The Warner Way

Talk to any studio executive going through the pains of organizing an in-house licensing and merchandising business division and, invariably, at some point in the conversation the names Warner Bros. and the Walt Disney Company are bound to come up....
July 1, 1996

Talk to any studio executive going through the pains of organizing an in-house licensing and merchandising business division and, invariably, at some point in the conversation the names Warner Bros. and the Walt Disney Company are bound to come up.

The two Burbank-based studios are the role models and the envy of every other studio trying to make serious inroads into the licensing field.

And no wonder.

The spin-off business generated by the huge cast of characters that Warner Bros. and Disney have brought to life over the years has generated more economic output than many countries’ gross national product.

Consider, for example, that Warners Bros.’ Looney Tunes characters alone generate a staggering $3.5 billion in worldwide retail sales every year. And Batman, the comic book character brought to life through three and soon to be four movies and an animated television series, evergreens at $1 billion-plus in retail sales every year.

The answer to how Warner got there is pretty simple. Experience, good product, good people, great communications with licensing partners and an unwavering commitment from the very top of the organization, says George Jones, president of worldwide licensing for Warner Bros. Consumer Products Division.

‘Our businesses are larger (than most other studios) because we’ve been a bit further ahead on the curve,’ says Jones, a former executive vice president of Target Stores and formerly CEO of retailer Roses. ‘We’ve been at it a bit longer and we’ve also got some really strong properties to work with. That makes a difference.’

Relationships with licensing partners are also key, says Jones.

‘Another big part of the story is the kind of relationships we have with companies like Kenner, our toy partner. They have done a great job in putting out fresh, innovative product. The toy line has really been a cornerstone of the licensing program.’

Close work and close communication between people at all levels make these relationships work, adds Jones.

‘Our partners at Kenner are involved at the earliest stages of the conception of the movie. It’s not that they have approval, but they do have an influence. They’ve already had numerous meetings at this stage with J’el Shumacher, the director, and Peter MacGregor-Scott, the producer of Batman and Robin (the fourth film in the Batman series, which is in production now and scheduled for release next summer).

‘They’ve been meeting for months going over the various elements of the film. J’el will listen to them. Kenner certainly has an opportunity to make suggestions that could help make parts of the movie more toyetic, in the area of certain vehicles perhaps or costumes and designs,’ says Jones. ‘None of this is to say that the storyline will be compromised. After all, the best thing for all of us is that it be a very successful movie.’

Creative talent isn’t restricted to the people who create the properties, says Jones.

‘In this business, and this is probably true of any other business, one of the things you need for success is really good people. We have a lot of talented people within Warner Licensing. They’re creative, talented and have a really good handle on the business. That’s the first thing you win with people.

‘We’ve also had terrific support from the top of the company, from Bob Daly and Terry Semel who are the co-chairmen and co-CEOs of Warner Bros.

‘They’ve been supportive because they realize how important these properties are. They appreciate the fact that they are quite lucrative for us and they realize that these are brands that need to be built and sustained. Thus we’ve had strong commitments from them, whether it is TV animation or movies.’

Warner has been arguably the most successful television producer in animation, has a long list of hit live-action features (Warner Bros. releases some 30 features every year) and the studio will soon see whether it can carry the winning formula through to feature animation. Warner has just started production on its first animated feature, The Quest For Camelot, which will be coming out Christmas 1997.

What are the next priorities for Warner’s licensing division?

‘We think our growth potential internationally is the biggest opportunity,’ says Jones. ‘We’ve grown our business dramatically in Europe over the past several years. The key thing is a commitment to resources.

‘Also, we need greater exposure of the properties internationally. Some of the ways we’ve built that exposure here mostly through TV animation, which has spanned generations have not happened to the same degree in foreign markets. So that’s something we’re working on with our international television distribution division. That should help immensely.

‘In the licensing business, now there’s increased competition. Everyone is jumping on the licensing bandwagon. The problem is that the major retailers who really drive the volume and the big mass-merchants are still pretty selective.

‘The next step for us at Warner Bros. is to grow our international business, as well as pay more attention to other media, and to build our properties through means other than television. We’re putting a lot of emphasis on growing our publishing business.

‘And we’re becoming a lot more involved in children’s music. The children’s music business, which, under Warner Bros., used to be a part of Atlantic Records, has now moved over to licensing and merchandising. We’ve now entered into a joint venture with Rhino Records and we’re starting to emphasize that a bit more.’

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