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Character Merchandising - US - March 2006

INTRODUCTION AND ABBREVIATIONS
Introduction
Other relevant reports
Definition
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
A struggling market where the fittest survive and thrive
Children drawn in, moms want to please yet nurture
Electronics and music segments thrive; toys, gifts and food dives
Multifaceted diverse group of companies as leaders
Dubious parent; triumphant kids
Classic characters and superheroes have the greatest staying power
Innovation on many levels needed for future growth
MARKET DRIVERS
Popular culture and media
Hollywood movies
Figure 1: Going to see movies, by gender and age, May 2003-April 2004
DVD rentals and sales are a key component
Figure 2: Forecast of U.S. DVD rental revenue, at current and constant prices, 2005-10
Television a dominant force
Video games popular among kids
Figure 3: Ownership of video game players, by gender and age, May 2003-April 2004
Kids’ books crossover
Figure 4: Types of books read, by gender and age, May 2003-April 2004
Comic books spawn characters
Figure 5: Kids’ readership of comic books and newspaper comics, by gender and age, May 2003-April 2004
The Internet: a growing exposure option
Figure 6: Time kids spend on the Internet, by age, Fall 2005
Tried and true titles dominate
Threats from music, celebrities and sports
Figure 7: Sales of licensed goods, by property types, 2003 and 2005
Demographic picture: More younger children equals more product sales
Figure 8: U.S. population projections, by age, 2000-10
Figure 9: Population, by age, race, and Hispanic origin, 2005
Reaching kids through moms
Figure 10: Influences on moms’ purchases of products for their children, 2004
The nagging factor
Figure 11: Opinions towards products with characters, agree summary, October 2005
Purchasing power of children
Food-related purchases
Figure 12: Fast food restaurant visits by kids, by age, May 2004-May 2005
Figure 13: Attitudes towards fast foods and fast food restaurant visits, by topline and race/ethnicity, May 2004-May 2005
MARKET SIZE, SEGMENTATION, TRENDS AND DISTRIBUTION
Introduction
Retail sales of entertainment/character merchandise
Figure 14: Retail sales of licensed entertainment/character merchandise, at current and constant prices, 2000-05
Entertainment/character merchandise segments
Figure 15: Retail sales of licensed entertainment/character merchandise, by product category, 2003 and 2005
Figure 16: New children’s personal care product introductions featuring licensed characters, 2000-05
New market activity and trends
Figure 17: Film releases featuring licensed characters, 2005-06
Distribution of licensed entertainment/character merchandise
Figure 18: Distribution of licensed entertainment/character merchandise, U.S. and Canada, 2003 and 2005
SUPPLIERS
Hasbro Properties Group (HPG)
Mattel
The Walt Disney Company
Studio Entertainment
Media Networks
Parks and Resorts
Consumer products
Warner Brothers
Licensing
HIT Entertainment
Marvel Entertainment, Inc.
THE CONSUMER
Introduction
Adults’ opinions on why children want character-licensed merchandise
Figure 19: Adults’ opinions on kids’ preferences for character merchandise, agree summary, October 2005
Figure 20: Adults’ opinions on kids’ preferences for character merchandise, agree summary, by household income, October 2005
Attitudes towards character-licensed products
Figure 21: Opinions towards products with characters, agree summary, October 2005
Figure 22: Opinions towards products with characters, agree summary, by age, October 2005
Figure 23: Opinions towards products with characters, agree summary, by race/ethnicity, October 2005
Summary
Character-licensed merchandise purchased
Food/snacks
Figure 24: Incidence of purchasing food/snacks character-licensed merchandise, October 2005
Figure 25: Purchases of top six products featuring a well-known character in the last 12 months, by presence of children under 18 in the household, October 2005
Figure 26: Purchases of top six products featuring a well-known character in the last 12 months, by presence of children under 18 in the household, October 2005
Clothing
Figure 27: Incidence of purchasing clothing character-licensed merchandise, October 2005
Figure 28: Purchases of top six products featuring a well-known character in the last 12 months, by presence of children under 18 in the household, October 2005
Toys/games
Figure 29: Incidence of purchasing toys/games character-licensed merchandise, October 2005
Personal care
Figure 30: Incidence of purchasing personal care character-licensed merchandise, October 2005
Stationery
Figure 31: Incidence of purchasing stationery character-licensed merchandise, October 2005
Household décor
Figure 32: Incidence of purchasing household décor character-licensed merchandise, October 2005
Average number of product categories purchased
Figure 33: Average number of product categories purchased, by number of children in household, October 2005
Figure 34: Average number of product categories purchased, by gender, October 2005
Figure 35: Average number of product categories purchased, by age, October 2005
Summary
Opinions about popular characters
Educational-themed television programming
Figure 36: Opinions toward characters from educational-themed television programming, October 2005
Figure 37: Opinions toward characters from educational-themed television programming, by gender and agreement with “It is a good role model” statement, October 2005
Classic characters
Figure 38: Opinions toward classic characters, October 2005
Family favorites’ movies
Figure 39: Opinions toward characters from family favorites’ movies, October 2005
Sci-fi/fantasy
Figure 40: Opinions toward Sci-fi/fantasy characters, October 2005
Superheroes
Figure 41: Opinions toward superhero characters, October 2005
Prime-timers
Figure 42: Opinions toward primetime television characters, October 2005
Summary
FUTURE AND FORECAST
 FUTURE TRENDS
Tight shelf space, low price points, and fierce competition…
…force companies to innovate at retail
Tried and true remains most sought after
Music, celebrity and sport licensing threatens to take share…
…leading to producers and marketers targeting younger children
Going to the dogs
Movie studios forging long-term relationships with partners, on shorter-term projects
Advances in video game and toy technology build brand awareness and loyalty
Childhood obesity and the move from fast food to health food character-merchandised marketing
Figure 43: Attitudes towards children and obesity, August 2005
Companies take greater notice of Hispanic children
Figure 44: Top purchased character-licensed merchandise, by race/Hispanic origin, October, 2005
Educational programming in search of long-term partners
 MARKET FORECAST
Overview
Figure 45: Forecast of total U.S. and Canada retail sales of licensed entertainment/character merchandise, at current and constant prices, 2005-10
Forecast Factors
APPENDIX: SELECTED LICENSOR/LICENSEE AGREEMENTS
Figure 46: Major examples of licensors and licensees in the marketplace, 2005-06
APPENDIX: NEW PRODUCT BRIEFS

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