The movers and shakers in the US toy industry – both manufacturers and retailers – are becoming really concerned about two things. One is that the top toy movies just do not seem to have the same pull any longer. And the second is that there are just too many of them which, in the view of the national toy buyers, could lead to cannibalisation.
The first issue is very material since there is as a rule a clear correlation between the box office of a movie and the toy sales that are generated by them. The exception are situations where strong movies back toys that are badly distributed or merchandised.
Two examples come to mind, both from last year – Alice in Wonderland and Avatar. The first was a billion dollar movie worldwide, the second a $2.7billion movie, the largest box office in history. Both were backed by insufficient product, insufficiently distributed and merchandised, and hence the resulting toy sales did not do justice to the promise of the movie.
So far, 2011 is very problematic. In the listing below, I am showing the box office of the 2011 movies up to July 12 and compare it to the same box office duration for their precursors. Every single one, even the blockbusters Cars 2 and Transformers 3, are limping behind earlier versions. Note that the numbers below are in $million and relate to the United States only – given the fact that the U.S. is the single biggest toy market:
Some national buyers had predicted six months ago that Transformers 3 would have a box office result in the US about 15 per cent lower than that of Transformers 2. At this point, the difference between the two is 13.3 per cent which is astonishingly close to what the buyers had foreseen.
There are several reasons why there should be such a decline in box office. One often mentioned is that cost is a factor – to watch a 3D movie costs about 30 per cent more than its 2D equivalent. The other is that the LCD glasses you need to wear are annoying. And all of the 2011 movies listed above are 3D films except for X-Men.
But the reason most often mentioned is that this year’s crop of movies is simply not as good as its predecessors.
I looked at the Metascores given by film critics and quoted in the Metacritic website. Everyone of this year’s movies listed above has a ranking below that of its earlier equivalent. Here is the comparison – note that the top score is 100 points::
This year’s Transformers movie gets a ranking on 42 versus 61 for the 2009 movie. Pirates of the Caribbean 2011 gets 45 points versus 50 points for the 2007 movie. Cars 2 gets 57 points versus Cars 1 70 points. X-Men 2011 gets 65 points versus its 2009 predecessor of 73. Kung Fu Panda 2011 has a score of 67 versus its 2008 version of 73.
Not to be forgotten, Green Lantern clocks in at 39 points and Thor at 58 points. Just in case you thought that the critics could not count above 75, Harry Potter and the Deathly Hallows, Part 2, gets a score of 90.
An article in the New York Times of July 1st probably put the finger on the underlying issue. of what ails most of these movies this year. Entitled “A Collision of Creativity and Cash” it makes the following comment in reference to Cars 2:
“This looks like the worst-case scenario,” Doug Creutz, an analyst at Cowen, told me this week after absorbing the reviews. “A movie created solely to drive merchandise. It feels cynical. Parents may feel they’re watching a two-hour commercial.”
In short, you cannot get good films if the sole purpose of the movie is to sell you stuff.
The buyers’ second concern – cannibalization – is also serious and the highest concentration of movies is still to come – between July 15 and August 14, the peak of the Summer movie season. This is how the action figure movie line-up looks in 2011 between 7/15 and 8/15 as compared to the same time frame last year and 2009:
Pirates of the Caribbean
Prince of Persia
The buyers are really concerned about what is going on with toy films this year and typically buyer concerns translate into shelf space cutbacks which translate into lower product movement and eventually lower Purchase Orders. In terms of shelf space, this is what happened at the big three toy retailers (Wal-Mart, Target, Toys R Us) – note that numbers are in feet of shelf space:
The only brand to expand its shelf space is Captain America, released on is on July 22nd. Harry Potter’s Deathly Hallows Part 2 is not yet on the shelves even though its in cinemas now.
In summary, it is an old truism that if you overdo things they begin to backfire on you. I think that the film industry and the toy manufacturers have overdone things this year and that they are beginning to pay the piper for this.