Event Preview: Licensing Show

As Licensing Show kicks off in Las Vegas, TV Kids Weekly explores key trends in the kids’ merchandising sector.

Against the backdrop of the heavy losses incurred by the advertising market in 2008 and 2009, the toy business held up comparatively well. Indeed, when it comes to spending during a recession, parents will always find a way to buy products that will make their children happy.  According to research from the NPD Group, the U.S. toy industry alone generated $21.5 billion in sales last year, down just 1 percent on the same period a year ago. That’s the good news.

The bad news is that it’s never been more challenging to get products into stores. “Retailers are consolidating their shelf space and carrying fewer brands, and are very cautious about the brands they select,” says Cynthia Money, the president of worldwide consumer products and marketing at the Moonscoop Group.

“It’s a giant challenge,” concurs Cindy Davis, the senior VP of licensing at Copyright Promotions Licensing Group (CPLG) U.S., Cookie Jar Entertainment’s licensing company.

Retailers like Walmart and Target, Davis notes, are “sticking hard to the tried and true. And there’s less shelf space being dedicated to licensed kids’ brands. [Retailers are] just going to private label. It used to be, in sleepwear, for example, you could sell multiple licenses—it might bring in eight different licensed properties. Now that’s gone down to one or two.”

Davis is comforted, however, by the fact that she’ll be talking about several well-known brands at the Licensing International Expo this year: Richard Scarry’s Busytown, which comes from a strong publishing heritage; Caillou, which has been performing well on preschool TV for years; and the perennial classic Strawberry Shortcake. “It’s just impossible to get something on shelves that’s new without equity,” Davis notes.

PRESCHOOL PLAYGROUND
The preschool-product sector appears to hold the most promise for brand-owners angling for a slice of the retail pie, but it is also the most crowded space in the L&M business, and one of the hardest to crack into. “The buyers [all say] the same thing when it comes to preschool properties,” Davis says. “It has to be airing on a significant network for at least nine months, and it needs to be television advertised. [Retailers] review 60 preschool brands in a year. Even if something shows promise, there’s no way they could just pick one out that’s brand new with no equity and say, Wow, that really looks like it’s going to have legs.”

She adds, “We’re getting people to sign on for our brands. We don’t have a roster of the hottest brands, but they’re good ones, they’re solid ones and they have equity.”

The key is good TV placement, which will give retailers some peace of mind that a brand will secure mass exposure. For example, the recent Nick Jr. U.S. deal on Pocoyo, a preschool series distributed by ITV Studios Global Entertainment, is serving as a key launch platform for the company’s licensing-and-merchandising campaign for the show. Discussing the strengths of Pocoyo, Marina Lum-Kang, senior VP of brand extensions and integrated marketing at ITV Studios Global Entertainment, remarks on the show’s appeal for both young ones and their caregivers. “It attracts the preschool demo and moms and grandparents,” she says. “There is a huge cuteness factor. Kids are immediately drawn to Pocoyo and his friends because of the vibrant colors and because he appears so huggable. Moms are enthralled, as the overarching theme of the Pocoyo brand and series is ‘Learning through laughter,’ so it touches on themes such as sharing, playing and working together, caring about friends, exercising, dancing, etc. The combination of the visual and the learning aspect is attractive to a consumer and also lends itself well to marketing activities.”

With Bandai America already on board as the master toy partner in the U.S. and Canada, ITV Studios is exploring publishing, apparel and sleepwear, accessories, footwear, stationery, back-to-school and home furnishings, among other categories. “For parents of younger children, developmental play and edutainment is key for most products,” Lum-Kang explains. “However, in some instances, the item may just be so cute that they just ‘have to have it.’ At the same time, innovation, quality, price points and value are equally important components. The child and the parent are captured by unique or innovative products of quality design and manufacture; the retailer is compelled by price points as well as the quality, and the consumer—usually the parent/caregiver—is attracted to and wants all of the above: unique products of good quality with prices that won’t hurt their wallet, but will also have some longevity, some form of interactivity and hopefully an element of education or positive messaging.”

TENDING THE GARDEN
At BBC Worldwide, educational preschool brands account for a significant portion of its licensing business, given the tremendous output of its sister channel CBeebies. In the Night Garden, for example, has been one of the channel’s most successful shows, and has been licensed into numerous international territories by BBC Worldwide’s sales and distribution division. “One of the key things that I’m trying to do is to make sure that we really manage these brands to get the full life out of them,” says Neil Ross Russell, the managing director of children’s and licensing at BBC Worldwide. “In the Night Garden is just at the beginning of its life cycle. Whilst [the show is in its] fourth year [in the U.K.], in many markets it’s the first year, or it’s been one or two years. In some markets it hasn’t even started yet. That’s the challenge—how do we take the learnings we’ve got from the U.K. and some of the early lead markets and make sure that in the secondary markets or the markets that are following, we absolutely get it right?”

A newer preschool property in the BBC Worldwide stable is 3rd & Bird, which has just begun its second season in the U.K. “We’re at retail now with the Fisher-Price line,” Ross Russell says, adding that a host of events are being developed to support the consumer-products rollout. Next up for his division will be the global launch of the new music-based series ZingZillas.

GETTING OLDER YOUNGER
While the preschool business is certainly lucrative, rights-owners are well aware of the “age compression” taking place in the market, where young ones are growing out of their toys much earlier than they used to. “When we talk about all these brands on the preschool aisle, they’re pretty much done with them by 5 years old,” says CPLG’s Davis. “For boys, that means that by the time with 6 they’re done with action figures.”

At Moonscoop, the strategy has been to offer up a range of properties that speak to a variety of age demos: from preschool with Chloe’s Closet to boys 6 to 11 with Hero:108 and the skateboarding-themed Wild Grinders. “We are in a good position because we have several new and interesting properties coming out,” Money says.

Mondo TV is also promising a diverse portfolio, led by Puppy in My Pocket, Virus Attack and Angel’s Friends. The first is a preschool brand, for the 4-to-7 set, that already has awareness at retail—it is based on MEG’s In My Pocket toy brand, which has been distributed in more than 50 countries. Virus Attack, meanwhile, is a boy-skewing animated series that is premiering on Cartoon Network Italy this fall. “We are looking for a master toy partner,” says Micheline Azoury, the international sales manager at Mondo TV. Rounding out the Licensing Show priorities for Mondo TV is Angel’s Friends, which targets girls 7 to 12. A European toy deal is in place with Giochi Preziosi. Elsewhere, “for many territories where Angel’s Friends was sold to TV, we need to find a partner/agent who will explore the categories and open the door for a master toy licensee,” Azoury adds.

For Japan’s Toei Animation, the goal is to hit both the girls’ and boys’ toy aisles with Sailor Moon and Dragon Ball Z Kai, respectively, according to Kenji Ebato, the chief manager of the international department. The plan is to secure toy and video-game partners first, followed by stationery, apparel and trading cards. According to Ebato, boys’ action merchandise will likely be an easier sell—the challenge, he notes, will be securing partners for the company’s Japanese girl’s properties, especially given the competition at retail.

SURVIVAL STRATEGIES
The difficulties of getting into Walmart and Target have prompted rights-owners to explore other avenues. “We definitely have programs with the dollar chains,” says CPLG’s Davis, referring to U.S. discount retail chains like the Dollar Tree and Family Dollar. “And you can grow your products in the specialty market, and then bring it into the mass [market] if you can prove success.” In addition, Davis says, “Toys ‘R’ Us will definitely try things more than Walmart or Target will. They seem to be a little more flexible.”

A multiplatform approach is also essential to any L&M strategy, Davis continues. “It’s just a given now. It used to be that the home entertainment, the publishing and the toys were your tent poles. Now you have online and interactive games as well.”

And with the economy showing signs of a recovery, L&M executives are cautiously optimistic that the market is improving. “As consumer confidence grows, the licensor, the licensee and the retailer are becoming more flexible, less averse to risk in terms of considering new properties and how a brand is marketed and merchandised,” says ITV Studios’ Lum-Kang.