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TV channels connect strongly with merchandising

Players like MTV, Turner International, Walt Disney, and even Movies Now, have been driving the boom in merchandising. It has not only helped establish a loyal customer base but is also turning into a strong revenue stream

BestMediaInfo Bureau | Mumbai | April 24, 2013

The wildly popular Teenage Mutant Ninja Turtles franchise, a smashing success for Nickelodeon globally, has just hit Indian shores. The all-time favourite reptilian brothers will be seen tackling bigger villains and tastier pizza than ever before, with a new look and a new catch phrase. The range marks Nickelodeon’s India foray into the action toys category dedicated to adventure loving young boys.

Merchandising is a rapidly growing concept among some television channels, especially in the kids’ genre, for brand building and establishing a direct connect with their consumer base off-air. Being an additional revenue stream for the TV channels makes merchandising a lucrative proposition too. MTV, Cartoon Network, Walt Disney, and even Movies Now have dived strongly into this emerging business that is turning to be a great brand builder with strong revenue potential.

The kids’ channels are the major drivers of the merchandising game. The increasing demand from kids for products associated with their favourite TV characters and toon heroes, increased availability of international licensed characters and products, and more licensees coming to India driven by the potential of the market have fuelled the growth of merchandising. Additionally, there has been an increased acceptance of licensed products within the traditional trade channels.

Sandeep Dahiya

Sandeep Dahiya, Senior VP and Business Head – Consumer Products, Viacom18, said, “Merchandising works for properties that resonate well with their audience, and if converted into products that stay true to the brand, they can address an inherent audience need. We’ve seen merchandise work extremely well in the kids’ space. With MTV, we’ve seen merchandising work successfully in the youth space as well. Merchandising can work well in the infotainment space as well, although that remains to be seen in India still.”

Gaurav Brar

Commenting on how television brands are merchandising in a big way, Gaurav Brar, Director, Cartoon Network Enterprises, South Asia, Turner International India, said, “By my estimates the licensing and merchandising market for the kids category is approximately $150 million. It’s one of the fastest growing categories and has been clocking high double-digit growth even in a subdued economic environment. While the category is growing rapidly, it’s still fairly small compared to smaller economies like Thailand. Nonetheless, the market is transforming rapidly and will continue to grow strongly well into the future.”

Both Dahiya and Brar agree that the growth of modern retail in India has played a big part in the growth of merchandising. Brar explained, “The rapid expansion of modern retail has been a significant contributor to this growth. And, hopefully, with the implementation of the new laws regarding FDI in retail, this should only boost the category growth.”

Added Dahiya, “Merchandising has been showing steady growth over the last three to four years and will continue to grow at about 30-40 per cent year-on-year over the next five years. It’s still a nascent market, but the good thing is that with the continued growth in organised retail, merchandising can only get better. Not only is merchandising leading to significant revenues, but more importantly, it is engaging consumers outside television, and this is significant especially for the kids’ category.”

The three big categories in the kids’ genre for animation shows like Ben 10 are toys, back-to-school products such as bags, water bottles, tiffin boxes, and apparel which include T-shirts, shorts and innerwear. These have a large affinity with kids as they love to interact with their favourite television characters outside the television space. Apart from these traditional categories, Turner International successfully leveraged its business by launching other categories for both POGO and Cartoon Network. Over a period of time Cartoon Network has also launched innovative products to keep up with the moving trends in the market. These include digital products like e-books based on the Ben 10 series and ‘M.A.D. Let’s Doodle!’ books that are school graded art and craft books based on the successful show M.A.D. (Music Art Dance).

Taking this engagement to a new level, the brand recently brought to India an international stage show called ‘Ben 10 Live: Time Machine’ that gave kids the chance to see their favourite superhero and his aliens live! The show took place from January 30 to February 3 in Delhi and gave them a huge response.

On what works for merchandising, Brar said, “I think the success of merchandising is determined more by the popularity of a property than a channel. We have successfully managed to leverage our on-air content from both channels CN as well as POGO across all product categories. Our products are available in over 5,300 retail counters across India and the division has witnessed 70 per cent category growth over last year. We are also one of the few licensor’s who have animation as well as live action shows and international as well as local shows.”

Talking about properties, MTV has not only established itself as a music and entertainment channel but also as a ‘brand’ on its own. MTV has forayed into innerwear, lingerie, footwear, adventure bikes, eye-wear, perfumes and many other consumer products categories. Conventionally, it is categories like toys, clothing, footwear, back-to-school, stationery, publishing and home entertainment that occupy the top slots in the licensing domain. However, MTV has shown that licensing can also succeed in unconventional categories as well. Over the last 12 months it the MTV range of adventure bikes, inner-wear, body-sprays and tablets amongst others. MTV’s premise is that as long as the product stays true to the brand values, and at the same time addresses consumers’ inherent need, it is going to succeed.

Dahiya explained, “With regard to the benefit the mother brand gets due to merchandising, I think it drives two things predominantly – first is revenue of course and, secondly, and more importantly, it engages the consumer outside television, far more effectively. Merchandising helps the brand engage with the consumer outside television, in a manner that’s far more interactive, engaging and exciting. It is specifically true for the kids’ domain, where they like to get into the world of their favourite character.”

Almost every channel today is attempting to take the on-air experience of shows off-air. With Turner International, the most important benefit is that licensing and merchandising comprise a separate revenue stream for the company.

Brar observed, “Licensing and merchandising leverage the company’s on-air assets across new platforms thereby widening the TG and increasing recall. It provides on-ground and physical brand experiences for kids that increases consumer loyalty and reinforces the company’s goal to provide the ultimate 360 degree experience for our consumers.”

Walt Disney is another brand which sets the company apart from other media conglomerates. The company enjoys the unrivaled success in selling global franchises. Over the years, Disney has scaled up its business through localisation of TV and film content and even in its kids retail business. In India, Disney is focussed on the first three of its four global businesses – Media Networks, Studio Entertainment, Consumer Products and Theme Parks and Resorts. The spokesperson was unavailable for comment.

Ajay Trigunayat

Ajay Trigunayat, CEO, English Movie Channels, Times Television Network, elaborated, “Merchandising facilitates interaction of the brand with key stakeholders in a unique and engaging way. It strengthens differentiation and works well as a reminder medium and works for channels across genres. Movies Now channel has always believed in creating unique merchandise which has set new benchmarks and has generated interaction across various forums. This gratification is a prized possession for our consumers.”

Some of the merchandising from Movies Now include a bean bag created for its property, Rocky, which was in the shape of a boxing glove; a cushion created for the property Showstoppers, with Hollywood iconography and premium Hollywood T-shirts.

There just couldn’t be a better win-win situation with merchandising helping the mother brand, hooking kids to their shows and generating revenues.

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