World Magazine, Issue 2.7, October 1997
by Heather Kenyon
What comes first today - the show or the licensing and the merchandising? It is a chicken vs. the egg question that varies from show to show. Nowhere are the impacts of licensing and merchandising as heavily felt as in the realm of production. I was able to speak to Robby London, Senior Vice President, Creative Affairs for DIC Entertainment, Inc. to glean just how important L&M is to getting a production in the works and off the ground. DIC is certainly one of the largest players when it comes to producing shows that are accompanied with aggressive licensing/merchandising campaigns. DIC has worked with major fast food chains like McDonald's, Burger King, Pizza Hut, Subway, and such major retailers as K-Mart, J.C. Penny, Toys R Us and Walmart.
Robby London, Senior Vice President,
Creative Affairs, DIC Entertainment.
Heather Kenyon: What is your role here at DIC?
Robby London: My personal role? Let me start with the title, which is Senior Vice President, Creative Affairs. So, nominally, I'm in charge of keeping a creative overview on everything the company does, and a consistency. Really I deal with all of our shows from inception through execution. Obviously we do so many shows, we normally do 200 half-hours, it's very hard to keep a hands-on overview of those things. I tend to be more involved at the beginning of the shows -- getting them launched, getting them underway, putting good people on them and letting them run themselves. I'm also peripherally involved in the marketing venture as well.
HK: How did kids television shows used to be financed vs. today?
RL: That's my area of expertise. Basically, it used to be very strongly a domestic U.S. network business. Cartoons as a Saturday morning staple started in the late `60s, `70s. At that time, there were three networks: ABC, CBS, NBC. They were all on Saturday morning. There were very few studios producing at that time too. Basically, Filmation and Hanna-Barbera were doing the bulk of the things. Networks would basically pay a license fee that would cover the costs of the show. So, the producer could get their costs covered simply with the U.S. network license fee, and any other revenues that could be generated on their show was gravy. The international licensing, merchandising, all those things were just profits to the studios. It was a very good business because there was basically no risk. The worst that you could do was break even. And mostly, you would make money. That changed radically -- and I mean radically -- in the `80s. It's gotten to the point now -- the pendulum has swung so far the other way--that frankly, in many cases, the domestic license fees are a relatively small part of the cost of a production. Two areas in particular--international and licensing and merchandising--have become far more critical and crucial to getting a show financed. Does that address the question?
HK: Yes. I didn't want to lead you, but it does seem that L&M is playing a much larger, more significant role...
RL: There's no question. It used to be gravy. Now it's almost the main course in a sense, because without it, it's just difficult to be. At the same time that the domestic license fees have gone down, the cost of production, particularly in the last two or three years...this last year in particular there has been such a huge demand for artists...has gone up. So many people now are getting into animation, and its been like another one of those "gold rush" eras. It's very cyclical. I've been in the business enough years now to recognize and absolutely not be phased by the cyclical nature of it. But I must say this particular cycle of the last two years, in terms of demand for artists, and artists' salaries, and competition amongst the suppliers has been just intense, so the costs have risen. Obviously, there's more outlets now, but the amount you get from each outlet, the license fees, are down. Many of the broadcast outlets are owned by vertically integrated companies that have their own animation units. DIC is in a very hard-to-describe mode, because on one hand we're part of the Disney Company, but in some ways we have to function very much as an independent company. Our shows have to compete in the marketplace. For independent producers now, it is very, very difficult to put all the pieces together and make the business work in a viable way.
HK: That's what I was going to ask. Isn't licensing and merchandising almost more important for an independent company? They need the revenues more?
RL: Yes, yes, yes. I don't mean not to elaborate and just give you a "yes" answer, but that's right. I'm not going to elaborate on that, because that's exactly right.
Let me go back for a minute. I have something else. Besides the financial importance of licensing and merchandising, there's another very, very large role it plays. There are so many kids' properties for kids' eyeballs, for kids' attention, not just animated shows, and not just television shows. We have the Internet, video games, home video, music. Kids are assaulted with people that want their attention today, and enterprises that want their attention. God forbid you talk about sports, hiking and the healthy things in life! It's really difficult to get attention for any kind of property you're launching. If you try to launch a property simply on television, even if it was completely paid for, it's very difficult to make a splash. The other huge role of licensing and merchandising now is that it's kind of an ancillary support and promotion for a television property. And it's symbiotic. It goes the other way around, too. There are so many licensed properties out there, they need the television. You need to have kind of a "Normandy Invasion" to make a splash, and to be heard above the noise. There's so much noise, you gotta just do a big "bang" or you'll drown. I think that's a real, real important role of licensing and merchandising.
HK: How has the role of L&M actually changed production?
RL: Interesting question. Again, thinking cyclically, I was involved in one of the first really big toy-driven series, which was He-Man and the Masters of the Universe. In the early days of toy-driven shows, there was the first wave of them, I think there was a very rigid, unimaginative application of how merchandise was incorporated into shows. It was sort of done by rote, and the toy executives would count the number of times that you mentioned the name of the toy, and the number of toy appearances. There were charts counting, you know, "We used this vehicle in this scene..." It became very intrusive on the creative process. Intrusive to the point that you would have these shows come out that were almost un-watchable, because they were so clearly [promoting the merchandise]. Every piece of dialogue mentioned the toy name. It would be like if I said, "Heather" in every sentence. It was awkward, and kids, god bless them, have a radar. They can just tell when they're being sold to and pandered to, and you're not observing the principles of good storytelling. A lot of those early shows that were financed by toy companies, and toy-driven, sort of had a heavy-handed approach to putting product in shows, and they failed. They failed miserably. Nobody watched them, and at the same time, of course, finally, the toys failed.
I think now there's sort of what I consider to be a new wave, sort of the enlightened era of intelligently trying to mesh merchandising with storytelling. I find now that most of the executives in merchandising and at the toy companies are far more savvy and far more sensitive. They grasp the concept that you have to make a good show first. You have to tell a good story, have compelling characters, and not be counting how many times the vehicle makes an appearance, or how many times you say its name. They realize they'd much rather have a "hit." They'd much rather have a show that kids can flow their imaginations into, and fantasize about, and role-play, and just be swept into that show. And they realize that people making the shows have a better chance of knowing how to do that than the toy company people. It's far more flexible now. It's being done in a far more intelligent way. The long answer to your question is that I find this kind of licensing and merchandising to be far less intrusive in this day and age, than it has been in the past. I find that in a way, the application of it is far more intelligent and actually can help the shows in some ways, because it's being done judiciously and intelligently.
HK: It seems that a lot more is being done when toys are packaged, even when they may not be directly related to the show, they're in packaging that kind of looks like the show, or they have "Nickelodeon splats" on them and as a result kids want them. So it's more that it doesn't have to be the exact toy that's in the show, as long as it's packaged with that artwork, and is somehow related in a kid's mind.
RL: I don't disagree with you. I don't know if what you say is accurate or not because I don't really pay attention to whether the toys correspond to the shows. But I do know that packaging clearly ties into tie-ins and capitalizes on the logos. Kids typically are really into authenticity. They know logos. Nick is a perfect example. Nick has absolutely permeated the kid culture as a brand. As Disney has. Of course, Disney is the king of that. But Nick has become a kids' brand and kids know brands. They know logos. They know when things are authentic. They know the difference between Disney's "Little Mermaid" and Saban's "Little Mermaid." They know and they want the real thing. I think clearly merchandisers and marketers understand that dynamic of kids and take advantage of the logos, and any kind of tie-in. When something's on television, it takes on a larger than life presence. For all of us, not just kids. I think that's a very human thing. There's something about TV, it's a magic. When something is on TV, it has been elevated to a larger that life status. Any way that merchandisers can legitimately take advantage of the TV connection, I think they do it. They put it on their packaging and I think that helps them to move their product.
HK: When do you start? When a show goes into development, when do you start working with the toy companies and manufacturers? Who designs the vehicle, and decides, "Yes! That makes a great toy and a great vehicle for our show..." How does that work?
RL: It depends on the show. There are certain shows that feel more "toy-etic." That's a new word from the toy industry, thank you very much. It makes a difference if you know who your partner is, and, sometimes you do, sometimes you don't. In the case of Mummies Alive! which is a show that we're launching this fall, it was an idea that we created at DIC, along with Ivan Reitman, we presented it very early on to Hasbro, very early. They really saw the potential for it and felt it was a great idea that would get kids' imagination and get kids' fantasy, and really press those archetypal buttons for kids. They kind of signed aboard at that point. We didn't have toys per se, but they liked the concept. Once we knew they were going to be the toy company involved with this, we did work with them. We traded designs back and forth, we took some input from them, they took some from us. At the end of the day, we are both marketing to the same audience, we're just marketing different products, but there are certain consistencies. In this new enlightened age of toy company/TV producer communication, it works very well.
HK: Do you feel--and I certainly have seen it with the kids in our family--that if the toys don't live up to the TV show, or if they're really different, you harm the integrity of the show because kids can spot that.
RL: Not just with toys. One of the very important functions of our merchandising division here is to police our licensers to make sure that there is a consistency amongst all of the varied projects that go out. Go back to kids and they're craving authenticity. Kids notice when Inspector Gadget doesn't look right in the coloring book. So, its very important to perpetuate the fantasy of these characters being real. When they start to appear differently, it breaks the illusion. It breaks the reality; the fantasy that you can believe in these characters. I think you'll find that most licensers believe that. That's a major role of most companies' licensing divisions. Obviously, though, a toy can only look so much like a 2D animated character, but you do what you can. We supply our licensing division these massive style guides. This is the style guide that we did for The New Kids on the Block series. It has everything, how to draw, storylines, how the characters behave, the logos. It's totally comprehensive and we still police it. When a licensee is ready with the coffee mug, they have to submit a prototype to us, for our evaluation and approval. Even with all the stuff that we give them in advance, we make sure that they conform.
HK: How much does licensing and merchandising influence the content of children's programming?
RL: That's a very loaded question. People are ready to sort of attack the concept that children's television is nothing more than an extended commercial to sell merchandise. I really, really take issue with that concept. I think you should come at it from a point of view that kids have a right to be entertained. The way kids entertain themselves is they watch shows, play video games, and they play with toys. Their toy-playing, I feel, is enhanced, and I think most people would agree, if they have a whole set of characters, stories, worlds, and a background to help facilitate and stimulate their play. So, I don't see anything intrinsically evil about the concept of merchandise. I think what's very detrimental to kids and to the industry is when merchandise takes such a heavy-handed role that it hurts the storytelling. I think the free market has policed that because I think the properties that so blatantly tried to manipulate kids, those properties failed. I think for the most part now, the real key is always to be a story teller first. I think most producers are storytellers, that's what they do. I mean, I write. My background is as a writer. Andy Heyward [President and Chief Executive Officer of DIC], his background is as a writer. Certainly speaking for DIC, we value storytelling more than anything else. We also value merchandise, and I think its very organic and natural for certain kinds of stories to make kids want to play with those toys. Kids have a right to play with toys, just as we have a right to enjoy stories. Just as adults have a right to play with toys--just different toys, more expensive than most toys. He who dies with the most toys wins (Jokingly).
Heather Kenyon is Editor-in-Chief of Animation World Magazine.
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