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COMPANY TOWN | THE BIZ / JAMES BATES

'Hercules' Is One Strong Dude, but Can He Move Merchandise?

May 27, 1997|JAMES BATES

Hercules has a task this summer that could make his 12 labors look easy: assuring wary retailers he's no Hunchback of Notre Dame.

Burned last summer by dismal merchandise sales from Walt Disney Co.'s "Hunchback" film, industry executives say retailers are nervous about betting too heavily on the Greek hero with the Schwarzenegger physique who is the subject of the studio's latest animated feature.

Advance orders for licensed merchandise from "Hercules" are lighter than usual for a Disney animated film, retail and entertainment executives say. Disney competitors, understandably biased, are whispering that "Hercules" merchandise to date is generating little buzz.

Making matters tougher is the competition the big guy faces for shelf space. The bloody battleground this summer in the multiplexes, where a batch of blockbusters will fight it out, is likely to spill over into the toy aisles as well. "Hercules," which opens in most areas June 27, will be battling with "Batman and Robin" and packs of new dinosaurs from Steven Spielberg's "The Lost World" sequel to "Jurassic Park," which opened to $90 million at the box office over the weekend. Still lurking around the toy stores is "Star Wars," whose re-release earlier this year triggered a huge merchandise bonanza.

"With all due respect to 'Hercules,' it's another big movie, but it doesn't have the history of success that 'Jurassic Park,' 'Batman' and 'Star Wars' has. Because they have an established history, retailers have bought more heavily into them. That's human nature," said Murray Altchuler, executive director of the Licensing Industry Merchandisers Assn. trade group in New York.

For its part, Disney notes that the success of the movie will drive the merchandise sales, that studio executives are high on the film and that they are confident retailers will push the merchandise.

"They've all stocked it. It's a good action movie with very appealing characters, and the merchandise is quite innovative," Disney spokesman John Dreyer says.

Hercules also is expected to get a big boost from several fronts. The studio will pour millions into marketing the film. Toy giant Mattel Inc., whose Disney product line generates a half-billion dollars in annual sales, touted "Hercules" at its recent annual meeting and will push it hard to retailers. In addition, "Hercules" is the first Disney animated feature film promoted by fast-food behemoth McDonald's Corp. since Disney signed a 10-year promotional agreement with the chain last year.

The stakes are high. Sales of licensed merchandise, often sold in studio-owned stores, such as the ones Disney and Time Warner Inc.'s Warner Bros. have opened, have become a substantial profit center for some studios. Obsessed with the concept of developing "brands" based on movies that can be merchandised, studios are looking with a vengeance for opportunities, and those that haven't fully developed merchandise sales are scrambling to catch up. Last Friday, Viacom Inc. opened its first company store in Chicago, where it will sell items from such units as Nickelodeon, MTV, Paramount Pictures and its "Star Trek" franchise.

This summer, all studios are taking the competition seriously, no matter how confident they are in their own products.

"For us, it means we have to work harder to stand out more," said Dan Romanelli, president of Warner Bros. Worldwide Consumer Products, who oversees the studio's "Batman" merchandising. "But we think we have the best property out there."

DreamWorks SKG executive Brad Globe, who heads director Spielberg's licensing and merchandise operations, says "The Lost World" is getting a bigger merchandise push than "Jurassic Park" because the story includes more dinosaurs, more human characters and a variety of vehicles. He sees "Batman" as the main competition for "The Lost World," with "Men in Black" possibly emerging as a surprise merchandise hit in the same way "Ghostbusters" did back in the 1980s.

The proliferation of movie merchandise raises the issue of whether Hollywood, as it often does, is taking a successful idea and producing it to death. The proliferation of movie merchandise this summer has some wondering whether the market will turn into a glut. Retailers have already been more conservative in ordering licensed products tied to movies, executives say.

"Retailers, in general, are being more cautious about their upfront commitments toward major properties. In general, they are loading up a little less upfront, relying on their confidence that they'll be able to get enough merchandise on reorders if something turns out to be hot," said Marty Brochstein, executive editor of the Licensing Letter, a biweekly newsletter in New York.

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