TV Kids Brand Licensing Special Report 2015

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TVKIDS

WWW.TVKIDS.WS

OCTOBER 2015

BRAND LICENSING EUROPE SPECIAL REPORT

L&M Trends / Arad Productions’s Avi Arad

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CONTENTS FEATURE

Shop Around Shelf space—or more accurately, the lack thereof—has long been cited by licensors as one of the biggest hurdles in the children’s licensing and merchandising (L&M) business.

Ricardo Seguin Guise Publisher Anna Carugati Group Editorial Director Mansha Daswani Editor Kristin Brzoznowski Executive Editor Joanna Padovano Sara Alessi Associate Editors Joel Marino Assistant Editor Victor L. Cuevas Production & Design Director Phyllis Q. Busell Art Director Simon Weaver Online Director Dana Mattison Alberto Rodriguez Sales & Marketing Managers Terry Acunzo Business Affairs Manager

Ricardo Seguin Guise President Anna Carugati Executive VP Mansha Daswani Associate Publisher & VP of Strategic Development TV Kids © 2015 WSN INC. 1123 Broadway, #1207 New York, NY 10010 Phone: (212) 924-7620 Fax: (212) 924-6940 Website: www.tvkids.ws

The aisles of major retailers are jam-packed with toys, plush, action figures and the like tied to kids’ TV shows, though they are mostly dominated by megabrands. There have also been a number of iconic properties that have been rebooted for a new generation, and these come with a builtin awareness that makes stores feel more confident about the potential for scoring sales. It’s increasingly difficult to get brand-new IP onto shelves at retail, but there are now more opportunities popping up beyond the traditional brick-and-mortar outlets.

Just as the digital world has transformed the way that children’s programming is watched, the internet holds much promise for exploiting the brand extensions of these properties. The e-commerce market has been growing worldwide, and is getting better and more convenient all the time as technology makes it easier to select items and pay for them.

Online retailers have the ability to target a very specific audience and can provide them with one-click access to the product they are looking for—without the hassle of having to tote the kids to the toy store.

Whether working with internet-shopping behemoths like Amazon or niche e-retailers, licensors are benefiting from the power of the web as a venue for L&M sales. According to LIMA’s first annual Global Licensing Industry Survey, the impact of digital-product distribution and overall growth in ecommerce is making the licensing industry more global. The report finds that many of the new opportunities in the licensing segment will come from outside of North America, specifically in the Asia-Pacific region. In fact, the proliferation of broadband connections, as well as the strength of the Chinese e-commerce outfit Alibaba, resulted in online sales accounting for 33 percent of retail sales of licensed product in China, the highest in the world by a large margin.

We explore the latest trends, opportunities and challenges in the global L&M market in this issue. There is also an interview with Avi Arad, the former head of Marvel Studios, whose Arad Productions is today working with 41 Entertainment to give a number of known properties new life.

Despite the difficulties that may come with launching new IP, brand owners understand that the value of providing kids with multiple touch points to connect with their favorite TV characters makes the process well worth it.

—Kristin Brzoznowski

6 READY FOR LAUNCH Brand owners heading to BLE in London are coming up with creative solutions to turn their shows into L&M hits, such as new forms of retailer promotions and exploring opportunities in digital.

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INTERVIEW 12 Arad Productions’s Avi Arad New series featuring King Kong and Tarzan are on the roster at Arad Productions.

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Playset for ITVS GE’s Thunderbirds Are Go.

READY FOR Brand owners heading to BLE are coming up with creative

By Jane Marlow

n a year when every trip to the supermarket means wading through aisles crammed with merchandise featuring the characters from Frozen, Ant-Man and Star Wars, it would seem that the kids’ licensing and merchandising (L&M) industry is enjoying a vibrant, fertile period. But, given that all these properties derive from one company—Disney— perhaps their omnipresence on the shelves presents more of a challenge to the industry as a whole rather than being a barometer of good health.

Jennifer Coleman, the VP of licensing and marketing at 4K Media, is upbeat about how Yu-Gi-Oh! has grown over the last two years. Coleman started with a blank slate in 2012 and now has a roster of licensing partners across apparel, back to school and more. But, she says, the consolidation and “Disneyfication” of the L&M industry is currently one of its biggest challenges.

“There’s been consolidation within the licensor realm and so much on the retailer side too—with some retailers going away—which makes it so much harder,” says Coleman. “Tesco can go meet with Disney and they’ve got every demographic covered, from preschool to the older folks, with Marvel and Indiana Jones and Star Wars—it’s one-stop shopping.”

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Confronting challenges generates creative solutions, however, and Coleman says that niche brands like hers are starting to benefit from the growth of online shopping and retail.

NICHE APPEAL “More small manufacturers in the industry are understanding niche brands and niche retail, which doesn’t necessarily mean brick-and-mortar [stores],” she explains. “There are manufacturers that are deciding they want to take advantage of these online opportunities. We have one T-shirt licensee that is making a huge investment to do a print direct and is partnering with Amazon. I feel that as a licensor we are benefiting from some of the unique opportunities that licensees are seeking out in the marketplace now.”

Mediatoon also has a wide manga catalogue, as well as comics with characters such as Garfield, Gaston Lagaffe and Spirou. Jérôme Leclercq, the director of Mediatoon Licensing, agrees that the rolling program of movies churned out by Disney, and Minions and Jurassic World from Universal, make shelf space hard to find. But, with a new movie release scheduled, new properties being added to the catalogue and a new TV season of

s

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Yakari in the offing, the next two years present good opportunities for the company.

“It’s important to refresh the catalogue and have events, new movies and new series coming up,” says Leclercq.

His strategy is to think differently than the larger outfits.

“We have the chance to partner with some licensees that don’t work with Disney. We try to be smarter and help them to continue to sell our properties at retail.”

DAY AT THE PARK Central to this approach are two theme-park projects, Parc Spirou in France and Spirouland in Belgium, which will feature properties from Belgian comics such as Lucky Luke. Mediatoon hopes success in Europe will open doors in China.

“We have an office in Shanghai and are trying to develop the Chinese market,” Leclercq adds. “We have a Chinese partner who is looking at what we’re doing with the theme park in France; it could be a great way to develop our brand in France and outside the country too.”

Increasingly, imaginative partnerships and product ranges are also improving the health of the L&M arena as companies strive to bring fresh and engaging products to shelves.”

STANDOUT BRANDS Hayward says the challenges lie particularly in the boys’ market, which is saturated by big-budget franchises like Star Wars and The Avengers. “It does seem that the licensing industry is still polarized to the tried-and-tested brands that can deliver an established fan base and the short-term opportunities for new properties.”

That said, Hayward reports that ITVS GE’s Thunderbirds Are Go has had a stellar year since its launch in April 2015, with British consolidated TV ratings nearing the 3-million mark for the series’ two opening episodes, which aired back-to-back.

“We have assembled a very strong consumerproducts program and already have all key categories covered with over 45 licensees on board globally,” says Hayward. “The retail rollout of Thunderbirds Are Go

LAUNCH solutions to turn their properties into L&M hits.

Theme parks are also core to The Smurfs’ presence in the marketplace and are indicative of the brand’s commitment to a long-term growth strategy. The iconic blue characters will have a home at various multi-property parks that are in the pipeline, and at motiongate in Dubai, which is set to open in 2016. Tim Verschure, the head of sales at IMPS, licensor of the Smurfs brand, says the benefits of a big project like this are manifold.

“You’re doing a licensing deal with theme parks for 10 or 15 years, so it’s long-term vision. That’s one of the most important elements. Secondly, you can get income from the entrance fee; your products will be shown in a restaurant with food, drinks and placemats; there will be a shop where people will come into contact with your products—toys, plush, apparel, health and beauty—so you create engagement. There are marketing commitments, which means that the brand will be promoted through the park on a national or international level. It means visibility and keeps the brand alive for the target group.”

Trudi Hayward, the senior VP and head of global merchandise at ITV Studios Global Entertainment (ITVS GE), thinks the L&M arena is improving all the time. “The upturn is underpinned by having strong brands across the market. They help buoy retail as their halo effect helps spread confidence among consumers and retailers alike.

merchandise kicked off in July with the debut of Vivid Imaginations’s new toy range.”

Thunderbirds Are Go will be leading ITVS GE’s presentation slate at BLE, where the focus will be on adding innovative products within existing categories for the brand. “It’s important that all our partners have a genuine passion for the brand and will develop products that fully capture the show’s key themes of adventure, teamwork and rescue,” Hayward continues.

“We’ll also be seeking promotional partnerships for the property to further enhance consumer engagement with the brand.”

Thunderbirds Are Go taps into audience recognition of the original series. Similarly, Saban Brands’s Power Rangers is an evergreen property, with evolving themes that help it engage old and new fans alike in the core 4-to-8 target age group. Dino Super Charge is the 23rd season of the franchise, launching in 2016.

“Toys are our strongest category—action figures, roleplay and costumes,” says Kirk Bloomgarden, the senior VP of global consumer products at Saban Brands. “Power Rangers is the perfect vehicle for kids to live the experience and role play. In the U.S. for Halloween we have a tremendous product sell-through, and in Europe for other year-round events. Kids want to dress up as their favorite

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Mediatoon’s portfolio of recognizable characters includes Garfield.

ZDF Enterprises arrives at BLE with a slate that includes H2O: Mermaid Adventures.

Power Ranger. Costumes are huge for us on a global basis. Apparel is strong—[it provides the ability to] express yourself and showcase your love of Power Rangers through your apparel and accessories.

The other strong category is publishing—comics and magazines that the kids can follow. It’s not as strong as it once was, clearly, but it is still important. It rounds out the categories that are important for the brand.”

Bloomgarden adds that, from a retail point of view, Saban Brands is also interested in online and e-commerce opportunities. “While staying traditional, we are still branching out into other areas.”

Mediatoon’s Leclercq agrees that online retail is important, notably for manga, which has a fan base accustomed to consuming material on the internet. “We have developed our own website to sell collectible products based on our comics. Collectorbd.com launched in November 2014, and now we have more than 600 different products—high-quality, high-price and limited-edition items—made by our licensees, which we sell directly. It’s a different way for us to sell and to expose our products.”

Collectibles are also central to 4K Media’s Yu-Gi-Oh!, whose fans graduate from the animated series to engaging with trading cards. It’s a play pattern the company is keen to build on.

“We’re looking for a licensing deal and a licensing partnership to enhance the trading-card play and the collec-

tability of the overall brand,” Coleman explains. “There are so many different types of collectibles, so we’re looking to target that market as much as we can.”

Having previously focused on opportunities in the U.S., Coleman says 4K Media is now looking to make inroads into the European market at BLE. The brand has secured good TV exposure in Italy, France and Germany, and Coleman is aiming to expand the presence in the U.K. Mondo TV’s current top properties are Sissi the Young Empress and the Ferrari co-production The Drakers.

Roberta Puppo, the company’s international licensing and marketing manager, says the two properties are working well with toy, food and publishing partners. She aims to increase their presence in accessories and luxury.

For Mondo TV, online is also key in supporting the brands.

“We consider online to be a really good opportunity for children to interact with their heroes in order to know them and the world they live in better,” says Puppo. “We are currently working to develop this business.”

TWEEN SCENE Launching new properties is still a challenge in the current environment. ZDF Enterprises is confident that the TV success of its key live-action tween brands Wolfblood, Dance Academy and H2O: Just Add Water will boost their appeal to licensees.

“Wolfblood, an award-winning BBC co-production, has sold to more than 150 territories, including a multi-territory agreement with Disney Channel,” says Peter Lang, the VP of ZDFE.junior at ZDF Enterprises.

“The third and fourth seasons guarantee the longterm perspective for any partner’s merchandising portfolio. Dance Academy, aired in over 140 territories, unifies a variety of attributes that will turn it into an international merchandising hit—unique look and feel, dance scenes and music and high involvement of the viewers.”

Lang continues, “Our ‘Home of Mermaids’ series have traveled all over the world and found millions of devoted fans everywhere. Sold to over 160 territories, these award-winning series stand out for their storytelling and, in the case of the live-action version, for special effects and underwater photography. Mako Mermaids was even launched internationally as the first live-action Netflix original children’s series.”

Tapping into that track record, ZDF Enterprises has launched the animated series H2O: Mermaid Adventures.

“It is a combination of comedy, friendship and adventure for

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younger fans. The combination of 2D and 3D animation offers countless possibilities for merchandising products for little girls 6-plus.”

Lang says that the home-entertainment, publishing and lifestyle categories will be priorities for the liveaction brands. For H2O: Mermaid Adventures, which skews younger, toys will also be a key focus.

Saban Brands is launching the preschool show Cirque du Soleil: Luna Petunia at BLE. “Cirque du Soleil is a global, family brand, so we feel we have a great basis to start this from,” Bloomgarden says. “We’re starting to talk to partners to get them on board early, but we’re not rushing things either. With preschool shows specifically, you need to let them build, and we want to grow an audience and, as demand builds, feed the marketplace with product.”

For IMPS’s The Smurfs, the show’s classic brand recognition has been bolstered in recent years by the live-action/animated feature films released by Sony Pictures Entertainment. The movie releases are tentpoles in terms of audience awareness. The next Smurfs movie is scheduled for release in March 2017 and will be accompanied by a “blue tsunami” of marketing initiatives across publishing, apparel, food, health and beauty, home products, toys and video

games, explains Verschure. “There is also a new category; we have signed an agreement with BrandLoyalty, which is putting in place the licensing deals with supermarkets. They are negotiating now with all the supermarkets in Europe, Asia and South America.”

Verschure says food is a category that is doing good business for the brand, but it’s crucial for The Smurfs to maintain a presence on TV to create a bond that feeds into a retail experience. “I think retailers are more open to talk to brands than before,” he says. “[Retailers] need to find ways to beat each other. It’s a red ocean [amid stiff price competition] out there in the supermarkets.

They need to find ways to get the clients in their shops, and brands are a possible mechanism to do that.”

“To keep consumers returning to their stores, retailers need to offer everything from pocket-money toys to impulse purchases and then higher-ticket gifting items,” says ITVS GE’s Hayward. “Within these larger ranges, it’s also important that each licensee complements one another. We strive to appoint licensees that bring something new and exciting to a brand’s licensing program.”

That remit will surely extend to other brand owners at BLE as they look for new and innovative ways to turn their hit shows into must-have products for kids.

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Saban Brands’s Power Rangers: Dino Super Charge launches in 2016.

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one time, people didn’t understand that the safest things in the world of entertainment are big brands. [When we launched Arad Productions] we started to look at the kinds of IP that we couldn’t look at in the Marvel days.

Manga was always a big priority, so we got into aggregating high-profile manga properties and big-title video games, converting them into movies that would satisfy fans and become broad-based entertainment. The skill set necessary to translate [these video-game and manga properties] into films and TV shows is virtually the same as what we did at Marvel. Part of the decision-making process for us is to make sure that the IP is the kind of brand that will generate licensing and merchandising for a long time.

In the spirit of [creating] brand-building vehicles, we went back into animation. I became executive advisory chairman for Bandai Namco [creator of the PAC-MAN video game] and Production I.G., the company behind [the Japanese franchise] Ghost in the Shell. We are now starting the live-action Ghost in the Shell movie with Scarlett Johansson.

I told my friends at Bandai that they had one of the greatest properties of all time—PAC-MAN—but it had been dormant. So we started working on PAC-MAN and the Ghostly Adventures. We created characters and backgrounds and origin stories and so on. We made 52 half-hour episodes. It’s been very successful on

AVI ARAD Arad Productions

By Mansha Daswani

Avi Arad has been involved with some of the biggest comicbook movie franchises of the last few decades, including the Spider-Man films. Formerly chief creative officer at Marvel Entertainment, Arad also founded and ran the comic-book giant’s Marvel Studios division. In 2006 he set out on his own, setting up Arad Productions. Today, Arad is working on a variety of titles, including two new animated properties for Netflix: Kong: King of the Apes and Edgar Rice Burroughs’ Tarzan and Jane. Arad tells TV Kids about how he is working with 41 Entertainment, which is handling TV, licensing and merchandising rights, to build these new shows into global brands that help kids understand the importance of protecting wildlife and the environment.

TV KIDS: When you created Arad Productions, what kinds of content did you want to make?

ARAD: When I started Marvel Studios we did a lot of animation and then we started making movies, which was not an easy thing to do. Believe it or not, it took two years for someone to say they’d do the Spider-Man movie! At

Disney XD and Netflix. There have been a lot of licenses.

I brought Allen [Bohbot, managing director at 41 Entertainment] in to handle the distribution and licensing. Together we are building a major animation business.

TV KIDS: What led to the Kong: King of the Apes series?

ARAD: Allen Bohbot produced a Kong animated show many years ago. I always loved Kong. The first movie, the black-and-white one, was awesome. Kong is a wonderful character, especially if you humanize him and make him misunderstood. Every show that I’m obsessed with now has to do with the environment and saving wildlife. One of the hottest subjects for kids and for parents is the issue of poaching and protecting the environment. So Kong: King of the Apes is very environmentally correct, with lots of adventure. It’s about the relationship between a family and the monkey they save as a baby, who is growing out of control. It’s kind of funny how fast he grows, and then they have to find a place to hide him.

There are two brothers, one is a naturalist who is all about

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41 Entertainment is working on a range of licensing deals for Kong: King of the Apes at BLE.

saving the environment and living things, and the other is a bionics genius who does not see the value of living things and would rather create robotic versions of extinct species. This creates an opportunity to give Kong a worthy adversary in the form of various bionic dinosaurs.

What can be better than bionic dinosaurs fighting a living, breathing Kong? Not only is it a fun story to tell, but it created great opportunities for licensing, merchandising, toys, games, etc. for the brand of Kong and the dinosaurs.

In our show, Kong is an unrealized hero on the run [after causing havoc at the brothers’] wildlife preservation on Alcatraz. It features the adventures of Kong. He’s a hero to some and a menace to others—but the audience knows the truth! It’s a very different-looking Kong; all you want to do is hug him. But when he gets mad, watch out!

The animation company on the series is the same one that did PAC-MAN and the Ghostly Adventures. There are a lot of licenses. MGA Entertainment is doing the toys.

And Allen is doing licensing deals in every form and every shape. The international support on this show is what I expected. Kong is a known character. If you have a Kong who you feel like you can hug, who will save people even if they are trying to hurt him, you have a heroic, misunderstood creature. That makes for a good story.

TV KIDS: How did Tarzan and Jane come about?

ARAD: Allen and I were throwing around ideas of known IP that had stood the test of time, both domestically and internationally. When Tarzan came up, it got me really excited. As a kid I loved the Johnny Weissmuller Tarzan [films from the 1930s and 1940s]. I had always tried to get the rights for the live-action movie. Tarzan has captured the minds and hearts of generations since the ’30s.

The Disney animated movie [in 1999] did $500 million at the box office. I believe it was a mishap that they didn’t renew it. So there was an opportunity [to do a new Tarzan animation]. Tarzan fits very well with my passion for saving the environment and wildlife. We

started dealing with the estate of Edgar Rice Burroughs [the creator of Tarzan]. We wouldn’t have done it without the estate’s permission.

During a presentation to Netflix, the executives came up with an idea: why don’t we call it Tarzan and Jane and make Jane just as strong and adventurous? In the old movies, she was sweet and pretty, yet not very active. So we wrote the story and called it Tarzan and Jane. They become a team, working together to save all living things and the environment.

It is hard to believe the tragedy of Cecil the lion. Poaching is a big business. The only way to change the situation is good awareness campaigns and teaching kids from a young age about this looming issue. Tarzan and Jane are probably the best ambassadors that one can have for this mission. We want boys and girls to look at Tarzan and Jane and say, I wish I could be like them.

The show takes Tarzan, Jane and audiences to remote places in the quest to stop this insanity [of poaching].

Tarzan and Jane’s base of operations is in London in Greystoke Estate. Their mission is to stop the people who pull the strings and support the destruction of both the environment and wildlife for financial gain. When the movie comes out, there will be a couple of surprises— which I would rather not divulge at this point—that make the team unique.

TV KIDS: Animation technology has changed considerably over the years. Are you finding you have more flexibility now in the way you tell your stories?

ARAD: To give you an idea, 10 or 15 years ago in the CGI business, hair was a tough thing to do, water was a tough thing to do. There are a lot of things that took a lot of research to accomplish. It was time consuming and expensive. In the CGI business now, we have the ability to [reflect] both humans’ and animals’ emotions, so you can feel for the animals as much as you do for the humans.

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