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The results this summer have already boosted Hasbro and Mattel, who both credit movie related sales for higher second quarter 2011 financial results. The research firm NPD says licensed toys and games generated $6.3 billion in retail sales through the beginning of July, a one% increase over the same period a year ago. “They know the personalities they’ve seen in movies and on TV.”
“It’s really about having the toys the kids want when they want them,” says Friedland. That is why by this Christmas Papa Smurf and Smurfette expect to be sharing more shelf space and front of store visibility with Lightning McQueen and Bummblebee the Autobot.
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The success of the Smurfs, however, is a signal for retailers as to how to prepare for the holidays. This summer the biggest displays in Kmart, Target, Wal-Mart and Toys R Us have been for Cars 2 and Transformers. The other two thirds of movie merchandise sales will be in the rest of the year, mostly in December. About a third of the year’s business will be done before Labor Day. Summer is only the opening salvo in the toy wars. “Year in and year out Star Wars is popular,” says Toys R Us’s senior PR manager Bob Friedland.
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NPD ranks Star Wars as the fourth biggest seller this year and the top movie license entering summer.
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No property in the modern era better exemplifies sustainability than Star Wars, which remains a top seller even though there hasn’t been a new movie since 2008 (although there have been new TV shows). So we look for properties that have a timeless quality attached to the characters.”
“If something only sells for three weeks out of the year, when it has big box office, then drops off completely as some properties do, that’s not sustainable. “We’re taking properties that don’t rely on the box office because the peaks and valleys that come with that kind of business model are pretty tough to manage in the marketplace,” says Michael McNally, Lego’s U.S. Those few franchises are the only ones that Lego looks to license for the “construction category.” Their current lineup includes Harry Potter, Pirates of the Caribbean, Cars, Toy Story, Winnie the Pooh and Star Wars, the reigning king of toy licenses. It’s the moment when the franchise becomes timeless and the toys continue to move independent of box office. The nostalgia-driven success of Smurfs could be the kind of holy grail for the licensing world that all these franchises are seeking.
Meanwhile, Hasbro is making a competitive marketing blitz for Transformers: Dark of the Moon with 350 licensees, well above the 250 for Transformers: Revenge of the Fallen in 2009. The largest merchandising program in history is being staged for Cars 2by Disney, which expects the Pixar movie to surpass the Toy Story 3 licensing bonanza last year of $2.8 billion sales and to eclipse Star Wars: Episode III - Revenge of the Sith record in 2005 of $3.5 billion in retail. Jakks Pacific, with revenue last year of $747 million, competes against industry giants Mattel and Hasbro (with $5.9 billion and $4 billion in 2010 sales, respectively). This summer served up 17 films that amount to toy business bait, including Thor, Captain America: The First Avenger, X-Men: First Class, Pirates of the Caribbean: On Stranger Tides, Green Lantern and Winnie the Pooh - up from the 10 or so in previous summers. Competing against two of the biggest toy-related franchises ever - Cars and Transformers - Smurfs has broken out in what is arguably the most competitive summer in movie history for blockbuster family movies that generate domestic and international licensing and retail merchandising revenue.
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