Toy companies are increasingly repositioning their brands as entertainment or lifestyle properties rather than simply as playthings. They are supporting their key lines with content, both company-generated and developed through licensing agreements for books, comics, DVD productions, software, videogames and music.
This strategy comes in response to declining sales of traditional toys, as well as retail consolidation caused by the leading toy chains' financial woes. FAO Schwarz has closed all but its flagship store and discontinued its Zany Brainy subsidiary, Kay-Bee declared Chapter 11 bankruptcy and Toys 'R' Us has said it may ultimately spin off its toy business.
"Kids today are sophisticated," said Stephanie Lawrence, director of global licensing for partnership and alliance management at LEGO. "They need content and multiple dimensions. Without that, [the toys] are just pieces of plastic." LEGO's Bionicle line is supported by a Web site, a DC Comics—produced insert in LEGO magazine—compiled into a book format for retail—and Scholastic's nine chapter books, as well as a series of made-for-video productions and a television series.
"[Toymakers] don't think of their brands as toys any more, they think of them as properties, and that's a very different thing," said Emily Brenner, editorial director of Harper Kids Entertainment and HarperFestival. "It's not an object, it's an idea."
"Toy companies are asking, 'How can we mine more of our assets?' " said Fred Paprin, a principle at the Wildflower Group, the licensing agency representing GUND, a non-entertainment—supported plush brand that recently secured St. Martin's/Priddy Books as a licensee. "They're realizing, 'We're not just in the toy business, we're in the children's entertainment business.' "
"We don't do books or a TV series or a movie just to sell toys, but as an enhancement to the brand," said Isaac Larian, CEO of MGA Entertainment, maker of the Bratz fashion dolls. The Bratz have appeared in a made-for-video production, are soon to star in a theatrical film and are featured in books from Penguin and Modern.
Entertainment Strategies
Toymakers promote their content-driven "worlds" in and on the toy packaging, as well as on their Web sites. In the past, Hasbro has packaged My Little Pony, G.I. Joe and Tonka toys with in-pack videos, while Transformers boxes have included mini-comics.
Mattel began its segmentation strategy in 2004, grouping Barbie products under themes such as CaliGirl and FairyTopia. Each doll comes with a CD-ROM, DVD, CD or mini-book. Barbie-licensed publishers, including Random House, Scholastic and Reader's Digest, sometimes tie in with these themes, although they don't have the marketing impact of an entertainment production. "It gives us materials to make stories, but there's nothing in today's kids' economy that beats TV or a video," said Kate Klimo, v-p and publisher, Random House/Golden Books Young Readers Group.
Toy companies also distribute content via traditional entertainment vehicles such as television shows, feature films, music and interactive software. The most common type of entertainment these days takes the form of made-for-DVD productions. In June, Hasbro announced a deal with Paramount Home Video to produce and distribute original videos based on its portfolio of brands. Among the first are G.I. Joe, Transformers and, for 2005, Weebles (Penguin is the publisher) and Candyland (Bendon). Mattel's Barbie starred in her first top-selling direct-to-video release, Barbie in the Nutcracker, in 2001, and her fourth, Barbie as the Princess and the Pauper, debuts this year.
DVDs are relatively inexpensive to produce and can generate significant sales and awareness, especially since their licensors often support them with movie-like marketing campaigns. As Andrew Steinberg, president of Modern Publishing—which holds licenses for Bratz, Build-A-Bear, Tyco, Fisher-Price, Mighty Beanz, Tonka, DuelMasters and Care Bears—says of the upcoming Care Bears DVD, "They're promoting it like it's Godfather VI."
For publishers, the awareness created by a direct-to-video production helps boost retailer support. "You have a natural reason to have a frontlist approach," said Harold Clarke, v-p and publisher, trade publishing, for Reader's Digest, which holds licenses for Barbie, Tonka, Little Tykes and Fisher-Price.
"When it's a proven toy brand and you add any kind of entertainment to it, it puts it back into top of mind," said Ben Ferguson, president of Bendon, which markets My Little Pony, Barbie, Transformers, Candyland and Cabbage Patch Kids books.
Well-promoted DVDs certainly can drive sales for publishers. "The video tie-ins are a lot of our Barbie business at this point," said Klimo.
Publishers' Role
"It was important to have the publishing component down first," said Lawrence about Bionicle, for which the first licensees were Scholastic, DC Comics and Upper Deck for trading cards and games. "That makes it authentic to the kids. They're scrounging for more information."
Scholastic has done well with Bionicle—so much so that it has expanded its agreement to include other LEGO brands such as Clikits and Knights' Kingdom.
Hasbro looked for publishing partners first on My Little Pony, according to Tom Klusaritz, v-p global publishing and business development at Hasbro. HarperCollins, Bendon and Publications International collectively have sold nearly four million My Little Pony books in less than a year. "The success we've had has certainly put some credibility behind our publishing effort," Klusaritz said.
"The brand team sees [publishing] as a huge category," reported Bryony Broyeur, v-p marketing, Hasbro Properties Group. "It's probably one of the first things they ask for, after entertainment. It's feel-good, it tells a story and it helps engage consumers."
In some cases, publishers develop content that later translates to other facets of the brand. Scholastic works with DIC Entertainment on Trollz, based on the colorful-haired dolls. "[DIC] not only shared the content with us, they asked us to develop it with them," said Randi Reisfeld, executive manager, licensing and media, at Scholastic, which also licenses Barbie, Fisher-Price, Care Bears, G.I. Joe and Tonka.
Similarly, Penguin has helped DIC create content for its Strawberry Shortcake property. "We've created themes for some of their videos," said Debra Dorfman, publisher of Grosset & Dunlap and Price Stern Sloan.
Toy-licensed books are a collaboration between toymaker and publisher. "[Book development] is a three-way street between consumer products, our publishers and the brand team," said Klusaritz.
"We work with our marketing team to bring out the personalities and see that we have the content we need to bring to the books," explained Caren Shalek, v-p, licensing, at Fisher-Price, whose licensees include Modern, Reader's Digest, Publications International, SoftPlay and Scholastic.
Toys as Toys
Some toys without entertainment support are licensed for publishing and other categories. HarperCollins acquired Build-a-Bear Workshop, a toy/retail brand. "We're tying in with what makes the toy special," said Brenner. Because the concept is interactive and personalized—store visitors create their own customized plush bears—formats will include a storybook where readers fill in the blanks with information about their bear's personality.
Melissa Segal, a principle at Evergreen Concepts, Build-a-Bear's licensing agent, reported that the company is developing an adult gift book program with Hylas Publishing and working on a craft/activity initiative for tween girls. "Because it's not a content-driven brand, there were questions for some publishers," said Segal, who believes the success of Bratz, Care Bears and the like helped publishers see Build-a-Bear's potential.
"If it's in society's hearts, it doesn't necessarily need to have this big entertainment thing behind it," said Chris Hilicki, co-chair of Dalmatian Press, which licenses Strawberry Shortcake from DIC. She believes a toy license without entertainment support could work in books "if it had intrinsic awareness and was cherished and multigenerational."
In fact, many of the brands that now are benefiting from strong-selling DVDs—Care Bears, Strawberry Shortcake and Bratz, among others—had no entertainment backing when first licensed into publishing. As Clarke reminded, "Barbie sold lots of books before she became a big media brand."
Toys Stand Alone
While toy licenses in many ways are like other entertainment properties, they have unique qualities that set them apart. First, many of the best-known toys are global and have been around for decades. "The good thing about toy licenses is they stay in the planogram for a long time," said Brenner. "As long as the toy company supports it, it will be around."
A toy brand maintains high consumer recognition. "It's not just because of the advertising behind it but because it's in the hands of kids and there's that emotional tie that comes from play," said Hilicki.
"When you go to Build-A-Bear Workshop, you're creating a best friend," Segal explained. "There's a real relationship."
Of course, toys also are advertised heavily. "Toy companies know how to build a brand, proliferate it and platform it," said Steinberg. "They have the money and the power and the marketing know-how to create serious brand recognition."
Toys also bring opportunities for cross-promotion and increased distribution; although this can occur for any entertainment property, toymakers are likely to increase their efforts on behalf of proprietary brands. Publishers often promote the toy line on the back covers of their books, while toy packages include inserts promoting the book titles. Of course, a toy-based DVD brings additional cross-promotional potential and awareness. "Miramax's marketing machine helps us sell more [Bionicle] books," said Reisfeld.
Toy stores tend to carry strong selections of toy-based books, and additional distribution is sometimes possible within toy company channels. Reader's Digest created a book featuring characters from a Little People nativity set sold through the Fisher-Price consumer catalogue. The books have performed in bookstores and at mass, as well as in the catalogue.
Of course, not all playthings lend themselves to books, no matter how successful they are within the toy industry. Reisfeld cited Rescue Heroes and G.I. Joe as strong brands that didn't work as books. She termed G.I. Joe "good but not stellar," and felt Rescue Heroes lacked "buzz." "It just didn't have that spark that kids need," she said.
Random House discontinued its book line based on Ohio Art's non-entertainment—supported Betty Spaghetty doll. "We thought its uniqueness was sufficient," Klimo explained. "As it happens, it wasn't."
Random House now considers toy brands "only in so far as they're headed toward being made into TV and movies," said Klimo. "You don't have a story unless there's a TV or movie tie-in, and that's the big challenge. We need the marketing machine, but we also need the story."
