Event Preview: Licensing International Expo

Licensing International Expo
June 2-4
Mandalay Bay Convention Center,
Las Vegas

The sale of toys generated almost $22 billion in the U.S. alone in 2008, according to The NPD Group. It’s big business, and kids’ content owners are anxious to ramp up their slice of the pie. It’s no secret though, that times are tough, with the recession putting a squeeze on how much parents are willing to shell out at the toy store, making  retailers even more cautious about how they stock their shelves.

As rights-owners head to the Licensing International Expo in Las Vegas next month, however, they can be comforted by some encouraging figures: another recent report from the NPD Group reveals that almost 50 percent of mothers’ discretionary spending on their kids goes to entertainment-related categories like toys, video games and consumer electronics, while 23 percent is spent on apparel. Those categories are driving the kids’ licensing business, and they are the key ones being pursued by producers and distributors seeking to extend the presence of their shows.

4Kids Entertainment has already done so with Chaotic, one of its key properties this year. A master toy deal is in place with Spin Master, covering action figures and other toys, while Activision Publishing came on board for a video game. The trading card game has already been a success for the show, which airs in the U.S. on TheCW4Kids block and has begun rolling out internationally. Apparel deals are being signed and 4Kids has inked a deal for a Chaotic beverage that is available across Canada, featuring codes that the kids can use online for the trading card game. 4Kids has also reached a deal for Chaotic to air on Cartoon Network, further expanding its exposure in the U.S. market.

The Cartoon Network deal also includes the rights to Yu-Gi-Oh! 5Ds, the latest season of 4Kids’ popular and long-running Yu-Gi-Oh! franchise. "With any classic property, we have to keep doing new things," says Roz Nowicki, the executive VP of marketing and licensing at 4Kids, which is also injecting new life into the Teenage Mutant Ninja Turtles brand. A live-action theatrical release for the pizza-loving heroes is slated for 2011, with 4Kids handling the licensing strategy for the film.

Nowicki is counting on the brand recognition of 4Kids’ properties to entice licensees and retailers. "Business is tough. [It helps] if you can offer them something new, something exciting, and a classic property that they already feel comfortable with. People are a lot more reticent about jumping into something brand new that has not been tried and true or tested."

MOM APPROVED
Cookie Jar Entertainment, too, has a tried-and-true property to showcase, with Strawberry Shortcake. "It’s a $2.7-billion business," says Lisa Streff, the senior VP of domestic consumer products, of the veteran girl-skewing brand that turns 30 next year. In a bid to reinvent Strawberry for kids today, Cookie Jar has embarked on a redesign.

"We decided to age her up a bit," Streff continues. "She’s still sweet and wholesome but she has a new world, it’s very magical, and her story lines are a little older skewed, very aspirational. That’s how we keep the girls continuing to love and adore Strawberry Shortcake."

Hasbro is the master toy partner on Strawberry and a full licensing program is in place, with more than 450 licensees already signed up worldwide. Part of the brand’s appeal, Streff says, is that it has "a ton of mom appeal. A lot of today’s moms grew up with Strawberry Shortcake. We’re always going after that generational appeal. It’s one of those brands that you can find at every retailer. She’ll be in the mass market, in the specialty market, at the department stores."

Cookie Jar is also emphasizing the Richard Scarry publishing franchise, which includes the TV adaptation Busytown Mysteries for CBC in Canada. Scarry’s books have sold more than 150 million copies worldwide, Streff notes, and have been translated into 30 different languages.

"Richard Scarry has built-in equity. Children are introduced at a very young age to the books. There is already some established brand awareness. We are combining the equity of the publishing with the new TV series, which gives us the opportunity to be able to launch [the licensing program] a little quicker."

The licensing program, targeted at boys, includes vehicles from the Busytown universe, as well as apparel, games, puzzles and new books to complement the TV show.

CLASSIC ROCK
The Jim Henson Company (JHC) is also home to a number of well-established properties, including Fraggle Rock, which HIT Entertainment had previously been representing. "We have a multifaceted strategy for Fraggle Rock," says Melissa Segal, the company’s senior VP of global consumer products. "One is to develop a whole classic, retro program for people in their 20s and 30s who grew up with it. We’re doing some cool fashion-forward, trendy things to make it relevant. And then we have a feature film in development, it’s a live-action family musical starring the original five Fraggle Rock."

JHC is also working with DECODE Entertainment on a new preschool show featuring Fraggle Rock residents the Doozers, which will feature a separate licensing program.

"Fraggle Rock, for us as a company, is a priority," Segal says. "It’s familiar but it feels new."

Also a priority at JHC is the new brand Sid the Science Kid, which has been airing on PBS KIDS since fall of last year. Hasbro has been appointed master toy partner for the preschool series, and will be bringing products to retail under the Playskool brand. Also on the roster is DVDs from NCircle Entertainment and books from Harper Collins. With those key deals in place, Segal is optimistic about the response she’ll receive from the licensing community for Sid, even though it is a relatively new brand.

"What I’m finding in this kind of conservative economic environment is that everyone wants to know, Who’s your toy player? Who’s your DVD player? Who’s your publishing player?"

Segal is aiming to line up partners for apparel, home furnishings, stationery and other preschool categories.

4Kids is also presenting a new property this year, with RollBots. Produced and distributed by Amberwood Entertainment in Canada, the YTV commission was picked up by 4Kids for its TheCW4Kids block, and the company is also representing the licensing and merchandising rights to the series.

"Mattel thought this had such toy potential they came on board pretty early," Nowicki says. "Most toy companies take a wait-and-see [approach] but Mattel saw a lot in it. Video games are really important to us and we’ve started talking to various trading-card companies. Those are the key things we always want to seal first. And then we fill in the other categories."

JHC, similarly, has a head start on Dinosaur Train. Although it doesn’t premiere until this fall on PBS KIDS, Learning Curve has been confirmed as the toy partner. "Its an easy property for licensees and retailers to understand," Segal says. "We were able to get a toy company on board sooner than usual.

"Everyone has been so risk averse," she continues. "The reason people seem to be excited about the Henson stuff is that it’s new but it feels like it’s going to be around for a while. There are long-term plans for the brands. Also, they’re coming from the Henson company, I think for parents, there is that built-in appeal."

That’s a sentiment that also applies to BBC Worldwide, which has been able to depend on the cachet of the output from its British kids’ services CBBC and CBeebies, including In the Night Garden, 3rd & Bird!, Charlie and Lola and the Teletubbies.

"What unites our brands is the quality of output from the BBC," says Neil Ross Russell, the managing director of children’s and licensing at BBC Worldwide. "First and foremost, a successful licensing property is built from great content, content that engages with the audience. On the commercial side we then work tirelessly to marry BBC content with entertaining and innovative products across categories for consumers to enhance their experience of their favorite television programs." 

AGE COMPRESSION
Even with great content, however, rights owners must contend with the fact that kids are growing up must faster than they used to. "The reality of our business today is age compression," says Cookie Jar’s Streff. The key, she says, is "designing and developing merchandising programs that are targeted to specific age groups. There’s a 2-to-5 market, a 3-to-6 and a 6-to-11 and we really have to make sure that we’re strategic and we approach each one of those segments differently."

This is a sentiment also expressed by 4Kids’ Nowicki: "We get [kids] for action figures for a year and a half, and then [they move on to] video games. They’re just harder and harder to impress!"

Add the economic downturn to the mix and having a hit at retail becomes even more challenging. "We are seeing lower price points and a consolidation of retail across the board," BBC Worldwide’s Ross Russell says. "More than ever, it’s key that once we have great content, we are working to deliver to the needs and objectives of the retailer. Our reputation as an established and trusted licensor stands us in good stead for the year ahead but it is fundamental that we retain our focus on a few key brands, delivering quality products that consumers put value on."