The Worm Goes Hollywood : A Company and an Artist from Orange County Work to Turn Video Game Character Earthworm Jim Into a Multimedia Star

Savvy kids know that Earthworm Jim has what it takes to vanquish video game villains like Major Mucus, Psycrow, Henchrat and Evil the Cat.

That’s the way things work for the unlikely superhero of Earthworm Jim, a hot-selling video game produced by a Laguna Beach-based company. In the game, Jim wins super-worm status when he dons a mysterious spacesuit that enables him to stand up against Major Mucus and the rest of the game’s bad guys.

But the quirky earthworm now is running with a decidedly rougher crowd as he tries to break out of his video game niche and into the wider and more lucrative market for action figure toys, cartoon shows and movies.

Only a handful of video games--including the Carmen Sandiego series, Pac-Man, Super Mario Bros. and Mortal Kombat--have produced characters that were strong enough to branch out into other media. And none has been able to reach the heights of two recent smash hits--the Mighty Morphin Power Rangers or the Teenage Mutant Ninja Turtles.

The allure to Earthworm Jim’s human handlers--including artist Doug TenNapel of Laguna Hills and video game producer Shiny Productions Inc. of Laguna Beach--is obvious. There’s a potentially huge pot of gold sitting at the end of the increasingly complex product licensing rainbow.

Licensing--taking one product, say a movie, and spinning off a related product like an action figure--isn’t new. Manufacturers have been producing licensed products for nearly a century.

What’s new, and what Earthworm Jim’s creators want to take advantage of, is the trend toward “vertically integrated products”--dramatically expanded lines that incorporate everything from movies and cartoon shows to toys, video games, fast-food chain giveaways and a wide variety of products, from toothbrushes to lunch boxes.

Nearly half of the $15.6 billion worth of toys (including video games) sold in the United States during 1994 were licensed products, according to the Toy Manufacturers of America and the New York-based Licensing Letter trade publication. And, experts say, the trend toward vertically integrated products is going to get hotter.

Disney upped the ante, observers said, with the release of “Toy Story,” a movie that further blurs the line between entertainment and toys. DreamWorks SKG, the new Hollywood studio formed by three of Hollywood’s most powerful executives, signaled its intent to join the fray with an agreement to have its movie-related toys manufactured by Hasbro Inc., maker of G.I. Joe, Tinkertoys and Mr. Potato Head.

Jim’s human handlers are aware that their annelid--who’s marketed as “a worm with an attitude”--has an uphill crawl to reach

celebrity status. But they see no reason why an earthworm can’t follow in the marketing and licensing footsteps of four hard shells and the ubiquitous Power Rangers.

At the same time, Jim’s backers acknowledge that engineering a hit line of licensed products is, at best, a murky process.

“Nobody can explain the addiction of things like Barney, the Mighty Morphin Power Rangers, the Teenage Mutant Ninja Turtles, phenomena that somehow hit beyond anyone’s expectations,” said TenNapel, who drew the original Earthworm Jim character in 1988. “If you ask the [property] creators, they’ll tell you that one day they just scratched their heads and had an idea. And the idea just happened to hit.”

Marketing and licensing gurus offer pet theories for why some concepts--the Power Rangers, Ninja Turtles, Cabbage Patch dolls--catch fire. But David Perry, chairman of Shiny Entertainment Inc., says success is driven by “schoolyard chatter. . . . If kids are all talking about it, it’s going to be an easy sell. If not, it’s a very, very hard sell.”

*

Jim’s owners are trying very hard to give the kids something to talk about.

La Mirada-based Playmates Toys Inc., which manufactures Ninja Turtles and “Star Trek” action figures, is producing Jim’s toy line and the popular video game. Universal Cartoon Studios produced Jim’s Saturday morning television show, which made its debut two months ago on Kids WB network, owned by Warner Bros.

There’s talk of a motion picture and a flurry of licensed products--including Jim greeting cards, lunch boxes, Halloween costumes--as well as the requisite fast-food promotional giveaway program, possibly with Irvine-based Taco Bell Corp.

If all of that sounds a bit much for a mere earthworm, blame the Ninja Turtles, whose success changed the way the industry works. Licensing Letter reports that the Turtles have generated more than $4 billion in retail sales, including licensed product, television shows, costume movies and video games.

At its peak, Turtlemania “was like gasoline being poured on a fire,” recalls Mark Freedman, a Jericho, N.Y.-based licensing firm executive who helped to shape the Turtles empire during the 1980s and early 1990s.

Savvy licensers built upon the Turtles’ success during the early 1990s, when they groomed the Power Rangers to become the next vertically integrated line. It’s doubtful that any parent who spent past holiday shopping seasons fruitlessly searching for White Power Ranger action figures would challenge the Rangers’ claim to have rung up at least $1 billion in retail sales.

But there are signs that the Power Rangers are beginning to stall, “so if you’re heading into the retail stores now, there’s . . . more elbow room,” said Danny Simon, president of Los Angeles-based Licensing Group Limited. His company has spent 20 years helping to squeeze licensed products from the likes of J.R. Ewing and is now guiding licensing for Mortal Kombat and “Baywatch.”

Jim, experts agree, will need elbow room, a leg up and a whole lot more to succeed in the broader world of toys, movies and television.

Jim’s two video games have sold about 1 million units. But while he’s not a complete unknown, Earthworm Jim sales pale in comparison to mega-hits like Donkey Kong, which released its latest game earlier this month.

*

Some product licensing experts who’ve seen Jim’s game and television show say that he’s got an uphill climb to broader success. To start, Jim will have to differentiate himself from video game stars that have sold far more games.

Unknown competitors will pop up as other companies push their way into the licensing world. Random House Inc., for example, recently created a new division in Newport Beach that’s charged with moving the publishing company into video games, action figures and movies.

Then there are the blockbuster films--Disney’s “Toy Story” for example--that start the licensing race with a huge head start.

Entertainment industry observers credit Perry with taking the right steps to help Jim establish beachheads outside of the video games industry. Perry avidly courted industry magazine editors who’ve written dozens of cover stories about the popular Earthworm Jim video game. Perry in turn used the stories to show Universal that Jim’s fans give him a base for a Saturday morning cartoon show.

“Shiny has had a master plan, and they’ve been able to execute it very well,” said Todd Mowatt, who edits Electronic Gaming Monthly in Chicago. “They’ve aligned themselves with many powerful allies, and they’ve developed a great character.”

*

Earthworm Jim’s journey from the video niche to television and toy department shelves gives a glimpse into the complex world of marketing and licensing. It’s a world where failure to meet strict deadlines can result in huge losses.

“So much of it involves timing,” said Michael Brown, a senior marketing manager with Playmates Toys who oversees Jim’s action figure line. Millions of dollars in advertising can be wasted if toys don’t make it to shelves on time, Brown said, and if the cartoon show isn’t ready when the toys are, “you’ve splintered your introduction.”

Year-end holiday season shelf space is locked up during huge toy fairs in February. Similarly, Halloween costumes--which take their lead from hot Christmas toys--are sewn up at trade shows early in March.

Space is at a premium because the ongoing consolidation of major retail chains means that five stores--Toys “R” Us, Wal-Mart, Kmart, Target and Kay Bee--sell more than half of the nation’s toys.

Risk-averse retailers are quicker than ever to dump perceived losers. “Before you know it, you can fall off one retailer’s shelves,” said Karen Raugust, executive editor of Licensing Letter. “That store’s buyer will tell all his buddies, and pretty soon, none of them are going to reorder.”

Playmate and Shiny are watching anxiously as Earthworm Jim action figures elbow their way onto toy department shelves, where they’re knocking up against time-tested toy war veterans, such as Mr. Potato Head and Barbie.

“We’re fighting, in some cases, for a foot of space on shelves,” Perry said. “One damn foot. And then you’re fighting to stay on the shelves.”

*

The fight is as fierce in Hollywood, where timing is everything. Jim’s Hollywood debut, for example, could get lost in the shuffle if, by chance, he debuts at the same time that the next “Jurassic Park” hits.

And, experts say, video games traditionally haven’t been complex enough to support good Hollywood story lines. “Everyone has good guys and bad guys,” Raugust said. “What you need for a break-out property is something that will produce a quality film and television show.”

One video game reviewer suggests that Jim would do well to follow the lead set by Superman and Batman, comic book heroes who can knock heads with the best of them. But, the ageless duo also can rely on human elements that provide endless grist for Hollywood writers.

What better plot lines, game reviewer Arnie Katz at Fusion Magazine in Las Vegas said, than the love triangle that forever binds Lois Lane to Clark Kent and Superman. And consider how long writers have been mining Batman’s foreboding nature, which seems to have grown as dark as the Bat Cave.

“I think it’s hard to imagine Earthworm Jim or most other video games having that degree of universality,” Katz said. “There’s a big difference between something that’s popular on a hard-core [video game] audience level and something that becomes part of the pop culture.”

There’s also the tough task of stretching Jim’s image to meet the demands of different market segments: Video games, for example, do best with teen-age boys, while cartoons generally are aimed at younger children. Movies must somehow cross over to all ages.

And, while Jim has done well in the video game realm as a solo act, toy makers generally prefer teams of heroes. “They say why not have three characters in magic suits, say, a snail and a slug,” TenNapel said. “They say, ‘Why not a group? It worked for the Turtles and the Power Rangers.’ ”

“But Earthworm Jim works because it’s a good video game,” TenNapel said. “I wouldn’t want to change it to make it a better toy or movie. If that happens, you risk not having enough [product strength] to reach the first destination of being a good video game.”

Simon, who is also president of the New York-based International Licensing Industry Merchandisers Assn., fears that the licensing machine risks grinding down the very elements that make a given product successful. “I’d hate to see every entertainment decision based on what they think they can stuff into a TV show.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Worm Crew

Here are the key players who get a call when Earthworm Jim wants to take a meeting.

* Doug TenNapel, a Laguna Hills artist who first drew the annelid in 1988. TenNapel has a say in some design aspects of Jim’s growing business empire.

* Shiny Productions Inc. of Laguna Beach, which produced Earthworm Jim’s video game.

* Playmates Toys Inc., the La Mirada-based toy company that’s manufacturing Jim’s growing stable of action figures.

* Universal Cartoon Studios, which produced the Earthworm Jim cartoon show that is broadcast on Saturday mornings on Kids WB network, owned by Warner Bros.