Subject:
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Re: Toy Makers Resurrect Dormant Toys
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Newsgroups:
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lugnet.general
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Date:
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Mon, 5 Feb 2001 05:02:36 GMT
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The most recent issue of Forbes (Feb. 5, 2001) also has a story about
"Trouble In Toyland". (By Mark Lacter, Pg 98)
The basic theme is that licensing properties for toys isn't as easy as it
used to be - a lot of toy makers are loosing money. Specifically mentioned
are the merchandising flops that Star Wars Episode 1 was for Hasbro, and
recently the Disney movies have been for Mattel. Mattel in fact, has
dropped their Magic Kingdom movie properties license, keeping only the
non-movie ones (old characters, etc.)
The last bit of the article talks about Mattel's recent Harry Potter
license, and how difficult it will be for them to do it right. The article
doesn't mention LEGO, but the fact that LEGO now has virtually ALL the
mentioned licensing properties (Star wars, Disney, and Harry Potter) didn't
escape my notice. I hope that TLC is very careful in using these
properties, and that they don't end up sinking the company. My fear is that
too large a portion of LEGO's revenues are coming from such properties, and
if they don't work out, it will be their demise.
Here are some selected quotes (in <<>> brackets) from the article, with my
comments.
<<...Mattel’s decision [to drop Disney movie licenses] – made as revenue in
the boys’ entertainment division fell 6% to $258 million in the Sept. 30
quarter – underscores how skittish toymakers are becoming about movie
licensing deals. Suddenly they are taking a pass unless there’s a long-term
franchise opportunity through sequels, TV shows or computer games that would
ensure a longer selling season. “We see the increasing importance of brands
as opposed to one-hit wonders,” says Matthew Bousquette, president of
Mattel’s Boys/Entertainment division.>>
TLC is new to these licensing deals. I hope that their inexperience doesn't
hurt them. From the tone of the article, I almost think if I were a toy
maker, I'd stay away from licenses altogether. Two of the choices TLC has
made (Star Wars and Disney's old time characters) seem to be long enough
lived. However, I'm still skeptical about the Harry Potter deal.
<<Toys and games linked to entertainment aren’t the hot properties they once
were. Industrywide, those sales were 5% lower in 2000 than in 1997, says the
Licensing Letter. The biggest problem seems to be competition from the small
screen. A glut of action figures and games tied to year-round TV properties
– such as the World Wrestling Federation and Pokémon, the perplexingly
successful Japanese animation series – are crowding shelves. It’s hard for
the movie companies to compete when their flicks come and go so quickly.
It’s also hard to blame everyone for becoming greedy in the first place.
After the enormous merchandising success of Disney’s The Lion King and
Aladdin in the early 1990’s, studios and toymakers assumed kids would snap
up every doll-sized movie hero they offered. Then came The Hunchback of
Notre Dame in 1996, a colossal merchandising dud, and after that Godzilla,
when toymakers were hurt by Sony’s decision to keep the monster off shelves
until the movie was released.>>
I know that TLC was loosing money, and that this is perhaps why they turned
to licensing deals in the first place, but I hope that it wasn't because of
greed that they did it. That's something that will bite them. Does anyone
know how the last sentence relates to Harry Potter? I don't know when the
movie is coming out, and how that relates to LEGO's release of their sets.
I hope that the Godzilla mistake isn't being made.
There's a paragraph on the royalty fees, minimum guarantees, etc. that shows
how high risk this game is. Royalties of 20% of *anticipated* revenues!
Ouch. For instance:
<<Star Wars: Episode I The Phantom Menace was a merchandising flop for
Hasbro in 1999. The toy company – which agreed to pay a $450 million advance
for the three Star Wars sequels – at first sold more than $500 million worth
of toys and games linked to the epic. But there was a ton of stuff left on
the market as interest in Star Wars action figures quickly faded. All told,
$150 million worth of merchandise remains unsold.>>
This makes me wonder how high an advance TLC payed for a similar license?
And how badly have they been bitten by it? Have the Star Wars sets made
money for LEGO yet?
<<...They are also trying to limit the amount of merchandise hitting stores.
That will be tested later this year when Warner Bros. And Mattel hope to
drum up interest in Harry Potter trivia games and plush dolls as part of the
movie’s release.
It would be nice for everyone if they limited other Harry Potter stuff, too.
Like gift wrap, toothbrushes and bandages.>>
There's the trick. I've often thought that there should be less toys from
movies - that rarity makes them more valuable. I don't know how many
different toys were release based on Star Wars, but sometimes it seemed like
thousands. Sure the movies are a rich source of material, but you don't
have to make a toy out of every object appearing in the movie. A dozen good
ones would probably have been much better than the veritable diarrhea of
toys that actually came out. I hope that TLC recognizes this as well. I
think they do, but I'm not sure.
So please, LEGO, just make a few very high quality sets. We know you have
it in you.
--
David Schilling
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Message has 1 Reply:
 | | Re: Toy Makers Resurrect Dormant Toys
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| (...) Darn it, why can't it be perplexingly successful over here? I can't even play Gold in public (the video games, incidentally, are the only really worthwhile part of Pokémon) without getting stares. (...) More proof that Sony is a company (...) (24 years ago, 5-Feb-01, to lugnet.general)
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