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TOY LICENSING: IS HARRY POTTER THE ‘NEW STAR WARS’?


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Is Harry Potter The 'New Star Wars' For Toy Licensing?

I was talking to an old time Toy industry guy at Toy Fair this year, and we were discussing Licensing in the toy business. He jokingly asked me this question: "Is Harry Potter The 'New Star Wars' For Toy Licensing". So let me answer that provocative question clearly – Harry Potter and Star Wars are very different properties in many ways, so the clear answer to the question in the title is NO, but nevertheless there is a lot to learn from looking at the development of both of these powerhouse franchises.

This article looks at these two major entertainment properties which can be found across Toy aisles, to learn from the analysis and comparisons and to try to be both entertaining and insightful about Toy Licensing.


 



Star Wars – A Perennial Best-Selling Toy License

When Star Wars: Episode IV – A New Hope released to movie theatres back in 1977 it was a massive success both on screen and for related products in stores. The original version had a reported production budget of $11m USD, and according to Box Office Mojo took over $300m USD at the global box office. The mass market merchandise frenzy that followed had never been seen before. I was only 2 years old, so to be honest it largely passed me by, as did The Empire Strikes Back in 1980. However, by the time Return of The Jedi released in 1983, I was a massive Star Wars nut, and I have vivid memories of watching that film at the Odeon cinema on Oxford Street, Manchester, England (pictured below), and of watching the previous two movies avidly whenever they were on TV.


I also remember deeply desiring the Toys. Unfortunately at the time the movies were all the rage, my family could not afford such fripperies as Licensed Toys, but I enjoyed playing with Luke, Han, Leia and co at my friends’ houses. Some years later (I think I was about 11 years old) I found a full set of original Toys at a jumble sale (like a UK version of a garage sale), which I bought for peanuts and cherished. Sadly I no longer have them much to my regret...


Anyway, the point is this, in many ways Star Wars was and still is the best practise template for a Toyetic movie franchise. The broad character array offers something for every child (or adult/kidult). The franchise features ‘goodies’ and ‘baddies’, heroes and heroines, funny characters, cute characters, weapons, robots, ground vehicles, space ships, big playset inspiring locations such as The Empire’s Death Star or Yoda’s Swamp, and so much more. Over the years I have advised various content creators about which key elements they need to include in their content output to maximise the opportunity for Toys & Games. I have often referred these clients to watch the original Star Wars movies.


This might well explain why Star Wars has been a top-selling Toy brand more or less since the originally released Trilogy kickstarted the whole thing. I began working full time in the Toy business around the turn of the millennium, and as best as I can remember, Star Wars has been a Top 10 License for Toys every year of this millennium so far.


 

HARRY POTTER – A DIFFERENT PATH TO PERENNIAL STATUS?

I remember a huge buzz around the original book instalment of Harry Potter, with the release of the second and third books then being hugely anticipated. Like many people I was hooked after the first book. Such a strong storyline, empathetic characters and a unique blend of fantasy and reality.


The original movie was also heavily anticipated, and thus when it released in November 2001 went on to gross just under $1 billion at the global box office. Since then ‘Wizarding World’ (which includes the Harry Potter AND Fantastic Beasts movies) has gone on to become the fourth biggest movie franchise of all time, with reported total box office takings of $9.65 billion at the time of writing, sitting just behind the Star Wars franchise in 3rd place with c. $10.3 billion box office takings.


So Harry Potter is a huge movie franchise. But more than that, it has become an ever present in Toy aisles. As I have meandered through retail across the last 12 months, one of the ever presents was Harry Potter licensed merchandise. 


One interesting thing to note here, is that when Harry Potter Toys first launched 20+ years back, they weren’t quite as big a success as the strength of following and passion for the franchise might have suggested they would be. Mattel had the original master Toy license but struggled somewhat. One reason given by many observers at the time was that the lower than expected sales results from Harry Potter Toy & Game products was a result of the stark Gender labelled merchandising options at the time – Toys back then tended to go in aisles clearly labelled as ‘Boys’ or ‘Girls’ or ‘Preschool’. These options didn’t really suit Harry Potter which was of course a property with a strong lead boy character, alongside many strong females in the film, not the least of which being the always impressive Hermione Granger. Harry Potter was not a very obvious traditional ‘Boys’ property, a la Power Rangers, He Man or Star Wars - whereby the focus is on action, quick wit and one liners, and physical conflict of some sort. Moreover, the characters lacked the glitzy fashion most prominently found in the ‘Girls’ aisle at that point in time.


I was at Hasbro back when the first Harry Potter Toys came out. I have vague recollections that those of us at Hasbro who were fans of the books were somewhat miffed when Mattel got the master Toy license for Harry Potter. We at Hasbro did get some peripheral opportunities with rights for ‘Candy’ and some other peripheral categories. I remember we had big expectations for Bertie Botts Every Flavour Beans, but I don’t think we enjoyed great success from memory back then. 


So if the original Toy products were not as successful as we would have expected back then, what changed to see Harry Potter grow into a perennial Toy brand which today only seems to grow in strength and retail presence every year, despite it being more than a decade since The Deathly Hallows Part 2 released in cinemas?


We can see 3 major trends affecting and boosting the opportunity for Harry Potter to become a powerful perennial franchise:


1.      Originally when the first Toy line was released, the property was arguably equally weighted between readers of the book and watchers of the movies, because to start with there was only one movie and the book series started the whole thing. Most kids would need to be c. 7 to 8 years of age to be able to read that type of book, which as we know is older than the typical Toy demographic. Now though, more than a decade after the release of The Deathly Hallows Part 2, new generations of kids are coming to the franchise fresh and greatly enjoying the movies as a primary point of entry to the franchise. This has in effect reduced the entry point to Harry Potter for children, as the movie is more accessible to younger kids than the books were originally due to movie watching age starting younger versus reading age.

 

2.     The whole 'Kidult' thang – today’s young adults grew up with Harry Potter movies releasing regularly throughout their childhoods. In effect, you could argue that Harry Potter is to their generation what Star Wars is to my generation – a massive family entertainment franchise which really spoke to that generation. As such, today’s ‘Kidults’ have affection and affinity for this mighty magical franchise and buy merchandise accordingly.

 

3.     The Toy industry has changed in terms of broader retail channels and marketing methods. Back when Mattel had the first master Toy license for Harry Potter the 'old skool' model still applied – you typically had either a Doll or an Action Figure range to reflect the main characters, plus playsets and ideally a vehicle or two, and heavy TV advertising combined with focus on a limited number of mass market retailers meant that no bigger company wanted to chase individual Toy categories with a license. Today’s market is so much more nuanced and full of niches of various sizes, meaning that Licensing can go further than it did before, and Licensees can easily tap into ‘Community’ that was not open or accessible to them twenty years ago to sell enthusiast product.


THE BOTTOM LINE: IS HARRY POTTER THE NEXT STAR WARS IN TOY LICENSING?

No, of course not…it’s a stupid provocative question which we shouldn’t take seriously, it was only asked of me in a joking tone. BUT if we compare the journey of both of these mighty Toyetic franchises we can see different paths to success with Licenses in the Toy & Game business, and we can also see how changing society and changing retail landscape allow different franchises to flourish.


N.B. All trademarks and other intellectual property featured herein are the property of their respective owners.

 

 

TOY & GAME BUSINESS FUNDAMENTALS TRAINING WITH STEVE REECE

Several of our clients have asked us to put together a training day program covering the fundamentals of the Toy & Game business.


We are currently working on rolling this training day out to a broader audience.

If you want to sign up to the waiting list, to receive more information and to get advanced ticket sale information for you or your team, please click here to sign up: https://steve-reece.aweb.page/p/f7499bff-42aa-436a-9ff0-ef581613a681


The curriculum is designed to offer an overview of how the toy & Game business works overall, and by working through key fundamental areas of the Toy business including:


  • Product concept and ideation

  • Manufacturing & shipping

  • Inventory management and forecasting

  • Distribution markets, models, methods and channels

  • Selling internationally, managing export sales

  • How to sell Toys & Games to retail buyers

  • How to get your products placed in retail

  • Toy & Game industry Trade shows

  • Toy & Game marketing

  • How brand licensing works

  • Consumer insights in the Toy & Game business

  • A non-legal look at Legal - IP/brand protection, Contracts, NDAs

  • Biggest mistakes to avoid in the Toy & Game business

  • Information sources on the global Toy & Game industry

  • And more...


 

WHO'S IT FOR?

This is a fundamentals training course, so by definition it is pitched at giving a basic understanding of key elements of the Toy & Games business. This course will be of help for people with c. 3 years or less experience in the business, or people who have primarily worked in one discipline and now need an idea of how the rest of the Toy business works, and for those who are in start-up or pre-start up mode.


The course will include ample opportunity to ask specific questions to aid your understanding and learning. This is not designed to be passive learning, the more questions you ask the more you will get from the training.

 

WHO IS THE COURSE MODERATOR?

Steve Reece will present all elements of this course. Steve has 25 years experience working across the Toy & Games business and has a long-term commitment to helping the learning and development of people in the Toy & Game business. He has worked for and with major Toy & Game companies as well as hundreds of smaller companies and start-ups. He first ran training courses for our industry back in 2011.

 

WHERE & WHEN WILL THE COURSE BE HELD?

We are delivering the course via online training. We are also running training days in client's offices..

 

WHAT DO YOU DO NEXT IF YOU ARE INTERESTED IN THIS TOY & GAME BUSINESS FUNDAMENTALS TRAINING WITH STEVE REECE?

Sign up to the waiting list for advanced ticket sales & more info here:

Several of our clients have asked us to put together a training day program covering the fundamentals of the Toy & Game business.

We are currently working on rolling this training day out to a broader audience.


If you want to sign up to the waiting list, to receive more information and to get advanced ticket sale information for you or your team, please click here to sign up: https://steve-reece.aweb.page/p/f7499bff-42aa-436a-9ff0-ef581613a681 


If you want to complete a simple survey to feedback on your needs so we can structure the course accordingly: https://docs.google.com/forms/d/e/1FAIpQLSfS6AJApTc11D6xQnwOW8_K7rZy5yfZZXWFA3hl0BjLWVvILQ/viewform?usp=sf_link 


The curriculum is being designed to offer an overview of how the toy & Game business works overall, and by working through key fundamental areas of the Toy business including:


  • Product concept and ideation

  • Manufacturing & shipping

  • Inventory management and forecasting

  • Distribution markets, models, methods and channels

  • Selling internationally, managing export sales

  • How to sell Toys & Games to retail buyers

  • Toy & Game industry Trade shows

  • Toy & Game marketing

  • How brand licensing works

  • Consumer insights in the Toy & Game business

  • A non-legal look at Legal - IP/brand protection

  • And more...



WHO'S IT FOR?

This is a fundamentals training course, so by definition it is pitched at giving a basic understanding of key elements of the Toy & Games business. This course will be of help for people with less than c. 3 years experience in the business, for people who have primarily worked in one discipline and now need an idea of how the rest of the Toy business works, and for those who are in start up or pre-start up mode.


The course will include ample opportunity to ask specific questions to aid your understanding and learning. This is not designed to be passive learning, the more questions you ask the more you will get from the training.


WHO IS THE COURSE MODERATOR?

Steve Reece will present all elements of this full one day course. Steve has 25 years experience working across the Toy & Games business and has a long term commitment to helping the learning and development of people in the Toy & Game business. He has worked for and with major Toy & Game companies as well as hundreds of smaller companies and start ups. He first ran training courses for our industry back in 2011.


WHERE & WHEN WILL THE COURSE BE HELD?

We are just gauging demand by meeting format/locations. We are considering online live training, face to face in conference suites and also potentially delivering the training in client's offices where the numbers of participants merit. We will confirm available options after we analyse feedback to the survey (link below).


WHAT DO YOU DO NEXT IF YOU ARE INTERESTED IN THIS TOY & GAME BUSINESS FUNDAMENTALS TRAINING WITH STEVE REECE?

If you want to sign up to the waiting list, to receive more information and to get advanced ticket sale information for you or your team, please click here to sign up: https://steve-reece.aweb.page/p/f7499bff-42aa-436a-9ff0-ef581613a681


Toy Market Growth Opportunities In Turkey & The Istanbul Toy Fair

Sign up for my free e-newsletter and receive all the latest reports, analysis and insights on the Toy & Games business: sign up for free here: https://forms.aweber.com/form/54/1325077854.htm

 

THE NEED FOR GROWTH MARKETS

I have written extensively in this newsletter about the dropping birth rates in most major ‘western’ Toy markets. This is a threat to sales growth, because if we have fewer children we have fewer customers. However, one avenue to sales growth over the medium term is to look at economies which are up and coming and to invest your efforts into those markets to capture market share. Then as that market grows, so does your business there.

For me one of the obvious opportunities, especially for European companies, is Turkey. It’s hard to find a better argument for growth than Turkey in and around Europe.

Before I get further into the case for Turkey, I was invited to visit Istanbul for the upcoming Turkey Toy fair (March 6th to 9th 2024), more details on that here if you are interested in attending: https://istanbuloyuncakfuari.com/en/

 


 

TURKEY: GROWTH OPPORTUNIES AHEAD

I spoke to one of my friends at a recent trade show who told me they had sold 60,000 units of one of their Games products in Turkey. That really opened my eyes, because that is a large sales volume for a game in any international market outside North America. This led to me conducting further research on the economy and Toy market of Turkey.

According to accountancy firm PWC, Turkey is set to move from being the world’s 17th biggest economy to being the 11th biggest economy by 2050, ahead of France and Italy, and very close in size to the UK. Turkey’s current population of c. 85 million people is set to hit 100 million by 2040.


Admittedly Turkey has had an inflation problem historically and is currently experiencing very high inflation c. 65%. This creates both challenges and opportunities for working with Turkey.


In terms of birth data, Turkey introduced 1.04m new potential Toy consumers in 2022, which is more than any European country. Turkey had more births than each of the ‘Big 3’ of Europe in France, Germany and the UK who all saw births of 710k to 730k new children each. That’s a lot of new children being born every year in Turkey, and so those who have yet to establish distribution into Turkey are missing a lot of youngsters to sell Toys to. As birth rates decline in many major Toy markets, there are a lot of newborns in Turkey every year that we can’t afford to ignore.

 

 

THE TOY MARKET IN TURKEY

In 2023, Turkey imported Toys worth c. $200m USD. That might not sound huge, but bearing in mind how under exploited the market is, and how the country’s economy is set to grow in the coming years there are clearly incremental opportunities on offer in Turkey. Just to prove this, the year-on-year growth trend in Toy imports in Turkey was + 28%. There are not many countries growing Toy imports by those kinds of numbers currently!


The biggest Toy categories in Turkey are (listed amounts are at import value, retail value would be higher):

1.       Building blocks (plastic) - $40.8m USD

2.       Toy sets - $38.7m USD

3.       Other plastic Toys - $27.7m USD

4.       Figures (non-stuffed) - $21.6m USD

5.       Other models with electric (plastic) – 15.8m USD

6.       Dolls & human figurines - $15.8m USD

7.       Stuffed Toys - $13.5m USD

8.       Toys made from other materials - $8.4m USD

 


TOY RETAIL IN TURKEY

In terms of retail structure, Turkey’s domestic market has some of its own differences, line in other countries.


For online channels, Hepsiburada, Trendyol and Amazon are the top tier in Turkey. These online channels are important in a country which is as geographically diverse as Turkey.

Toyzzshops have c. 250 stores in Turkey and is the biggest Toy specialist chain. After that, there is also Armağan Toys with nearly 80 stores across Turkey. Following that is another specialist Toy chain: Adore Toys.


Another small but growing area for Specialist stores are niche stores including TırtılKids, KeyifBebesi or Penguen. These stores tend to be in established shopping malls in urban areas of Turkey.


The Grocery channel is also a player in Turkey with Migros (c. 2000 stores) & Carrefour (c. 850 stores) having a strong presence.


Additionally there are various independent stores, stationery chains and also discount retailers.


In terms of retail dates & key events, Turkey has several: National Sovereignty & Children’s Day is celebrated in Turkey on 23rd of April. Also, Turkey has a LONG summer vacation (those poor parents!), running normally from mid-June to start September, this tends to prompt some Toy purchasing as parents try to occupy their children. Being a Muslim country, Christmas is not celebrated in Turkey, however New Year’s Eve is one of the biggest holiday dates in Turkey. There is a tradition of giving gifts on New Year’s, which instead of being brought by Santa Claus are brought by ‘Noel Baba’.

 

 

TURKEY AS A NEARSHORING OPTION

I have been investigating Turkey as a potential Sourcing hub for supply to Europe for a few years now. As some production of Toys has begin to ebb away from China, and as various crises from the Covid induced shipping container price inflation through to the Houthi rebels attacking ships heading to the Suez Canal, AND as the world of Toys begins to rethink our reliance on shipping products from the far side of the globe, so Turkey can be part of the solution.


Turkey has a comparatively very low wage level versus most European countries. Minimum wage is currently the equivalent of c. $550 USD per month in Turkey, which is around the same ballpark, or perhaps a little less than China. The benefit with Turkey vs China of course is proximity to the major European markets, total driving time from Istanbul to major European capitals like Paris or Frankfurt is under 24 hours, versus container ships from China taking c. a month.


As with elsewhere in the world though, Turkey cannot begin to rival China’s breadth of component supply chain, efficiency or depth of capabilities, BUT Turkey is a real option for basic plastic Toys today. Going forward I anticipate significant growth in exports of Toys from Turkey – for 2023 exports were c. $83m USD, I would expect significant growth of 3 times, 5 times or even ten times that level in the coming years.

For any companies seeking manufacturing alternatives closer to Europe, Turkey really does now merit further investigation.


 

TURKEY AS A PRODUCT DEVELOPMENT HUB

Another trend to highlight is a small but strong growth in Turkey as a product origination and development hub. By way of example, one of my client’s – TOYI – embodies this with an innovative, open ended and sustainable approach to the Construction Toy category.

Turkey’s burgeoning start-up culture is leading to the creation of a strong hub for Toy ideation, and as such is worth investigating for future products for Toy companies from elsewhere to distribute into their own markets.


ISTANBUL TOY FAIR 

Now we come to the best way to access the opportunities on offer in Turkey. The Istanbul Toy Fair is held on the European side of Istanbul at the Tuyap Fair Convention and Congress Center. The 2024 show runs from March 6th to March 9th and will see people arrive at the show from more than 60 countries around the world. 


The exhibitor satisfaction for the show is 97.3% and the show features exhibitors both from Turkey and from other countries as overseas companies seek to exploit the Turkish market opportunity.

If you are a Trade visitor you can access Free tickets to The Istanbul Toy Fair here: 


HOSTED BUYER PROGRAM

The Istanbul Toy Fair show organisers are offering a Hosted Buyer Program, whereby you can qualify for two free nights accommodation in a 5-star Hotel next to the show ground (at the Tuyup Palas Hotel). if you would like to take advantage of this program, you can just contact the show organisers direct via the website, or I can put you in touch with the right people if you need :)


Sign up for my free e-newsletter and receive all the latest reports, analysis and insights on the Toy & Games business: sign up for free here: https://forms.aweber.com/form/54/1325077854.htm

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