Merchandising Moolah

Last September, Forbes published a list of the 20 most lucrative merchandising properties for the preceding year:

1. Disney Princess (Disney) $1.60 billion in 2011 retail sales
2. Star Wars (Lucasfilm) $1.50 billion
3. Pooh (Disney) $1.09 billion
4. Cars (Disney) $1.05 billion
5. Hello Kitty (Sanrio) $800 million
6. Mickey & Friends (Disney) $750 million
7. WWE (WWE) $700 million
8. Toy Story (Disney) $685 million
9. Peanuts (Iconix, Peanuts Worldwide) $600 million
10. Sesame Street (Sesame Workshop) $515 million
11. Disney Fairies (Disney) $435 million
12. Thomas the Tank Engine (Hit Entertainment) $390 million
13. Garfield (Paws Inc.) $370 million
14. Dora the Explorer (Nickelodeon) $330 million
15. SpongeBob (Nickelodeon) $330 million
16. Spiderman (Marvel/Disney) $325 million
17. Ben 10 (Cartoon Network) $295 million
18. Angry Birds (Rovio) $250 million
19. Batman (DC/Warner) $245 million
20. Barbie (Mattel) $242 million

The above figures represent retail sales.  That money is split between retailer, manufacturer and licensor.  As the Forbes article states, the average license fee is 8.7% of the wholesale price (retail price is generally 30-40% higher).  As stated in the article, some Disney license fees are as high as 15%.  Companies like Disney are not only the licensor but also the retailer when it comes to their theme parks and Disney stores.  Mattel is both licensor and manufacturer when it comes to Barbie.

Now that Disney has bought Marvel and Lucasfilm, it has the top four spots, five of the top six, and eight of the top sixteen.  Nickelodeon has two spots and Warner, which owns DC and Cartoon Network, also has two.

This is where the real money is in animation.  Disney controlled properties grossed more than $7.4 billion dollars.  That's why Disney made Cars 2 and why it is releasing Planes (and the already announced Planes sequel) to theatres.  This is why there will be more Tinkerbell DVDs.  While Star Wars fans went years searching for anything new relating to the property, they are about to be buried in more than they can possibly consume.

This is also why a studio investing tens of millions of dollars in an animated feature aims it at the family market.  If the film can become a franchise, like Toy Story, the money keeps rolling in even in years when there is little to no new animation done.  Assuming that the wholesale price was 60% of the $685 million and assuming that Disney received 10% as a license fee, Toy Story merchandise brought Disney $41.1 million in gross revenue for a single year.  While there are costs associated with licensing, primarily office overhead, lawyers, art directors and/or artists,  there had to be millions in profits.  And that's just one of Disney's licensing revenue streams. Using similar numbers, the Disney Princess line brought in $96 million.

Why risk making an animated property for adults when animation aimed at children might have a wealthy afterlife through merchandising?  So long as this is the economic basis of animation, the situation will not substantially change.