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Who would have thought that a business could turn around so much in just a few years? But looking at the Marvel business today, it is easy to see how, armed with a new strategy for its comprehensive portfolio, all aspec
April 6, 2018
Who would have thought that a business could turn around so much in just a few years? But looking at the Marvel business today, it is easy to see how, armed with a new strategy for its comprehensive portfolio, all aspects of the business started to fall into place.
And that strategy is clear: to take control of a large portion of its entertainment output to create an ongoing franchise of super hero properties. These link from movie to animation to consumer products, toys, video games, DVD and online across three styles guides covering movies, animations and classics.
The idea reflects on the very basis of the Marvel business. In the comic books, key heroes regularly appear in one another's stories. And for a business that was dependent on Spider-Man for so long, it's refreshing for core Marvel fans—as well as for the bottom line—that more characters from the portfolio of 5,000 individuals are being reinvigorated. The Marvel Studios entertainment output runs alongside the existing licensed movie and animation slate from other studios and producers.
The benefit of the entertainment slate for the consumer products side of the business is already paying off as retailers and major licensees come on board for the long term.
In this year's annual License! Global Top 100 Licensors listing, Marvel ranked at No. 4 with worldwide retail sales of licensed product at $5.78 billion in 2008—moving up from fifth place in 2007. In 2008, Marvel's internationally earned royalties were up by over 147 percent on 2007, and the percentage increase in active deals with its 1,500 partners worldwide was up 53 percent in 2008, compared with 2007.
Simon Philips, president of worldwide consumer products for Marvel Entertainment, says: "Our entertainment business now offers us an incredible opportunity to tell a detailed, in-depth and linked story. Consumers no longer need to sign on for a single franchise; it really is a unique opportunity. And it's the first time that individual movies have been brought together to form an umbrella story."
The movies (See page 31 for forthcoming slate) are individual in their own right, but also form part of the whole super hero story. The animation slate, which debuts this year, gives continuity between the movie slate at the same time it brings forward new brands such as The Super Hero Squad, aimed at a younger audience. "The animation reintroduces super heroes from Marvel comics but in a lighter manner than the movies," Philips says, "combining heroics and comedy.
"At Marvel, we are taking a nonsiloed approach to our properties, and it is very strategic in that regard as each property now works for the benefit of each other. Licensees and retailers appreciate this because it gives them an interconnectivity and, at the moment, the ability to build a program into 2012."
In a sector in which retailers have become increasingly less willing to invest in single-movie product campaigns, Philips says there is a tangible excitement. "With the links that we are making, retailers and licensees can really get behind the franchise and invest in it."
There have already been some stand-out deals that underpin the concept both internationally and in the U.S. Early in 2008, Marvel signed a ground-breaking multi-property textile products deal with international retailer Carrefour. Other international retailers who have since signed direct-to-retail deals include Zara, H&M, C&A, Marks & Spencer, Next and fashion retailer and brand French Connection.
"When we can provide a retailer with a unique proposition, the retailer has more vested in the brand, and that opens opportunities for our licensees to also work with the retailer," Philips says.
In the U.S., for example, Marvel has been working with Pottery Barn and with Old Navy on projects—opening up new retail customers in the process. In the case of Pottery Barn, a DTR model was used with a retailer that did not have any relationships with Marvel licensees, while for the Old Navy deal, Marvel partnered with an existing Old Navy private label partner.
Paul Gitter, president of consumer products for North America, also has been working on co-branding models, positioning Marvel as a lifestyle brand. Through its Reebok deal, the licensor went into Footlocker's children's offer for the first time.
Gitter says: "This type of deal gives us incremental revenue from sectors that are outside of our core demographic. At the same time, we are looking less at one-off deals. Output deals and portfolio deals have benefits because they give licensees an ownership position from which we gain more commitment. For retailers there is less confusion, and that enables our discussions to become more long-range in nature."
The licensing teams work collaboratively across the globe with ideas and product concepts taken from the international markets into the U.S. and vice versa. Gitter says: "Our approach is global and aims to develop the synergies. There are a lot of exciting things happening globally, and we have already brought some of the trends and concepts in the U.S.—the French Connection and H&M deals, for example."
On the international markets, Sandrine de Raspide, executive vice president at Marvel Entertainment International, has been instrumental in signing the hero franchise deals. She has recently been on the road presenting Iron Man 2 to retailers and licensees in 30 cities and has already signed deals on the 2010 film with retailers C&A, Carrefour and George at Asda and is in talks with Tesco and Walmart. Major licensees Mega Blok, Sega and Gameloft are among the licensees also signed to the movie.
"We are creating a very powerful combination of key licensees and key retailers and some extremely innovative product reflecting the science, technology and gadgetry in the stories," she says. And the technology goes across categories. "We are looking at a T-shirt collection that exploits sound and light on textiles," she says.
De Raspide, who also signed DeAgostini for a science-based partwork due to launch in 2010, adds: "The science aspect of Iron Man is helping us to broaden out to new product categories, but it is also helping us operate in a wider band of price points. While there has not been an issue with lower price points or on the higher price points, the challenge for us has been in the middle market. But the technology aspect in innovative products is enabling us to justify middle price points."
The science and technology aspects of the storylines also are opening up Marvel to a new demographic: teens and tweens.
It is not only in the U.S. and developed international markets that Marvel is staking a claim with licensed product. The company has serious intentions to expand in India and China, Latin America and Canada and recently set up an international advisory board to support the business as it explores the possibilities.
The idea is that Marvel will create localized programming and other initiatives tailored to specific markets to seed brand awareness. Philips says, "The developing markets are all extremely different, and our plan is to have a local approach working with local partners."
With Philips representing Marvel, the advisory board is chaired by James F. Halpin, a Marvel director since March 1995; Peter Yip, executive vice chairman and chief executive officer of China's CDC Corp.; and Bollywood film producer, Manmohan Shetty, former chairman of Adlabs Films.
Philips says: "The idea of the advisory board is to bring us the expertise of business leaders from different growth markets. China and India comprise a huge proportion of the world's population, and that is a significant growth area for licensing in general and for Marvel. The board's expertise is a definite benefit to us. We will expand it to bring in an expert on the Latin American market, and we also plan to add a European board member."
Marvel already has a template. In Japan, it has localized characters, and it could be possible to develop similarly in other markets. In India, where there is already a limited product presence, there also is a Hindi-language "Spider-Man" comic book.
"This is about what these markets will bring tomorrow as opposed to what they can bring today. Our view is to take a position for when the market infrastructures improve, for when more people become wealthier and for when television becomes more prominent—as it already is in India—because that is when the opportunities for product licensing will increase."
Philips sums up: "When I joined Marvel back in 2006, I was conscious that I was joining a piece of our cultural history that provided an amazing set of properties to work with. And because of the array of characters, we have lots of different markets that we can work in for adults, children and for teens. The key is to know the consumers—and because of the comic fan base, we get constant feedback.
"The Marvel business is now both the IP rights holder and the content creator. We are in control of our future, and that's a real opportunity for innovative product creation, too."
Hasbro has re-signed its global partnership with Marvel in a deal that goes through to 2017 with a $100 million guarantee.
In a multiyear license deal, Hallmark has signed the North American rights to produce and market a wide range of social expression products—many featuring innovations such as lights, sounds and personalization—based on both Marvel's classic comic book look, as well as product lines inspired by the movies and animated series. The deal covers party goods, ornaments, seasonal and everyday wrap, greeting cards, electronic greeting cards and mobile greetings, as well as Crayola arts and crafts products.
Four apparel partnerships have been expanded, including a multi-year extension with Fruit of the Loom for children's underwear on the Marvel franchises, including the upcoming Marvel Studios film slate; with Mad Engine for T-shirts and hoodies featuring all Marvel Universe character properties; as well as Iron Man 2 and Thor for mass market to mid-tier and high-end stores; with Freeze for men's and boys' merchandise, including the upcoming film roster for all tiers of distribution; and an expanded relationship with Mighty Fine for men's adult-driven classic programs for mid-tier, department and specialty stores. Freeze and Mighty Fine will continue to supply Marvel character fashion tops for women inspired by Marvel Comics/Retro and Marvel Extreme across all tiers of distribution.
Marvel Entertainment has signed Gazillion Entertainment to create massively multi-player online games based on the super hero roster. The first MMOG is branded Super Hero Squad and will feature Iron Man, Hulk, Wolverine, Thor, Fantastic Four, Captain America and others.
Brown Shoe has signed for a multi-character, multiyear deal with Marvel covering children's, women's and men's footwear in sports and casual, sandals, boots and slipper categories. The first collection launches in spring 2010 and will be based on characters from Iron Man 2, which premieres in May.
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