Licensee: Action Products International

Location: Orlando, Florida

Company history: Servicing museum and educational specialty retailers since its inception in 1977, Action Products transformed from a toys/books distributor into a manufacturer and producer of educational toys and published products in 1996.

Product range: Proprietary and licensed lines range from wood kits, nature and science tools, die-cast models and adventure sets, to educational publishing and sticker and pop-up books.

Retail channels: The company’s offering is available in specialty toy retailers, toy stores, museum gift shops, on-line retailers, mail-order catalogs, zoos, theme parks, attractions and other education markets.

Licensing contact: Ronald Kaplan, president and CEO

Property portfolio: The company announced its first license with Discovery Channel in November 1998, followed in August 2000 by a deal with Buzz Aldrin for a signature series toy.

The latest: A license for Gullane preschool property Thomas the Tank Engine was announced near press time. Action Products’ Thomas line, slated to debut this spring, concentrates on creative play and includes arts, crafts and hobby kits. Based on retailer response to the line at February’s Toy Fair, Kaplan expects Thomas will become the company’s best licensed success ever, and is currently seeking additional preschool properties.

Licensing philosophy: Action Products doesn’t consider itself a typical licensee and seeks differentiation through being very focused, creating win-win situations with licensors. ‘We’re not looking to license a dozen things per year and hope that one or two of them make up for those that don’t hit,’ says Kaplan. Thus, Action Products looks to take on only a small number of licenses in any given year, and doesn’t want to get into the game of competitive bidding, something Kaplan identifies as a trend of the late `90s culminating with Star Wars.

‘Our philosophy is to work with licensors that are more interested in the longevity and success of the property and the products that the licensee is going to be working on,’ he says. According to Kaplan, concentrating on a select few ensures that all of the company’s resources and creative energies will be focused on making the licensors’ brands successful in Action Products’ line and distribution channels.

When considering a license, Action Products looks for properties that fit with its brands and make sense for strong distribution in the specialty toy market. ‘Then we look at our product mix and where we’re wanting to achieve new growth or distribution-age groups, gender, play patterns-that sort of thing,’ says Kaplan. Properties the company is never likely to pursue include ‘fad’ TV series and first-time big-budget movies.

When it comes to his company’s product category, Kaplan prefers brands to characters. Indeed, the company’s first license, Discovery Channel, was chosen for its brand equity (Kaplan felt it had ‘strong opportunities as a perennial license’), its unique exposure level (broadcast 24 hours a day, seven days a week), and its fit with the company mandate to produce educational, nonviolent toys.

Character licenses aren’t off limits for Action Products, but they must have an evergreen quality, as Kaplan saw in Thomas the Tank Engine. ‘It’s white-hot,’ says Kaplan. ‘It’s a brand that’s been in the market for over 10 years, and it’s become a classic.’ According to Kaplan, more toys are purchased for three- to five-year-olds than any other demo, but in terms of creative play, it’s an under-served group, and this preschool license presented an opportunity to diversify the age range of Action Products’ offerings.

Licensing has opened doors to new distribution channels and expanded the number of retail outlets Action Products is present in. ‘We’ve seen a lot of activity lately with book chains, and that’s largely thanks to licensed properties,’ says Kaplan. ‘We think it’s extremely important to have a growing base of distribution and look beyond the obvious toy market because of the current climate of the toy retail market for retailers that are strictly toy sellers.’

On the out-licensing front, Action Products has licensed its trademarked Climb@Tron brand and associated copyrighted graphics to a British toyco for packaging and merchandising. Kaplan is also interested in out-licensing the company’s Space Voyagers brand.

Credit check: Generally speaking, Gullane Entertainment looks for licensees with solid business fundamentals, a strong focus on product development and creative thinking.

Action Products’ track record in working within the creative play arena, coupled with an ability to access existing Thomas product worldwide and modify it for the U.S. market while developing innovative new product, made a strong case for the licensee in its category.

‘This is a company that seems to focus a lot of time and attention on servicing the specialty trade,’ says David Jacobs, group VP and head of licensing at Gullane. Since Thomas is typically geared at specialty, Jacobs says the pairing simply made sense.