Hollywood creates promo fog: mega-hits make guesswork of handling product tie-ins

Discount Store News, Jan 26, 1998 by Michael Hartnett

As recently as the last decade, the key social events in the lives of U.S. families have tended to revolve around major holidays. But more and more these days, motion picture studios are doing their part to stretch that list of social obligations to include the super-duper, gotta-see premier of the month.

The pressure on consumers to stay up to date with these releases is intense, especially since the penalty for not doing so will be paid for in the form of incredulous stares and comments from colleagues and schoolmates, such as, "You haven't seen "Titanic?"

Such a steady succession of major movies being woven into the social fabric begs the question, Will consumers be overwhelmingly pressured to indulge in the product lines that are so often associated with these mega-productions? Will kids demand "Titanic" pj's? Will they require a lunchbox with the "Amistad" license -- even though November and December are already in the distant past on the movie industry timeline?

While consumers tred their way through this tidal wave of movie promotions and sort out their shopping priorities, retailers are having to work harder to identify the properties that will survive the next round of premiers. So far, the best strategy for reaping the benefits of a major license while minimizing the attendant risks has been to choose properties backed up by the largest promotional programs. The theory being that a license supported by $10 million in promotions is usually better than a property with a $5 million program. Unfortunately, not all properties are that predictable.

"It's no longer just a matter of big promotions equalling a big license. The opportunities are still there, but risk management is needed," observed Marty Brochstein, executive editor of The Licensing Letter. "Some very successful motion pictures are not huge licensing properties. Take `Independence Day,' from the summer of '96. It was a huge success at the box office, but it was not a major licensing property because the aliens were not warm and fuzzy."

To make matters worse, the mega-hit phenomenon is becoming increasingly more common, which only adds to the difficulty of predicting which films can gain favor among consumers.

"The studios have set out individually to create a series of "event" films [such as] "Titanic" and "Godzilla." But the issue then becomes: If every studio has an event film each summer and fall with 10 to 12 events per year, they cease to be events," Brochstein said.

In the face of such unpredicatability, the retail industry is looking for ways to best coordinate its licensing know-how.

"Retailers are putting people in place to act as license promotion coordinators. They work internally with merchandise departments to pull the whole program together, and get the apparel guy to work with the toy guy and the stationery guy in a unified way," Brochstein said. "The increased number of event movies does have a negative impact on the staying power of licensed properties. It does, absolutely, affect their value."

While the motion picture industry can be faulted for creating this promotional fog, the industry's major players are trying to understand the problems of retailers and offer some solutions. For example, the studios are trying to work more closely with retailers by bringing in former retail executives. At Warner Bros Consumer Products, which is the licensing and merchandising arm of Warner Bros Studios, there are former Target and Rose's execs.

The product categories which benefit from licensing programs are largely unchanged -- toys, video games and software, gifts and novelties, accessories and apparel. But with retailers and consumers being barraged by the hype for one film just as the hype for the next one is being cranked up, attention spans shorten, and the amount of shelf space that can be devoted to each new property remains limited.

For what it's worth, the next round of blockbuster premiers set for the first half of 1998 feature some interesting, warm and fuzzy characters, but there are several of them vying for the attention of consumers. In addition to "Godzilla" by Sony, there will be "Lost in Space" by New Line Cinema; "Quest for Camelot," an animated feature from Warner; "Mulan," a new animated feature from Disney; and "Small Soldiers," featuring computer animation from DreamWorks.

In the months to come, all these names are likely to become as common as the current crop of high-profile titles they will replace. For retailers sorting through the pros and cons of these properties, timing will not only be critical, it will be the key factor in deciding when to jump on board and when to jump ship.