One expert in the toy industry has had enough. Marvel merchandise isn’t selling, Star Wars has tanked, and manufacturers want to make money again!
The following article provides information from a purported insider to the toy industry. While information from the source appears fully accurate to editors of this site, we cannot corroborate each piece of detail. We can only comment on the opinion provided by the source. Anonymity has been provided to protect the career of the individual leaking the information.
Earlier this week, one of our writers for That Park Place received a tip from a toy industry insider who wanted to leak information obtained legally and ethically as part of their long career. While we have agreed to maintain the person’s anonymity, we can also confirm that particular details revealed by this individual lined up with other information we had received which leads us to believe the reliability of the statements provided. Our anonymous source has agreed that portions of their conversation may be released unredacted, though we will protect their identity and hold any dialogue which could lead to adverse actions against them.
Enjoy the conversation from below which will be provided with some commentary:
Overall we [the toy company holding licensees] have mandates from companies operating in three HUGE consumer categories. Princesses are doing fine for most license holders, no issues. Lucasfilm is a disaster, with new characters having no consumer pull, and worse even classic characters are now seeing diminishing returns. Star Wars were previously the most expensive royalties at Disney (though they vary by category), but following the veritable deluge of markdowns at retail, many of the bigger guys were able to negotiate not only rebates, but even concessions on “next product” because of the markdowns. If it ain’t selling, Walmart doesn’t want your dead plastic, garment, or whatever. Also that the brand is no longer a theatrical brand, didn’t go over well with business partners.
This matches up with what WDW Pro has been reporting and documenting here at TPP. Do you remember the images of modern Star Wars novels sitting on the floor while Timothy Zahn books fill what was supposed to be High Republic premiere shelf space?
The toy industry insider with a decades-long career continues:
But this email is regarding Marvel. Both unit and licensing are down roughly 50% units and about 30% in dollars.
The new stuff is failing to generate the level 2 and level 3 interest that brings in the big $ branded dollars at retail (level 1 interest is going to see the movie, level 2 and 3 are deeper down the trickle down interest chain where you are willing to buy branded merchandise that is further and further removed from the “source”)
Spider-Man, Cap and Iron Man are holding everything together at this point. Spider-Man is the only sub brand showing growth in units and dollars and in fan interest (confirmed by quanti and focus).
Eternals was the worst across the board, but here is the general statement : female heroes do not sell merchandise. Sorry, they don’t. > > Unfortunately current economic conditions mean that few of our mandates are exploratory to find opportunities, but are more in the “what the hell happened” vein.
This is getting long so I will simplify: say you were going to ship a master carton of 8 plastic drinking cups to Walmart for them to sell individually, what would be the character mix? Confirmed by UPC sales and after the fact consumer data, your ideal mix would be 2 each of Spider-Man, iron man and cap and one each of Thor and Hulk.
Of course Marvel would ask for 50% female representation, but you could deal that to 25%, were Thor and Hulk are out, replaced by Widow and Wanda. Thor and Hulk outsell Widow by at least 8 to 1, with an even bigger gap for Wanda.
The problem here is as the male heroes sell, and you ship in more case packs, the female heroes back up on the shelves and clog the pipeline (think thousands of stores in the US)… markdowns!
This is not a new fad. Lucasfilm attempted this same strategy when they pitched the Sequel Trilogy to Bob Iger on the idea that Rey could see toys just as well as Luke Skywalker… but Rey would also sell to girls. In the end, Rey did poorly with both genders. Perhaps it’s not the ideal world you wish to live in, but the reality is that little boys want to play mostly with action figures they can roleplay their most heroic selves into… and that means boys want to dream of being male superheroes. And girls, even when given the option to play with masculine female heroes, often choose toys that are more feminine or maternal in nature. Maybe you think that’s wrong or a bad thing, but it’s the reality we live in.
As a result, this attempt by Marvel to move to 50% female representation is reportedly crashing the toy industry making Marvel merch. Little girls want to play with Barbie, baby dolls, Polly Pocket, etc. Little boys want to play with cars, robot dinosaurs, ninja turtles and muscled-out superheroes. Is that true for every little boy and every little girl all the time? No. But when it comes to trends and when it comes to the scale of nations, it matters if it’s generally true.
Wanna make it worse? Sure you do!
How about Marvel oblige you to ship a case pack of Eternals-themed drinking cups for each case of Classic Characters shipped… something they did over many categories when Eternals came out …. At that point the markdowns are so significant that you’re losing money in my example.
Also: virtually none of the purely TV characters even register with consumers for merchandising purposes. None!
This is one of those lines that let the original recipient of the email know that the information is likely legitimate. Indeed, we have heard from other sources that Marvel has been trying to force merchandise contracts that required failing properties like The Eternals be shipped with the popular franchises. It’s essentially an attempt to manipulate the market. Your licensed manufacturers don’t want to produce a line of items that receive abysmal focus group reaction, so you force them under the belief that you know better and the flood of products will have parents buying it just because “it’s Marvel.”
I could also [add] the following : While Disney merchandising dept write up the contracts, from a merchandising perspective all the power is still with the divisions (Marvel, Disney, Pixar) because the key character pulls (design, screen time, future plans, characterization, in-story interactions, etc) reside on the creative side. Say you still have 20,000 vision t-shirts in stock and want to know if there are impending plans for the character to help move the merchandise? Well, good luck with that …. (In that example the shirts will be moved by the pound to a developing nation for tax credits).
Again, 100% how the industry works and those who work there know it. Where do all those President Hillary Clinton victory shirts go? They go to developing countries. Where do all those Lightyear 2022 baseball caps go? Ship ’em to Rwanda as a charitable gift and write it off.
Here’s one more: [redacted to protect identities] told me that a couple high ups at key Marvel business partners told him (convoluted I know) that Marvel management (though not Disney management) know damn well that their creative decisions are impacting merchandising revenue but they are trying to manage things where merch sales from classic characters masks/balanced out poor merch sales from nuMarvel characters. I mean do I really have to do 36 hrs of focus groups across [region redacted to protect identity] to tell you that Spider-Man is a better merch driver than Dr. Strange who is a better merch driver than Falcon who is a better merch driver than Moon Knight who is a better merch driver than Echo etc…
Two regional observations [for North America]: Cap is number 2 in the US, with Iron man third (both behind Spider-Man), and in Canada Cap is third behind iron man. So Captain America is top 3 in both Canada and the USA. Other note on Cap: blue t-shirt with shield (but no character visual or name) is a USA best seller. Falcon as Falcon outsells Falcon as Captain America in our clients’ categories. If you only have three different skus of bedsheets to make you do a Spider man, a cap and an iron man. Pay the premium to Marvel to replace the iron man with an Avengers bedsheet with all characters and that will be your best seller.
All of this essentially confirms what we’ve been seeing on clearance aisles and knowing with common sense. Still, it’s great to have it confirmed by an industry expert.
Do you really need for me to ask in focus group (for a example ..) if little girls are just dying to get Agatha Harkness pajamas …. If I hold up two pictures in focus, one with scarlet Johansson and one with the blonde lady and ask « which one is black widow?
… what do you think they answer ? ;)
… correct !! Choosing which licensed characters you put on your product is the key decision, especially when so many are available and Marvel is pushing Falcon, Shang Chi and any female character often obliging you to include a hefty bunch of these in your character mix. Which is the top selling beach towel? Spider-Man or Shang Chi? ….. the difference is a couple hundred thousand units at $12.99 US ..
While we’re holding the company(s) this individual works for, let’s just wrap up this conversation with an important reminder. The really big toy companies can handle this sort of inefficiency, miscalculation and forced equity of IP inclusion. It’s the smaller companies out there who are getting absolutely hammered. Imagine being on the brink, you have a lucrative Marvel license contract that could put your company over the moon, but you’re stuck printing Agatha Harkness stickers in equal measure to the Spider-Man items that would make you 90% more money. You can begin to see how a story like this starts out as math, but it often ends up with stress and heartbreak by people who just want to sell toys and merchandise.
Hopefully Marvel gets its act together.
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The big toy companies cannot afford Disney madness. I assume, Disney is about to get booted from merchandise. Once booted, the discount deals or creative control moves to the toy manufacturers.
Somewhere Ike Perlmutter is chuckling.
Except he still made a crap show and said shit most fans would disagree on.
Not defending him, but I don’t think that bothers him in the slightest.
Of course it doesn’t bother him since he’s long gone now, but that’s not why I said it.
I can sell all those clearance toys in a month! Just need a few machine rentals. I’m thinking a Wood Chipper, Steam Roller, Hydraulic Press, a Vacuum Chamber and some Liquid Nitrogen to start with… and Bam, Destroy A Hated Toy Day is born! Buy at least one specially marked clearance toy and choose what means are used to destroy it. (No limit)
No one cares about characters that don’t sell. They don’t hate or love them. They don’t know who they are or see them as cool.
The biggest shame is that people can’t even seem to comment on the reality of these things without throwing the caveats like “you may not like it but that’s the world we live in” and such. We really live in crazyworld.
So I guess apparently women don’t belong in pop culture ultimately since they don’t buy shit.
Nice hyperbole Alex. You do know that pop culture extends beyond sci-fi and super heroes. At the beginning beginning of the article they even discussed how the “princesses line” (typically marketed to girls) was doing just fine. The problem is that Disney decided that the market that used to cater to boys (sci-fi and super hero’s) needed to have a domineering female presence (and not just be equally represented)
It may not be hyperbole if that’s sadly the case. Most people in pop culture are male and as much as there are females in pop culture, not enough to warrant making things to get more even if done right. The Princess line is just that: The only thing that sells.
Depends on how you define pop culture. I’d include Kardashian shows, Dancing with the Stars, and pop music, and women are very involved with that. But most aren’t interested in collecting Marvel action figures.
This was a great “get” of a story, and I hope we hear more from these insiders. I’ve been a collector for YEARS, and there’s very little merchandise I could/would want to buy these days. (As an example – at my local Wal-Mart, the ONLY Star Wars action figure on a peg is a vintage-carded Lando Calrissian – there’s about a dozen of them. Nothing else.)
When your stories flop, your characters are flat and/or shrill, and you’re not producing cool vehicles – your crap isn’t going to sell.
I know this article was focusing on Marvel, but the horrible part about Star Wars is that a big reason they wanted it was to expand the boys market. They were tired of being associated with Princesses and wanted Star Wars and Marvel to cater to the 50% of the market that wasn’t interested in Princess stuff.
I’ve never seen a company slaughter golden geese with such glee before this.
Hey hey, thought I’d chime in here since I’ve been in/around this industry for, well all of my life at some function or another. Watching Disney/Marvel ‘get woke go broke’ was disheartening at first….but now it’s a necessity. These megabrand megacorps are all pushing diversity equity gender trans exclusionary non binary, well whatever crap buzzword you want to use. And guess what, it doesn’t sell. The vocal minority doesn’t buy the very product they complain needs to represent them and the majority rejects it, hell even demands the destruction of said companies for purposely jamming a narrative down our throats.
Now all this can be tied to Larry Fink and his manipulation of the market with the implementation of the ESG score (look that up for an astonishing WTF look at what happened to our markets) and when corporations are tied to “environmental, social governance” thanks to Fink’s BlackRock it destroys every company it touches. To fix the market we must free the manufacturers/corps of the ESG and that means Fink and BlackRock have to be eliminated. That’s rather hard to do when it’s worth 8.4 trillion. The changes you see destroying businesses with woke culture, climate equity, and all the BS stems from this little ESG score.
Great comments and well-received.
FYI.. Very NOT COOL that you disallow commenting on your site if your using a VPN. In this day & age of data & identity theft someone like you should be pro-VPN not anti-VPN.
Mmm… then how are you commenting?
Thanks for the additional info
Plus the days of just picking up a figure of a character that you have a fleeting interest in, as prices have climbed to $26-30+.