Hot entertainment properties make licensing lucrative

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Boxoffice receipts and Nielsen ratings offer tidy numbers, but nothing illustrates an entertainment property's success like a lunchbox. Or millions and millions of lunchboxes, in the case of A-list brands like "Star Wars" and "Hannah Montana."

On the eve of the annual Licensing International Expo in New York, The Hollywood Reporter consulted with top branding agents and executives to identify the licensing Goliaths, the blockbuster properties and the brands to watch in the coming months.

Brands of the Year

Property: "Hannah Montana"
Parent: Disney

The licensing star of the year is already well-acquainted with the limelight. "Hannah Montana," the Disney Channel show about a teenage girl's double life as a pop star, "will continue to be a huge success that will not go away," says Debra Joester, president of the New York licensing agency Joester Loria Group.

The property has launched hit albums, a sold-out concert tour and its own clothing line. Along with "High School Musical," it has kept Disney at the top of the consumer products game with $26 billion in sales in 2007. And even though "Hannah" star Miley Cyrus raised a few eyebrows recently with racy Vanity Fair photos, insiders don't expect the brand to suffer much. "There is a huge gap between Disney and the second player," says Tony Lisanti, the Editor-In-Chief of License! Global magazine. "Disney is just a juggernaut in terms of their licensing and merchandising programs."

No one can explain exactly why a licensing property catches fire, but Disney has succeeded by focusing with razor-sharp precision on an energized market. "The reason 'Hannah Montana' works so well for merchandising is because it is hitting the preteen market and talking right to them," says Danny Simon, the president and CEO of the Licensing Group in Los Angeles.

Because Hannah Montana herself undergoes a transformation from an ordinary student to a rock star, some of the most successful licensed products are the ones that allow her devotees to undergo a similar transformation. "People have such a strong affinity for the characters and the brand that they want to purchase the merchandise and show their loyalty to those brands," says Charles Riotto, the president of the International Licensing Industry Merchandisers' Assn. in New York. "And the best way to do that is to wear the apparel or carry the backpack."

Property: "High School Musical"
Parent: Disney

What started in 2006 as a Disney Channel original movie quickly evolved into Disney's Little Licensing Engine That Could. The country's best-selling album in 2006 became a televised sequel in 2007 and is slated to become a full-blown feature film in theaters later this fall.

Part of the property's appeal lies in creating a fantasy universe in which all kids at a high school -- the jocks, the mathletes, the marching band -- can become popular. The result has been a broad and loyal following. "This is one of those properties that no one really expected to be as huge as it was or is," Riotto says. "Even Disney was caught by surprise. But it really strikes home, and kids can really relate to it. It's like what happened with the 'Teenage Mutant Ninja Turtles.' "

All of this enthusiasm for the core property translates into strong licensing forecasts.

" 'High School Musical' seems to have a lot of momentum and is creating lots of anticipation about when the product will hit," Joester says.

Property: "Star Wars"
Parent: Lucasfilm

"Star Wars" celebrated its 30th anniversary last year, but the franchise shows no sign of slipping from its status as the property to which all other entertainment licenses aspire. " 'Star Wars' is going to be huge again," Joester says. "Hasbro is doing just an unbelievable job." Even Lucas' "Indiana Jones," with its flair for danger and comic relief, can't touch the invincible six-episode saga. " 'Indiana Jones' is just never as kid-targeted and fantasy-filled as 'Star Wars,' " Joester explains.

Much of the space epic's stronghold can be credited to its parent company. "Lucasfilm has a tremendous history of doing strong licensing programs and pioneering the field," Lisanti says. "Lucas created a universe that has worked for 30 years," Simon says. "To sustain a property for that length of time in a marketplace as fickle as the American marketplace is a feat in and of itself."

Like "Hannah Montana" and "High School Musical," part of the success of "Star Wars" is that it acknowledges and embraces fantasy. "It's a story people can relate to," Riotto explains. "Saving the world and space travel really appeal to people's fantasy nature."

And "Star Wars" continues to appeal to new generations. "The franchise has an extraordinary fan base that keeps finding new blood," Simon says. "People who obviously weren't alive when the first 'Star Wars' was released are fans. It would be hard to find another property that even comes close to matching that kind of success or duplicating that kind of longevity at the level it's sustained."

Blockbuster Brands

Property: "American Idol"
Parent: FremantleMedia and Fox
Its ratings might be down, but "American Idol" has leveraged its leading Nielsen ranking to become a branding juggernaught. First, the show raised more than $70 million and $60 million for families living below the poverty level on its "Idol Gives Back" shows in 2007 and 2008, respectively. And in November, Disney will unveil an "American Idol" stage at its Hollywood Studios theme park in Florida, providing "a chance for everyone to be on 'American Idol,' " says David Luner, senior vp interactive and consumer products for FremantleMedia Enterprises.



Property: "Bakugan Battle Brawlers"
Parent: Cartoon Network
This anime series debuted in February, but its Spin Master toy line has quickly become one of the top brands in the boys' aisle at U.S. toy retailers. Following similar successes in Japan and Canada, "Bakugan" placed among the top 10 with kids and boys aged six to 11 on Sunday mornings in April. "They are really starting to sell a lot of the 'Bakugan' product, and there's a lot of excitement around it," Joester says. At the Licensing Expo, Cartoon Network will announce new 'Bakugan' partners that will launch product in the fall and and spring in home entertainment, apparel and publishing.

Property: Dora and Diego, from "Dora the Explorer" and "Go, Diego! Go!"
Parent: Nickelodeon
Dora and her cousin Diego have been taking preschoolers on adventures for the past eight years, but "we're expanding and freshening the product," says Leigh Anne Brodsky, president of Nickelodeon and Viacom Consumer Products. This year, for example, Diego introduced his own animal rescue Nintendo Wii game "Go, Diego! Go!: Safari Rescue," and Nickelodeon will unveil new toys, books and videos for the franchise.

Property: "Handy Manny"
Parent: Disney
"Handy Mandy" introduces preschoolers to Manny Garcia, an animated bilingual Hispanic handyman and his "handy" collection of talking tools. Thus far, Disney has licensed Manny plush dolls, DVDs, games and apparel. "You don't necessarily see the (same) ratings that Nick is getting with the younger groups, but Disney has such an advantage at getting products into consumers' hands," Joester says.

Property: "Indiana Jones"
Parent: Lucasfilm
It took "Kingdom of the Crystal Skull" to finally introduce Gen Y to Indiana Jones. "There's a certain value to the nostalgia of the 'Indiana Jones' franchise that will connect with parents, and then a whole new 'Indiana Jones' audience will be created as a result," Lisanti says. "There will be a collectors' market for the older group and certainly a huge product offering for the younger generation."

Property: "Iron Man"
Parent: Paramount/Marvel
Although it may be too soon to predict "Iron Man's" ultimate licensing success, the initial numbers have been extraordinary. Part of its success might hinge on the fact that the film caters not only to kids, but to their deeper-pocketed parents as well. "By creating the property as an entertainment vehicle for parents as well as for kids ... the barriers of resistance to purchasing goods were broken down by the parent enjoying the entertainment experience," Simon says.

Property: "Speed Racer"
Parent: Warner Bros.
"Speed Racer" crashed in theaters last month, but Mattel's Hot Wheels-branded Mach 6 vehicles and Race-a-Round sound helmets could get more mileage. "Only the top properties can command shelf space a year or two after theatrical release, and we believe 'Speed' is one of them," says Doug Wadleigh, vp marketing action play at Mattel. He plans to keep "Speed Racer" action figures, role-play toys and racing sets on shelves well into 2009.

Property: "Spider-Man"
Parent: Sony
Although it began as a comic book, "Spider-Man" owes its popularity and its licensing success to Sony's blockbuster films. "For a long time, it wasn't a must-have character in the repertoire," Simon says. "But in the last 10 years or so, it has certainly become a very strong and very important property in the Marvel armory." With a successful trilogy under its belt, and a Saturday morning cartoon on The CW4Kids every week, Spidey has already woven an effective licensing web.

Property: "Transformers"
Parent: Paramount
Even though a "Transformers" sequel won't debut until June 2009 , the first installment of the Hasbro-endorsed franchise was enough to create a strong foundation. "You have a huge boy toy aspect to the film, which is a very strong licensing area in terms of action figures and cars," Lisanti says. " 'Transformers' will have tremendous potential."

Property: "Yo Gabba Gabba!"
Parent: Nickelodeon
"Yo Gabba Gabba!", a new TV show aimed at preschoolers, introduces a collection of singing robots and furry monsters to Nickelodeon. "It's a challenging year for new properties launching because there's not the velocity we've normally seen in the preschool space," says Joester. "But I'm watching 'Yo Gabba Gabba!' and hoping this one will stick."

Brands to Watch

Property: "Batman"
Parent: Warner Bros.
The second installment of the new Batman series, "The Dark Knight," won't unfurl until July 18, but its products hit shelves in May. Mattel's new Batman line specifically appeals to a child's imagination and desire to become the ultimate protector of Gotham City. For instance, "The Dark Knight" Bruce Wayne Tech Mega Cape Accessory transforms into wings (and retracts into a back harness) with the push of a button, a la Bruce Wayne himself. And Joker figurines are flying off shelves, no doubt fueled by star Heath Ledger's untimely death. "Batman is an evergreen franchise," Wadleigh says. "It's been around in the toy aisles for decades, and we expect to see it perform well into 2009."

Property: "Kung Fu Panda"
Parent: DreamWorks and Paramount
Po, the lazy, unlikely hero of "Kung Fu Panda," is nunchucking his way into toy aisles. The product line, which represents the first time DreamWorks has partnered with Mattel as the master toy licensee, includes Po's Power Paws, which enable kids to recreate Po's kung fu training experience with interactive, paw-shaped gloves. According to Wadleigh, role-play toys represent a growing segment in action figures for boys. "It started with the 'Star Wars' light sabers," he says. "Now all boys want to become the heroes themselves."

Property: "Star Trek"
Parent: Paramount
J.J. Abrams won't fly his version of the storied USS Enterprise into theaters until May 2009, but Paramount is already busy setting up promotional licensing for its debut. Thus far, Playmates Toys is poised to launch a collectible set of figures, vehicles, play sets and role-play toys next spring. The line will include three scaled versions of lifelike action figures as well as special foot-tall collectors' figures. In addition, Playmates will offer basic role-play toys and deluxe role-play versions with electronic capabilities.



In the battle of Lucas properties, "Star Wars" dominates
By Jason Matloff

When it comes to movie merchandising, there's "Star Wars" and then there's everything else. Ever since George Lucas' 1977 intergalactic epic landed in theaters, fans have snatched up action figures, books, video games and numerous other products. Five sequels later, the licensing machine is revving up again for the upcoming Warner Bros. and Cartoon Network CGI feature and television series "Star Wars: The Clone Wars."

So when Lucasfilm's licensing team started its campaign for Paramount's "Indiana Jones and the Kingdom of the Crystal Skull," they avoided unnecessary pressure. "We think 'Kingdom of the Crystal Skull' could be very successful," says Howard Roffman, president of Lucas Licensing. "But not in the league of 'Star Wars.' "

"Star Wars" revolutionized the industry. The size of the action figures was taken down to three and three-fourths inches, and they were priced affordably so fans could collect the whole series. Last year, the franchise's merchandise had exceeded $15 billion in retail sales. In contrast, only a handful of products were produced for 1981's "Raiders of the Lost Ark," mostly because retailers were still hesitant to embrace movie-related merchandise.

Before the release of 1999's "Star Wars: Episode I -- The Phantom Menace," Lucasfilm was faced with the challenge of stirring up interest for a franchise that, like Indy, hadn't been represented theatrically for nearly two decades. Nearly 100 licenses were granted, ultimately resulting in store shelves full of unsold merchandise. As a result, Lucasfilm has taken a more measured approach to Indy merchandising, granting about 50 mostly short-term licenses to stalwarts like Lego, Hasbro and Hallmark.

So far, the strategy is working. In January, Lego released a line of classic Indy items designed to appeal to multiple generations. "I was recently in the Lego aisle at Wal-Mart," Roffman says, "and saw a mother with two young boys checking out each and every 'Star Wars' item. When the mother saw the Indy section, she blurted out, 'Oh my God, "Indiana Jones" Legos! Is that cool or what?' "
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