Movie merchandise, the unlikely hero
Decline in DVD, box office sales has studios betting on tie-ins
BURBANK, CALIF.— The once-catatonic corner of moviedom dedicated to merchandise has suddenly come alive as studios — walloped by vanishing DVD sales and determined to keep fans engaged between sequels — look at themed toys, clothes and home decor with renewed vigour.
And Pam Lifford, president of Warner Bros. Consumer Products, is in many ways leading the charge.
“To gain market share, it has to come from somewhere,” she said with a mischievous grin, padding in sparkly shoes past a Hobbit- themed pinball machine at Warner headquarters.
Before Lifford joined Warner in January 2016, the studio’s merchandising unit, in some years, had no growth at all. Last year, profit increased 47 per cent compared with 2015. Revenue from licensed products — Wonder Woman action figures, Harry Potter iPhone cases — totalled $6.5 billion (U.S.), an 8-percent increase.
Lifford, described by License Global magazine as “savvy, seasoned and supercharged,” credits toyready movies that were already in Warner’s pipeline, such as the Potter prequel Fantastic Beasts and Where to Find Them. Kevin Tsujihara, Warner’s chief executive, credits the way Lifford came in guns blazing.
“I’m confident we can build on the momentum Pam and her team have created,” he said in an email. “It’s a great growth opportunity for the company.”
With the decline in DVD sales speeding up and the box office stalling on a global scale — even as movies become more expensive to make — studios such as Warner, for the first time, are looking to merchandise as an engine.
Film companies will release 25 movies with toy tie-ins this year, according to Bloomberg, up from roughly eight annually in the past.
This summer, stores worldwide will be flooded with items for Wonder Woman, Spider-Man: Homecoming, Cars 3, Transformers: The Last Knight and Despicable Me 3. Mountains of Justice League and Star Wars: The Last Jedi paraphernalia will arrive in the fall.
More than ever, consumer products influence moviemaking decisions — namely, sequels and more sequels. Retailers are more willing to devote shelf space when there is already proven interest.
Consumer products can also be a fraught business. Some studios have found themselves caught in socialmedia storms involving gender parity — why are some female characters less prevalent in stores than male ones? — and items that overreach, such as a Moana costume that turned children into tattooed Polynesian warriors.
But the opportunity is too great for studios to pass up, and Exhibit A is Disney. Over the past five years, operating income at Disney’s consumer products and video game business has roughly gone from $1 billion to $2 billion, fuelled by hits such as Frozen. Disney is the world’s No. 1licenser, with themed products generating $56.6 billion in retail sales last year.
It is not a coincidence that Warner, Universal and 20th Century Fox turned to Disney veterans to invigorate their merchandise divisions.
Lifford spent 12 years at Disney Consumer Products, leaving in 2012, when she was an executive vicepresident. When she arrived at Warner Bros. Consumer Products, she was shocked to find licensing efforts scattered across 437 shows and films from the studio’s library.
Warner now concentrates on: all things Harry Potter, DC Comics superheroes and classic cartoons, including Looney Tunes (Bugs Bunny and Daffy Duck) and Hanna-Barbara ( The Flintstones, and Tom and Jerry).
Mindful of increasing upheaval in the retail world, as more consumers move toward online shopping, Lifford also insisted that Warner become an “active” licenser instead of a “passive” one.
“We needed to be curating retail experiences so each one is special,” she said. “In today’s environment, no one can afford to look the same.”
Lifford sees particular promise in grouping together female DC characters such as Wonder Woman, Supergirl, Harley Quinn and Poison Ivy.
“I think we can rival princesses with that one,” she said, referring to Disney Princess, a line that annually generates more than $4 billion in sales.