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Hollywood eyes more play dates with toy industry
Thu Feb 12, 2009 11:28pm EST
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By Georg Szalai
NEW YORK (Hollywood Reporter) - Spock and Captain Kirk will jockey for position with Transformers, Harry Potter and Wolverine. SpongeBob is looking to outcharm Dora the Explorer and the Simpsons.
In short, the annual Toy Fair that kicks off in New York this weekend is expected to place bigger bets on the latest dolls and playthings based on movies and TV shows.
"Every studio is very involved this year," says Reyne Rice, trends specialist for the Toy Industry Assn. "It's definitely going to be a big year for entertainment licenses."
Rice says that 25- to 35-percent of all toy dollars are typically spent on products tied to a licensed or entertainment property, but this year, it may be more. She counts more than 25 movies that lend themselves to toy treatment; in most years, it's closer to 10-15.
That's good news for Hollywood studios.
Licensors of entertainment properties generally get an upfront guarantee from a master toy licensee, which can be worth $1 million or more for top franchises. Then the studio typically gets a 10- to 15-percent cut of wholesale receipts, which are around 50 percent of retail, says Steven Ekstract, group publisher at License Global! magazine.
In the case of major franchises like Disney/Pixar's "Toy Story," that percentage can go even higher. "It's a very great and very profitable business for studios," Ekstract says. "It's a revenue stream they really need."
TRANSFORMING THE GAME
Meanwhile, such powerful retailers as Wal-Mart and Target won't even accept product if it's not a franchise property because they use it as a promotional tool to drive people to their stores. Sterne, Agee & Leach analyst Margaret Whitfield says that 2007's "Tranformers" movie changed the game, helping boost Hasbro toy's sales from $100 million a year to an estimated $500 million after the film's release.
"No wonder they want to continue with a sequel," Whitfield says.
"'Transformers' the movie reinvigorated the toy franchise to such a degree that we launched a TV show after it, greenlit 'G.I. Joe' and made a deal with Universal on nine more properties," says Lisa Licht, GM of entertainment and licensing at Hasbro. "It's very compelling for the company."
At the same time, film studios increasingly mine the built-in name recognition of toy and game brands for potential blockbusters.
This summer brings Paramount's "G.I. Joe" and a "Transformers" sequel from DreamWorks/Paramount, both based on Hasbro properties and with Hasbro as a producer. Ridley Scott is set to direct Universal's "Monopoly," and "Candyland," "Ouija" and the maritime classic "Battleship" also are in development as part of Hasbro's six-year strategic partnership with Universal covering nine Hasbro properties and at least four films.
In addition, "Trivial Pursuit: America Plays," based on the Hasbro classic, is airing as a syndicated TV program.
In fact, in the past years, Hasbro quietly has refashioned itself as a quasi-content company, licensing its franchises for film or TV treatment and partnering on development and financing. Continued...
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