COVID-19 affected the “Wonder Woman 1984” and “Minions” license agreements

End of August, DC Comics and Warner Bros. hosted a virtual meeting to showcase superhero content to fans around the world, all of which was live-streamed due to the coronavirus. One of the most anticipated moments of the event was Kristen Wiig, who stars alongside Gal Gadot in the sequel Wonder Woman 1984.

As the movie’s villain, Wiig has yet to be seen as the menacing cheetah, a weak woman who transforms into an apex predator with the aim of destroying Gadot’s Amazonian queen. Footage of Wiig bouncing in her skin-tight fur erupted on social media. Fan blogs and mainstream publications covered the reveal. But alert consumers would have seen the expected costume unveiled weeks earlier – Cheetah has already tracked the shelves of their local Target or Walmart in the form of a collection of 13-inch Mattel dolls based on the film.

The release date for “Wonder Woman 1984” has been postponed six Times, mainly due to COVID-19 and the clumsy and sluggish reopening of global cinemas. As a result, the licensees and retailers behind this line of Wonder Woman dolls had to nail for months, wondering if they would have a new feature film to accompany the launch of their products. It’s November and Wiig’s cheetah has yet to get on screen and may see another delay. The dolls had to do it alone.

Similar to other best-lay plans in 2020, the consumer goods pipeline has been devastated by the coronavirus. According to a global study by the trading organization Licensing International, the licensing rights for big films and streaming of intellectual property had sales of 124.8 billion US dollars in 2019. The entertainment category accounts for 44% of that market share, doubling the size of its closest competitor. These products range from toys to lunch boxes with detours to backpacks, board games and clothing. In addition to physical goods, big brands are devising campaigns tied to tentpole films that seduce consumers into buying the frosty Heineken in James Bond’s hand or tell the owner of a McDonald’s Happy Meal that the cute yellow creature in the box means that the minions are coming back to the cineplex.

“Consumer products don’t get a lot of recognition because they’re not that sexy, but they are absolutely a form of content. We are the tail that extends the commitment of the fans until the next big moment, ”says a film studio manager responsible for licensing on condition of anonymity.

In March, as the disease hit the world, numerous studio managers said they panicked phone calls to licensees on a daily basis. These companies categorically include toy giants like Mattel, Hasbro, and bobble-head maker Funko; Apparel companies like Judith Leiber Couture (which made a $ 5,295 wallet for a collection based on Disney’s live action Beauty and the Beast), Nike, and Old Navy; and food stamps from children’s cereals to Doritos.

Before the extent of the pandemic became clear, both the studios and their product partners asked to simply ship the inventory out of locked China – a huge manufacturing center for such goods. When it turned out that the cinemas wouldn’t open for the foreseeable future and the release dates would have to shift, the dominoes began to fall.

MGM, the studio behind the new Bond film “No Time to Die,” was the first to blink and delay the release of the Daniel Craig film five weeks before its scheduled April debut. According to his MGM insiders, one factor in the decision was to offer his marketing partners an “exercise in transparency” diversity. The Bond films enjoy legacy deals with Heineken beer, Omega watches, and automakers Land Rover and Aston Martin. All of these companies were ready to do millions of dollars in ad purchases and live activations around the premiere of the film.

“We went to great lengths to bring our partners’ editions to market. They realized that the original version was unsustainable and was relatively easy to move around. Hard goods are a different story and much more difficult, ”says the individual.

NBCUniversal faced the same situation with “Minions: The Rise of Gru”. In April, from July 3, 2020 to July 2, 2021, Universal Pictures boldly pushed ahead with the latest sequel to the high-earning Illumination franchise for a year. Numerous licensing deals were able to move with them, but an expensive and timely activation with McDonald’s got stuck. A 90-piece collectible set of Minions toys was set to appear during a month-long campaign co-ordinated with the film’s release.

According to insiders familiar with the strategy, the studio has worked out a plan to make the toys and other existing partnerships appear relevant, although there is no new film to show. These included a Minions PSA with the World Health Organization in honor of the frontline workers, network broadcasts of the 2015 film “Minions” on NBC and Telemundo, and themed film nights with broadcast partners in the UK, Mexico and Latin America.

That a large studio would go to such lengths to maintain these relationships is not surprising given the amazing foot traffic and marketing potential of a company like McDonald’s. The fast food company serves an estimated 69 million customers per day worldwide, 25 million are served daily in the US (sales numbers that have certainly decreased since the quarantine began) diversity. For a partner like McDonald’s, according to several studio managers, it is more urgent that the grocery retailer not have the same storage capacity as megastores like Target and Walmart. Products must move through the store fronts immediately.

Consumer goods play a critical role in the longevity of franchise businesses.

“There is a lot of marketing you can use to get the box office moving. The agreement with licensees generates revenue for them and the studio. Most importantly, it allows fans to engage with the brand and take it home with them, whether it’s a game, an interactive toy or a T-shirt with the Batman logo on it. This means that this brand expression can be continued after the film, ”says another top manager of the film studio.

According to half a dozen people with knowledge of the process, the life cycle of physical consumer goods tied to films averages 18 to 24 months from conception to shelf. License partners are brought into the studio at the greenlight stage of a film.

“You have to see what the Indominous Rex will look like before they shoot the movie if it’s going to be a Christmas present the year the movie comes out,” says one person who works with top manufacturers, referring to to the monstrous dinosaur hybrid from Jurassic World.

Licensees pay the studios a healthy minimum guarantee of use of the intellectual property as well as royalties if the goods are resold. Some sources suspect that these contract terms will change in the face of the coronavirus as retailers are in no better shape than the cinema market.

“It’s quite unusual for both sides of a market to be so severely disrupted at the same time,” said David Anderson, co-head of UTA Marketing, of the landscape. “Even if the theater worked magically today, we would have to deal with the realities of retail. There are fewer store visits across the board, and online behavior has changed. “

In the way that COVID-19 has expanded the priorities of older media to include streaming content, the licensing business is facing similar adjustment or die decisions about accelerated production times and increased product availability.

In an upcoming white paper from License Global, a trade journal covering this category, a study finds that licensing has also been affected by the coronavirus. The industry expects annual sales to decrease by 21% in 2020 and the number of employees to decrease by 10% compared to
previous year.

Survival depends on the cooperation and forbearance of partners like the studios: the study also shows that 62% of licensees in 2020 renegotiated a contract to extend the terms of payment, rather than the amounts paid to the intellectual property owners to reduce.

Relief could be on the horizon as streaming originals rally legions of fans. The advantage is that these companies don’t have to rely on theatrical releases to reach hundreds of millions of eyeballs. Netflix’s breakout series “Stranger Things” has spawned capsule collections from Nike and intricate Lego sets. Newer franchises like the streamer’s animated “Over the Moon” take time to captivate families, despite this film about a young scientist constructing her way to the moon, a collection of Mattel dolls, bespoke bedspreads and DIY paper lanterns contains a novel based on the film.

“We’ve watched the markets change for a long time. E-commerce has increased; Stationary operation has changed. S-Comm, or social commerce, has increased, ”said Amanda Cioletti, director of content and events at License Global. “And the pandemic has accelerated this pace of change.”