NEW YORK — Will old standbys like The Cat in the Hat and Peter Pan or newcomers like Powerpuff Girls and Harry Potter be the next hot licensing opportunity, pouring in a gold mine of royalties?
This story first appeared in the June 26, 2002 issue of WWD. Subscribe Today.
Time will tell, but they were just some of the potential big names being promoted by entertainment companies such as Universal Pictures, Warner Bros., United Media and Sony Pictures at the 22nd annual International Licensing & Merchandising trade show. The event ended its three-day run June 13 at the Jacob K. Javits Convention Center here.
Many were competing for the next hot property, as larger-than-life images of TV, movie and storybook characters such as Raggedy Ann, Teenage Mutant Ninja Turtles and Winnie the Pooh were depicted. To promote the whimsical energy and spirit of The Cat in the Hat, a man on stilts juggled at the entrance of Universal’s area, while a giant Kermit the Frog air balloon floated nearby.
“This is an opportunity to meet new people and find new resources,” said Mari Beth Towers-Toth, vice president of apparel licensing at Warner Bros.’ consumer products division, which was hoping to attract interest for “The Powerpuff Girls” film, set to hit theaters next month, “Harry Potter and the Chamber of Secrets” being released this November, two “Matrix” sequels scheduled for 2003, as well as “Looney Tunes: Back in Action.”
“We look for people who do different looks and treatments,” Towers-Toth added. Meanwhile, with the “Hulk,” “The Cat in the Hat” and “Peter Pan” films set for next year, Debra Jackman, vice president of publicity and special events at Universal, was trying to generate an early buzz, while confident about the possibilities.
“People are into `The Cat in the Hat’ because it’s a popular literary classic and it crosses all generations — for many, it was their first book,” Jackman said. “And with `Peter Pan,’ it’s a live-action movie, based on a classic book. There’s a good opportunity for it to hit apparel, too.”
Overall, the exhibit featured upward of 5,000 properties and slightly more than 400 vendors, according to Diane Stone, general manager of the global licensing group for Advanstar Communications, the show’s producer. Reflective of the economic slowdown, square footage at the show decreased to 155,000 from 355,000 last year. However, about 18,800 retailers and manufacturers participated in the show, a 4 percent increase from last year.
“Square footage is not the important operative number,” Stone said. “What’s more important is that the number of exhibitors was about the same. It’s really and truly the creative vision that exists among the partners of the agreement, whether that’s the licensor or licensee that makes these things come to life.
“In this kind of economic climate, what people are looking for is what’s new and this show is totally about what’s new. They’re looking for the next Pokemon, the next Teletubbies and the next thing that’s going to capture the consumer in ways that will have that kind of far-reaching effect.”
There were about 138 new vendors, including Disney, Better Homes & Gardens, FDNY Fire Zone, Woolrich, M&M/MARS and the rock band Phish. Still, the tough retail climate has not left the licensing industry unscathed, making it more difficult to gain potential licensees’ attention, said Charles Riotto, president of the International Licensing Industry Merchandisers’ Association.
“It’s very competitive getting shelf space and I don’t see that turning around anytime soon,” Riotto said. “But for companies introducing new products or launching new lines, licensing is an attractive way to go because you’re buying instant recognition by having a recognizable name attached to your product.”
Riotto noted that licensing revenues and royalties paid were actually down about 4 percent in 2001, based on a study conducted by the Yale School of Management and Harvard Business School. The study revealed that more than $5.6 billion in royalties were paid to licensors in the U.S. last year, down from $5.84 billion in 2000, and retail volume of licensed products were about $96 billion, down from $97.3 billion the previous year.
But with big movie sequels such as “Austin Powers,” “Men In Black” and “Harry Potter” coming out over the next few months, Riotto is optimistic that entertainment licensing will see a boost in 2002.
“Last year, there was `Shrek’ and `Monsters Inc.,’ but they didn’t have a lot of merchandise,” he said. “The trend will be capitalizing on properties that have already developed a strong following. That gives retailers a higher comfort level.””