Net Brings Licensing In-House

Feb 27, 2006  •  Post A Comment

There are even more fun and games going on inside Cartoon Network now that it has taken over the licensing of consumer products based in its original properties.

Licensing for products featuring such characters as “The Powerpuff Girls” had been handled by Time Warner sibling Warner Bros. Consumer Products. As of last June, the network’s licensing efforts have been headed by John Friend, senior VP of Cartoon Network Enterprises.

“Managing it ourselves allows us to be much more integrated, much more nimble, with network priorities,” Mr. Friend said. “We’re able to take stuff back to the network much more seamlessly and really try to build these brands together.”

Mr. Friend sees licensing as a way to both generate revenues and build viewer attachment to the network. “At the end of the day, if a kid’s playing a video game or playing with a toy, then they’re buying into that character or that world more and they’re going to identify more with our network and our shows.”

Of course, done right, licensing can also generate big dollars. Cartoon Network’s rival Nickelodeon boasts that its consumer products generate sales of about $4 billion. Mr. Friend declined to say how much in sales Cartoon Network merchandise generates, but noted that even Nick’s $4 billion doesn’t go as far as it might seem.

“I’ve seen them cite that, but that’s retail sales, so you have to work your way back from retail sales to wholesale sales, and then you have to work your way back from wholesale sales to actual royalty revenues to the company that owns and has created the intellectual property,” he said. “So there’s a significant gap between that retail sales figure and what the actual revenue is to the intellectual property owner.”

Earlier in the month, at the annual Toy Fair in New York, Cartoon Network introduced a line of toys based on its show “Ben 10” that will be made by toymaker Bandai. In “Ben 10,” a 10-year-old finds a watch-like device-called an Omnitrix-that transforms him into one of 10 alien heroes.

The toy line includes figures that transform from alien forms to useful play items like a flashlight or binoculars or a water gun; figures that ooze DNA slime bubbles; and play versions of the Omnitrix.

“It’s a nice one because it just hits the sweet spot of what Cartoon Network is,” he said, noting that compared with Nick and Disney, Cartoon Network skews towards boys.

At Toy Fair, Cartoon Network also launched new lines for “Hi Hi Puffy AmiYumi” and “Codename: Kids Next Door.” Other new Cartoon Network shows, such as “Squirrel Boy” and “My Gym Partner’s a Monkey” will also be moving into the consumer products pipeline.

Future opportunities in licensed product range from high-tech to low-tech. Cartoon was a launch partner for Hasbro’s VuGo product, a portable device kids can use to download video. Cartoon is also working with the toymaker on character toys that can download new jokes and new information based on what’s happening on the show on a weekly basis.

“There’s been a tremendous amount of hype about electronics and technology and toys for the last few years, some of it justified, some of it not, but we’re in a stage now where you could use the technology to make the play better, to make it more interesting, to make it more personal, more fun,” Mr. Friend said. “And some of that technology is as simple as better washable inks. So if you buy a shirt, you can customize it. Then you can wash it and do it again.”

But Cartoon Network aims at more than kids, particularly with its popular Adult Swim late-night block.

The biggest part of Adult Swim consumer product line is home video. “People like buying DVDs. Our audience has a little bit more disposable cash than your average 9-year-old, so they’re inclined to want to get deeper. If they love a show, they want the extra stuff.” Cartoon Network expects the DVD of the first season of “Robot Chicken” to sell as well as its popular “Aqua Teen Hunger Force” franchise.

After video, the next two categories are T-shirts and collectible toys.

“One of my favorite ones is we’ve got something called the Mega Meatwad,” Mr. Friend said. “Meatwad is one of the characters on ‘Aqua Teen Hunger Force,’ and literally he’s a wad of meat. And so the Mega Meatwad is a big collectible statue of what Meatwad looks like, and it’s just hilarious and you can see it from across the room. And it’s like ‘Oh my god, there’s Meatwad sitting on my desk.'”

Mr. Friend’s purview goes beyond toys and T-shirts and into what he calls themed entertainment.

“There’s everything from touring shows, musical tours, theme park rides,” he explained. “It’s the physical experiences. It’s not necessarily the souvenir, buying one toy or one T-shirt, but it’s kind of touching and feeling and being there with it.”