5 Things Kids Media Companies Should Know About The Toy Business

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We’ve had a number of requests recently to offer advice to independent kids media companies relating to the Toy industry, how it works and what content producers with merchandising aspirations need to know about the toy industry to allow them to maximise their Toy licensing potential. (Clearly more established & more corporate companies have established licensing & merchandising teams so will find the following points not that insightful!).

Here’s 5 things we see as being critically important:

Toys Are Physical Objects – this may seem glaringly obvious, but apparently not always obvious enough! A physical object needs to be designed, engineered, manufactured and played with in the often very rough hands of children. Fundamental features of TV content such as the look and shape of key characters will define to a great degree whether Toys can be produced or not. Therefore, it is critical to think about the needs of the Toy production process at the very beginning of content creation processes.

Toys Need To Be Differentiated From Generic & Competitive Products – if the lead character in your kid targeted content is (for instance) a cute but fairly standard looking fluffy dog or other animal, then potential licensees would struggle to differentiate your brand at retail versus the generic and much cheaper fluffy dog toys already on shelf. Visual distinctiveness is critical in terms of ensuring Toy licensing opportunity.

The Toy Industry Works On Fixed Timings Around Retail Seasons – Toy retail has two key seasons in most major markets – Spring/Summer with a focus on outdoor play & wet play items and Autumn/Winter or Fall/Winter, with the focus on the Christmas gifting season. There are very clear timings and trade shows built around the retail selection process – starting September/October with previews for the following year, through to manufacturing the majority of stock from May-September through to the peak season in retail in November/December. Therefore, trying to sell new licensed properties to Toy companies needs to begin far enough in advance for Toy companies to select the licenses they want to run with and to develop concepts/prototypes for new product lines. Hence Licensing Expo in the US is held in May or June. If you target Toy fair season (Jan-Feb) for selling to Toy companies because they are easy to get in front of then, you will most probably have to wait until the following year to see any product on shelf.

Toy Companies Review Many Licenses – licensing is such a major factor in the Toy industry that Toy companies are faced with an almost bewildering array of licenses to choose from. Most kids media producers are used to having to sell, sell, sell in order to get their programs on air, however, the pitch needs to be tailored for the toy industry. One of the most critical factors, often overlooked, is that due to the extended development & selling cycle of the toy industry, longevity is key. While all Toy companies will be inclined to chase the hits, the reality is that stability over a few years is more appealing to toy companies than a massive ‘flash in the pan’. Carry forward product is where Toy companies make profit, they can advertise less, have no or limited development investment and inventory risk is very low. Therefore, a sales pitch to Toy companies should include as much tangible proof of longevity as instant impact!

Gauge Demographic Target Carefully – traditionally, the Toy industry has split the end consumer into 3 categories: preschool, boys and girls. Accordingly, toy companies are still mostly structured this way, and although retail has now mostly removed such gender labelling markers in store, in effect the content of each aisle hasn’t changed, just the label. Gender labelling/stereotyping is now a hugely contentious issue, and pressure on Toy companies has grown over the last few years to avoid saying product is targeted at one gender or the other. However, (from our perspective) this may take a generation or more to take full effect. The reality is (rightly or wrongly) that the vast majority of fashion dolls are still bought for girls, and the vast majority of super hero style action figures are still bought for boys. We’ll let you take your own view on this issue, and how you should adapt your brands/content accordingly based on your own beliefs, however, in order to maximise Toy licensing potential you may want to still ask yourself does your property appeal primarily to either gender or both, or is it younger than that. To try to create a new demographic positioning may be commercially risky.

Clearly there are many other factors and nuances kids content companies will want to learn about, but hopefully this has answered a few questions/given some food for thought for those companies without in built expertise in Toy licensing.

PS You can sign up for our newsletter featuring articles & commentary on how the toy industry/kids media worlds interface here:  https://www.kidsbrandinsight.com/kidsmedia


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