December 26 1982
PHILADELPHIA - While a megahit like Star Wars earns Kenner products more than $100 million a year in retail sales of related toys, and Kamar international delivers 10 million stuffed E.T. dolls to stores around the world, other movie-inspired playthings never got off the ground this year.
Duds
Every industry has them. But in the burgeoning world of licensed toys - which will gross about $4 billion (U.S.) in 1982 according to industry sources - the duds far outnumber the hits. And the licensed film-related toys produced under exclusive agreements with movie studios appear to be among the riskiest ventures.It's a competitive, high-risk business. As manufacturers will tell you, even a hit movie doesn't guarantee a hit toy.
A visit to toy stores tells the story. At one kiddie emporium, Kamars, stuffed E.T.s, Parker Bros. E. T. board game, and LJN's E.T. windup dolls are hot items lining shelves in the front of the store.
Star Trek
Hidden along the farthest aisle are the "bargain basement" items. Mego Corp's Star Trek and Buck Rogers action figures, along with Mattel's figures from Battlestar Galactica, are reduced to 91 cents from as much as 2.47 in many U.S. stores. Mattel's Clash of the Titans figures, previously $2.68, are $1.14.
The movie Legend of the Lone Ranger, an embarrassing bust for Universal in 1981, didn't do much to generate interest in Gabriel's line of Lone Ranger action figures. And even a couple of Warner Brothers blockbusters, 1978's Superman and 1981's Superman II, didn't stop Mego Corp from recently discontinuing its 16 year Super heroes line of Action figures.
At another big store in the Philadelphia area, E.T. and Annie are the new big sellers, while Lone Ranger figures have been reduced to $1.69 from $2.95. "If they don't sell at that price, the store will either lower them again or give them away to charity," manager Mike McArdle says.
"Everyone has jumped on the bandwagon and licensed everything that comes out, but they haven't really analyzed what makes a good toy," says Kenner spokesman Dave Demala. "A good movie does not necessarily make a good toy."
Kenner knows. The Cincinnati based company may have hit the mother lode with its Star Wars/Empire Strikes back line, but its 18" Alien monster lost more than $1 million and was produced for only one year, DeMala says.
Choosing the right movie from which to license a toy "is a combination of luck and knowing what to look for," DeMala says.
"There was an awful amount of hoopla about the movie Annie, but nobody at Kenner was concerned about it as a toy. We felt kids couldn't really get involved with it at a fantasy level."
Box Office Disaster
A titanically successful broadway musical but a box office disaster as a Columbia film, Annie's merchandise has been nothing less than mind-boggling. Knickerbocker toys, with 15 of the films 100-plus licenses, has sold more than 2 million of the films' Annie dolls at $7 to $8 (US) retail. The company stands to make as much from its products as the film did at the box office.
"The key to a successful toy," DeMala says, "is a child's ability to fantasize with it." In the case of the Butch Cassidy line, "It wasn't so necessarily that the movie killed the toy as much as the fact that kids aren't into cowboys and indians anymore" he says. "Because of technology, kids prefer to look ahead 200,000 years rather than back to 1896."
Looking back is something officials at Mego Corp prefer not to do. Last June, the financially beleaguered company - the producer of such short-lived beauties as the Farrah Fawcett and Diana Ross dolls - filed for reorganization under Chapter 11 of the bankruptcy laws.
Mego dropped its license for Buck Rogers, a 1979 Universal loser, after one year. The company did the same for its Star Trek line based on Paramount's 1979 disappointment. The Super heroes line which includes Batman, Robin, Wonder Woman, Hulk, Green Goblin, Spider-Man and Superman is also being phased out.
"Superman didn't increase sales for us," says Cindy Schreibman, Mego's director of marketing. "It came out at the time of Star Wars and other blockbusters. It was a question of vying for dollars for action figures."
Star Trek? "Unfortunately, it wasn't the kind of movie we had hoped it would be," she says. "It appealed to adults. Kids didn't relate to it"
Buck Rogers? "Too much competition from too many other Space Movies."
Devastating Effects
"Toy producers always go into licensing game expecting films to be great," Schreibman says, "but very few actually do become great. Backing a loser can have devastating effects."
"Psychologically, you're afraid to take another gamble," she says. "You're more wary, in which case you can miss something viable."
"Licensing a toy based on a film can be a double risk," says Tom Murn, editor of Toy and Hobby World Magazine. "In the first place," he says, "you can't test-market the toys before the movie is released. Secondly, once the toys are out, manufacturers must pay a royalty on each license, which cuts into profits."
"You have no way of knowing what the reception of the film will be in theatres," says Murn. "How many people envisioned the enormous success of E.T.?"
Walt Disney introduced Tron, a sci-fi film with flashy computer generated animation, to toy manufactures months before it was released last year. Duncan Toys Co took a chance on a Tron yo-yo - with "four phase video graphics" - because the movie was innovative and was being backed up with video games in arcades, according to Duncan spokesman Ray Gummer. It also seemed to fit with the company's recent success of the Pac-Man yo-yo.
But the public didn't think so. The film was a disappointment. It never broke into the teenage market as Disney hoped. The Tron yo-yo was a dud too. "Most buyers said the product was great but the license wasn't," says Gummer.
Wholesale buyers, too, can be caught in the squeeze of a dud licensed toy
Lone Ranger items are not particularly big sellers for the Kiddie City chain of stores, but the stores will continue to stock them because "they are a basic," says Philadelphia area buyer Bob Breeze.
Superman products "will probably always be on the shelf" because they tend to run in cycles, but Clash of the Titans will be unloaded at a discount, Breeze says.
Adult Market
Joel Spivak, owner of the Rockets and accessories store, is selling certain Star Trek and Battlestar Galactica items as fast as he can stock them - to adults.
"People into Sci-Fi are not your average toy buyers" he says.
Spivak's biggest sellers include Mego's rare Star Trek Aliens action figures and Flash Gordon figures that were never mass distributed.
Even Star Trek's Mr. Spock would have a tough time figuring out the logic of licensed toys.
"Like anything in the licensing business, the key is to get in and out quick," sighs Mego's Schreibman. "It's a problem. It's risk."