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LICENSING & MERCHANDISING TRENDS
MIP JUNIOR, MIPCOM & BRAND LICENSING SPECIAL REPORT
www.tvkids.ws
OCTOBER 2013
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brand design Mansha Daswani reports on key trends in the kids’ licensing and merchandising business.
eOne Family’s Peppa Pig.
There are lots of factors parents will consider when deciding whether or not to buy something for their child—safety, educational value, durability, price point, the ability to keep them entertained for hours on end…. Increasingly, even the creative auspices of a toy or other piece of merchandise is becoming a major condition in purchasing decisions, according to a report issued by the research firm NPD Group earlier this summer. The survey found that 56 percent of parents considered the license that inspired a product an important factor when evaluating toy purchases. That sentiment is reflected in retail figures—sales of licensed toys rose 4 percent this summer, as compared with a 2-percent decline in overall toy sales in the U.S. While the big theatrical franchises—Iron Man, The Avengers, etc.—continue to dominate the licensed merchandise business, television remains an essential platform for building brand recognition for kids, particularly in a major segment of the business: preschool. “For preschool it’s key to establish yourself well on traditional TV before you roll out your licensing program,” observes Olivier Dumont, the managing director of Entertainment One (eOne) Family and Licensing.The
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Easy rider: Power Rangers Megaforce from Saban Brands has licensees across numerous categories worldwide.
ideal model, he says, is to let a show build an audience base on television for 12 to 18 months before a licensing program can be launched at retail. That’s the road eOne Family took with its megahit Peppa Pig, which airs on Nick Jr. in the U.S. and the U.K., among a host of other broadcasters. Ensuring good television slots was Dumont’s initial priority and now that that’s been achieved his team can focus on the L&M rollout worldwide. “The licensing program is really on fire in Spain, Italy, Australia, it’s doing really well in the U.S., and we have Latin America lined up next.” Rollouts are also slated for other markets in Europe and Asia, Dumont notes. The international L&M campaign for Peppa follows on the show’s British success, which, Dumont says, shows no sign of waning. “In the U.K., we thought we were plateauing and we were working really hard to maintain the licensing at a very high level. But we found that we’re progressing again this year. We’ve had quite a few new deals in the FMCG [fast-moving consumer goods] section.We’re working very closely with retailers.We just had a promotion with [retailer ASDA] called Super Daddy and it was extremely successful, because dads actually love Peppa, they love watching it with their kids.”
The opportunities in the British preschool L&M space are also being pursued by Hoho Entertainment, which counts Cloudbabies and Toddler Time among its portfolio of properties. The TV series Cloudbabies has a strong broadcast platform in the U.K., airing on leading preschool channel CBeebies. At Brand Licensing Europe (BLE), Hoho will be looking to shore up new partners on the brand. The goal, says Helen Howells, Hoho’s joint managing director, is “to establish the brand beyond the TV by partnering with good toy and publishing companies who have a clear track record in the preschool market and who understand the challenges that all new projects face in today’s retail environment.” Toddler Time, meanwhile, is a book franchise that Hoho is looking to extend via licensed merchandise and retailer partnerships. TIME FOR TOTS
Even Saban Brands, home to the boys’ megahit Power Rangers, is getting into the preschool business with Julius Jr., an offshoot of the Paul Frank lifestyle character. FisherPrice has signed up as toy partner for the new animated series. “Consumers can expect a full range of products, including play sets, plush, roleplay toys and much more in the global marketplace,” says Kirk Bloomgarden, senior VP of global consumer products at Saban Brands. “Since the Paul Frank brand already has a set fan base, we foresee great success with Julius Jr. at retail.” Already well established in the preschool arena is American Greetings Properties (AGP), home to Care Bears, Holly Hobbie and Strawberry Shortcake, which Carla Silva, the VP of global licensing, refers to as “our beloved evergreen brands.” Merchandise around the three properties targets the core preschool set, Silva says, but there are also products aimed at juniors (teens and tweens) and infants. While all three have a slew of licensing relationships, AGP will be looking at new ways to extend the brands at BLE. “We look for partners who believe in the brands as much as we do…who are able to create innovative opportunities and unique campaigns, without compromising the integrity of our brands,” she says. For Strawberry Shortcake, a lead priority will be signing on distributors for the new toy line due
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from The Bridge Direct in fall 2014. On Care Bears, meanwhile, the focus will be on the apparel, publishing and back-toschool categories. “We’ve also seen tremendous interest in our juniors’ program, which has been proven through our direct-to-retail partnerships with H&M and Benetton this year,” Silva notes.“We will continue to expand this demographic across additional regions.” The Holly Hobbie program, meanwhile, is expanding across Europe, reaching into new territories such as Italy, Spain, Portugal and Turkey, and a refreshed apparel line is being prepped for the spring. ACTION PACKED
A developing area of opportunity for AGP is the lucrative boys’ action sphere with the Disney XD series Packages from Planet X. Dumont at eOne Family is also gearing up for expansion into this space, with a boys’ action series currently in development. Planning ahead, Dumont says that merchandise around that as-yet-unannounced brand will have to be lined up ahead of the television debut, unlike the preschool business, where there tends to be a significant time lag between the broadcast premiere and an L&M launch. “It’s a bit like a theatrical release when you’re doing boys’ action adventure. Everything needs to be ready for the day of the launch of your program on TV.” ITV Studios Global Entertainment (ITVS GE), for example, is already looking at the merchandise program for the new Thunderbirds series, Thunderbirds Are Go, a remake of the ’60s classic that is still in development. “We are already working closely with Vivid Imaginations, who signed as master toy partner for the E.U. with worldwide manufacturing rights, excluding Asia, to launch in 2015,” says Trudi Hayward, the senior VP and director of global merchandising at ITVS GE. “We’re also starting a series of highly targeted licensing discussions for other categories at BLE. We will also be launching our Classic Thunderbirds 50th anniversary licensing program, so there will be plenty to excite Thunderbirds fans old and new.” Another veteran property celebrating a milestone anniversary is Saban Brands’ Power Rangers. “The Power Rangers 20th anniversary products have been a huge success for us this year,” says Bloomgarden.“We also had limited edition Comic-Con International exclusive items that were selling out like wildfire at the show. Super fans and kids alike have also shown great excitement over products such as the Power Rangers 20th Anniversary Editions of Monopoly and Trivial Pursuit that recently became available for purchase.”
Boosting the brand this year is the new season in the franchise, Power Rangers Megaforce, which has been rolling out worldwide courtesy of MarVista Entertainment. “We have licensed Power Rangers Megaforce to Channel 5 in the U.K., and we will be announcing additional distribution partners during MIPCOM,” Bloomgarden says. The British broadcaster adds to a global footprint that includes Nickelodeon and Nicktoons in North America;YTV and TELETOON in Canada; and Gulli and Canal J in France, among others. Meanwhile, the next iteration, Power Rangers Super Megaforce, premiering on Nickelodeon across the globe in 2014, is due to be presented to international broadcasters at MIP Junior. At BLE, Saban Brands will be meeting with its L&M partners to introduce the new season. “We are working with our existing partners to transition toys and merchandise from Power Rangers Megaforce to Power Rangers Super Megaforce,” says Bloomgarden.“With all of our partners and especially with our global master toy licensee, Bandai, we work closely to make sure the toy transition between seasons is a smooth, natural progression. We work to ensure all items are show-accurate and on shelf and ready for when the show debuts.” Another boys’ action brand on Saban’s books is Digimon, a Japaneseoriginated property
Back in time: Mondo TV S.p.A.’s Dinofroz is based on an existing toy line.
Young at heart: While largely a preschool brand, AGP’s Care Bears also features apparel aimed at teens and tweens.
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Don’t let go!: Hoho will be at BLE with a preschool portfolio that includes Toddler Time.
that was first introduced to the U.S. in 1999.The show is being updated with Digimon Fusion, which launched on Nickelodeon U.S. this September, with an international rollout to follow. “Through the new series, upcoming licensed merchandise and mobile and online integrations, Digimon Fusion will allow fans to connect with the digital world within the series for the first time ever,” Bloomgarden says. TOYS TO TV
Mondo TV S.p.A. also has a portfolio of boy-skewing properties that are already known to kids, notably Gormiti and Dinofroz, based on existing toy brands.The company is also showcasing The Drakers, which Roberta Puppo, international licensing manager, refers to as an “exciting racing series,” being made in conjunction with Ferrari. “The continued interest of boys in cars and in everything related to the racing world has led Mondo TV to start its collaboration with Ferrari to make The Drakers,” adds Moris Calasso, licensing sales manager for Mondo TV Consumer Products. Also a priority for BLE is the video game Tetris.“It’s one of the most recognized brands worldwide,” Puppo says.
“We are working to celebrate the 30th anniversary in 2014.” While having a brand with built-in awareness certainly helps in the ultra-competitive kids’ L&M business, it is possible to find success with a new property, as Xilam has done with Oggy and the Cockroaches. The animated series has been the company’s biggest success thus far on the merchandising side, according to Erick Rouillé, executive VP of TV sales and licensing.The show has signed some 30 licensing partners in France alone, and the company is now working on building out the L&M campaign internationally “given the worldwide visibility of the series,” Rouillé says. “While there has been a retrenchment back to the classic brands in the last few years, there is an opportunity for retailers and licensees to get behind wellthought-through new brands and to be more confident about identifying the hits of the future,” observes Hoho’s Howells. LET’S GET DIGITAL
The digital space is proving to be an intriguing way to build awareness of new brands. “We’re definitely going to be launching properties as digital first, even before TV,” notes eOne Family’s Dumont. “We’ve watched the rise and popularity of nontraditional brands transforming into huge licensing properties,” states Saban’s Bloomgarden. “We have seen this trend spread throughout the digital and gaming realm with titles like Angry Birds creating merchandise. In anticipation of this trend, we’ve grown our digital capabilities with the acquisition of Zui.com and The Playforge last year. We can foresee future licensing opportunities with all of our priorities, including The Playforge, our mobile social game developer who is known for its internationally successful Zombie Farm games.” Digital extensions in general have become an essential part of developing broad licensing campaigns for properties. “The digital space is absolutely critical for kids’ brands in this online age,” says ITVS GE’s Hayward. “No
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brand strategy is complete without a digital strand. Being able to offer exclusive digital content to partners is crucial. Retail partners are seeing increasing online sales and being able to offer kids’ content is proving critical for them. Many see this as a way to evolve their own online sales strategy, driving the family audience.” Games, apps and e-books provide “another opportunity for us to complement our existing consumer-products program and connect new content with consumers,” says AGP’s Silva. “We work closely with our digital team and we’ve seen a great response with our new Strawberry Shortcake and Care Bears apps. Digital entertainment is also a crucial aspect of our global licensing strategy.” According to Xilam’s Rouillé, apps in particular are a must. “This is instrumental to strengthen the marketing around our properties, develop a good feeling and affinity from consumers and generate added value.” “Children are getting to grips with all sorts of handheld devices (mobiles, iPads, tablets, etc.) at a very early age these days,” says Hoho’s Howells. “Apps probably play a greater role today than websites as these devices are so intuitive and children are capable of finding their way around the games independently by simple trial and error.” The growth in mobile and tablet usage among kids has led Saban to take an “omni-channel management approach with all properties, in order to extend our brands into markets worldwide and to consumers of all ages,” says Bloomgarden. “Additionally, e-commerce websites and online sales have become extremely important within the marketplace, as sites like Amazon.com have become bigger than ever.” SUCCESS STORIES
Xilam is also taking a multifaceted approach to developing consumer-products programs for its properties, Rouillé explains. “There is no generic rule; it’s on a case-by-case basis. According to the potential of the property, we can either decide to work with a broadcaster or with agents. Sometimes broadcasters don’t have structures dedicated to the licensing business and it does not make sense always to work with them. Agents are often much better [prepared] to deal on a daily basis with manufacturers, designers and retailers. Efficiency of the brand management and the property’s visibility at retail are our only priorities.” As for what kinds of properties lend themselves to L&M campaigns, Rouillé believes there are certain subject matters that translate particularly well—“cars, animals, robots, superheroes, etc.” Equally important, however, is the volume of episodes produced for a show and its worldwide exposure in good television slots. Saban recently reorganized its consumer-products division in part to “streamline the process between licensees, retailers and all business partners globally,” says Bloomgarden.“By thinking globally and acting locally, we are able to
focus on the global expansion of licensing programs for all properties and on driving the strategic consumerproduct plans with licensees, retailers, broadcasters and agencies worldwide.” At eOne Family, expanding its licensing capabilities has taken the form of the acquisition of Art Impressions, home to lifestyle brands like So So Happy and Skelanimals. “We want to be present in and launch products for each of the key demos of the licensing arena,” Dumont says. Plus, given eOne’s expanding theatrical-moviedistribution business, “we want to be equipped to do the licensing programs for the big teenage franchises such as Twilight or The Hunger Games in the key markets where we do the theatrical distribution. With [the Art Impressions] acquisition we demonstrate that we know the target demo and we know how to handle a licensing program targeted to teenagers.” At ITVS GE, Hayward and her team are expanding their business by talking on third-party properties like Matt Hatter Chronicles, which airs on CITV, and the gaming app Cut the Rope. Ultimately, “there is no magic solution to ensure the success of a licensing program,” says Xilam’s Rouillé. “Being lucky is also part of the solution!”
Love is in the air: Xilam’s most successful property on the L&M front has been Oggy and the Cockroaches.
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41 Entertainment’s Released into the world in 1980, the maze-traversing doteater PAC-MAN was a global arcade game phenomenon throughout the ’80s. Dormant outside of the video-game arena for the last two decades, the iconic character has been refreshed courtesy of former Marvel Studios head Avi Arad, brand-owner NAMCO Bandai and Allen Bohbot’s 41 Entertainment. PAC-MAN and the Ghostly Adventures is currently in its first season on Disney XD in the U.S., with a second season in the works and sales across the globe. Bohbot, the chairman and CEO of 41 Entertainment, tells TV Kids about his unique approach to building brands for kids in a crowded marketplace.
TV KIDS: How are you positioning 41 Entertainment in the kids’ media business today? BOHBOT: I’ve been in the industry for a long time. I’ve seen the industry change. In the beginning, it was all about having a big catalogue, and independent animation studios thought that success was measured by how many projects they produced a year. The mentality was that success was achieved through quantity. However, broadcast networks around the world are not looking to buy quantity—they’re looking for quality and want to find those few selective hits. There may be a market for libraries in terms of new digital platforms, but even Netflix has enough quantity, at least in the United States. The whole world is looking for the same thing: that selective premium brand that can really break through to the consumer. To answer your question, our objective a few years ago was to set up a company that specializes in the animation business, with a focus on building brands that we can manage in all forms and venues worldwide. We wanted to build the infrastructure to distribute domestically and internationally; manage the licensing and merchandising internally, with our staff and with the use of high-quality agents; and carefully manage the broadcast landscape and the digital rights all under one roof. We speak to retailers, manufacturers, broadcasters, DVD distributors and digital companies.We knew that a brand with history and legacy was the key. With those guidelines, our first brand was PAC-MAN, because it met all of our criteria. If indeed the animation TV business is becoming more like the animation theatrical business, as we believe, then we want to take on one major project every 12 to 18 months. DreamWorks and Pixar do not produce and release five to ten movies a year; they do one or two.We did PAC-MAN.We’ve already commissioned season two—or the sequel, in theatrical terms. For 2014 at MIPTV, we’ll announce another new series for 2015 that will likewise be an important proj-
Allen Bohbot ect. If we get bold and think we can do two, we’ll do two. But that’s it. Once you have one project that really works, it’s equal to the revenue stream of ten average properties. I’ve done enough average properties to know that the work is the same, the cost is the same, the time is the same, but the results aren’t the same. TV KIDS: What are the major challenges for independent kids’ companies today? BOHBOT: You’re going to see lots of companies really struggling because they have overextended themselves by making too many shows. If they can’t sell them and
By Mansha Daswani
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was immediate. Avi was right again. By February 2012, the group, including NAMCO Bandai Games, Arad Productions and 41 Entertainment, commissioned the entire project of 26 episodes with Disney XD support in the U.S. Today, the ratings are strong in the U.S. and merchandise is just getting into retail. The property launches internationally in February of next year. We have already commissioned another season, and most international partners are buying both seasons now. TV KIDS: How important is it to have
a known brand in this landscape? BOHBOT: Retailers are focused on major
properties—Batman, Despicable Me, Monsters, Inc., Spider-Man, etc. Besides that, there may be one to two additional properties per year that Walmart or Target or Toys “R” Us buys, and that’s it. It is the same with Cartoon Network, Nickelodeon and Disney. Just as we expected a few years ago, this is the “new normal.” TV KIDS: What are your plans for
PAC’s back!: Disney XD is the U.S. home of PAC-MAN and the Ghostly Adventures, which is sold internationally by 41 Entertainment.
in fact broadcast license fees are dropping, where can these producers and distributors make their money? And due to the new economic realities, government subsidies are not the solution. Canada and France have a strong subsidy market, but how many hits come out of that business model? Not many. We live in America and get no subsidies. We compete solely on product. TV KIDS: How did your partnership with Avi Arad and NAMCO Bandai come about? BOHBOT: It started in 2010, the year of PAC-MAN’s 30th anniversary. Google dedicated its home page to PAC-MAN’s birthday. Avi saw that and realized that PAC-MAN had been a very under-marketed property. It was an arcade game more than anything else. He flew to see NAMCO Bandai Games in Tokyo, the property owner, and they agreed to do a couple of episodes in Avi Arad’s theatrical high quality. I was in Los Angeles in the fall of 2011 and Avi asked me to see the footage. He said, “Take it to MIPCOM and you will see the market reaction.” We took it to MIPCOM 2011 and the response
PAC-MAN as you head into MIP Junior and BLE? BOHBOT: In terms of MIPCOM and MIP Junior, the plans are very modest because we have already licensed to broadcasters in most markets. We’re there to reaffirm to everyone who bought it that they made the right judgment, and with those that have yet to buy the series, if this is an opportunity to do so, we are happy to discuss. At BLE, we’ll have a PAC-MAN booth with product and designs. We hope to sign many new partners in all categories and markets. Financially, we’ll do more business at Brand Licensing than we will at MIPCOM, but you do need MIPCOM. It’s still the one event every year that everybody goes to. We will have a dedicated PAC-MAN booth at MIPCOM and at Brand Licensing. The message from us is clear. We’re going to have one property per year and we’re going to make it very important in the market. In terms of products, from a pencil topper to underwear, we’re going to have almost a thousand PAC-MAN SKUs [stock-keeping units] by March when the international launch kicks off.Whether the kids are enjoying watching on TV or on a tablet, wearing the pajamas to bed or playing the new video game, that’s when you know that you created something that will last.
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