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Licensing Plays a Growing, Risky Role in Toy Business

February 17, 1985|MICHAEL A. HILTZIK | Times Staff Writer

NEW YORK — Throughout the toy industry, people are asking: Will She-Ra, the Princess of Power, just be the next Brooke Shields?

For Mattel Inc., any such comparison is likely to be disconcerting. She-Ra, a six-inch blond doll in fanciful costume and riding a winged unicorn (sold separately), is the centerpiece of Mattel's bid for what it believes is a $200-million market in girls' fantasy dolls. The Brooke Shields doll put out by LJN Toys, by contrast, is one of the renowned toy-world bombs of the last couple of years.

The future of She-Ra is on the minds of exhibitors and retail store executives populating this year's Toy Fair, the annual trade show sponsored by the Toy Manufacturers of America at the trade group's exhibition building in the toy-and-trinket district of Manhattan. Here, more than 700 manufacturers and distributors are competing for the attention of thousands of store buyers.

Although the Toy Fair is not a "writing show," in the words of one prominent buyer--meaning that order-taking is not a top priority, particularly for big companies that have already shown their 1985 wares to buyers--it is a critical arena for toy makers jockeying for shelf space in department stores and toy shops by showing off their advertising budgets.

Here it is possible to get a feel for the subtle cycles of marketing that define the toy business, just as the tussle between big cars and small cars defines Detroit. Everyone accepts that transformer toys--those trucks and tanks and spaceships that metamorphose into robots and back again--will still be big this year, while the A-Team theme toys that dominated some markets through 1984 have run out their string.

But among the uncertainties is the future of a phenomenon that, within the Toy Manufacturers of America's hallways, has the mystique of a mantra: licensing.

Licensing has been a cornerstone of the toy business for several years. Someone creates a character--E. T., say, or Snoopy--and markets the rights to feature it in doll collections, lunch boxes, television shows, books and so on. Licensing is something the She-Ra and Brooke Shields dolls have in common.

The father of this concept was Walt Disney, whose characters have been recycled into toys and other items for decades. Charles Schulz's "Peanuts" characters have been similarly merchandised for more than 20 years.

But licensing was not a crucial element of toy marketing until the 1970s. Karen Weiss, director of licensing for New York-based LJN Toys, says her company's first license was for toys based on characters and vehicles from the "Emergency" TV show of that time. Galoob Toys Inc. took out its first license in 1977 for the "Starsky & Hutch" program.

Surged With 'Star Wars'

Licensing really took off with "Star Wars," a revered name in the toy business not only for the movie's popularity but for its abundance of licensable characters.

"There was so much product in that movie," says Paul Starkey, senior toy buyer for the Dayton-Hudson department-store chain. "Every scene of it had 10 new items." (In contrast, for all its popularity, "E. T." had only one such commodity, the title character.)

About the same time, American Greeting Cards Co. created Strawberry Shortcake, a juvenile character whose delicate shoulders managed to support an entire industry of television specials, dolls, clothes and scores of other items. After that, "people figured that anything with a license would sell," Starkey says.

The Toy Manufacturers of America estimates that licensed products accounted for half the $8 billion in domestic toy sales last year. The proliferation has scarcely made life easier for buyers or manufacturers.

Starkey says: "I'd guess there were 25 to 30 licensed characters at the Toy Fair last year. It's been damned confusing to come out of there and say, 'These are the three licenses that will be successful.' "

Then there is the proliferation of items based on a single successful character. "You have only so much space," says Thomas Castle, toy buyer for The Broadway, a Los Angeles-based department store chain. "If you laid out every SKU"--that's "stock-keeping unit," or individual product, in retailing argot--"of Cabbage Patch, there's probably 6,000 of them." (Cabbage Patch merchandise is expected to remain a hit this year.)

Some Characters Flop

The licensing market is also an annoyance to manufacturers who are charged premium fees in advance for rights to characters that might not sell, whose television programs might never air or whose movies might flop. LJN, for example, is rumored to have paid $2 million for the rights to characters from the movie "Dune," a box-office dog. (LJN's Weiss won't say what the price was, but acknowledges that the results are disappointing.)

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