37 entertainment/character properties surpass $100m each in licensed merchandise sales at retail.
In all, four properties surpassed the $1 billion mark in retail sales of licensed merchandise in the U.S. and Canada last year, up from three that achieved that level in 2010.
Angry Birds is both the only new entry on the list and the youngest property on the list. (The Biggest Loser held that honor on the inaugural list last year.) The only property to drop off from 2010 is Shrek, which did not have a new movie in 2011.
The total retail sales of licensed goods for all 37 properties in the U.S. and Canada was $15.4 billion in 2011, up 1% from $15.3 billion for the "$100 million club" the prior year.
Reflecting the increasingly global nature of the licensing business, those same properties--all but six originating in the U.S.--registered an additional $22.4 billion in retail sales outside North America (also up 1% from 2010) for a total of $37.7 billion.
Globally, 10 of these properties surpassed the $1 billion mark, with five of them at $3 billion or more. The global leader: Hello Kitty, with retail sales of $4.1 billion in licensed merchandise in 2011.
Across the 37 members of the "$100 Million Club," 59% of retail sales are outside the U.S. and Canada.
NOTE: The list is of properties that generated retail sales of $100 million or more in North America in 2011; while we provide global figures for those properties, a list based on global sales would include additional properties that lack a strong (if any) presence in North America.
For theatrical films in particular, studio executives agree that licensing is skewing the way the box office is--toward markets outside North America. But that is not to say that the ratio of North American to foreign licensed product sales is the same as for box office sales.
For example, there are six properties on this list that had theatrical film releases in 2011: Cars, Transformers, Alvin and the Chipmunks, Harry Potter, Twilight Saga, and Pirates of the Caribbean. Foreign ticket sales ranged from 57% to 77% of the total take for each, according to BoxOfficeMojo.com.
Across all six, however, North America still accounts for 49% of retail sales of licensed merchandise worldwide.
Overall, across all property types and at all sales levels worldwide, THE LICENSING LETTER estimates the U.S. and Canada account for approximately 62% of retail sales of licensed merchandise, but entertainment/character properties overall register only about 40% of sales in North America.
Defining The Sector
Properties included in this list are broader than TLL's traditional Entertainment/Character segment as defined for our annual business-wide estimates.
For this analysis, we have included properties that are based on a recognized character and use the strategies associated with an Entertainment/Character licensing program, as well as the expected TV shows and films. Some properties on this list would normally be categorized as Art (Precious Moments), Toy (Barbie), Interactive (Angry Birds), or Publishing (Peanuts), while others have major film licensing programs but are at core toy properties (Transformers, G.I. Joe), and some originated as films but have become evergreen toy properties (Cars).
Analyzing The Big Swingers
While there are some large swings in the year-to-year merchandise sales, with Cars up 30% (the film came out in June and the DVD in November, giving merchandise the benefit of both selling seasons) and Toy Story down 25% in North America (the film came out in 2010). These titles were up 35% and down 30%, respectively, outside the U.S. and Canada. Despite such swings for these and a few other properties, the change in total value of retail sales for the entire list between 2010 and 2011 is only 1%. That roughly flat figure is in keeping with Entertainment/Character performance overall.
Studio executives concur that for a film-only property, retail sales of licensed merchandise will likely be down 50%-70% in a non-film year. And yet that's not the case for any of the film properties on this list, all of which are long-term franchises which see a bump in a film year but where the changes year-over-year are less pronounced.
Therefore, for a property such as Transformers, the gyrations are much less severe. Similarly, the non-film-year dropoff for a Batman or Superman--both ongoing properties that happen to have films--will be closer to 25%. (Transformers toys aren't counted in our estimate of retail sales of licensed merchandise because they are the core property and are manufactured by licensor Hasbro; ditto for Barbie and Mattel.)
Merchandise sales for TV properties that make it to $100 million or higher typically have a decade or more run at that level, but merchandise sales decline rapidly as the shows lose momentum. Dora is off 15% between 2010 and 2011 in North America and 9% elsewhere, according to THE LICENSING LETTER estimates.
The same is true for Ben 10 and Bakugan, while Warner has managed to reinvigorate Looney Tunes and Scooby-Doo with new animation. The Simpsons continue chugging along into a 25th anniversary that Fox will be playing up next year.
As was the case in 2010, the 2011 $100 million sellers underscore the critical importance of sequential exposure across multiple media, regardless of where the property originates, to the success of a licensing program in this sector. Exceptions that make the rule: Betty Boop, Biggest Loser, Precious Moments, and Hello Kitty, which have little or no multi-media exposure.
It is also interesting to note that only a handful of the properties are 10 years old or less; the others are all 25 years old or more.
Analyzing The Rankings
Disney Princess at $1.6 billion, Star Wars at $1.5 billion, and Pooh and Cars both just shy of $1.1 billion top the list. Looked at by licensor:
* Nine properties (24%) are from the Disney stable, including two from Marvel; these account for 41% of retail sales of licensed merchandise among the $100 million-plus group, the same as in 2010.
* Five properties are from Warner, accounting for 14% of the list and 6% of retail sales.
* Nickelodeon, Cartoon Network, and Fox have two each.
* No other company has more than one property on the list.
In terms of retail revenue, the top four $1 billion+ properties accounted for sales of $5.24 billion, or 34% of sales across the 37 properties.
The 21 properties generating $100-$299 million each collectively did $3.9 billion at retail, for 25% of sales. The six properties that registered retail sales of $300-$499 million did $2.2 billion in aggregate (14% of sales), and the six in the $501 million-S999 million range together had sales of $4.0 billion (26%).
Average retail sales of licensed merchandise for these top 37 properties was $416 million in the U.S./Canada in 2011, up from $413 million a year earlier; the median was about $250 million.
TLL Estimates In Context
The individual property figures are sometimes at variance with publicly reported numbers from the companies that own them. This stems from the fact that we look exclusively at consumer products that are licensed to third parties for manufacture and distribution, and for which the manufacturer is paying a royalty.
Typically, when companies report a dollar value for a property, they include all revenue, not just what is licensed. TLL does not tally sales of DVDs/Blu-Ray, video games, publishing, or other products created through in-house divisions of the licensor rather than through licensing agreements with third parties; so-called "content licensing" including mobile apps, web entertainment, and the like; or non-retail products such as live touring shows, theme park attractions, cruises, and similar. Nor does our tally include "core" merchandise manufactured by the licensor.
For example, Mattel says Barbie is a $1 billion property in the U.S./Canada; we estimate $245 million in retail sales of licensed merchandise. Mattel manufactures the majority of Barbie items itself--the dolls, doll houses, and other toys.
Similarly, Disney says its Consumer Products division generates about $26 billion annually worldwide. However, that figure includes revenue for the Disney Stores, where 95% of the merchandise, according to the company, is manufactured for Disney and not licensed. The same is true for most merchandise sold in the theme parks, and Disney handles some of its own publishing and videogames, which are therefore not included in our estimates.
For those properties that are multimedia, the estimates include all merchandise for the franchise (e.g. tied to films, TV shows, etc.).
LEGO cross-licensing deals (LEGO Star Wars, LEGO Batman, LEGO Harry Potter) are included under the respective partners' properties (e.g., LEGO Star Wars under Star Wars). They are usually pretty strong components of the properties. Star Wars includes Clone Wars. Superman includes Supergirl. Some of the individual properties listed (e.g., Batman, Superman) are sometimes licensed as part of families of properties (e.g., Batman as part of a multi-property DC deal). These figures estimate only those products tied to the individual property as specified.
These estimates are developed through a combination of surveys; interviews with licensors, licensees, agents, and retailers; analysis of annual reports, royalty income, and data from publicly held companies; store visits; corporate retail sales information from websites; press releases; and articles.
SHARE OF DOLLAR VALUE FOR RETAIL SALES OF LICENSED ENTERTAINMENT/ CHARACTER MERCHANDISE, BY LICENSOR, FOR $100 MILLION+ PROPERTIES, U.S./CANADA, 2011 (DOLLARS IN BILLIONS) # OF SHARE OF LICENSOR PROPERTIES DOLLAR VALUE Disney/Marvel 9 41% Lucas 1 10% Warner 5 6% Sanrio 1 5% Nickelodeon 2 4% Iconix 1 4% Other 18 30% SOURCE: THE LICENSING LETTER SHARE OF $100 MILLION+ LICENSED ENTERTAINMENT/ CHARACTER PROPERTIES, U.S./CANADA, 2011, BY SALES LEVEL >$1 billion (34%) $100-$299 million (25%) $300-$499 million (14%) $500-$999 million (26%) SOURCE: THE LICENIING LETTER Note: Table made from pie chart. SHARE OF $100 MILLION+ LICENSED ENTERTAINMENT/ CHARACTER PROPERTIES, U.S./CANADA, 2011, BY LICENSOR (% Of Properties Making The List) Disney (24%) Other (47%) Warner (14%) Cartoon Network (5%) Fox (5%) Nickelodeon (5%) SOURCE: THE LICENSING LETTER Note: Table made from pie chart.