Properties, Properly
A decade later, Lego's licensed lines still growing
By Cliff Annicelli and Karyn M. Peterson -- Playthings, 4/1/2008
It's been nearly 10 years since Lego first surprised long-time fans with the announcement that it would join the world of licensed toys through an assortment based on George Lucas's powerhouse Star Wars galaxy. And while there have been a few missteps—a line based on Jurassic Park III comes to mind—the construction toy maker's licensed toy business continues to flourish. Star Wars-related sets remain its mainstay, but for 2008 Lego grows its licensed toy offerings with additions like Lucasfilm's other marquee property, the Indiana Jones franchise, and Warner Bros.' update of Speed Racer.
Playthings spoke recently with Jill Wilfert, Lego's vice president of global licensing and entertainment, about the company's continuing efforts to tap into entertainment properties.
Playthings: Where do your licensed lines currently fit in to the company's business?
JW: We leverage licensing as a way to add another layer of relevance within our portfolio, both to excite kids who like to build and recruit inactive builders to the play pattern, so we seek global properties that have strong top-of-mind awareness among kids. Licensed products generate approximately 25 percent of our total sales globally. We're happy to say that we have seen a lot of stability in our licensed portfolio over the years, and many of the properties transcend the “event” model and have lasting appeal.
Playthings: How critical are licenses in introducing the brand to new users and older fans?
JW: Over the years we have found that the right licenses do have the potential to recruit new users to Lego building, but we have to be careful here because if a child isn't a builder, the introduction may not have long-term viability. Our brand is very highly penetrated in most of the main markets around the world, but we have seen that licenses tend to encourage kids to play more and longer with Lego products.
Licensing works in two ways with adult consumers: it often spurs a reconnection to Lego building among a group who might not otherwise be purchasing Lego products, and it excites the collector market. Lego and licenses like Star Wars are a great combination for the adult collector because they combine a favorite childhood toy with a favorite childhood movie.
Playthings: How has your licensing program changed since its inception?
JW: The Lego Group did not engage in licensing until 1999, when we added Star Wars to our portfolio. The decision to add licenses was not taken lightly and there was a tremendous amount of internal debate regarding this new strategic direction for the company. A considerable amount of consumer research was conducted to see how consumers would react to us heading in this direction. Given the strong success we had with our initial foray in to licensing, we have expanded our licensed portfolio in a measured way. We are not a company that is going to get involved with every 'hot' license on the market, as we prefer to focus on only a few global, high-impact properties.
Playthings: Have the issues that determine the success of a licensed toy line changed?
JW: Certainly with licenses much of the success lies with the ability of the property to drive awareness and be relevant to kids within our target age range. We have seen that video games have become instrumental in this regard, and we feel that the Lego Star Wars video games have, for example, really helped to keep Lego's Star Wars sets top of mind with kids, even when there has been no new “entertainment” content. Licensors who approach their properties with a longer-term view versus a single-minded desire to maximize volume also tend to be better suited for Lego, as we are most interested in opportunities that have longer term potential.
