Nick Puts Muscle Behind everGirl

Jan 5, 2004  •  Post A Comment

When it comes to licensing its brands for consumer products, Nickelodeon has proved that it has the Midas touch, selling $5 billion in goods based on hugely popular Nickelodeon characters such as Dora the Explorer, the “Rugrats” clan and SpongeBob SquarePants.
Now Nick Enterprises, the unit responsible for all of Nickelodeon’s nontelevision-related businesses, is taking on an even bigger challenge. It is hoping to apply its marketing acumen to a new line of products that has no connection to characters found on its TV shows.
Starting this month Nick Enterprises is debuting everGirl, a lifestyle brand aimed at the so-called tween girl set, ages 8 to 14. Using as its foundation a line of apparel sold at Kohl’s department stores, a Web site with an animated collection of ethnically diverse young girls and a theme song and music video to be recorded by the all-girl band Play, everGirl is being touted as a brand aimed at promoting self-esteem, creative expression and self-discovery.
Plans call for the Web site, everGirl.com, to be launched by the middle of January, followed by the release in March of the official everGirl song and the introduction in July of the clothing line and accessories.
“We have a real commitment to girls,” said Nick Enterprises President Jeff Dunn, noting that Nickelodeon was one of the first kids programmers to introduce girls in lead roles on shows that targeted both sexes. “We felt a lot more could be done [to market to tween girls].”
The launch of everGirl is part of a broader strategy at Nick Enterprises to have a presence in virtually every medium targeting children, using original creative properties when appropriate. Nick Enterprises comprises licensing and merchandising for consumer products, a publishing group that produces the Nick and Nick Jr. magazines and a recreation business that produces live theatrical shows and theme-park rides.
Nickelodeon is also partnering with Holiday Inn Hotels & Resorts to renovate a Holiday Inn in Orlando, Fla., into a Nickelodeon-themed facility, complete with suites that feature separate bedrooms for parents and children. The branded hotel, which is located near the Universal Studios theme park, is slated to open in early 2005.
The division’s first foray into creating original content came in October, when Nick Enterprises introduced Tak and the Power of Juju, its first video game, which is based on a character created specifically for that medium. Nick Enterprises is on schedule to sell a million units of the video game by Easter. And as with everGirl, there are no plans to launch a television series based on the Tak character, though Nickelodeon officials don’t entirely rule out the possibility.
“We want to be wherever kids are,” Mr. Dunn said. “We know all these different platforms are meaningful parts of kids’ lives, and we want to be there.”
Being there has proved lucrative for Nick Enterprises. While Mr. Dunn declined to offer specifics, he said the unit’s profitability rivals that of many well-known cable networks. The division, which has grown 20 percent a year for the past five years, generated $3 billion in retail sales in 2003, up from $2.6 billion in 2002, and was once referred to as MTV Networks’ fastest-growing division.
A source familiar with the division said the company keeps for itself around 10 percent of those annual sales as part of its agreement with licensees. Products based on the SpongeBob character-Nick Enterprises’ biggest property-alone have generated $2 billion in sales in the two years since being introduced, while goods based on Dora the Explorer have hit $1 billion so far.
Retail consultant George Whalin said Nickelodeon’s strategy of extending its brand into the video game and apparel arenas is a smart one because it enables the network to take advantage of growth opportunities in both fields. He added that both sectors are popular with youngsters, with products aimed at tween girls especially hot.
He said he thinks launching a new product outside its core television business has less risk than upside for Nickelodeon.
“In consumer products, you are always looking for new brands, a new frontier, because it can be huge for you if you get a home run,” he said. “Any vehicles that extend and build their brand help them as a company.”
Mr. Dunn is the first to admit that while Nick Enterprises has had a string of hits, it is important for the division to come up with the next hot property, whether it comes from a television property or not.
At the same time, the division is careful to stick to its knitting. That’s why Nickelodeon didn’t follow Warner Bros.’ or Walt Disney’s strategy of opening retail stores and has avoided opening themed restaurants, which Mr. Dunn said have suffered from overexposure.
“A hit on television does not guarantee you will be a hit in licensing,” Mr. Dunn said. “Some terrific shows have not been hits [in the consumer products realm]. The key is some intangible quality. To be a licensing hit you have to want to play it, be it, wear it or connect to it.”
That’s why Mr. Dunn believes the new themed hotel will be a hit. “The family vacation is a big part of kids’ lives,” he said. “It has never been done with families of kids in mind.”
But don’t expect to see a crop of Nick-themed hotels. Mr. Dunn said there might be no more than five destinations throughout the world that would be candidates for Nickelodeon-themed hotels.