Pop culture pulls in major bucks

Entertainment and sports heroes had only a so-so year in 2007 if you look at traditional yardsticks such as sales of tickets and discs.

But their appeal as pop culture icons was stronger than ever, judging by sales of clothing, book bags, games, toys, food packaging and other goods emblazoned with licensed names and likenesses.

Popular characters and brands including Hannah Montana, Calvin Klein and the New York Yankees helped drive global spending on licensed merchandise up 3.6% last year to $187 billion, according to trade magazine License Global and PricewaterhouseCoopers.

"The emerging markets and middle classes in Eastern Europe, China and India want our brands in entertainment, lifestyle, fashion and sports," says Steven Ekstract, the magazine's publisher. That's one reason he expects sales this year to hit $200 billion, even if the U.S. economy remains in a slump. Another reason: When money is tight, people take comfort in familiar and trusted names.

He and others also are optimistic that kids attending this summer's popcorn movies — including Iron Man, Speed Racer, Indiana Jones and the Kingdom of the Crystal Skull, The Chronicles of Narnia: Prince Caspian, Kung Fu Panda, The Incredible Hulk and Wall-E — will walk out wanting related toys and clothes.

About 44% of cash spent on licensed merchandise in 2006 went for goods linked to entertainment characters, most from movies and television, says the International Licensing Industry Merchandisers' Association (LIMA).

Manufacturers and retailers take a leap of faith when they make and stock products based on entertainment characters. These commitments often must be made a year in advance.

Sometimes, promising films misfire.

For example, sales last year tied to The Golden Compass and Bee Movie "turned out to be somewhat disappointing," says Michael Stone, CEO of licensing consulting firm The Beanstalk Group. Movie-related sales "were primarily driven by evergreen and franchise properties. There wasn't a big new merchandising success."

Still, Disney reinforced its No. 1 position on the License Global company list with a string of successes including Hannah Montana (the TV show with singer Miley Cyrus as the title character), its made-for-TV High School Musical franchise and characters promoted in its Disney Princesses merchandise lines.

"Most entertainment is here today and gone tomorrow," Ekstract says. "Disney creates brands. And they tapped into the zeitgeist of the tween girl marketplace."

If a movie's big enough, it can sell merchandise even when it isn't in theaters. This year, Star Wars fans who own a Nintendo Wii can imagine themselves to be Jedi knights with a game controller shaped like the movie's famous light sabers.

Adults also often take comfort in products with familiar names — which is why several non-entertainment corporations are entering the fray.

"They're taking their brand names that consumers already know and trust, and licensing them into related but not competing product categories," says LIMA President Charles Riotto. "That creates a very nice revenue stream."

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