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Character Merchandising - US - August 2009

The recession has had an extremely detrimental affect on the character merchandising industry, with estimated retail sales of $8.5 billion in 2009, a 28% decline from the level observed in 2007. Given the current climate, it is especially important for character merchandisers to examine other possible streams of revenue and distribution. This report focuses on emerging and untapped opportunities marketers can focus on, including:

  • Analysis of emerging target populations, including Hispanics and young adults
  • Analysis of the key drivers and consumer lifestyles trends that are affecting the market
  • Case studies profiling the greatest innovators in the industry
  • Examination of how merchandisers are using social networking and mobile communications to make new inroads with consumers
  • Thorough analysis of key consumer demographics, including how the recession has impacted attitudes and behavior toward character merchandise
  • Market data, including market size and forecast, segmentation and retail distribution

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                  • Executive Summary

                      • Sales decline rapidly as consumers become more frugal
                        • Population growth among kids aged 1-11 offsets some losses
                          • Case studies
                            • Insights and opportunities
                              • SpongeBob SquarePants and iCarly among the most popular characters
                                • Sesame Street viewed as good influence by most adults
                                  • Most adults report that character merchandise is not a good value
                                    • Adults most likely to report purchasing food and personal care products
                                      • Fast food and t-shirts especially popular with parents
                                        • Young adults more likely to report increased spending
                                          • Most kids cite media as part of their favorite activities but feel school is important
                                          • Insights and Opportunities

                                            • Work with kids and parents to create customized products
                                              • Invite kids and parents to create characters and share with others through social media
                                                • Reduce resistance to character merchandising with better-for-you tie-ins
                                                  • Target young adults with parodies and pop culture characters
                                                    • The better-for-you private label: Eating Right Kids and Looney Tunes
                                                    • Character Merchandising Case Studies

                                                      • Case Study 1: Largest film franchise ever rolls out museum exhibit and theme park
                                                        • Harry Potter: The Exhibition
                                                          • Harry Potter: The Theme Park
                                                            • Case study 2: Fast food chains remain a prime target for licensing opportunities
                                                              • Self-regulation doesn’t work
                                                                • Case Study 3: Higher-end apparel tie-ins making waves
                                                                  • SpongeBob gets precious with 12-carat diamond jewelry
                                                                    • Disney and Warner Bros. wooing designer crowd
                                                                      • Case Study 4: Video game tie-ins drive growth in a struggling category
                                                                        • Electronic Arts tops 1 million units with Harry Potter
                                                                          • Case Study 5: Mobile gaming tie-ins are heavy on film adaptations
                                                                          • Market Size and Forecast

                                                                            • Key points
                                                                              • Retail sales and forecast of entertainment/character merchandise
                                                                                • Sales and forecast
                                                                                  • Figure 1: Retail sales of licensed entertainment/character merchandise, at current prices, 2004-10
                                                                                  • Figure 2: Retail sales of licensed entertainment/character merchandise, at inflation-adjusted prices, 2004-10
                                                                              • Segmentation and Distribution

                                                                                • Key points
                                                                                  • Entertainment/character merchandise segments
                                                                                    • Figure 3: Retail sales of licensed entertainment/character merchandise, by product category, 2006 and 2008
                                                                                  • Distribution of licensed entertainment/character merchandise
                                                                                    • Figure 4: Distribution of licensed entertainment/character merchandise, by retailer type, U.S. and Canada, 2006 and 2008
                                                                                • Competitive Context

                                                                                  • Agelessness trend increases threats from celebrities, sports and trademarks/brands
                                                                                      • Figure 5: Sales of licensed goods, by property types, 2006 and 2008
                                                                                  • Market Drivers

                                                                                      • Increasing number of children bodes well for market growth
                                                                                        • Figure 6: Population, by relevant age groups, 2004-14
                                                                                      • Minority populations key to market growth
                                                                                        • Figure 7: Population, by race and Hispanic origin, 2004-14
                                                                                        • Figure 8: Households, by presence of children—Hispanics vs. non-Hispanics, 2006
                                                                                      • Recession boosts movie admissions
                                                                                        • Figure 9: Sales of movie tickets at box office, 2004-14
                                                                                      • Rise of the Screenager: Online and gaming platforms beg customization, interaction
                                                                                        • Figure 10: Hours of filmed entertainment consumption per person per year, 2003-07
                                                                                        • Figure 11: Activision’s Transformers: Revenge of the Fallen (video game) television ad, July 2009
                                                                                        • Figure 12: Hours of game play—kids, by age and age/gender, October 2007-December 2008
                                                                                        • Figure 13: Incidence of game play while connected to the web—kids/teens, by age and gender/age, October 2007-December 2008
                                                                                    • Most Popular Characters and Role Models

                                                                                      • Key points
                                                                                        • Kids’ favorite characters
                                                                                          • Figure 14: Hasbro’s Connect 4 SpongeBob SquarePants Edition television ad, July 2009
                                                                                          • Figure 15: Kids’ favorite characters/shows, by age, April 2009
                                                                                        • Characters viewed as good role models
                                                                                          • Figure 16: Cartoon and movie characters seen as good role models, by age, May 2009
                                                                                        • Cartoon characters designed for adults most likely to be seen as a bad influence on children
                                                                                          • Figure 17: Perceptions cartoon and movie characters as good role models or not appropriate for children, May 2009
                                                                                      • Attitudes Towards Character Merchandising

                                                                                        • Key points
                                                                                          • Products with characters not seen as good value
                                                                                              • Figure 18: Value perceptions of character merchandise, by age, May-June 2009
                                                                                            • Social influence does not drive sales among adults; many concerned about potentially negative impact in children
                                                                                              • Figure 19: Influence of character merchandise on purchasing behavior, by age, May-June 2009
                                                                                            • Characters lead to pestering
                                                                                              • Figure 20: Attitudes towards character merchandise; pester power, and childhood memories, by age, May-June 2009
                                                                                            • Ambivalence about using characters to educate children
                                                                                              • Figure 21: Attitudes towards using characters to educate kids, by age, May-June 2009
                                                                                            • Most parents, especially men, unsure about how characters motivate child’s behavior
                                                                                              • Figure 22: Influence of character merchandise on children’s product preferences, parents by gender, May-June 2009
                                                                                            • Impact of income on influence of characters on children’s product preferences
                                                                                              • Figure 23: Influence of character merchandise on children’s product preferences, by household income, May-June 2009
                                                                                          • Purchase of Character-linked Products

                                                                                            • Key points
                                                                                              • Food, clothing and personal care top the list
                                                                                                  • Figure 24: Purchase of character-linked products, by type of product and nature of purchase, May-June 2009
                                                                                              • Products Parents Buy for Their Kids

                                                                                                • Key points
                                                                                                  • Characters drive food purchases; moms generally more likely to be purchasers
                                                                                                      • Figure 25: Character merchandise purchased for child/children in the last 12 months, by gender, May-June 2009
                                                                                                    • Lower-income households more likely to buy character merchandise
                                                                                                      • Figure 26: Character merchandise purchased for child/children in the last 12 months, by household income, May-June 2009
                                                                                                  • How Parental Attitudes are Evolving in Recession

                                                                                                    • Key points
                                                                                                      • About one in three report buying fewer character products than last year but nearly half are buying the same amount
                                                                                                        • Figure 27: Purchase of character merchandise relative to last year, by age of parent, May-June 2009
                                                                                                    • Children’s Attitudes Toward Media, School, Friends and Self

                                                                                                      • Key points
                                                                                                        • Television is a favorite pastime of most respondents under 12
                                                                                                          • Figure 28: Kids’ attitudes towards TV, movies and video games, by gender and age, October 2007-December 2008
                                                                                                        • Most enjoy school and think academic work is important
                                                                                                          • Figure 29: Children’s attitudes towards school, by gender and age, October 2007-December 2008
                                                                                                        • Most kids report being quite social; demand for social networking likely to continue growing as kids become teens and adults
                                                                                                          • Figure 30: Children’s attitudes towards friends, by gender and age, October 2007-December 2008
                                                                                                        • Most feel confident, curious and distinct from parents
                                                                                                          • Figure 31: Children’s personal preferences and attitudes about self, by gender and age, October 2007-December 2008
                                                                                                      • The Impact of Race and Hispanic Origin

                                                                                                        • Key points
                                                                                                          • Child’s favorite cartoon or movie character
                                                                                                            • Figure 32: Hannah Montana’s The Hannah Montona Light-up Dance Lounge television ad, July 2009
                                                                                                            • Figure 33: Child’s favorite cartoon or movie character, by race/Hispanic origin, May-June 2009
                                                                                                          • Character merchandise purchased in the last 12 months
                                                                                                            • Figure 34: Character merchandise purchased in the last 12 months, by race/Hispanic origin, May-June 2009
                                                                                                        • Cluster Analysis

                                                                                                            • Price-Conscious Reducers (29%)
                                                                                                              • Scrutinizing Users (26%)
                                                                                                                • Steady Users (46%)
                                                                                                                  • Cluster characteristics
                                                                                                                    • Figure 35: Character merchandising clusters, May-June 2009
                                                                                                                    • Figure 36: Use of character merchandise relative to last year, by character merchandising clusters, May-June 2009
                                                                                                                    • Figure 37: Influence of character merchandise on purchasing behavior, by character merchandising clusters, May-June 2009
                                                                                                                    • Figure 38: Influence of character merchandise on children’s preferences, by character merchandising clusters, May-June 2009
                                                                                                                  • Cluster demographics
                                                                                                                    • Figure 39: Character merchandising clusters, by gender, May-June 2009
                                                                                                                    • Figure 40: Character merchandising clusters, by age, May-June 2009
                                                                                                                    • Figure 41: Character merchandising clusters, by household income, May-June 2009
                                                                                                                    • Figure 42: Character merchandising clusters, by race, May-June 2009
                                                                                                                    • Figure 43: Character merchandising clusters, by Hispanic origin, May-June 2009
                                                                                                                  • Cluster methodology
                                                                                                                  • Custom Consumer Groups

                                                                                                                    • Blacks, Hispanics and young adults heavy users of character merchandise
                                                                                                                        • Figure 44: Purchase of character merchandise for personal use, by key custom consumer groups, May-June 2009
                                                                                                                      • Affluents and mature segments less likely to purchase
                                                                                                                        • Figure 45: Purchase of character merchandise for personal use, by key custom consumer groups, May-June 2009
                                                                                                                    • Appendix: Additional Consumer Tables

                                                                                                                      • Demographic comparisons of parents
                                                                                                                        • Figure 46: Use of character merchandise relative to last year, by gender, May-June 2009
                                                                                                                        • Figure 47: Influence of character merchandise on children’s preferences, by age, May-June 2009
                                                                                                                        • Figure 48: Influence of character merchandise on children’s preferences, by race/Hispanic origin, May-June 2009
                                                                                                                        • Figure 49: Perception of child’s favorite cartoon or movie character, by gender, May-June 2009
                                                                                                                        • Figure 50: Perception of child’s favorite cartoon or movie character, by age of parent, May-June 2009
                                                                                                                        • Figure 51: Perception of child’s favorite cartoon or movie character, by household income, May-June 2009
                                                                                                                      • Favorite programs of boys and girls aged 6-17
                                                                                                                        • Figure 52: Kids’ favorite characters/shows, by gender, April 2009
                                                                                                                      • Additional demographic comparisons of adults who are not parents
                                                                                                                        • Figure 53: Attitudes towards price and quality of character merchandise, by household income, May-June 2009
                                                                                                                        • Figure 54: Influence of character merchandise on purchasing behavior, by household income, May-June 2009
                                                                                                                        • Figure 55: Attitudes towards character merchandise, by household income, May-June 2009
                                                                                                                        • Figure 56: Attitudes towards price and quality of character merchandise, by race/ethnicity, May-June 2009
                                                                                                                        • Figure 57: Influence of character merchandise on purchasing behavior, by race/Hispanic origin, May-June 2009
                                                                                                                        • Figure 58: Attitudes towards character merchandise, by race/Hispanic origin, May-June 2009
                                                                                                                        • Figure 59: Good role models, by household income, May 2009
                                                                                                                        • Figure 60: Good role models, by race/Hispanic origin, May 2009
                                                                                                                        • Figure 61: Inappropriate role models, by age, May 2009
                                                                                                                        • Figure 62: Inappropriate role models, by household income, May 2009
                                                                                                                        • Figure 63: Inappropriate role models, by race/Hispanic origin, May 2009
                                                                                                                        • Figure 64: Classic characters, by age, May 2009
                                                                                                                        • Figure 65: Classic characters, by household income, May 2009

                                                                                                                    Companies Covered

                                                                                                                    • Blockbuster USA
                                                                                                                    • Burger King Corporation
                                                                                                                    • CBS Corporation
                                                                                                                    • Dolce & Gabbana
                                                                                                                    • Electronic Arts, Inc
                                                                                                                    • Entertainment Software Association
                                                                                                                    • Facebook, Inc.
                                                                                                                    • Federal Trade Commission
                                                                                                                    • Flickr
                                                                                                                    • Fox Entertainment Group Inc.
                                                                                                                    • Gameloft (USA)
                                                                                                                    • Glu Mobile Inc.
                                                                                                                    • Greenfield Online
                                                                                                                    • Hasbro Inc
                                                                                                                    • J. Choo Limited
                                                                                                                    • Kashi Co. Inc.
                                                                                                                    • Kellogg Company
                                                                                                                    • LG Electronics Inc (USA)
                                                                                                                    • Manolo Blahnik USA, Ltd.
                                                                                                                    • Marc Ecko Enterprises
                                                                                                                    • McDonald's U.S.A.
                                                                                                                    • MGA Entertainment, Inc.
                                                                                                                    • Microsoft USA
                                                                                                                    • Motion Picture Association of America
                                                                                                                    • MTV Networks
                                                                                                                    • MySpace.com
                                                                                                                    • National Football League Inc.
                                                                                                                    • Nestlé USA
                                                                                                                    • Nickelodeon Networks
                                                                                                                    • Nike
                                                                                                                    • Nintendo of America Inc.
                                                                                                                    • Papa John's International, Inc.
                                                                                                                    • Pizza Hut Inc
                                                                                                                    • Pokémon USA Inc.
                                                                                                                    • Public Broadcasting Service
                                                                                                                    • Safeway Inc
                                                                                                                    • Sony Corporation of America
                                                                                                                    • The Cartoon Network
                                                                                                                    • The New York Times Company
                                                                                                                    • Twentieth Century Fox Film Corporation
                                                                                                                    • U.S. Bureau of Labor Statistics
                                                                                                                    • U.S. Bureau of the Census
                                                                                                                    • Universal Studios Inc.
                                                                                                                    • USA Today
                                                                                                                    • Walt Disney Company, The
                                                                                                                    • Warner Bros. Entertainment Inc.
                                                                                                                    • YouTube, Inc.

                                                                                                                    Character Merchandising - US - August 2009

                                                                                                                    £3,174.67 (Excl.Tax)