Toy Licenses How Important Are They?
by Lutz Muller
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Figure 1 he licensed toy segment is large and continuously growing. According to The NPD Group, the overall toy Positions License Licensor Product Manufacturer market in the U.S. declined by 1 percent last year, while 8 Frozen Disney Doll Mattel 2 Frozen Disney Doll Just Play toys carrying a license grew by 3 percent and now represent 1 Frozen Disney Coloring Book Easter Essentials about 31 percent of the U.S. toy market in value. 1 Frozen Disney Balloon Anagram 1 Frozen Disney Balloon Shindigz The reason why the licensed segment grows at the expense 1 Rapunzel Disney Lego Set Lego of all other products is that licenses provide a number of major 1 Super Heroes Disney Lego Set Lego 3 MineCraft Mojang Lego Set Lego benefits. A good license is a key that opens important doors. It 1 Chima Cartoon Network Lego Set Lego gets you into the major retailers and onto their shelves, which 2 Transformers TakaraTomy Action Figure Hasbro 1 Angry Birds Rovio Balloon Airswimmers you might not otherwise accomplish. It exploits consumer awareness of a movie or TV character, and hence, Source: Klosters Retailer Panel enhances the appeal of a product. It is also about 50 Figure 2 Trends in Age Group Share of Moviegoers percent more likely to lead to an impulse purchase in 25 the store. 20 While top licenses are expensive, they tend to produce 2009 sales, market shares, and profits for the licensee. Second15 2010 rate licenses tend to be more costly in the long run 2011 10 because they typically do not provide the same benefits; 2012 they do not necessarily get you into the right retailers, 2013 5 and they do not give you the same built-in sales and 0 market shares. 2 to 11 12 to 27 18 to 24 25 to 39 40 to 49 50 to 59 60+ Source: Motion Picture Association of America Inc. The benefit of a first-class license is best demonstrated by looking at Amazon’s best-selling toys. In late seen in Figure 2. April, 22 out of the top 100 toys were license-based, and of these The same cannot be said of cable. Cynopsis Media reports 22, 13 were for Frozen, the fantastically successful Disney audience numbers of the 2 to 11 age group, and these are its adaptation of the Snow Queen fairytale, as shown in Figure 1. statistics for comparable weeks in mid-February between 2009 What is not shown in this table is Jakks Pacific’s Frozen ice and 2014 for the top 10 basic cable ad-supported networks, as gown, which has been sold out since January. seen in Figure 3. This reinforces the view held by national buyers that the There is also considerable evidence suggesting that a TV main drivers for licensed toys are movies screened in cinemas. series will not produce the same toy sales volume compared to a One major reason for this is that audience numbers for kids ages single blockbuster movie—e.g. Transformers: Dark of the Moon 2 to 11 have held reasonably steady between 2009 and 2013, as in 2011 produced nearly three times more action figure sales
100 • THE TOY BOOK
MAY/JUNE 2014