The last few months have brought news about the signing of several multi-faceted, multi-year toy deals, both in the U.S. and globally, many involving well-established properties:
- Spin Master joined the Wizarding World through a deal with Warner Bros. Consumer Products, with plans to produce playthings tied to the Harry Potter and Fantastic Beasts franchises. Merchandise in the works includes dolls, figures and accessories, playsets, vehicles, and games, for a fall 2021 introduction. While the Wizarding World has had an ongoing and high-profile presence in the toy industry, it has lately skewed toward specialty categories through a number of different licensees (e.g., 3D puzzles with Wrebbit, building kits with Lego), as well as toward the more collectible end of the toy spectrum. This agreement brings the property broadly back into the children’s mass-market arena.
- Melissa & Doug announced a license with ViacomCBS for co-branded PAW Patrol toys. The deal is significant in that this is the largest deal of its type ever signed by Melissa & Doug, which has, for the most part, never been an active player in licensing. The deal is focused on the hands-on, traditional, skills-based educational toys for which Melissa & Doug is known; Spin Master, the owner of the Paw Patrol IP, continues to be the property’s primary mass-market toy partner. The deal between Nickelodeon and Melissa & Doug also includes Nickelodeon’s Blue’s Clues & You!, the new iteration of the classic Blue’s Clues property.
- Mattel signed on as the new toy licensee for Hello Kitty, through an agreement with Sanrio. The toy line also includes the My Melody and Badtz-Maru characters. It debuted on Amazon and at Walmart earlier this month in the U.S.; its European introduction is expected in January 2021 through Smyths and Amazon. Products include dolls, playsets, surprise toys, and collectibles. Over her 60 years, Hello Kitty has been one of the biggest licensed IP there is, but the property has not had as wide a presence in the mass-market toy world to date as it has in stationery, collectibles, apparel and accessories, home goods, and other categories.
- Jazwares became the global master toy licensee for International Merchandising Promotions and Services (IMPS)’ The Smurfs, with products scheduled for a 2022 introduction. The assortment will include plush, figures, and playsets, with a goal of introducing today’s children to the classic Smurfs IP as well as capturing the property’s nostalgic positioning in products with adult appeal. There has been some toy-industry activity for the Smurfs in the U.S. over the past decade, such as in conjunction with Sony’s feature films in 2011 and 2013, and Schleich has offered PVC figurines and accessories globally since 1965, but this is the broadest program for the property in the U.S. in recent memory.
After a lull in the early months of the pandemic to deal with issues such as addressing supply chain disruptions while trying to keep up with a spike in demand, deal-making in the toy industry seems to be back. One reason may be the strong performance of the toy category in the COVID era, as parents search for things for their kids to do while they are forced to spend much of their time at home. Licensed toys have reportedly been doing particularly well. This is likely due in part to consumers’ desire for things that are familiar and comfortable; the rise in use of streaming entertainment, spurring demand for tie-in products; and the fact that licensing promotes discoverability as more toy purchases move online.
All of these factors help give licensors and licensees the confidence to sign long-term, wide-ranging deals at a time when limited partnerships such as collaborations, special editions, or narrowly focused deals tend to be more attractive to risk-averse licensing executives. The fact that so many deals are with long-successful properties such as those outlined here suggests some risk aversion is in play, although it should be noted that a few of these properties are unproven in the world of mass market toys, despite success across other categories.
Meanwhile, a handful of similarly multi-faceted, multi-year toy deals involving brand-new properties have come to light recently as well. For example, Mattel acquired the rights from PGS Entertainment and Technicolor Animation in a global deal to produce Gus The Itsy Bitsy Knight toys under the Fisher-Price brand, while Jazwares secured a license from Amazon Studios and Gaumont for Do, Re & Mi preschool toys, set to hit the market with the debut of the show in early 2021. These agreements, coupled with the new ventures outlined above, suggest growing optimism about the toy business, which seems to be showing signs of bouncing back from several years of challenges.
The next edition of Raugust Communications’ e-newsletter—the last of the year—goes out tomorrow, December 15, 2020. Subscribe here if you do not yet receive this monthly publication. This issue’s Licensing Topic of the Month examines the importance of the shop-local trend this year and what it means for licensing; the Datapoint research spotlight looks at how the balance of traditional licensing deals versus alternative methods of creating IP-based merchandise has changed over the past three years, including data on the impact of the pandemic.