R.L. Stine's children's chillers, licensed by Scholastic Inc., are the nearest thing to a sure thing in the unpredictable children's licensing arena, because of it's quality, proven track record in books and familiarity among children.
But other than general guidelines like popularity to look for in searching out a licensed product, the experts can't offer definiitive answers in picking winners.
`It's a real roll of the dice and the chances are that you'll lose if you try to pick the next big one," says Michael S. Stone, co-chairman of consultancy Beanstalk Group. Instead, he says, the emphasis should be on developing licensed properties that will perform year after year.
If the property catches fire and sales top the coveted blockbuster $1 billion mark, so much the better. But how does a company chose a solid performer?
"The reality is there has to be a terrific basic storyline to build upon," advises Leslie Levine, VP-licensing, Playmates Toys, which markets, among others, the Star Trek series of action figures and accessories. "There has to be something there to really build a franchise."
That's one reason why "Goosebumps," available since late last year, is one up on the competition, experts say. Already, Scholastic has signed Aladdin Industries for lunch boxes, Antioch Publishing for stationery, Happiness Express for school supplies and novelties, Hallmark Cards for greeting cards, gift wrap, ornaments and party goods, OSP Publishing for posters and Pyramid Handbags for bookbags and backpacks.
Fox Children's Network is also airing a "Goosebumps" live action weekly anthology series; Fox also is planning a feature film release.
REQUIRES A GOOD FIT
But finding a powerhouse property isn't enough. Experts caution that the licensed products have to fit the property perfectly to succeed.
"There has to be a logical reason for a licensed character to be associated with a particular toy or product," agrees John Lee, president, Learning Curve Toys, holder of the license to market the Thomas the Tank Engine and Friends line of wooden railway trains, track and accessories.
"We concentrate on determining...what is the most appropriate product niche."
Karen Raugust, executive editor of The Licensing Letter, believes there are at least four criteria for creating a winner out of a licensed character.
First, many kids have to see a particular event, movie or television show based on the character, and second, they have to really like it. Then, the characters themselves must appear on items that make the most sense, matching the demographics of both the licensed product and the media event. Finally, the product has to stand on its own.
HISTORY SERVES WELL
A powerful indicator of whether a particular licensed property will do well is the track record of the licensor. If the licensor is Walt Disney Co., "you know they're going to do a terrific job with marketing," says Gary Caplan, president of his own licensing consultancy. "If it's a company you've never heard of or has a spotty track record, that automatically raises a lot of questions as to performance."
It also is important that retailers be aware of the property. A big marketer like Warner Bros. will make sure retailers know what licensed properties are coming up, so that by the time the licensor presents the merchandise, retailers are already presold on the concept, Mr. Caplan says.
One factor he explores for his clients, which include Sara Lee Corp.'s Hanes division, James River (partyware) and Anagram International (licensed character balloons), is the quality of the other licensees signing on for a particular licensed character. He looks at the holders of the master license in the toy, apparel, fast-food, videogame and publishing categories.
"You want to be in good company," he says.
For independent consultant Beverly Cannady, a critical factor in the success of a property is that everyone involved be pursuing the same consumer. "You want to be sure that the consumer for the property is the same consumer that's going to buy the product," she says.
That fatal mistake was made by Hasbro, which in 1995 had the distinction of producing licensed action figures and accessories for both "Waterworld" and "Congo," two movies that bombed. The two licenses flopped not only because the properties weren't boffo box office but because Hasbro marketed their licensed products to kids when the movies appealed mainly to adults.
"You can't avoid the clunkers in this business," acknowledges John Gildea, Hasbro VP-corporate licensing and promotions. "But you can do a lot to [mitigate] the impact a losing property will have.*.*.on the rest of the business."
One way is to limit the financial liabilities. Hasbro, Mr. Gildea claims, tries to keep production and marketing expenses for individual licensed properties and brands each to about 5% of sales.
Innovation, interaction and imagination are top-of-the-list criteria in finding a property to license for Shelley Rosen, VP-director of promotion development, Leo Burnett USA, Chicago. Burnett works with McDonald's on licensed properties such as its recent "Busy Town" promotion based on Richard Scarry's children's books and "The Magic School Bus" property.
Ms. Rosen says a property doesn't have to be high-tech nor does it have to be the hottest item on the market to do well, but adds that timing is paramount.
The trick, she says, is to "identify stuff that will be hot 6 to 8 months down the road because it takes that long to gear up for production." Coming out with a product too late, after the peak, can be disastrous, she says.
WINDOW DRESSING COUNTS
Action, humor and music are all important in broadening the appeal of a licensed property, according to Shelley Pazer and Ellen Sackoff, principals of Discovery Group, a market research company that specializes in the youth market. "These are all elements that engage a child beyond the character itself," says Ms. Pazer.
"If it's a popular licensed character, there is be a burst of initial interest," adds Ms. Sackoff. "But for the product to stand up over time, there have to be other elements, whether it's action or humor, to the character that make it a well-rounded character."
Of course, when all else fails, industry executives say, it's often just as helpful to put the potential licensed properties all on a bulletin board-and throw a dart.
"I'd like to think that we all make decisions in a rational, considered manner," says Mr. Caplan. "But sometimes, you just have to go on your gut."