary in 2010, with a licensing program by Paramount Pictures and a 2011 movie slated for worldwide distribution.
With origins across a wide variety of mediums, such as books, comics, internet, video games, kid’s television or blockbuster movies, there was a broad spectrum of new properties at Licensing Expo ‘09 to lure consumers back to shopping once the economic recovery kicks in.
The US annual toy retail buying schedule picks up again in October at TIA's Fall Toy Preview, followed by the February 2010 American International Toy Fair. More information is available on events.toyassociation.org.