Delivering the opening keynote address of the TV Kids Summer Festival today, Ynon Kreiz outlined the transformation strategy put in place to “unlock the true value of Mattel.”
“Mattel today is a very different company from what it was just a few short years ago,” said Kreiz, chairman and CEO, in conversation with TV Kids’ Anna Carugati. “The biggest change was to transition from being a toy manufacturing company to becoming an IP-driven, high-performing toy company. Our transformation strategy is paying off. We’re starting to unlock the true value of Mattel.”
Read excerpts of the keynote below and watch the entire video here.
Kreiz referenced the company’s financial performance, with net sales up 47 percent in the most recent quarter. “This was the highest quarterly growth rate on record, going back more than 25 years.” It was also the third consecutive quarter with growth in each of the company’s four regions. The company also gained market share, he said.
With the “heavy lifting of restructuring” complete, Mattel is entering into “growth mode,” Kreiz noted. “This is all driven by the Mattel playbook, a portfolio-wide framework and methodology, which sets us apart from the competition. We’re seeing our products resonating with consumers at levels we have not seen in years, all fueled by innovation and cultural relevance.”
Kreiz said that Mattel is now in the strongest position it has been in many years. “The performance is really broad-based. In the first quarter, we saw double-digit growth across all of our product categories and strong double-digit increases in our three power brands: Barbie, Hot Wheels and Fisher-Price and Thomas and Friends, as well as American Girl.”
The results, while benefiting from year-on-year Covid-19 comparisons, were driven by the strength of the Mattel brands, he said. “This is not about Mattel riding the wave or tagging along; we are growing well ahead of the industry and continuing to drive the momentum.”
On Barbie, in particular, Kreiz said the brand has “continued its phenomenal performance. It was up 86 percent in the quarter, with growth across all segments. Barbie strengthened its position as the number one global doll property and continues to gain market share. We are extending characters, like Chelsea, we’re launching a new fashion segment like Barbie Extra, we’re celebrating Ken’s 60th anniversary. Barbie today is much more than a toy; it’s much more than a doll. Barbie is a concept. It’s about a very clear brand purpose to inspire the limitless potential in every girl. It has been a multiyear journey about diversity, inclusivity, equality. Barbie today is the most diverse toy line on the market, with multiple body types, skin tones, hairstyles, hair colors. Over half of the Barbie dolls today are diverse, so there’s a lot to be proud of. Barbie represents the world as we see it today and continues to resonate with parents, with consumers, with families, at levels we have not seen in many years.”
Asked about the company’s film and television segments, Kreiz noted, “We own one of the strongest catalogs of children’s and family entertainment franchises in the world. In addition to the significant value we are creating on the toy side of the company—our core business—our strategy is designed to commercialize our brands in highly accretive business verticals that are directly adjacent to the toy industry and capture the full value of our IP.”
The mandate for the company’s film and television divisions is “to create great quality content that people want to watch. This is not designed to just sell more toys. It is about engagement and making great content and engaging people at an additional level to what we do as a toy company.”
Mattel Films, Kreiz said, has become “a magnet for some of the most prolific talent in the entertainment industry who are excited to collaborate and reimagine these brands. In many cases, they themselves were fans of our products since their own childhood.” The company recently announced Rock ‘Em Sock ‘Em Robots, a live-action film with Universal Pictures and Vin Diesel starring. “The model is about working with the best talent and partnering with the right studio per project, which gives us flexibility and the ability to partner with the best players as it relates to that specific project.” There are films in the works with Barney, Major Matt Mason, Magic 8 Ball, View-Master, American Girl, Hot Wheels, Masters of the Universe and Barbie.
Mattel Television also has strong momentum, he continued. “We will see the results of what we’ve been seeding over the last couple of years. We now have 17 shows in production and more than 25 projects in development.” New projects include Barbie Fashion Battle, in which designers compete to make a Barbie collection, and Uno and Whack a Mole game shows. The division recently released Barbie & Chelsea The Lost Birthday, which was the number five movie on Netflix in its launch week. It follows the success of last year’s Barbie Princess Adventure. There are also two new Masters of the Universe series with Netflix premiering this year. Kreiz also referenced the return of Monster High, “which has a very strong, inclusive message of belonging.” The TV movie and series are being made with Nickelodeon. The company is also developing new shows for Fireman Sam and Polly Pocket, among others.
The content from Mattel serves as an “important way to connect with consumers and engage with fans through multiple touchpoints,” Kreiz said. “In today’s world, it is not just about one representation of a franchise or a brand. It’s a holistic experience. The fact that we own the underlying rights for these brands gives us the ability to engage consumers, entertain them, in multiple ways. We always stay true to the DNA of our brands and franchises. We maintain the ethos of these brands in a way that is really threaded throughout the experience. It is a consistent representation, a consistent experience, but gives us a much broader base to reach and engage consumers on many levels.”
On refreshing and reimagining classic brands for contemporary audiences, Kreiz noted, “This is about finding the balance between reviving legacy, heritage brands that have many years of representation and a built-in fan base, and [making them] more relevant to today’s world, more culturally relevant, and still maintaining the brand purpose of what made them successful in the first place. It is about integrity, authenticity. This is one of our core strengths: being able to find that right balance.”
He referenced the enduring success of Barbie, American Girl, Hot Wheels, Masters of the Universe and Thomas; “it has been about finding the balance and continuing to innovate, reimagine and staying relevant to today’s world.”
Discussing retail, Kreiz said e-commerce has been a key part of the company’s transformation strategy. “Covid has brought about a big shift in how consumers shop, obviously with the acceleration of online retail and e-commerce. And, of course, we pivoted the company and were able to respond to that change in consumer shopping habits.”
On consumer behavior as the world begins to return to normal, Kreiz observed that “physical play is here to stay. It is projected to grow. We do believe in the long-term growth prospects of the toy industry. In 2020, the industry saw extraordinary growth and proved its resilience yet again, partly backed by the shift to e-commerce. The pandemic emphasized how parents prioritize physical play, especially when it comes to quality products and trusted brands. Consumers want to buy brands that align with their values, their beliefs. And parents increasingly are drawn to toys that promote positive values and reflect how they would like to raise their kids. We know that parents will always prioritize spending money on their children. We do our share by creating products that resonate, that stay true to our mission and purpose as a company. We are aiming to create innovative products and experiences that inspire, entertain and encourage children to play. A big part of our success over the last three quarters has been driven by our ability to manifest that vision in the product we make and how we engage with consumers on multiple levels.”
Kreiz went on to say that screen time is on the rise, accelerated by the pandemic, “but it is not taking away from play and especially from physical play. The toy industry will continue to thrive and has performed very well over the last few years, even with the rise of screen time, the growth of tablets and video games in parallel.”
As Mattel owns its IP, “we can participate in these areas,” he added. “This is a complement to what we do, and we see exciting opportunities as part of our mid- to long-term strategy in these areas as well.”
Kreiz went on to discuss the Mattel Playback initiative, “which is designed to recover materials from old Mattel toys that have reached the end of their useful life and reuse those materials in future Mattel products. This is another example of Mattel doing the right thing for the planet.”
On skills he brought to Mattel from his extensive experience in the media industry—including roles at Fox Kids Europe, Endemol and Maker Studios—Kreiz noted, “The companies I managed before were all creative organizations that had a core content library, intellectual property assets or access to creative talent, where we looked to leverage market developments and new technologies to reposition those companies and create a new economic model or find new commercial opportunities. At Fox Kids, for example, we capitalized on new digital technology to transition from being a content distributor of children’s programming to free-to-air broadcasters, which was a mature industry at the time, to becoming a leading children’s entertainment company and one of the fastest growing pay-TV channels in Europe. At Endemol, we expanded the business from being a producer of reality and game shows, also a mature industry, to becoming a global distributor of TV programming and a key player in scripted content as the demand for localized scripted shows was growing. And at Maker Studios, which was a pioneer in a brand-new industry, we leveraged our relationships with leading YouTube talent and aggregated UGC content through our technology platform to create a global multinetwork and become one of YouTube’s largest partners. And, of course, working as part of The Walt Disney Company, after they acquired Maker Studios, was a great experience in and of itself. Taking all of that, coming into Mattel, I saw the incredible asset catalog, a treasure trove of intellectual properties, heritage brands, incredible franchises with so much appeal and built-in fan bases. I was attracted by the opportunity to extend what we do into new areas, new activities, as part of becoming a high-performing toy company.”
Mid- to long-term, priorities include extending the company’s brands “to all these highly accretive business verticals and capture the full value from the assets we own.”
After the keynote, TV Kids Summer Festival featured a sneak peek at Barbie & Chelsea The Lost Birthday.