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Why 'Frozen' and 'Star Wars' matter so much to toy makers this holiday season

James F. Peltz, Los Angeles Times on

Published in Business News

As this summer wound down, Hasbro Inc. was feverishly ramping up for the winter holidays.

The toy maker added air-freight services and shifted its warehousing operations to get toys based on two new Walt Disney Co. movies, "Frozen 2" and "Star Wars: The Rise of Skywalker," to retailers in time for the holiday shopping season.

The toy launches were "critically important," and the company hustled to "ensure shelves were stocked" ahead of the opening of "Frozen 2" in theaters in late November and the "Star Wars" opening Dec. 20, Hasbro Chief Executive Brian Goldner told analysts last month.

Hasbro's effort illustrates the central role movies and TV shows play in shaping which dolls, action figures and other toys hit the shelves. But licensing of others' intellectual property, or IP, is now spreading beyond films and TV to include toys tied to video games, home video streaming, music, YouTube and other platforms that are increasingly part of kids' free time in the digital age.

"We'll continue to see a proliferation of licensing in the toy industry based on the content kids are watching," said Juli Lennett, vice president for toys at the research firm NPD Group. "There are so many different places where kids can go now" for entertainment.

Conversely, the toy makers also are licensing their popular in-house toys to film studios and other entertainment platforms to bolster sales and otherwise generate more revenue.

 

Mattel Inc. has a live-action Barbie film in the works. There have been Lego movies. Hasbro is paying $4 billion for the studio Entertainment One, and Hasbro teamed with Paramount Pictures a year ago on the movie "Bumblebee," based on the Transformers character. Spin Master, the Canadian company that makes Hatchimals and "Paw Patrol" toys, has produced six TV series around its brands in the last decade, including "Paw Patrol" on Nickelodeon.

Mattel Chief Executive Ynon Kreiz repeatedly has talked about transforming the El Segundo firm into an "IP-driven" toy company whose strategy includes licensing Barbie, Hot Wheels and its other popular brands to others while also licensing outside IPs.

Case in point: Kreiz has said its toys based on "Jurassic World" from Universal Pictures "exceeded all expectations in 2018." Mattel also has licensing deals with Sanrio's Hello Kitty and Disney's Pixar Studios, including the "Toy Story" and "Cars" franchises, among others.

"They realize that building these IPs brings immediate brand recognition, builds licensing revenue and is essential to help a toy company grow," said Jim Silver, chief executive of TTPM, a toy review and research website.

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