From Mickey to SpongeBob, the kids consumer products space has long been driven by animated content. But times change, and kids are relating to live-action IPs like never before. Let’s take a look at three examples of industry players navigating this trend. First, a bold adaptation of one of the most popular gaming properties of all time. Second, several live-action films based on animated properties from the world’s biggest IP owner. And lastly, an exploration of influencer culture from a broadcasting and licensing heavyweight. Taken together, the three approaches give us a glimpse into a whole new dimension in the licensing world.

Tune in tomorrow for the final part of our three-part series on how the kids entertainment industry is shifting into live-action to take advantage of new licensing opportunities. 

A close look at Disney’s Q1 earnings gives some insight into the company’s CP strategy going forward. While the financial report showed 4% overall revenue growth to US$15.35 billion, the CP numbers declined 2% to US$1.5 billion in the first quarter. This continues an overall trend at the House of Mouse that may be having an operational impact: Following an 8% category decline in September 2018, there were reportedly layoffs in the division.

In the face of some underwhelming results, Disney adopted the seemingly risk-adverse strategy of rolling out IPs that retailers and consumers have supported in the past.

Enter the live-action version of the 1992’s animated movie hit Aladdin, directed by Guy Ritchie. Premiering this month, with Will Smith filling Robin William’s pointy shoes as the Genie, the film has been the subject of a robust marketing spend, and box-office expectations are high. Later this summer, a new version of The Lion King will roar onto screens as director Jon Favreau re-envisions the story that first premiered in 1994, and has since enjoyed life as an animated TV series and a Broadway musical.

Disney’s CP dilemma was how to create new extensions that can live alongside evergreen properties without confusing or over-serving consumers.

“Our core evergreen programs around characters like Genie or [Simba] dwell upon [nostalgia] aspects that are really strong,” says Josh Silverman, EVP of global licensing for Disney and Marvel.

Silverman says the new movies targeted broader demos, which allowed for product lines—such as accessories and apparel—that the traditional animated versions simply did not.

For example, Disney partnered with jewelry retailer Zales to create a 20-piece line of Aladdin-inspired jewelry, including a ring that is identical to one actress Naomi Scott wears throughout the film. This high-end extension in particular would be a stretch for an animated feature.

Despite its hold on so many iconic properties, there has been concern throughout the industry that Disney fatigue is setting in. However, Silverman believes the new films will benefit the entire franchise. “There is definitely a halo effect,” he says.