Disney Outlines Master Plan For Next Few Years – Major Implications For The Toy Business
Disney recently unveiled a multitude of content plans at their investor day. For the direct source material for this, check it out here: https://thewaltdisneycompany.com/disney-investor-day-2020/ there is a presentation and a video available. The most succinct list we found of new content announced with dates can be found here: https://www.bloomberg.com/news/articles/2020-12-11/disney-s-new-slate-includes-indiana-jones-and-star-wars-films
The major news abounds. The major news as far as those in the toy business are concerned is as follows:
Firstly, Disney has reinforced their strategic pivot to in home viewing with the announcement that there are 10 more Star Wars ‘TV’ series and 10 Marvel series coming to Disney+ in the not too distant future. This in itself is not surprising following the massive success of The Mandalorian, but it is the scale of commitment which is most notable. 20 different series is a massive undertaking, but when you start to think through all the worlds, characters and elements of the Star Wars and Marvel franchises it is not difficult to identify even more potential beyond the recently announced plans. With Disney+ now at over 86m subscribers and with forward projections for 300% of those subscriber numbers Disney+ has made it, and clearly therefore needs more content to support the success so far to ensure subscribers don’t fade away.
Secondly though is a strong forward movie slate including new movies from Marvel, Pixar and further instalments of the Star Wars franchise. While Disney appear to be ramping up their direct to consumer offering, they are also continuing with major blockbuster movie production, which should lead to plenty of footfall in movie theaters again once the pandemic clears.
What does all this mean for the toy business though? Well the good news is that great content based on known franchises has been shifting toys and games off shelves since the first Star Wars movie effectively ‘invented’ mass market toy licensing from movies back in the 1970s. So, while Disney+ is grabbing the headlines and the lions share of proliferated content by volume, major box office releases are still on the menu with a lot to be excited about. Therefore, the toy business should win from this because there will be broader content offerings across multiple sub brands which will offer plenty of opportunity. Moreover, while many cynics may have originally doubted that content via streaming could deliver major sales success for licensed toys when we have become so used to the movie model, The Mandalorian and Baby Yoda have clearly disproved that. The major challenge though is to ensure that we can get product on shelf for long enough, with enough of a gap before the next wave of content to ensure that product sells through and retail inventory is healthy.
There is an argument that has been made to our team multiple times from various different toy companies that the frequency of Star Wars movies in recent years did not leave enough time in between for toys to be cleared through retail in time to allow for clean shelves for toys based on the next instalment. Doubtless though lessons will have been learned, and above all the major challenge comes when the same characters from the same overall franchise are on shelf at the same time but from different movies or content series, this is when bargain retailers will tend to bring out large quantities of undersold previous versions and undercut the market.
The other effect we are likely to see of Disney’s massive ramp up in content output is a growth in market share for licensed versus non-licensed toys. We have had a couple of years where licensed toys played less of a role than they perhaps had in previous years, which in turn created growth in evergreen perennial brands and on trend toy items. Now the pendulum is looking like it will swing back towards licensed toys for a few years ahead. Either way though, Disney is making bold strides and looks set to be an ever more critical partner for the global toy and games business going forward.
We run a Consultancy business for toy & game companies. We work with major toy & game companies through to start ups and one person bands. For more information on how we help toy & game companies grow their distribution around the world: www.KidsBrandInsight.com/services
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