Merchandising can come too soon

Mar 12, 2001  •  Post A Comment

From the moment the preschool series “Dora the Explorer” hit Nickelodeon and CBS’s airwaves last summer, parents were calling and
e-mailing the networks to find out where they could buy toys, books and other licensed goodies based on the 7-year-old bilingual heroine and her animated world.
The answer: nowhere.
Executives at Nickelodeon, the show’s creator, had decided to take a wait-and-percolate approach to merchandise, as they have done with properties ranging from “Rugrats” to “SpongeBob SquarePants.” There’s no “Dora”-themed product on retail shelves yet, and it could be a year or more before any exists.
“We don’t put product out day-and-date with a show’s release,” said Leigh Ann Brodsky, senior vice president, Nick Consumer Products. “The show has to resonate with kids first. It has to prove it’s a sustainable hit, and then we do research and figure out if it makes sense to do product and in which categories. The last thing we’d want is for merchandise to come out too soon and fail.”
Though the common perception might be that every entertainment property-especially those aimed at kids-is overcommercialized, executives controlling the product floodgates are beginning to recognize a growing need for restraint. When a property takes off it’s tempting to produce an abundance of merchandise and make a quick buck, industry sources say. But the consequences can be severe-the property can burn out and retailers will be stuck with it. And kids, deciding it’s too ubiquitous to be cool, will move on to the next thing.
“There’s a lot of gratuitous licensing out there,” said David Jacobs, vice president and group head of licensing at Gullane Entertainment, the home of “Thomas & Friends,” a book-based preschool property that recently passed the $1 billion mark in worldwide licensing and merchandising. “But the properties with the most backbone have the most success.”
Allowing a fan base to build, thereby creating a pent-up demand for product, has proven a boon to Nick’s merchandising division. “Rugrats” is now a billion-dollar franchise, with thousands of items imprinted with Angelica, Chuckie, Tommy and the rest of the crew. “SpongeBob,” a teen and college favorite, was the top licensed product sold during the holidays at Hot Topic, a cutting-edge mall-based retailer. None of the toys, apparel, video games or other products launched until after those shows’ sophomore seasons.
Some in the industry have adopted the admittedly conservative Nick approach, while others are more aggressive about having show-themed merchandise at retail as quickly as possible.
Whatever the game plan, it’s no wonder that show creators and networks have their eyes on product, considering that a hot kids series can generate billions of dollars in revenue from themed merchandise over its life cycle. Creators often share in the ancillary money, though their deals vary wildly from one to the next, depending on their clout in the industry.
Merchandising dollars are increasingly kept in the family these days as broadcasters and program suppliers consolidate under a common parent-“Rugrats” creator Klasky Csupo is a Viacom sibling with Nickelodeon, for example, and ABC has a steady stream of kid content from its owner Disney.
At a time when movie-themed merchandise is in a lull, television properties are generating considerable heat. The talk of the recently concluded American International Toy Fair in New York was “BattleBots,” a Comedy Central show that’s all about building cool robots, putting them into a “battlebox” and crunching some metal. The show’s no-nonsense mantra: “Kick Bot!” And no one gets hurt.
Toys are on the way from Hasbro’s Tiger division, which will create remote-controlled, customizable robots, and Jakks Pacific, which will produce model kits and die-cast replicas of the real fighting “bots.”
Other licensing is imminent, and a spinoff kid-targeted show is in the works, according to “BattleBots” co-creator Trey Roski. “To me, this show naturally lends itself to toys and video games,” Mr. Roski said. “Kids can play and actually learn something. It’s meant to spark their imagination and their creativity.”
HIT Entertainment’s “Bob the Builder,” which leaped out of the ratings gate on Nick Jr. in January, has elicited many “Dora”-like calls and e-mails about product. The stop-motion animation show, which features an affable handyman and the upbeat teamwork slogan, “Can we fix it? Yes, we can!” will get a controlled introduction to merchandise. Videos and books will launch late this spring, and an exclusive deal will put “Bob” apparel at Sears, starting in July. Hasbro toys hit in late summer.
“Product helps to solidify the property, and it extends the experience for the child,” said Holly Stein, vice president, HIT Consumer Products. “If it’s good product, then it supports the show and drives ratings.”
Scholastic’s “Clifford the Big Red Dog,” a decades-old literary property that premiered as an animated show on PBS last fall, now has a stable of 40 licensees, including toy company Trendmasters. Small amounts of talking plush dolls and CD-ROMs that have been in the marketplace have been quickly snapped up. Videos, apparel, watches, furniture, digital animated storybooks, and more toys hit mass retailers starting this spring.
“Retailers want a confidence level that there will be staying power in a property,” said Leslye Schaefer, Scholastic’s senior vice president, marketing and consumer products. “The timing’s right for something classic and book-based.”
Preschool has been sizzling for the past few years-it was a path forged by the likes of “Teletubbies,” which has since waned, and the still-strong “Blue’s Clues.” Gullane’s “Thomas & Friends” continues to expand its live events and apparel, software and video lines. Execs say they are mulling attractions at theme parks and electronic learning aides as future brand extensions.
Some television shows are stalwarts, generating merchandise sales season after season. Saban/Fox Kids’ “Power Rangers” a rite of passage for young boys that is now in its ninth year on the air, has raked in $5.6 billion in licensed merchandise worldwide. It was the top-selling action figure of the decade, beating out “Star Wars” and “Pokemon.”
“It’s a symbiotic relationship between the licensed product and the show,” said Elie Dekel, president, Saban/Fox Family Worldwide Consumer Products. “You want to be as much a part of kids’ lifestyles as possible, and product helps you do that. It’s an important part of occupying mindshare.”
Television executives, while interested in offsetting the cost of producing shows with back-end revenue from merchandise, said the series themselves must lead the way.
“The licensing is supportive,” Nickelodeon’s Mr. Brodsky said. “Developing shows that make a connection with kids is the entire reason for being.”