Evening Standard: The marketing of Harry Potter
It's a marketing and merchandising phenomenon, worth an estimated billion dollars. David Rowan reports on the selling - and exploitation - of Harry Potter
ONLY a muggle could have missed the 150-second internet trailer, the 22-page Vanity Fair photo shoot and the commemorative Isle of Man £5 coins. But if Pottermania has thus far eluded you, prepare to face the interactive candy, the handheld video games, the commemorative Coke cans and the Pokmon-style trading cards.
Oh, and a film, too.
Harry Potter and the Philosopher's Stone, Warner Bros' much-hyped take on the JK Rowling novel, has already become a marketing and merchandising phenomenon - and it's not even released for another 65 days. Already hundreds of millions of dollars have been agreed in aggressive licensing deals - ensuring the Christmas market will be flooded with Harry Potter role-playing games, personal radios, voicechanging devices, construction kits, video consoles, metallic bookends, trivia games and orange drinks.
'The launch of Harry Potter products will be a worldwide effort,' according to Dan Romanelli, president of Warner Bros' consumerproducts division. 'We're looking to support the literary and film property as a long-term franchise.'
And that, say licensing experts, means the characters invented by a single mother in a Glasgow cafe are now 'properties' as valuable as any in recent film history. Although Warner Bros protects its investments with obsessive secrecy - 'We won't be able to give out that information,' it responded to even our blandest questions - others who know the territory suggest the merchandising tie-ins compare to blockbusters such as Star Wars. Ian Downes, whose company, Saban, licensed Power Rangers and Digimon, estimates that the merchandising fees and the associated cross-marketing agreements will bring in enough to break Gringotts bank: 'They have to be looking at a billion-dollar franchise on a global level.'
Those eager to buy into the Potter film include Coca-Cola, which acquired global marketing rights for a reported Dollars 150 million (with a pledge to fund community-reading schemes, at Ms Rowling's request, lest her creation become simply a commercial entity). Also wielding the chequebook was Mattel, which bought the worldwide 'master toy' licence; Hasbro, which acquired rights to products ranging from trading-card games to 'the magical Bertie Bott's Every Flavor Beans'; Lego, proud to market Hogwarts School construction kits until 2004; and Electronic Arts, which 'will work closely with JK Rowling' to turn Harry into a range of electronic games. Even the Queen is a willing participant - accompanying Harry on an officially endorsed set of coins issued last week in the Isle of Man. According to the Pobjoy Mint, 25,000 of the coins sold within five hours.
Such frantic merchandising is now typical among the major film studios, which can claw back large chunks of their production costs by concluding licensing deals sometimes two or three years ahead of a film's release.
Merchandise tie-ins now account for a Dollars 150 billion industry, of which the UK market is worth Dollars 6.1 billion, according to the International Licensing Industry Merchandisers' Association (Lima). And although Ms Rowling might be uncomfortable with the idea, licensed merchandise adds considerably to the prices paid by parents and children.
According to industry insiders, manufacturers of toys and clothing typically pay a royalty of around 12 per cent of the wholesale price - money that's added to the mark-up. (Mattel is thought to have agreed to 15 per cent on Harry Potter toys.) On a £1 children's comic, the contribution might be 10p. With mass-market drinks, such as Coke, the royalty will normally be less than one per cent of the wholesale-price, but the film will benefit from the cans' widespread visibility.
Negotiations begin on day one of a film's planning, and are a vital part of raising finance. 'It's a well-worn formula,' says Andrew Levy, Lima's managing director, who sees nothing atypical in the Potter marketing.
Licences have a strictly limited shelf-life. 'There are classic brands, such as Tom and Jerry, where the licensing programme could go on for 50 years. But for the huge hyped movies - such as Godzilla - there will be a three-month window of licensing opportunity.' With Harry Potter, he believes Warner Bros is aiming at a series of three-month bursts: first the movie, followed nine months later by the video, and then the second movie.
So valuable are the spin-offs that marketable characters may be specifically written into films: some in the industry suggest that Buzz Lightyear was such a merchandise-led creation in Toy Story. But as Star Wars showed, the 'greed' factor is not always met by consumer demand: although Hasbro sold Dollars 500 million of light-sabres and C-3POs, a further Dollars 150 million remained on the shelves. 'You can manipulate things too much - consumers are sophisticated and can see through it,' said Ian Downes, of Saban, which licenses for Fox Kids Europe.
'Arguably, there may be too many Harry Potter products out there - only Warner Bros will know that.'
Another danger for the studios is overly hyping the film itself. Excessive advance promotion risks boring the audience - which is why Nick James, editor of Sight and Sound magazine, believes Warner has 'drip-fed' us trailers and snippets in a co-ordinated web campaign. 'Feeding little titbits is the new approach - the web has much to do with it. The more previews, more razzmatazz that's generated, the more the studio could be seen to be compromising the purity of the book.'
(Evening Standard, September 13 2001)
ONLY a muggle could have missed the 150-second internet trailer, the 22-page Vanity Fair photo shoot and the commemorative Isle of Man £5 coins. But if Pottermania has thus far eluded you, prepare to face the interactive candy, the handheld video games, the commemorative Coke cans and the Pokmon-style trading cards.
Oh, and a film, too.
Harry Potter and the Philosopher's Stone, Warner Bros' much-hyped take on the JK Rowling novel, has already become a marketing and merchandising phenomenon - and it's not even released for another 65 days. Already hundreds of millions of dollars have been agreed in aggressive licensing deals - ensuring the Christmas market will be flooded with Harry Potter role-playing games, personal radios, voicechanging devices, construction kits, video consoles, metallic bookends, trivia games and orange drinks.
'The launch of Harry Potter products will be a worldwide effort,' according to Dan Romanelli, president of Warner Bros' consumerproducts division. 'We're looking to support the literary and film property as a long-term franchise.'
And that, say licensing experts, means the characters invented by a single mother in a Glasgow cafe are now 'properties' as valuable as any in recent film history. Although Warner Bros protects its investments with obsessive secrecy - 'We won't be able to give out that information,' it responded to even our blandest questions - others who know the territory suggest the merchandising tie-ins compare to blockbusters such as Star Wars. Ian Downes, whose company, Saban, licensed Power Rangers and Digimon, estimates that the merchandising fees and the associated cross-marketing agreements will bring in enough to break Gringotts bank: 'They have to be looking at a billion-dollar franchise on a global level.'
Those eager to buy into the Potter film include Coca-Cola, which acquired global marketing rights for a reported Dollars 150 million (with a pledge to fund community-reading schemes, at Ms Rowling's request, lest her creation become simply a commercial entity). Also wielding the chequebook was Mattel, which bought the worldwide 'master toy' licence; Hasbro, which acquired rights to products ranging from trading-card games to 'the magical Bertie Bott's Every Flavor Beans'; Lego, proud to market Hogwarts School construction kits until 2004; and Electronic Arts, which 'will work closely with JK Rowling' to turn Harry into a range of electronic games. Even the Queen is a willing participant - accompanying Harry on an officially endorsed set of coins issued last week in the Isle of Man. According to the Pobjoy Mint, 25,000 of the coins sold within five hours.
Such frantic merchandising is now typical among the major film studios, which can claw back large chunks of their production costs by concluding licensing deals sometimes two or three years ahead of a film's release.
Merchandise tie-ins now account for a Dollars 150 billion industry, of which the UK market is worth Dollars 6.1 billion, according to the International Licensing Industry Merchandisers' Association (Lima). And although Ms Rowling might be uncomfortable with the idea, licensed merchandise adds considerably to the prices paid by parents and children.
According to industry insiders, manufacturers of toys and clothing typically pay a royalty of around 12 per cent of the wholesale price - money that's added to the mark-up. (Mattel is thought to have agreed to 15 per cent on Harry Potter toys.) On a £1 children's comic, the contribution might be 10p. With mass-market drinks, such as Coke, the royalty will normally be less than one per cent of the wholesale-price, but the film will benefit from the cans' widespread visibility.
Negotiations begin on day one of a film's planning, and are a vital part of raising finance. 'It's a well-worn formula,' says Andrew Levy, Lima's managing director, who sees nothing atypical in the Potter marketing.
Licences have a strictly limited shelf-life. 'There are classic brands, such as Tom and Jerry, where the licensing programme could go on for 50 years. But for the huge hyped movies - such as Godzilla - there will be a three-month window of licensing opportunity.' With Harry Potter, he believes Warner Bros is aiming at a series of three-month bursts: first the movie, followed nine months later by the video, and then the second movie.
So valuable are the spin-offs that marketable characters may be specifically written into films: some in the industry suggest that Buzz Lightyear was such a merchandise-led creation in Toy Story. But as Star Wars showed, the 'greed' factor is not always met by consumer demand: although Hasbro sold Dollars 500 million of light-sabres and C-3POs, a further Dollars 150 million remained on the shelves. 'You can manipulate things too much - consumers are sophisticated and can see through it,' said Ian Downes, of Saban, which licenses for Fox Kids Europe.
'Arguably, there may be too many Harry Potter products out there - only Warner Bros will know that.'
Another danger for the studios is overly hyping the film itself. Excessive advance promotion risks boring the audience - which is why Nick James, editor of Sight and Sound magazine, believes Warner has 'drip-fed' us trailers and snippets in a co-ordinated web campaign. 'Feeding little titbits is the new approach - the web has much to do with it. The more previews, more razzmatazz that's generated, the more the studio could be seen to be compromising the purity of the book.'
(Evening Standard, September 13 2001)
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