Everybody wants a piece of something successful. The desire in children of all ages to take a piece of a beloved tv or film character home is rampant to the tune of billions of dollars in yearly retail sales. The monolith otherwise known as Disney generates about $15 billion in sales per year; Batman merchandise made $2 billion in the past five years, as did The Simpsons. Sesame Street stuff brings in an annual $800 million.

While many Canadian companies do not yet have the end results of burgeoning merchandising initiatives built into the bottom line, most will acknowledge that merchandising is a very lucrative aspect of their operation, and one that is viewed as an organic extension of the originating tv program.

Nelvana

Nelvana’s ongoing merchandising and licensing initiatives accounted for almost $5 million in revenues in 1994, or about 8% of the bottom line. In the company’s first year as a public entity, Nelvana signed licence agreements with Playmates Toys for its Wildc.a.t.s Covert Action Teams characters and, together with the Clifford Ross Company, with Japan’s Takara Company to bring Babar booty to the Japanese market.

There is also an agreement with Crystal Dynamics for a cd-rom adventure game for Sega Saturn and Sony Playstations based on the Blazing Dragons animated tv series, produced by Nelvana and Carlton Television of the u.k. Merchandising for the live-action series Nancy Drew and The Hardy Boys, and the animated series Little Bear and Stickin’ Around will be reflected in next year’s bottom line.

‘Libraries are most valuable when they have exploitable, recognizable brand names,’ says Nelvana chairman Michael Hirsh. ‘Our focus on developing classic and well-known characters lends itself to our third business, which is merchandising.’

Paragon

Richard Borchiver, president and coo of Paragon Entertainment, says the company’s merchandising efforts are viewed as inseparable from programming.

‘We don’t isolate merchandising as just one area,’ says Borchiver. ‘The quality of the show in the family entertainment area and the engineering of shows from the ground floor up dictate the kinds of revenues one can expect to earn in the merchandising area.’

Paragon, producer of the Emmy-winning children’s series Lamb Chop’s Play-Along, gained experience in merchandising from Shari Lewis’ lovable lamb, and Borchiver says banks are accepting the company’s estimates for merchandising revenues.

Paragon’s merchandising efforts presently account for about 25% of the company’s revenues, a portion that is expected to increase as existing merchandising arrangements for Lamb Chop are added to upcoming initiatives.

For Kratts’ Creatures, a documentary-style wildlife program debuting in 1996 on pbs in the u.s. and tvontario in Canada, Paragon has a number of merchandising arrangements, including a toy deal and a deal with Scholastic Books, which, according to Borchiver, paid one of its highest advances ever for a series of books based on the tv series. Paragon is also close to signing a multimedia deal for the series with a u.s. company.

Cinar

Louis Fournier, vp sales and marketing at Montreal’s Cinar Films, says in the last two to three years Cinar, with The Busy World of Richard Scarry (which was recently involved in a promotion through Viacom Consumer Products and McDonald’s), has moved from a tv producer mentality to a more holistic approach of developing different properties and different platforms.

Fournier says the company is just starting to generate licensing revenue in a meaningful way and merchandising figures won’t be reflected in the bottom line until next year.

Cinar property Wimzie’s House, which will air on cbc in the fall of ’96, will be built ‘block by block’ in every aspect of rights, says Fournier: ‘The launch pad is tv, and then you can move into consumer goods like videos and publishing, and then you move forward with other categories like apparel and toys if the product lends itself to that.’

Fournier says Cinar’s Are You Afraid of the Dark? series, while doing well on video, is not a natural product for the medium, whereas other merchandising, like t-shirts and caps, is doing ‘fabulously well.’ It’s all a matter of finding the ‘hook’ of the property and which categories are most appropriate to exploit that hook, he says.

Fournier says while Cinar is exploring digital merchandising (the company has a deal with Viacom, which created a cd-rom for Are You Afraid of the Dark?), they will be looking at it from a licensing point of view as cd-rom distribution is still risky and it will take some time to get to the point where distributors or publishers will pay, as in the video business, for acquisition of titles for distribution.

Alliance

Alliance Communications is covering the merchandising bases with products based on its high-profile ReBoot series. Helen Chapman, who handles merchandising and licensing for Alliance, says merchandising is currently being managed by Alliance Productions but will be separated in the future if the initiatives continue.

Chapman says it’s too soon to tell what kinds of revenues the products will generate as most are just being launched this fall, but the guideline is that merchandise is expected to make as much or more than the property itself.

Alliance has 80 licensing agreements for about 1,000 ReBoot products worldwide, including interactive games developed by Electronic Arts, action figures by Irwin Toys, apparel, stationery and coloring books.

Alliance was also involved, with Cinevisions and Sony in a Johnny Mnemonic cd-rom game.

Breakthrough

Breakthrough Films’ Dudley the Dragon, who gently tackles the issues of the day on his weekly program, has earned his keep with extensive merchandising work.

Ira Levy, one of the producers of the Dudley experience, says that as the show moves into its third season – it now airs on tvo and ytv in Canada and pbs in the States – it has so far amassed 20 licensing arrangements in Canada and is expanding into the u.s. with 40 licensees lined up.

Dudley lends his kindly persona to items like plush toys and, this Christmas, through a deal with Hallmark, will appear on greeting cards, party goods and Christmas ornaments. Levy says the company is also working on Dudley-based cd-roms and Internet projects and an apparel line is being developed for spring.

Levy says the philosophy behind the show has facilitated Dudley’s expansion into other aspects of society as well. The organizers of the Macy’s Thanksgiving Day parade have decided that the 48 million Americans who view the parade could benefit from the presence of the environmentally concerned caring nurturer. A 65-foot balloon version of Dudley will stroll the parade while a more life-sized version will attend FAO Schwartz toy store openings.

While u.s. licensing agent Robert A. Stone of Meridian Direct (n.y.) has no sales figures yet (these will be available at the end of the year), he reports core licensees like Hallmark, Happiness Express and Vida Footwear say their product lines are doing ‘very well.’

Chains Walmart, Toys R Us and Targets have all been placing reorders on test product.

Coming soon

The creatures from the eco-aware Groundling Marsh series, which is seen on ytv and in over 20 countries worldwide, will also be featured on a number of take-home items. Portfolio Film and Television and J.A. Delmage Productions, in addition to launching home videos for the program through Amazing Space stores in the u.s., will be featuring Marsh characters on about 15 products, including a clothing line, caps and magnets.

Robert Mills, president of Radical Sheep Productions, says a number of merchandising efforts are underway for their Big Comfy Couch series. Through Hollywood Ventures, an l.a.-based distribution and licensing company, deals have been struck with Time Life for home video, book publishing and audio cassettes. Mills says there are also a number of other deals in the works to produce such things as plush toys and games.

The series has been airing since January on pbs in the u.s. and is currently seen in 70% of markets there. Mills says u.s. response to the show has been outstanding and he expects merchandising efforts to be lucrative. ‘We reek of potential,’ says Mills, ‘and we’re waiting for that smell to come over us.’