Licensing and retail expert/opinion leader Tony Lisanti, provides insight and perspective for the top headlines of week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.
Licensing Expo: Entertainment and Beyond
Licensing Expo 2018 had all the ingredients for an exciting and productive business showcase and deal-making environment. Based on headlines across the licensing media, as well as the main aisle stands, private summits and character presence, entertainment licensing was once again—to no one’s surprise—the focal point and dominant aspect of the Expo. But if you walked the aisles and attended a few seminars, and talked to a few friends, then you may have come across some other new opportunities and trends that affect licensing the coming months.
There are more superheroes, sequels and women dominating the new slate of theatrical releases and TV shows, including the following from the top entertainment licensors that inevitably will be in command of licensed products at retail in 2019 and 2020:
- Disney: Star Wars Episode IX; Ant Man & The Wasp; Captain Marvel, Avengers, Wreck-It Ralph 2, Toy Story 4; Aladdin, The Lion King (live action); and Frozen 2
- Universal: Jurassic World: Fallen Kingdom; How to Train Your Dragon 3; Trolls 2; The Secret Life of Pets 2; Minions 2
- WBCP: Aquaman, Lego 2, Shaft and Wonder Woman 2.
- Hasbro: With the acquisition of Power Rangers, and other brands from the Saban portfolio, Hasbro is well-positioned to expand these properties globally. Great deal, great brands, great company. And by the way, huge growth potential.
- BBC: The first ever female Doctor will bring a whole new world of excitement and licensing opportunities for the popular Doctor Who Franchise.
- Sony: Several sequels in pipeline including Hotel Transylvania, Goosebumps, Jumanji and Men in Black. In addition, Sony acquired a stake in the Peanuts brand from DHX Media. It’s an interesting deal that further slices the ownership pie and should enhance the Peanuts brand with new entertainment and licensing opportunities as well as build new audiences worldwide.
Once you peel away the layers and look beyond the mega licensors, you will get a better sense of what went on beyond the obvious and dominating entertainment sector.
Here are some of the key factors and trends that will impact the overall licensing sector in the coming months and beyond:
Amazon’s New Initiative
E-commerce leader Amazon unveiled its new licensing initiative, called Merch Collab that will give smaller brand owners the opportunity to design and sell licensed products with just “one-click.” This initiative supports what I have discussed for a long time that smaller brands can effectively use ecommerce to sell their products. There’s not enough shelf space at traditional brick and mortar stores for the mega brands, and seldom a chance for smaller brands to squeeze on the shelf at the nation’s leading retailers. Now, Merch Collab is offering the opportunity for various types of brands to sell licensed products online and expand their business.
The liquidation and closing of all TRU stores has undoubtedly left a void and dilemma for many licensors as to where else they can distribute their products. And with more $11 billion in sales, other retailers will be looking to capitalize on TRU’s demise and grab a piece of the sales pie. Walmart has already acknowledged that it will expand its toy offerings and you can bet that other retailers including Amazon, Target the dollar stores and drug stores, among others, will follow by expanding SKUs in the respective categories that make sense and fit their strategic position and consumer profiles. In addition, look for other specialty retailers such as Best Buy and Staples, and maybe even JCPenney and Kohls, to consider adding toys in categories that make sense for their customers. This might be a timely opportunity for Best Buy to further expand tech toys and related items, for example, and for JCPenney to reenter the toy biz.
The Fox Factor
The Walt Disney Company was set to acquire 21st Century Fox until Comcast, parent of NBCUniversal, decided to ante up a stronger bid. These two rivals are vying for control of the Rupert Murdoch empire and the story is still unfolding. No matter which studio ends up with the Fox IP, the acquisition will likely change the dynamics and relationships for many retailers, licensees and other partners. It will also create one incredible entertainment juggernaut.
Buzzfeed’s Heating Up
One of most significant growth stories in licensing is what Buzzfeed has accomplished for its brands in such a short period of time and what’s in the pipeline is even more impressive. At first glance, the Buzzfeed stand was rather intimidating and inaccessible from the outside, but it was an incredibly creative presentation of its brands, products and approach to licensing. Kudos to Eric Karp, head of licensing, and his team, for building a bona fide business that will eclipse $250 million in retail sales in about a year’s time frame. Yes—you read that right. And the potential is unlimited.
Isaac Larian’s Tweet
At a time when tweets make headlines almost every hour, MGA Entertainment CEO Isaac Larian is using Twitter to voice his opinion about the toy biz and rival Mattel. Larian—who recently attempted to acquire TRU and made a bid for Mattel, which the toy company quickly rejected—is riding high nowadays with one of the hottest brands, LOL Surprise. Larian tweeted, “A 2-story, whole block licensing booth with 3 security guards? STOP WASTING SHAREHOLDERS MONEY. Next year, when I run Mattel, this won’t happen. Even MGA’s booth is too big and we have great properties.” Well Isaac, as the saying goes, tell us how you really feel. And in a subsequent tweet, Larian states, “Withdrawing merger offer. After seeing the waste at li censing show (estimated $3 million for 3 days), I see more problems than it’s worth to fix. Maybe when shares hit $8. Now I’m shorting Mattel stock big time.”
Withdrawing #Mattel @Mattel merger offer. After seeing the WASTE at the licensing show ( estimated cost of $3 million for 3 days) I see more problem than it’s worth to fix. May be when shares hit $8. Now I’m SHORTING Mattel stock big time.
— Isaac Larian (@isaaclarian) May 25, 2018
A 2 story , whole block licensing booth with 3 security guards? STOP WASTING SHAREHOLDERS MONEY. Next year, when I run Mattel this won’t happen. Even MGA’s booth is too big and , we have GREAT properties. #Mattel #waste pic.twitter.com/GyqdxtfjEI
— Isaac Larian (@isaaclarian) May 23, 2018
The point is that Larian’s comments raise several questions regarding the business of Mattel from what it’s strategies really are, if it’s on the block, how many other companies might be looking to acquire the toy company, and what new CEO Ynon Kreiz has in mind to turn things around. Stay tuned on this scenario as it could impact many partners, licensees and retailers.
In the Aisles: Licensing and Merchandising
Sears’ Craftsman Brand is Front and Center at Lowes
One might think that Sears has nearly closed up all of its stores, following its latest announcement to an additional 72 this year. But believe it or not, there are still nearly 900 Sears and Kmart stores still open, almost 400 fewer than a year ago. But perhaps the most eye-opening news is the Craftsman Brand making its debut at Lowes stores. The merchandise was stacked and displayed on the main aisle at the entranceway and featured various core products the brand has sold and solidified its reputation for over the years, including tool boxes and workbenches. This is an example of the inherent value of brand beyond its core retail historical existence and popularity. The value of venerable Sears is its real estate and its core brands. Will we soon see a similar path for the Toys R Us brand? And how much is that IP worth and who would be interested in buying it? Surprising answer: perhaps too much—a couple hundred million dollars too much—for anyone to be seriously interested.
Execs in the News
These five execs in the headlines this past week have all made significant contributions to the licensing business throughout their careers and epitomize leadership, vision and commitment.
Michael Stone, Beanstalk
With more than 30 years of developing brand extensions for major Fortune 500 companies such as Coca-Cola, Stanley Black & Decker, P&G’s Febreze, Diageo’s Baileys, Weight Watchers, Energizer and Briggs & Stratton, to name a few, Michael will share his expertise and insights in a book that will be available in August. In The Power of Licensing: Harnessing Brand Equity, Michael will discuss the benefits and risks of licensing, how to avoid pitfalls, the nuts and bolts of strategy development and program management, the pros and cons of a retail exclusive strategy, and much more. I’m sure you will want to add Michael’s book to the top of your reading list.
Pam Kaufman, Nickelodeon
I have followed Pam’s career for more than a decade and her promotion is a well-deserved recognition of her many accomplishments at Nick. As President, Viacom/Nickelodeon Global Consumer Products, Pam will oversee global consumer products for Viacom Media Networks and Filmed Entertainment Brands Worldwide, including Nickelodeon, MTV, Comedy Central, BET and Paramount Pictures.
Brian Goldner, Hasbro
When I first met and interviewed Brian in 2008, he shared his vision for the transformation of Hasbro from toy company to entertainment company. I called him, “Master Transformer” and he has certainly lived up to the name, spearheading change at Hasbro in so many ways. Congrats to Brian on his induction into the LIMA Hall of Fame.
Elias Fasja-Cohen, CEO and Founder of Tycoon Enterprises
And congrats as well to Elias on his induction into the LIMA Hall of Fame. This is well-deserved honor for this exec who has built a vibrant licensing agency throughout Latin America over the past three decades.
Charles Riotto, LIMA
For 21 years, Charles has been synonymous with LIMA and he has compiled a long list of accomplishments during his career. The tribute to Charles in Total Licensing captures the sentiment and respect he has achieved. Best wishes to Charles as he officially retires on July 1.
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