Merchandise Sales Boost Pixar ‘Cars’ Franchise

When it comes to sequels, “Cars 2” goes against Hollywood’s conventional calculation. Its predecessor was the lowest-rated of Pixar Animation Studios’ 11 films and among its worst performers at the box office – at least, by the animation studio’s premier flawless standards.

One attribute sets “Cars” apart from most other movies: It sparked a licensing windfall that continued to fuel merchandise sales long after Lightning McQueen, Mater, and the film’s other anthropomorphic cars rolled off the megaplex. So the animators at the Walt Disney Co.-owned studio got the go-ahead to take a few more laps around the track – and introduce hundreds of new airplane, train, ship, and automobile characters – with “Cars 2”, which opens in theaters this Friday.

“This isn’t the movie we can expect Pixar to make a sequel to – yet they are,” said Doug Creutz, media analyst for Cowen and Co. “And the reason is that it was a huge license success. “

In the five years since its release in 2006, “Cars” generated global retail sales approaching $ 10 billion, according to Disney. This ranks the Pixar film alongside such flagships as “Star Wars,” “Spider-Man,” and “Harry Potter,” as well as its own toy anthem, “Toy Story,” according to the NPD researcher.

No less than 300 toys – and countless other items, including bedding, backpacks and SpaghettiOs – are being rolled out in stores, ahead of the opening of “Cars 2”.

“We expect the consumer products program to be the largest in industry history, eclipsing the high standard set by ‘Toy Story 3’,” Disney Consumer Products President Andy Mooney said at ‘a webcast last week ahead of the annual Toy Licensing Show in Las Vegas. . Last year, the third installment of “Toy Story” generated $ 2.8 billion in merchandise sales.

Disney, like its Hollywood rivals, spends heavily on potential film franchises that can exceed the box office to make money – through sales of licensed merchandise or other spin-off forms of entertainment, such as attractions. theme parks, TV shows and interactive games. These sources of revenue are growing in importance at a time when production and marketing costs continue to rise and DVD sales continue to collapse.

Major “event” movies and sequels such as “Toy Story 3” have cost more than $ 350 million to make, promote and distribute worldwide.

Disney CEO Robert A. Iger directs most of the studio’s annual production budget on films as prestigious as “Pirates of the Caribbean: On Strange Tides,” set to raise $ 1 billion in sales World Banknotes, and the upcoming releases “Winnie the Pooh” and “The Muppets” which have the potential to benefit other units of society, including consumer products.

Meanwhile, the entertainment giant has struggled to maintain interest in its “Cars” franchise and characters over the years between movie releases, creating animated television shorts dubbed “Cars Toons.” , which aired 15 times a week on the Disney Channel and according to Mooney is watched by some 68 million children.

Iger told investors on Disney’s latest earnings conference call that he expects “Cars 2” to boost sales of consumer products during the holiday season, as well as create anticipation for the opening next summer of a 12-acre Cars Land attraction at Disney California Adventure in Anaheim as the centerpiece of a $ 1 billion park renovation.

This week, Disney’s interactive division is releasing Cars 2: The Videogame, and animation studio DisneyToon is developing a direct-to-DVD “Cars” spin-off, “Planes”, slated for release in 2013.

Mattel Inc. chief executive Robert Eckert said the film’s potential global appeal and spy subplot present plenty of sales opportunities for the toy maker – which plans to introduce 70 new toy characters. (not counting the racing tracks) based on “Cars 2”. The company has designed and marketed more than 600 die-cast vehicles since 2006.

“Cars 2” presents an international spy story set against the backdrop of a World Grand Prix race in which Lightning McQueen competes for the title in Japan, France, England and a fictional seaside town in Italy.

Foreign markets are of crucial importance for sales not only of tickets but also of licensed merchandise. The rapidly expanding economies of Brazil, Russia, India and China grew 23% last year even as global purchases fell 2%, according to the Licensing Letter, a publication that follows industry trends.

“That’s why everyone is looking internationally,” said Ira Mayer, publisher of Licensing Letter. Although these countries only account for 5% of global sales of licensed goods, “that’s pretty significant. This kind of rapid growth is probably not going to abate for some time. “

Pixar Creative Director and “Cars 2” director John Lasseter, a car enthusiast and toy collector, agrees that the cars and tracks in both films are a natural fit for the way children play. By introducing the spy element into the sequel, he was able to add cool gadgets to vehicles – and create even more merchandising opportunities. Each car in the film – even a minor one – has a name and a story, nodding to the fans who continued to collect small cars.

“Toy sales have actually gone up every year since the movie was released, and it’s all over the world,” Lasseter said in an interview. “The products are truly a manifestation of the love of these characters… and are a way for collectors, children, families, to have the characters with them beyond the confines of the film.”

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