Retail sales through entertainment deals hit $107 billion in ’14
Blockbusters like “Frozen” and the “Despicable Me” series helped drive $107 billion in retail sales for the entertainment-based licensing business last year.
Character- and entertainment-related products generated 44 percent of global sales for the entire merchandising business in 2014, according to a new survey from the Licensing Industry Merchandisers Association.
It marks the first time the industry group has published worldwide figures. In the U.S. and Canada, character-based products accounted for $47.5 billion in sales, or nearly half of the global total.
The association’s Marty Brochstein said comparable figures for the previous year aren’t available because the group’s methods of tracking sales have changed from when the survey focused just on the U.S. and Canada. Still, he is bullish.
“It was a strong year on a global basis,” Brochstein said. “‘Frozen’ was the biggest story of the year, and overwhelmed everything else.”
Total licensing sales — which also includes products based on sports, colleges and corporate logos — were $241.5 billion, resulting in $13.4 billion in royalty revenues, the association said.
Looking to this year, U.S. toy and clothing retailers are keeping an extra close eye on the box office, with “Jurassic World,” “Avengers: Age of Ultron” and “The SpongeBob Movie” already driving big sales, according to industry experts.
But the licensing industry is most anticipating September, when products related to “Star Wars: The Force Awakens” hit the shelves ahead of the film’s December release. The space opera and others such as Pixar’s “Inside Out” and Universal Pictures’ “Despicable Me” spin-off “Minions” could also boost the industry.
E-commerce giant Amazon began shipping some customer orders in bright yellow, Minions-branded boxes last month.
Toys R Us Executive Vice President Richard Barry noted that the “Star Wars” brand has long been a top seller, even without the new films. The new anticipated trilogy, and future stand-alone “Star Wars” movies, should reignite sales.
“We’ve been in this biz nonstop for 40 years” Barry said. “It frankly hasn’t needed a movie to be an absolute rock star in terms of product sales.”
But even blockbusters come with risks for retailers. Brochstein cau- tioned that stores face the challenge of not getting caught up in the hype and buying too much inventory.
“There’s a risk of flooding the market,” he said.
Specialty retailers such as Hot Topic are also looking to film to get crowds into their stores, though some don’t rely as much on the blockbusters.
A big business for Hot Topic, for example, are TV shows such as “Penny Dreadful,” “Orange Is the New Black” and “American Horror Story,” as well as anime series. Some darker film titles such as “Maleficent” have also worked, said Chief Executive Officer Lisa Harper.
Brands and logos are becoming less important to teens as TV and movie characters take over the market, she said.
“There’s demand because they relate to these characters,” Harper said.