Warner Bros. and the Magic World of Harry Potter

The wild and whimsical world of Harry Potter, which is the largest-grossing movie franchise in film history, has become the magical mainstay of Warner Bros. Consumer Products' global licensing strategy.

With a rich portfolio of properties including Looney Tunes, Batman, Superman, Watchmen, and DC Comics, Warner Bros. is committed to fewer but bigger releases, and few will be any bigger than the final three Harry Potter films.

"Warner Bros. is an entertainment powerhouse that builds incredible franchises. We are fortunate to represent such a strong portfolio of perennials in the world of licensing," says Brad Globe, president of Warner Bros. Consumer Products. "To be able to extend—and expand—consumer interaction with great properties like Batman, Looney Tunes, Scooby-Doo and, of course, Harry Potter, is really a unique circumstance for us and our partners."

Since acquiring the film rights from creator/author J. K. Rowling in 1999, Harry Potter has grown and matured, beyond the 12-year-old boy who instantly became a cultural phenom and has become the definitive tentpole of the '00s decade.

Now, as the mega entertainment franchise approaches its final three films, Warner Bros. Consumer Products, the world's third-largest licensor with $6 billion in total sales at retail, is mixing a new potion for growth in licensing, and it hopes to exceed the global prominence and multi-billion licensing juggernaut it became since the first movie, Harry Potter and the Sorcerer's Stone, debuted in 2001.

With next month's much-anticipated premiere of film six, Harry Potter and the Half-Blood Prince, WBCP has established a multi-pronged global licensing strategy that boasts extensive product assortments based on three theatrical releases, video games, a museum exhibit and a theme-park attraction.

"Harry Potter is an instant classic that remains as relevant as ever today. Based on the already-established film content and what's to come over the next few years, we are really focused on making sure that retailers and licensees know the opportunity to connect with consumers through merchandise has never been stronger. It doesn't stop there, though," emphasizes Globe. "With major projects such as the Harry Potter Museum Tour and the Wizarding World of Harry Potter, we see a promising horizon for Harry Potter across the entire licensing landscape."

The strategy and timeline includes the following:

As Harry Potter and other characters aged and the movies became darker, WBCP evolved away from a licensing strategy targeted to younger boys and mass to one geared more toward an older audience and specialty stores.

But that's changing again as WBCP recognizes the opportunity to merchandise the entire franchise of Harry Potter, versus just the current theatrical release.

Says Globe: "We've certainly had to re-evaluate and reposition our licensing and retail strategy as the property storyline evolved and aged-up. As a result, our once very broad product offering became much more focused. But now, we have such a plethora of past, present and future content from which to draw, we are uniquely positioned to enter a growth cycle with our retail and licensing partners over the next few years—and beyond."

Jordan Sollitto, executive vice president of new initiatives and international licensing, recalls the early days of Harry Potter when merchandise was first sold exclusively at Warner Bros. studio stores and was actually part of the retail division before it moved into the licensing group.

The HP property experienced huge growth in its first three years and slowed slightly in the mid-2000s. And the consensus now is that the property has unlimited potential worldwide.

According to Sollitto, WBCP evaluated the brand, researched consumers and found out just how devoted the fan base really is.

As a result, he says, "WBCP will re-engage in Harry Potter with more fervor than the last couple of years.

"We have six movies telling 80 percent of the saga of Harry Potter with our merchandise, but a fan has only been able to buy a slice of it. Now we have a product selection that appeals to any-age fan and a fan's particular fascination with any phase of the Harry Potter saga," except the last book/two movies.

Says Karen McTier, executive vice president of domestic licensing and worldwide marketing: "Harry Potter differentiates from other properties because it's very rich in terms of stories and characters. The amount of content has created an endless opportunity to merchandise this rich and robust world.

"We have built up a fan base that wants to look at the entire history of Harry Potter," McTier adds. "And we are very excited about having a program that's not directly tied to one movie and taking a broader approach to the franchise."

The licensing strategy is simply to hit all age groups from age 4 to the serious adult collector from typical toys such as the popular wands to edgy apparel and high-end collectibles.

"We have remained true to the property and movies and didn't take much license as we might have done for DC comics, where we interpret products more," McTier explains. "We stay true to films and work closely with set designers and illustrators."

Sollitto believes that international business can double over the final three years.

The top 10 markets, according to WBCP, are: the United States, United Kingdom, Germany, Japan, France, Spain, South Korea, Russia, China and Taiwan.

Sollitto explains that each territory/region is very different and a local market strategy is applied. For example, Japan is strong in the adult/collectibles business of higher-end products; Latin America is predominantly kids' apparel and toys; and in the U.K. a broad selection of products can be offered.

Both Sollitto and McTier believe that strong relationships at retail, coupled with a shift in philosophy, have helped WBCP execute its aggressive licensing strategy.

For the past several years, explains McTier, retailers were interested in something new. "Now, it's completely flipped, and retailers are very interested in classics and are less interested in things they never heard of," she says. "Retailers have always been cautious about new properties, but their rabid appetite for 'new' has diminished. Retailers now ask, 'What's new with the classics?'

McTier says products will be developed and extended in three key areas: authentic merchandise that is very true to genre; adult collector/specialty; and film-specific.

The strong merchandising programs, such as books and stickers, will continue to be emphasized, as will various new categories, including bedding and home décor.

In fact, DeAgostini's Harry Potter Chess Partwork has sold more than 23 million copies to date in just over two years and the licensee DeAgostini has rolled out the Harry Potter Chess Collection in more than 25 territories to date and has launched a new figurine collection with poster books in Italy in December 2008.

Says Isabelle Giggins, global licensing director at DeAgostini, "Harry Potter Chess has been one of our most successful collections over the last two years. Our partnership with Warner Bros. Consumer Products has enabled us to join forces to create a unique product, which captured the imagination of millions of Harry Potter fans worldwide."

Another example of a strong licensing program is with Panini, which has sold in excess of 1.25 billion Harry Potter stickers.

Says Peter Warsop, group licensing director, "Panini has been involved with publishing sticker album collections throughout the movie life of Harry Potter and has found new markets for the franchise each launch, with more than 70 international territories involved. Sales volumes for each movie launch have been maintained to surprising levels without the expected declines in sales, which makes this the longest-running movie franchise for our product category ever at this high level of sales."

In addition to the movies and extensive licensing and merchandising programs, the expansion of live events will help strengthen the Harry Potter brand's popularity worldwide.

The museum exhibit recently debuted in Chicago, and the theme park attraction, called the Wizarding World of Harry Potter, will open at Universal Orlando Resort in spring 2010. It will include rides, interactive games, shops and restaurants.

"The Wizarding World of Harry Potter will be an entire land that brings the stories of Harry Potter to life in an amazing and special way," says Mark Woodbury, president of Universal Creative. "Warner Bros. Consumer Products has been a great partner. They have been an important part of making sure what we create together realizes its full potential and that we bring the authenticity of the Harry Potter stories to everything we do."

The magic of Harry Potter will continue as a bona fide evergreen property for WBCP long after the final movie is released in 2011. And while there are no current plans for the development of additional content—publishing, television or theatrical—you can't help but wonder what wizardry and spells will be cast to further extend this franchise into the next decade and beyond.