THE TOYS OF SUMMER PRODUCTS LICENSED FOR LATEST KID FLICKS.
Shrek loves to wallow in dirt, but DreamWorks SKG hopes to clean up on his image.
The pea-green ogre of the animated feature opening this weekend inspired a merchandising blitz by the Glendale-based studio, from action figures to cookies, socks to storybooks.
Shrek-obsessed kids can play the spin-off video game in their flame- resistant sleepwear, pack their Shrek backpacks for school and get there with official gasoline sponsor Chevron.
There's a collectible Burger King Kids Meal and Shrek-themed ice cream at Baskin-Robbins, but this onslaught isn't unprecedented - it's the norm for kid flicks looking to boost revenue and build a franchise.
``We think it's probably not enough,'' said Brad Globe, head of consumer products for DreamWorks. ``We do these things to make the movie look desirable, to make it look fun and hopefully motivate the kids and their mothers and families to think this is a piece of entertainment that is enjoyable.''
It's a strategy of high risk and occasionally higher reward.
Consumers in the United States and Canada spent $15.2 billion on products licensed from entertainment and characters in 2000, down 5 percent from the year before because there was no ``Star Wars'' to generate $1 billion in ancillary sales, as it did in 1999.
Yet ``Star Wars: Episode 1 - The Phantom Menace'' disappointed some in the industry because it left a glut of unsold action figures, toys and other collectibles.
For the studios, the retail challenges are considerable, from approaching chains like Wal-Mart 18 months before a film's release to moving a mountain of product in the four to eight weeks it plays.
Notoriously fickle consumers can also sink a project by ignoring the movie or feeling put off by the campaign.
``The concern is parents will start to see the movie merely as a marketing vehicle, as a reason to sell toys,'' said Marty Brochstein, executive editor of the New York-based The Licensing Letter. ``Nobody wants to feel they're being manipulated, and people can get very cynical very quickly.''
This summer promises several merchandise-heavy films, particularly Universal Pictures' ``Jurassic Park III'' and the animated ``Atlantis: The Lost Empire'' from Burbank-based The Walt Disney Co.
That is just a warm-up to massive licensing campaigns this winter for Warner Bros.' ``Harry Potter and the Sorcerer's Stone'' and ``Lord of the Rings: The Fellowship of the Ring'' from New Line Cinema and Disney's ``Monsters Inc.''
Hollywood is already banking on an even bigger summer next year for ``Spider-Man,'' the next ``Star Wars'' and the sequel to ``Men in Black.''
``The flip side is the movie has to do well,'' said Diane Cardinale, spokeswoman for the Toy Manufacturers of America. ``If it doesn't, then that merchandise will be in the markdown bin, so it's still a big gamble for the toy manufacturers.''
Retailers are also showing more caution to these campaigns.
Product licensing isn't an option for the studios. It's an integral part of a film's marketing and revenue - and the brands would be bootlegged otherwise.
Modern movie licensing can be traced back to the original ``Star Wars'' movie in 1977 and the surprising amount of retail sales it sparked.
``In the early '90s there was a fundamental change within Hollywood where licensing turned from a nice ancillary income to a line item on the budget,'' Brochstein said. ``It was built into the expected revenue stream.''
The strategy works both ways, earning a film more money and encouraging people, particularly kids, to see a film.
``When you're on the shelves, people see it, and it helps bring momentum and excitement to a movie,'' said Jim Silver, publisher of the New York- based Toy Book and Licensing Book.
To a degree, merchandise can drive the success of a movie, said Andrew Shiozaki, consumer products manager for Square Soft Inc., which produced the coming animated feature ``Final Fantasy: The Spirits Within.''
``If we have cool products out there, people who may not necessarily be interested in the movie can see it, and that can garner interest,'' Shiozaki said.
``Final Fantasy'' has toys aimed at both a mass audience and adult collectors willing to spend $40 to $100 on a high-quality, 18-inch action figure.
The products a film generates depend on the age group targeted and its rating, usually G or PG.
Few films lend themselves to broad merchandising. Those that do churn out coffee mugs, games, beach towels, Halloween costumes, trading cards, calendars, posters and more.
Toy makers share in the risk by competing for the licensing rights and assuming the cost of making the products. Studios often get 12 percent to 15 percent of the wholesale.
One way to hedge the risk is to go with an established brands with a built-in audience, like best-selling book series ``Harry Potter.'' That film generated a bidding war between Hasbro Inc. and Mattel Inc., who ended up sharing the rights.
Disney's ``The Lion King'' set the benchmark in 1994 with an estimated $1.5 billion in merchandise sales.
That is no reason to get overly optimistic, according to Malibu-based Jakks Pacific Inc., which keeps tight inventory control on the action figures it made for ``The Mummy Returns'' and ``Josie and the Pussycats,'' both from Universal, and Columbia Tristar's ``Charlie's Angels.''
``Retailers are a little more skeptical because they don't want to be left with the products, and there's a shorter window to sell movie properties,'' said Genna Goldberg, a Jakks spokeswoman.
The studios must be careful that promotional giveaways like fast-food tie-ins do not cut into retail sales of higher-quality toys.
Another challenge is keeping up with kids' changing leisure tastes, which have shifted from action figures to computer games.
The problems encountered by ``Phantom Menace'' illustrate the financial pressures on movie makers, said Lawrence Marquit, a professor of marketing at Georgia State University in Atlanta.
``I believe some films are being made exclusively for the purpose of merchandising materials like toys and school materials,'' Marquit said.
Hollywood has a long tradition of marketing toys and other products from films and TV shows, as Marquit recounts the must-have items of his childhood bore the likeness of the Lone Ranger, Roy Rogers and Superman.
But ultimately, it is parents who are shelling out the money, so it's important not to overdo it, said DreamWorks' Globe, who is encouraged by reorders on ``Shrek'' goods even before the film's release.
``The studios want to generate a lot of revenue on their properties, and I think at times they extend their licensing to too many categories or ones that don't make any sense,'' Globe said. ``When it works it's very wonderful.''
Photo: (1 -- color) From left, Debbie Stallings, Jakks Pacific Inc.'s vice president of sales, confers with sales manager Brenda Gavdenzi in the Malibu home office. On the wall are toys Jakks produces.
Michael Owen Baker/Staff Photographer
(2 -- color) `SHREK'
Merchandise from the computer-animated movie featuring the voices of Mike Myers, Eddie Murphy and Cameron Diaz are expected to be big sellers. McFarlane Toys designed the 6-inch action figures, right.
(3 -- 4 -- color) `Josie and the Pussycats'
This Josie doll is ready to rock. Designed and produced by Jakks Pacific Inc. in Malibu, she comes equipped with a guitar, microphone and stand.
(5 -- 6) `The Mummy Returns'
These action figures from ``The Mummy'' sequel were designed by Jakks Pacific Inc. in Malibu.
Michael Owen Baker/Staff Photographer
|Printer friendly Cite/link Email Feedback|
|Publication:||Daily News (Los Angeles, CA)|
|Article Type:||Statistical Data Included|
|Date:||May 20, 2001|
|Previous Article:||HEALTH DISCOVERY AREA MOM ON TV FITNESS ODYSSEY WITH HELP FROM TRAINING REGIMEN.|
|Next Article:||BERMITE: WHO'S RESPONSIBLE? BLAME FOR WATER CONTAMINATION NOT CLEAR ISSUE.|