Ever since the debut of Mickey Mouse, movie studios have dominated sales of licensed merchandise using characters like Mickey to sell everything from plush dolls to lunch boxes. But that dominance is starting to wane now that TV networks, publishing companies and toy makers are using the same formula to grab a share of the market.
Nickelodeon Enterprises, which is expected to generate $3.9 billion in revenue in 2004, has developed a stable of characters that have become a cash cow for licensed merchandise, headed by SpongeBob SquarePants, Blue's Clues and Dora the Explorer. Nickelodeon has teamed with dozens of licensees like toy maker Fisher-Price to create a brand that's now familiar enough to stand on its own at retail.
Last fall, Nickelodeon opened its NickZone program at JC Penney on a trial basis that gave the network its own departments in hundreds of stores. The brightly colored boutiques have the familiar Nickelodeon colors and logo and carry a wide array of merchandise that includes toys, clothing and accessories.
And last month, it launched its new EverGirl brand with an exclusive at Kohl's. More than 20 licensees are on board ranging from clothing to home decor for the brand that targets girls aged 8 to 13. EverGirl marks a departure for Nickelodeon, since it's being launched without a TV show to support it. Nickelodeon is opting instead to use "Webisodes" on its Web site to introduce the characters and story lines.
Other companies using the studio formula include publisher Scholastic Entertainment. In the late 1990s, it resurrected "Clifford the Big Red Dog" through a small licensing program that grew to more than $300 million in sales in 2002 on the strength of dozens of licensees and two popular cartoons. The company is hoping the same formula works for its new animated show "Maya & Miguel" with a line of merchandise due early next year.
And toy maker MGA Entertainment is leveraging the popularity of its "Bratz Doll" line through a straight-to-DVD movie release and a feature film it's developing with 20th Century Fox. MGA will follow a path blazed by Mattel, which has sold millions of "Barbie" straight-to-video DVD titles and has another on the way through its partnership with Lion's Gate.
One advantage animated cartoons have on movies is consistency. While movie merchandise has a short shelf life driven by a film's release in theaters, TV merchandise gets daily exposure on cartoon networks that kids watch every day.
