TV licensing requires marketing push, but movies need shove - Apparel Merchandising - Licensing

Discount Store News, Sept 16, 1996

Let Me Entertain You" is becoming a marketing song of retailers as consumers nationwide continue to embrace licensed character apparel.

Entertainment-related merchandise is evolving as a business, and now is one of the largest segments of the mass market apparel business. In fact, licensed goods now vie with branded merchandise in a contest for space on selling floors that are increasingly filled with private label products.

What's more, the licensing piece of the apparel pie has been transformed from an items-oriented business based on "events" like feature releases into an ongoing endeavor involving continuous marketing and merchandising efforts.

This kind of licensing maturity has many obvious retail advantages, not the least of which is improved product quality. But as the business changes and grows, it makes buying choices more complex and difficult. Not only do retailers--and potential licensees for that matter--have to spend time evaluating the growing numbers of licensed properties, they also have to choose between different types of entertainment-related products.

Should, for example, mass merchants only put a major purchasing push behind the big studios' theatrical releases or can they garner incremental licensing sales by capitalizing on television properties as well?

That's a rhetorical question; both avenues can mean increased revenues. But the marketing efforts behind the two types of properties differ radically, and positioning of TV and movie merchandise requires merchants to be aware of the nuances involved in each product category.

"One of the principle differences between television and film properties is that the film properties tend to explode into the marketplace in a compressed time frame. Television properties, on the other hand, tend to build over longer periods; they develop over time with the successful ones coming back year after year," says Pat Wyatt, president of Twentieth Century Fox Licensing & Merchandising.

While nothing in retailing is a sure thing, the marketing efforts of the major studios in conjunction with movie releases make the big theatrical events attractive retail opportunities. Timing the release of the goods on the floor can be routinely tied to a film's grand opening. Typically the hype begins six weeks prior to a film's release, and merchandise hits the selling floor two weeks in advance of opening.

However, television requires that retailers pick the right cycle in a show's existence to make an in-store licensing push. "With a TV show, consumers don't have the same sense of urgency in buying licensed merchandise at a specific time. With a movie, it's very different. The customer says to herself, "I saw the movie and now I'm going to buy that T-shirt or purchase that toy.' It's very clear when a consumer expects to see Space Jam merchandise, for example, on the selling floor," says Rob Gruen, senior vice president of worldwide marketing and retail development at Warner Bros.

Yet TV-related product can certainly be a customer lure for retailers, particularly if a store positions itself as a destination operation. "We tell retailers that if you are going to be in that business, represent TV in total. That way, the customer will understand that you are either a headquarters for entertainment properties or not," Gruen says.

In theory, that concept makes perfect sense, but to execute the idea takes some serious assortment editing by the retailer involved.

"Prioritizing is actually our biggest challenge--to decide what licenses we're going to do a big job with. Because if you do it bottoms up from the buyers, you get 15 or 20 licenses in the store without any point of view. What we are trying to do is organize our efforts from the top down," explains Skip Chustz, senior vice president at ShopKo.

Ultimately picking a profit-inducing property can be compared to picking the winning horse in a race. And retailers, like gamblers, have developed different systems.

One way of betting is to only put your money on the licensing equivalent of a sure thing--a heavily marketed theatrical release produced by a major studio. Getting behind a TV license is more like spreading your money--open-to-buy dollars in this case--on a number of races over a period of time. That particular system also has advantages and allows for hedging the bet.

"A license that is based on a motion picture is heavily dependent on the success of the opening of the film. If it's a blockbuster, the licensing program is all but assured, but not every picture has that kind of success," says Elie Dekle, executive vice president of marketing and advertising at Saban.

"In TV," he continues, "the ability to build a successful licensing program is not necessarily dependent on premiere week. Over a long period of time, more impressions are released and retailers can have more time to evaluate a license before they have to make a decision."

Wyatt adds, "The two vehicles penetrate the culture at different rates and in different ways. The challenge for retailers is to evaluate a property and identify whether its audience is a match with the customers who shop the store."