'Cars 2' Merchandise Bonanza

 June 27--late adds with link to Media Post article and new last paragraph for text below....

By Robert Marich
   June 20, 2011—Cars 2 is already a gusher in licensed merchandise for Walt Disney. The Wall Street Journal estimates that Cars 2—which is the G-rated animated movie opening Friday—will surpass the $2.8 billion merchandise haul of Toy Story 3.
   Ira Mayer, publisher of the Licensing Letter and EPM Communications (who is also quoted in the book Marketing to Moviegoers: Second Edition), says that Disney commands merchandise royalties that are 2-3 percentage points higher than the 9.4% norm in entertainment.
   “In recent months, Disney and its licensees have packed the shelves of Target Corp., Wal-Mart Stores Inc. and Toy R Us Inc. with Cars Kleenex, shampoo, juice boxes, sleeping bags, kids’ furniture and a half-size acoustic guitar emblazoned with the image of Lightning McQueen, a red race car with a friendly smile,” says the Wall Street Journal article by Ethan Smith. “Beyond that, Disney Interactive Studios on Tuesday is releasing Cars 2: the Videogame, for major console systems, including a 3-D version for PlayStation 3.”
   Notes a Reuters story by Lisa Richwine, “Disney partners are producing a plethora of Cars-themed products from toys and clothing to food. Mattel Inc, for example, is selling more than 150 Cars 2 toys, while Williams-Sonoma Inc is launching aprons and mini cake-baking pans. Other partners include Nestle Ltd and Kimberly-Clark Corp.”
   Target discount stores issued a press release saying that Cars 2 merchandise is spread out throughout its stores, which number 1,755 nationally.
   “They’re still selling Cars 1 (merchandise) that leads into 2,” says Miller Tabak securities stock analyst David Joyce said. The original Cars was released in 2006, grossing $244 million in the U.S./Canada alone. It cost $120 million to make, according to Boxofficemojo.
   The WSJ article adds that a few years ago Disney embarked on a film production policy to emphasize movies with tie-ins to Disney and thus merchandise riches. This year, 80% of its production budget is to such films, up from 40% in 2010.
   It’s not sure-fire formula for success. Disney had a big hit with Up—which like the Cars franchise comes from its Pixar Animation unit—but there wasn't much of a licensed merchandise boom from Up. The film was somewhat sad, and lacked cool gadgets and characters.
   “Up to a year of lead time is necessary for design, manufacture, and sales of merchandise to stores, which may be before the first scene of a movie is even shot,” says Marketing to Moviegoers: Second Edition.

   LATE ADD: Thom Forbes writing for Media Post noted that various news stories suggested Disney/Pixar made Cars 2 because of strong merchandise sales and then flogged licensed merchandise tie-ins. “The war in the store is increasingly starting at the movie theater or the stadium," wrote Jack Neff in an Ad Age piece that detailed Kimberly-Clark's global, multi-brand strategy -- Kleenex, Huggies, Pull-Ups, Scott, Cottonelle, Viva -- with Cars 2 a couple of months ago. At least 22 retail chains are participating in the U.S., including regional ones. The effort includes movie advertising, a newspaper coupon insert and direct-mail program, in-store ads -- including spots on Walmart's in-store TV network -- and working with leading parenting bloggers to host a Cars 2 contest.

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