7/15/2013
Digital properties, nostalgia, and preschoolers were top of mind at Licensing Expo in Las Vegas. Here are some of the themes that emerged in interviews, informal discussions, seminars, and observations by EPM publisher Ira Mayer:
Classic With a Twist
Classics were omnipresent at the show, in part because of retailers’ ongoing insistence on proven properties. Given its overwhelming prominence, Nickelodeon’s enormous booth’s green slime motif was more than a brand design component. It was, in part, though, a cover for the lack of a major new introduction, although Tickety Tock is gaining traction.
Within the first few minutes of Elie Dekel’s presentation at Saban’s licensee/retailer summit the afternoon before the show opened, he used the phrases “entertaining new generations” and “reimagining popular brands”-a theme that ran throughout his and Kirk Bloomgarden’s talks and which could be seen around the show floor in full flower. In addition to “Power Rangers,” Saban is reviving “Digimon” and “Popples.”
Hasbro continues mining My Little Pony and building on its surprising (even to Hasbro!) multigenerational appeal. The “pony parlor” at the Hasbro booth, where women could get Kidada for My Little Pony hair extensions and other accessories, as well as nail decorations, was packed even at the show. The pop-up “parlors” are touring the country.
American Greetings is still reaping the rewards of successful Strawberry Shortcake (internationally as well as in the U.S.) and Care Bears revivals. NBCUniversal is reviving “Leave It to Beaver” and “The Munsters.” CBS uses its Television City umbrella to embrace a host of old television shows, and there are the usual concurrent “classic” and movie-based programs for Marvel, DC, and others.
In the video game world, Sega is supporting a celebration of its 25-year-old Genesis console and “classic” games with planned coffee table books, in addition to accessories and apparel.
Preschool
For classic preschool properties, the appeal is multigenerational-Dekel’s “new generations” but also the generations that grew up with the properties, whether they are My Little Pony, “Sesame Street,” or “Winnie the Pooh.” That said, most current preschool properties are relatively new, with Disney Jr.’s “Sofia the First,” “Doc MacStuffins,” and “Jake and the Neverland Pirates” clearly home runs in the making.
If Nickelodeon’s “Dora” was already on the wane, the Disney Jr. series is pushing her even further back. And at least one observer believes “Sesame Street” may be suffering as well-appealing to the parents but unable to maintain the level of intimacy that Disney Jr. is presenting. (Sesame Workshop reduced its staff 10% after the show.)
Tiers, Channels, and Platforms
Whether you’re talking about retail or media, it’s all about multiple exposures. At retail, exclusives seem to have an edge on DTR deals this year, at least in the U.S., where the pendulum has swung back to retailers who don’t want to be stuck with inventory and with no one to turn to for markdowns.
For most entertainment licensing executives we spoke with, “exclusive” is back to meaning just a few SKUs the retailer can tout-not the property overall and not even a full assortment. Discovery Kids, for example, will have nine SKUs focusing on the outdoors this summer as part of its DTR deal with Walgreens.
Outside the U.S., Warner’s Sollitto says, “We have more options [for DTR] because more tiers are actively doing licensing.” In the U.S., adds Warner’s Karen McTier, “retail is more consolidated.”
On the media side, it’s about multiple channels and platforms. Saban’s “Digimon Fusion” has what Dekel says is the first TV schedule that will see episodes airing on three national networks simultaneously: Nicktoons is already airing classic “Digimon” episodes. Next year, Nickelodeon will begin airing “Digimon Fusion” episodes, which Nicktoons will pick up-both during the week-while Vortex, Saban’s Saturday morning bloc on the CW, will air the new episodes in that time frame. Bandai’s toy line will roll out in spring 2014.
Beyond the television exposure, there are apps, online games, Facebook, and other social media platforms that must be integrated to sustain storylines and interest.
Those new media also represent the chance to create original content that is consumer products-friendly.
“Digital gives us the opportunity to create assets,” says Brad Globe, of Warner Bros. “We have a critical mass of people getting their entertainment digitally. Before we had to wait for the studio to provide us with content. We didn’t have control over that process, and we didn’t have control over the fact that some of that content was darker than what works in consumer products.”
Now, says Globe, the division can create some content of its own and tailor it to the CP world. “Today, it has to be quick, fun, and adapt to the way consumers ingest entertainment,” he adds.
Licensing Potential for Mobile Apps
Most business executives agree there will be another Angry Birds-level digital property at some point. Some of the contenders include Candy Crush Saga, Subway Surfers, Plants vs. Zombies, Cut the Rope, Doodle Jump, and Mega Jump. But a number of ingredients must come together to make that happen. “The challenge is, how do you cut through the clutter and rise to the level where we can go to someone like [Walmart] and have something that will sustain itself for six months?” asked Brad Globe of Warner Bros. Consumer Products, in a keynote panel at June’s Licensing Expo in Las Vegas.
“It’s a great game and a great game engine,” said Josh Silverman of Disney Consumer Products, speaking about Angry Birds at the same session. “But there’s also a soul and a story. You want to know, why are those birds so angry?”
Andy Prince of Walmart commented on the game, “It’s quick, it’s simple, and it’s inexpensive. And that’s the same with the toys to a degree.” Retailers investing in a mobile app property, therefore, must appropriately estimate how deep to order and how long to keep the merchandise on shelf, since excess inventory is a danger.
Role of Digital Distribution
Not only are more properties originating in the digital space, but more established properties are using digital distribution to reach consumers:
- Elie Dekel of Saban pointed out in a sales presentation that “Power Rangers” episodes have reached 750 million streams on YouTube to date.
- The Edgar Rice Burroughs estate, represented by Licensing Works!, is making all-new comic strips about Tarzan, Carson of Venus, Eternal Savage, War Chief, and other Burroughs properties available digitally on edgarriceburroughs.com for $1.99 per month.
- Shortly before the Expo, Dreamworks announced that “Turbo F.A.S.T.,” its follow-up series to this summer’s Turbo film, will debut on Netflix, while Amazon Studios greenlit three original kids series for its Amazon Prime Instant Video platform.
That kind of exposure can help keep a property fresh between television seasons or film tentpoles. “Management is going to come to me, and no matter what our content is, tell me I have to grow my business,” noted Globe, who said digital distribution, along with experiential licensing such as theme park attractions, can help fill in the gaps between movies.
Cartoon Network is looking at digital distribution as part of a less TV-dependent strategy for its boys’ action properties, such as “Ben 10.” “How do we develop our boys’ action brands in a new way?” asks the network’s Pete Yoder. “TV is not the right financial model and it’s not where the kids are.”
He notes that with TV, the network makes a heavy financial investment, puts a show on the air, hopes it succeeds, and then, if it fails, it’s over. On the other hand, a combination of digital games, digital video, and books and comic books might be a better way to launch. “Let’s leverage our publishing program, let’s leverage our digital assets,” he says. “This gives us more at-bats with boys’ action. If it works, then we can ask, is that where it lives, or could we expand it on air?”
Virtual Goods and Monetization
Aside from revenues from licensed merchandise, apps and other digital properties create revenue streams through advertising or consumer payments, the latter either through paid apps or in-game purchases.
In-game purchases can both generate revenue and add marketing clout. The mobile app Talking Tom has offered in-app purchases of items such as Star Trek uniforms and virtual football (soccer) gear tied to the Euro 2012 tournament and has done well with both, according to Ze’ev Rozov of Iconicfuture, a virtual goods marketplace. That said, the marketing value of virtual goods is key as well. “Adding a second brand is critical to developers to bring in new players and added entertainment value,” he pointed out.
Impact of Social Media on Marketing
Another topic of conversation at the show was the rising importance of social media in the marketing strategy for any property. Henry Stupp of Cherokee said during the retail keynote panel that social media is decreasing the power manufacturers and retailers have when it comes to sales of licensed products. “A consumer can put up a Cherokee dress on YouTube and say ‘I bought this at Target for $15 and I love it,’ and the next thing I know I have a run on that dress,” he said.
Several licensors also noted that social media is playing a role in product development. When Facebook pages and YouTube channels are rife with instances of fans decorating their rooms with self-made property-centric objects, for example, licensors may follow fans’ lead and consider licensing wall graphics or arts and crafts projects.
CONTACTS AND CONNECTIONS: Cherokee Group, Henry Stupp, CEO, 6835 Valjean Ave., Sherman Oaks, CA 91406; 818-908-9868; henrys@cherokeeusa.com; www.cherokeegroup.com.
Disney, Josh Silverman, EVP Global Licensing, Consumer Products, 1201 Flower St., Glendale, CA 91201; 818-544-0000; josh.silverman@disney.com; www.disney.com.
Iconicfuture, Ze’ev Rozov, CEO/co-founder, Arena House, 66-68 Pentonville Rd., London, UK N1 9HS; 44-20-7843-5891; info@iconicfuture.com; www.iconicfuture.com.
Licensing Works!, Leslie Levine, President, 1978 Newcastle Dr., Oxnard, CA 93036; 805-983-7102; leslie@licensingworks.us; www.licensingworks.us.
Saban Brands, Elie Dekel, President, 10100 Santa Monica Blvd., #2600, Los Angeles, CA 90067; 310-557-5124; edekel@sabanbrands.com; www.saban.com.
Walmart, Andy Prince, 702 SW 8th St., Bentonville, AR 72716; 479-273-4000; andy.prince@wal-mart.com; www.walmart.com.
Warner Bros., Karen McTier, EVP Domestic Licensing Worldwide, Consumer Products, 4000 Warner Bros. Blvd., Bldg. 118, #3039, Burbank, CA 91522; 818-954-3008; karen.mctier@warnerbros.com; www.warnerbros.com. Also, Brad Globe, President, Consumer Products, 818-954-5658; brad.globe@warnerbros.com; www.warnerbros.com.
© 2013 Business Valuation Resources, LLC (BVR). May not be reproduced without written consent of publisher.