Breaking up is hard to do
By Kate Bulkley
For Broadcast April 19, 2012
But Chorion sets good example for kidsí IP companies, says Kate Bulkley.
For some kidsí IP companies, breaking up has been hard to do.
Hit Entertainment, Ragdoll and Entertainment One all put themselves in the shop window last year, between them owning strong properties including Thomas The Tank Engine and Bob The Builder (Hit), Teletubbies (Ragdoll) and Peppa Pig and Twilight (eOne).
When Mattel bought Hit for $680m (£429m) in October 2011, the all-in-one strategy looked like a good idea, but that conclusion faded when eOne and Ragdoll remained unsold.
Now, Mattelís first-quarter 2012 profits are down by 53% and eOne and Ragdoll have both been forced to change strategies.
The kidsí market in particular is caught up in the belt-tightening of the recession (letís face it, kidsí TV economics is about toy sales), so keeping your IP brands together for a one-off sale is going to make finding the right buyer a lot tougher.
In fact, if you want a happy ending for how to sell your classic IP characters, then look no further than Chorion, which has wrapped up 14 deals in seven months, selling off the likes of Noddy, Olivia, Beatrix Potter, Octonauts and Mr Men in the kidsí sector, as well as adult properties such as Agatha Christie.
Doing so many deals has been hard work for Chorion, but now it looks like the right strategy. What Hit, Ragdoll and eOne found out was that although kidsí brands are always supposed to be hot, they also demand ongoing investment to keep them fresh for a new crop of children (and toys).
You canít just keep repeating the old episodes of Thomas, Peppa and Bob, because thatís boring and the retailers wonít stand for it. Yet to make new programming all the time requires big, recurring investments, which in a recession is not easy And thereís another problem: retailers such as Walmart and supermarkets (which are where toys are now sold) are in the driverís seat.
That means not only do you have to negotiate with these big guys, but your toys are competing not only with other toys but also with tins of baked beans Ė even the most loving recession-hit mum is more likely to buy food than another Peppa Pig doll.
So what about adult IP? Last month, Chorion sold its majority 64% stake in the Agatha Christie literary estate, including Hercule Poirot and Miss Marple (pictured), to Acorn Media Group, which already owns the rights to Foyleís War.
Hilary Strong, the executive who has been leading the Chorion sales process, was recently hired by Acorn and will be given the task of tapping into the detective-friendly zeitgeist, judging by the interest in Sherlock Holmes on both sides of the Atlantic and beyond. There is also more to mine from Agatha Christie, including Thomas Beresford and Prudence Cowley Ė more commonly called Tommy and Tuppence Ė as well as the 160 short stories she penned.
But the challenge for Acorn will be the economic nurturing that Chorion and many other IP owners have found so difficult to provide. With the growth in digital platforms, there will be continued demand for good stories and their spin-offs, so Acorn will hope that, like Miss Marple, it does a good job of solving the mystery.