Sample Book Chapters
Chapter 5 - Merchandising
Chapter extracts in this website amount to 4,000 words distilled from 102,000 words in the print book
Up to one year’s lead time is necessary for design, manufacture, and sales of merchandise to stores. Thus, the merchandising industry must decide on whether to embrace a new film before it is finished and, in many cases, before the first scene of a movie is even shot. Merchandising companies may have a script and know the talent involved (actors, director, and producers).
Licensed merchandise companies, which make products such as key chains and towels with movie logos and characters, and retail stores are reluctant to buy into movies based on a totally new concept. Originals have burned them too often, such as the box office disappointment “The Last Action Hero” in 1993. And nothing has come close to the $1.5 billion retail merchandising haul from Walt Disney’s 1994 theatrical release “The Lion King,” which holds the all-time record for an original property.
Merchandisers prefer to wait for video release, sequels, and embrace new films based on properties adapted from other media, such as books or video games. But even that’s not an insurance policy. The big budget, English-language “Godzilla,” which was based on the famous Japanese movie property, was a merchandising disappointment in 1998.
Since the bonanza from “Star Wars” in 1977, merchandising mushroomed as a source of revenue for Hollywood. Today at the top end of expectations, a major studio film that is aimed at the family audience and is a big holiday-season theatrical release earns $5–$15 million for studios from merchandise rights.
The movie merchandising business actually peaked in the late 1990s but has fallen back since then because retailers—burned by underperforming movies—turned cautious. These days, there’s something of a feast or famine for films. Some films get little merchandising interest while others line up hundreds of deals.
Merchandise licensing conveys the right to manufacture products with theme elements based on movies (and can include the creation of movie-themed services for companies that do not make durable goods). Typically, films are represented directly by movie companies, although in some cases the producers, star talent, and/or owner of underlying property rights, such as a comic book publisher, also are involved.
The biggest headache remains trying to sort out the hits from the misses in advance. Entertainment stock analyst Lee Isgur famously mused years ago that one never knows what to expect even when accomplished filmmaker George Lucas creates a movie with cute characters. It could turn out nicely like “Star Wars” or badly like “Howard the Duck.”
***
Copyright © 2005, Elsevier Inc. All rights reserved.
Note: Book passages and tables are updated where appropriate, and some bridge text may be added to smooth transitions in the accompanying excerpt.
TABLE -- Movie License Categories for Children
Backpacks & bags
Children/costumes
Children/shoes
Children/infant clothing
Children/jackets
Children/sleepwear
Children/swimwear & outdoor
Children/underwear
Lunch pails
Tee-shirts
Watches/children’s
Candy/general
Candy/novelties and empty containers
Cookies
Drinks/juice and non-juice
Fruit snacks
Gifts & Collectibles
Die-cast vehicles
Coasters/drink holders
Plush dolls
Playing cards
Vending items/rubber balls, vinyl items
Lunch kits
Sleeping bags
Interactive
Video game console
Video game handheld
Toy video game
Cell phone game
Publishing
Book/children’s print
Book/children’s sound
Book/making of
Book/novelization
Magazine/souvenir
Sticker book
Wall calendars & mini-calendars
Stationary
Arts & crafts supplies
Posters
Toys & Games
Assembly kits/snap together
Assembly kits/glue models
Assembly kits/wood & other
Backyard & inflatables
Cards/trading
Characters/bobble head
Characters/plastic action figures
Games/board & puzzle
Games/hand-held electronic
Infant toys
Kites/flying toys
License plates, waste baskets, etc.
Props, masks & busts
Scooters/in-line skates
Skateboards/body boards
Sports equipment
Source: Marketing to Moviegoers
