Property Values

The shelf life of toys is always unpredictable, particularly when there are products based on a popular book, television, film or character-based property. The right number of licensing partners and a solid marketing strategy can mean the difference between having product that exceeds consumer demand or having just enough to go around at retail. According to several licensors who spoke with Playthings, the latter is more agreeable in the long term, preventing the brand from stretching too thin or from eventually piling up in the bargain bins.

There is a point when available product can outpace demand if too many licensing partners are involved, warns Roz Nowicki, senior vice president of marketing and licensing for 4Kids Entertainment, New York, the company behind properties like Teenage Mutant Ninja Turtles (TMNT), Yu-Gi-Oh! and Cabbage Patch Kids. “There is a curve, and when you begin leveling out, having too many licensees can adversely affect the long term brand management and cause a glut of products in the marketplace,” she says.

Appointing a limited number of manufacturers per brand is one strategy 4Kids follows for properties of varying types, whether it's Viva Piñata or Yu-Gi-Oh! “With Yu-Gi-Oh!, we were very careful to hold back on the licensing of certain categories and keep the licensee list limited,” says Nowicki. “We felt this was right for its older-targeted demographic and for the long term success of the brand.”

Similarly, licensors also find it useful to carefully apportion the amount of product its licensees release to retail. “A key to the licensing game is keeping supply slightly below demand,” says Tamra Knepfer, senior vice president of consumer products for AG Properties, New York. “Once you exceed it, you have product not turning and sitting on shelves, which often signals an early decline for the brand.”

AG's plans for 2008 and 2009 product roll outs include campaigns for two new Nickelodeon preschool series—Maryoku Yummy, about magical creatures that make wishes come true, and Sushi Pack, adolescent pieces of sushi that come to life—which launch this fall. AG's Sushi Pack program will release books, toys and digital products by fall 2008; and for Maryoku Yummy, a storybook is in development.

Nelvana's Mark Northwood, vice president of licensing for the Americas, says that it's easy to over-license. As they look for partners, Northwood believes that licensors must ask themselves, “What is the driver category for the type of show we're producing?” For the new preschool series Max & Ruby, based on the books of Rosemary Wells about two bunny siblings, there is plush from Ty (Beanies) and Danaware, bowling sets and a talking toy bank from Buzz Bee Toys and an off-Broadway deal in the works, whereas the upcoming tween boys' series Di-Gata Defenders will see action figures and trading cards from Upper Deck available by spring 2008.

Timing can also determine how much product to have in retail at a given time. Joshua Kislevitz, senior vice president of domestic licensing for New York-based United Media, says that for Fancy Nancy, a book about a little girl determined to teach her family a few things about fashion, United Media's merchandising efforts will focus on role-play products for 4- to 6-year-old girls since the book already has an audience in that demographic.

“When I look at whether a property is successful or not, one of the things I look at is whether the audience was in the market before the product,” says Kislevitz. “There needs to be an audience looking for a consumer product.”

When product exceeds consumer demand, it may be time to cut back on licensees or put a property to rest for some time. “Scaling back and focusing on the core product categories can maintain a license at retail,” says Melanie Summers, director for toys, electronics and packaged goods at Nickelodeon, New York.

Rick Goralnick, licensing director at AG Properties, adds, “Don't try to 'label slap' your brand onto everything that comes your way. Be selective and stay true to the essence of the property.”