Tag Archives: movies and toys

How Will Toy Licensing Change Coming Out Of The Pandemic?


Developing and launching toys based on licensed properties has been an integral part of the toy business for a long time. More specifically, toys based on characters and scenes from movies have been a major factor in driving toy sales ever since Star Wars first came out back on the 1970’s.

The reliance of the toy business on movies has ramped up in recent years as more and more of the archetypal ‘toyetic’ movies came under the control of Disney. Whereas historically the toy business tended to roll up and down on an annual basis like a roller coaster due to a vairable movie slate as rival studios launched as and when they were ready, the relatively recent ability of Disney to plan their business (and as a by product the toy business) around so many key franchises has lead to a previously unknown security in terms of guaranteed strong drivers for toy sales each year due to an ongoing raft of massive cinematic events with large marketing budgets on a global basis.

Then two things happened: firstly two of the major movie franchises driving the toy market reached a logical peak – that being Star Wars with the end of the 3rd trilogy of films and the Marvel movies reaching a climax with Avengers: End Game.

The resulting insecurity surrounding movie driven toys was yet to be resolved in a clear way with new movie release dates when the coronavirus pandemic hit and closed cinemas across the world. Many new movie releases were postponed until later in 2020 or pushed back further to 2021. Some movies have been released direct to video on demand as some movie studios seek quicker revenue return versus postponements.

The question is whether the short term effects of the pandemic will turn into long term effects (i.e. an ongoing situation where more movies are released straight to VOD and less focus on cinematic releases) or whether they will prove to be a short term blip. We also need to consider the question of whether the business segment of movie related toys can continue to be such a sales driver as in the past since two of the biggest franchises reached a peak which may be hard to get back to.

On the straight to video on demand question, it seems likely that some content will go straight to VOD once the pandemic clears, but then that has already been happening. Generally speaking some content with potential for a cinematic release fails to register enough interest/demand to put bodies on seats in cinemas and as a result skips cinemas. This is a phenomenon that goes way back with straight to VHS or DVD releases stretching back decades. Netflix, and increasingly Disney+ will be able to justify commissioning production on some headline content based on their revenue model, but generally speaking these VOD platforms are built on a quantity based formula i.e. they need a lot of content to justify subscriptions, otherwise people would watch their way through the catalogue quite quickly. So aside from a few headline productions designed to bring in new subscribers and to build the kudos of the platform, it doesn’t seem likely that we are going to shift from cinematic releases to straight to VOD on a long term or permanent basis on the biggest movies.

Again, if we go back to the time of DVDs and VHS, there were typically 2 windows around a movie’s toy selling effect. The cinematic release and surrounding marketing would offer a big spike, often in the summer or other school hoildays when toy sales would otherwise be lower without a big blockbuster movie, and then again for the VHS or DVD release again towards the back end of the year into peak toy selling season. So in effect toy companies were getting two bites of the cherry with each movie they signed up for. And to some extent this still applies with DVDs still having distinct launch windows in retail, albeit this is far less important than it once was. Even then though the release to VOD tends to have a fixed window, so in a way while the content delivery mechanism has changed, the 2 spikes scenario hasn’t really, it’s just that the 2nd spike has softened a little and now burns a little less brightly but for longer.

So therefore while some movie companies have done ok out of sending much anticipated movies straight to VOD while cinemas are closed, they would be turning down a significant commercial opportunity to continue this strategy once cinemas reopen. Despite the friction between cinema chains and movie studios around the straight to VOD release we expect that once people can go back to cinemas the usual model will return but perhaps with VOD having improved revenues. It is possible that some movie chains will not reopen of course as will happen across many industries as not all businesses will make it through the economic turmoil resulting from the pandemic lockdown. In the end though, a cinema is a cinema, and is hard to convert for any other purpose, so either the current operators or future operators will still be likely to be showing movies in these cinemas in the future.

Perhaps the bigger question which is on the way to being resolved is how Disney will manage and originate around the Star Wars and Marvel franchises going forward. At the time of writing, it has been announced that academy award winner Taika Waititi will direct and co-write a new Star Wars cinematic release, whilst another Disney+ exclusive Star Wars series is also reportedly in the works. The depth of the Star Wars universe will make it easy for Disney to keep rolling out new TV series for the fabled interplanetary series to keep the Disney+ platform ticking over for years if not decades, but the cinematic strategy is yet to be revealed in full. What we can be sure of though is that Star Wars has been a top toy brand since the first movie, and with the brand planning, content production and merchandising might of Disney behind it a backward step seems very unlikely!

With Marvel, while the incredibly successful franchise seemed to come to climax and conclusion with Avengers: End Game, reports suggest that the next phase of the Marvel story will include more than half a dozen new movies, as well as various TV series as new stories and new sequels are spun off this massively toy friendly franchise.

In short then, kids and family entertainment movies have been intertwined through the toy business for as long as most of us have been alive, and this is not going away. While cinema goers may be bingeing on VOD at home right now we predict a full return to the usual way of things once the pandemic clears, which can only be a good thing for the toy business.


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