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Licensing revenue flat, movies still stars of show
Source: AZCentral - David Lieberman of
USA Today (original article no longer available)
NEW YORK - Marketing executives expect a sense of traditionalism, of retreating to the tried-and-true, to pervade this week's Licensing 2005 International trade show - the leading showcase for the licensed goods about to hit the shelves at stores that traffic in pop culture.
After years of consolidation in retailing, including the recent merger of Kmart and Sears, it's harder than ever for studios, sports merchandisers and other companies to find store managers who'll risk stocking up on toys, clothing, lunch boxes, backpacks and other items plastered with images from movies or TV shows that might bomb.
And everyone's having a hard time figuring out what toys will interest kids who are dazzled by the fast-growing world of video games. So they are taking a more conservative approach they hope is safer.
"Retailers are putting their focus on properties that have a heritage, that are classics," says Sony Pictures Consumer Products' Juli Boylan. "Films have such a short life, they're often too much of a risk for retailers. It's so competitive."
As a result, the convention will be dominated by familiar images including Superman's "S" shield, Marlon Brando's face from "The Godfather" and vintage Pepsi logos. Baseball greats Hank Aaron and Reggie Jackson also will show up at the show to support apparel and sports merchandise licensed by a group called "Baseball's 500 Home Run Club."
"There will continue to be breakout properties," says Debra Joester of licensing agency The Joester Loria Group. "But it takes a lot more work and strategic vision than ever. Logo slapping (on merchandise) doesn't excite consumers."
Total licensing revenue grew less than 1 percent, to $5.85 billion, last year, according to a study out today from the International Licensing Industry Merchandisers Association (LIMA).
Most of the gains came from entertainment, which benefited from movie sequels led by "Spider-Man 2" and "Shrek 2."
Fashion and sports brands generated less excitement.
"Higher-end merchandise is a treat - and money has been tighter," says LIMA President Charles Riotto. "A lot of the sports apparel was being sold as fashion merchandise. That's pretty much run its course. It's a trend business."
Yet he's optimistic that things will pick up this year. "Corporations are looking for every edge they can get to increase brand awareness," Riotto says.
For example, Pepsi hopes to add fizz to its image by reminding consumers of old logos and slogans such as "More bounce to the ounce" and "Uh-huh."
Johnson Publishing also will jump into the licensing business with hopes of striking deals with clothing, DVD, music, financial service and toy companies interested in identifying with the publisher's Ebony magazine.
"It's such a historically deep name in the African-American community and gives us an opportunity to expand the brand," says CEO Linda Johnson Rice. "This could be a good revenue stream for us."
Nonprofit organizations including the Sierra Club, ASPCA, World Wildlife Fund and Save the Children also will be flocking to the show in search of deals for apparel and other goods.
Sports fans will discover opportunities to buy merchandise from organizations that hope to generate more excitement in the USA, including European and Asian soccer teams, sumo wrestling and the Professional Bull Riders.
But as usual, entertainment properties, especially films, still are likely to grab most marketers' attention.
Coming off last weekend's successful opening for "Batman Begins," Warner Bros. plans to rev up the hype machine for "Superman Returns" in June 2006.
The studio hopes to make the famous "S" shield ubiquitous, appearing on everything from pajamas to cashmere sweaters. Mattel's toy line will encourage kids to identify with the Man of Steel. For example, a Superman costume will inflate to mimic his muscles.
"We bring retailers in very early to make these projects into events at the retail level," says Warner Bros. Consumer Products' Brad Globe. "The movie's the launching pad. Then we focus on all the things we can continue to do," including a Superman animated TV series.
Sony Pictures Animation has a lot riding on its first flick, due September 2006: "Open Season", a story about a grizzly bear (with Martin Lawrence's voice) and a mule deer (Ashton Kutcher).
"It's about animals, and kids just love that," Boylan says. "It's a natural for plush (toys), and plush is very young."
Meanwhile, Viacom's coming to the licensing show with offers it hopes merchandisers can't refuse: clothing, collectibles and other goods tied to "The Godfather." It also hopes to generate interest in a live-action version of the classic children's story "Charlotte's Web," due in 2006, and in the Internet's popular Neopets, a business Viacom just bought.
"You have to figure out how to manage a portfolio of properties," says Nickelodeon & Viacom Consumer Products' Leigh Anne Brodsky. "There's a lot of enthusiasm for brands off the big and small screen. People want a piece of that brand. Ten or 15 years ago it was more about the toy."
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