In the space of a few years, film studios have begun to appreciate the full licensing potential of their movies, with some making as much from merchandising as they pull in at the box office. Now, licensing is less a spin-off than a full-scale

Creators and promoters are refusing to comment, but the word is that The Lost World, Universal’s big movie release for next year, will involve one of the biggest licensing programmes in the history of movie merchandising.

The Lost World’s predecessor, Jurassic Park, set new records when it was released three years ago. The film generated 690 licences, issued on 5,000 different products – a record number in support of a motion picture. Worldwide retail sales of these products came to over $1bn, actually superseding box office takings for the film of nearly $1bn.

Movie merchandising has come a long way since simple logos on T-shirts began selling in cinema foyers, and a new understanding of the value of merchandising by the studios is certainly part of the reason. Movies are seen as investments which can produce all sorts of spin-offs, such as home videos, computer games, TV licensing for the future, consumer products, music and publishing. And many film companies have responded by developing their own merchandising divisions.

Mark Matheny, managing director for Warner Brothers’ consumer products licensing operation in Europe, the Middle East and Africa, says: “Over the past seven years, the studio’s emphasis on ‘classics’ – Batman, Superman, Looney Toons and so on – has enabled us to build a solid foundation on which to launch our own subsidiary sales and marketing offices around the world; by doing this we have become more market savvy and less dependent on agents.”

He says that as a result, Warner Brothers has become directly responsive to retail and licensing partner needs and consumer demand. In turn, this has led to even faster growth and allowed the company to launch new projects, like Steven Spielberg’s animated TV series Animaniacs.

MCA/Universal Merchandising’s senior vice-president, Keith Isaac, says: “The movie merchandising business is certainly more professional than it used to be. Most of the cowboys have disappeared.”

This is partly a result of the studios becoming less insular, he says. Many have set up international operations to put greater emphasis on European and other markets.

“More blue-chip players are now tying in with promotions and finding the benefits are phenomenal; this lends credibility to the whole business,” says Isaac. “There is also a new emphasis on retail support. The studios have realised that it’s not enough just to give stores the products and a bit of promotional material. We have to work with them in an integrated way on an ongoing basis to really make the most of the tie-up.”

Jurassic Park’s success demonstrated how the new, more pro fessional approach can be put into practice. Isaac stresses the importance of integration. He says: “The whole marketing approach was fully integrated from the beginning. The major players – film distributors UIP, the merchandising arm and key licensees, like Ocean Software and Sega – came together early on to exchange marketing plans and discuss how we could all work to our best advantage.

“This meant that everyone understood from the September before the film’s July release what everyone else was doing. As the licensing programme grew in every territory, we ended with 40 or 50 different participants all working together.”

But other factors were also at play. Jurassic Park owed much of its success to the existence of the best-selling book, the critically acclaimed special effects and the fact that Spielberg was the film’s director. Isaac adds: “Every child wanted to see a dinosaur and we spent 18 months telling people they would believe the ones in the film were real, the special effects were so extraordinary.”

MCA/Universal UK licensing director Tim Collins says: “A range of characters is also helpful as they offer flexibility and the chance to create a range of products. A film that involves only human faces has limited merchandising potential. Mission Impossible and Independence Day are blockbusters but may not be as lucrative, in merchandising terms, as films of equal stature that feature animated characters.”

The shelf-life of merchandised goods can be long – as with Batman spin-offs – or just a flash-in-the-pan. Trend-setting characters such as the Mutant Ninja Turtles can generate a huge increase in promotion-driven sales over a short period of time. But the craze for any fashionable character will inevitably wane and this type of character licensing tends to be short-lived.

Brand synergy is also a factor, but it is more important for the merchandising agent to have a target market in common with the studio, than to find a clever tie-in with some aspect of the film.

For Batman Forever, Warner Brothers linked up with car manufacturer Nissan to promote a special edition theme car during the traditionally slow summer months of 1995. Nissan, already using a “Nissan at the Movies” general theme, developed a sweepstake promotion in which scratchcards offering prizes of movie merchandise were distributed at cinemas.

McDonald’s was a licensee for both Jurassic Park – promoting “dino-sized” servings of drinks and French fries – and Batman Forever, operating a six-week instant-win promotion in July 1995.

Batman Forever also inspired a range of products from Buxted Foods, including Batarang Nug-gets, Hot Turkey Burgers with Holy Smoke Sauce and Gotham City Burgers.

For The Flintstones, Buxted launched Fred and Barney Crunchies and Dino Bites, and KP Foods brought out a range of Hula Hoops “stone-age packs – 200 million years in the making” featuring Fred’s Spicy Pterodactyl, Barney’s Bronto Pie Skips and Bedrock Pickled Onion flavour. Sales increased by 63 per cent during the six-week period of the promotion.

Disney ran a range of promotional tie-ins for its big hit The Lion King. In September 1995, a pan-European Burger King promotion offered Lion King merchandised characters free with selected meals. The aim was to keep children coming back until a complete set of characters had been collected.

Running parallel to this promotion was a competition giving children the opportunity to win The Lion King videotape and a set of tumblers featuring Disney characters.

The Casper merchandising programme saw SmithKline Beecham make its first venture into movie merchandising on the Ribena brand. An instant-win promotion, offering consumers the chance to win up to 1,000, ran on both ready-to-drink and dilutable versions of Ribena. Marks & Spencer launched its big-gest range of licensed products as a tie-in with the film.

The range included Casper and Fatso celebration cakes, chocolate lollipops and gum-shaped confectionery as well as character biscuits, paper partyware and an extensive range of clothing for children from 18 months to 14 years. In addition, Kellogg featured a Casper promotion on its Corn Flakes brand, offering eight sets of glow-in-the-dark stickers to collect, with one set free in every pack.

Obviously, a fully integrated movie merchandising campaign cannot be created for every film released but, when promotional link-ups are developed, there is clearly a degree of organisation not apparent in the industry ten years ago.

In the future, Isaac expects to see the studios help the retail community to manage products better. He says: “We would like there to be more fun and entertainment in the retail environment, to make it more like being in the cinema. We are also attempting to establish strategic, long-term relationships with retailers and promotional partners.”

Movie merchandising has already moved a long way in a short time. The future should see less emphasis on short-term deal making and more on long-term, marketing-led organisation.

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