'Simpsons' Sales: Halving a Cow

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Now in its ninth season, "The Simpsons" has made television history on News Corp.'s Fox Broadcasting. It's become the longest-running prime-time animated show (having surpassed "The Flintsones") and was key in the revitalization of animation.

It probably ranks near the 11-year run of "M*A*S*H" as 20th Century Fox Television's most profitable TV series ever, according to Jeffrey Logsdon, an analyst with Cruttenden Roth. Nearly every person in America recognizes Homer, Marge, Bart, Lisa and Maggie Simpson.

In short, it's a cash cow, man. But when's the last time you saw a Bart Simpson doll?

Once a phenomenon--racking up an estimated $2 billion in retail sales to date--Simpsons merchandise has dwindled in the U.S. to a trickle. Only about two dozen companies now sell T-shirts, magnets and greeting cards bearing the characters' likenesses, down from 100

such U.S. licensees in 1990.

The Western Pacific Airlines plane decorated with the Simpsons characters is flying its last flights; it will be painted over as Fox lets its two-year contract lapse. Even the costumed characters trotted out at a recent Fox media event looked noticeably shopworn, their yellow arms matted and dingy.

The boom and bust of Simpsons merchandising illustrates how fickle the $17-billion licensed-goods marketplace is. It also raises questions about whether it's best to take a short- or long-term approach to merchandising hit shows. From "Howdy Doody" in the 1950s to "The Six-Million-Dollar Man" in the 1970s and "Alf" in the 1980s, the big merchandise hits from TV have almost all been wide, quick hits with little long-term strategy.

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Studio consumer products executives--Hollywood is lousy with them these days--would love to replicate the long-term success of, say, a "Star Wars." That merchandising strategy took its cue from TV's "Star Trek," which inspired a cult fan phenomenon, and the heavily merchandised "Buck Rogers" serials and TV show of the '30s through the '50s.

Studio licensing divisions rarely have the patience or ability to build a property slowly.

Fox's "The X-Files" is a notable exception, having tightly controlled its merchandising. Whether this tack helps turn the series into a long-term hit, or whether it has merely held the show back from selling millions of dollars worth of merchandise at the peak of its popularity, is unclear.

What's more, say retailers, the attention span of consumers is only becoming shorter.

Michael Tabakin, director of trend merchandising for the Toys R Us and Kids R Us chains, says there is a "stampede of competing merchandise today. It used to be the flavor of the month; now it's the flavor of every two weeks. Kids are on to something new that quickly."

When "The Simpsons" debuted in December 1989, there was a bigger window of opportunity. "Alf" was in its waning days. Disney had just begun to revitalize its animated films with "The Little Mermaid." There weren't any Warner Bros. Studio Stores. So when Fox found itself with a break-out hit, it had a relatively open playing field for merchandising.

Recalls then-Fox licensing head Al Ovadia: "The Monday after 'The Simpsons' special debuted, Jon Dolgen [then chairman of Fox TV, now head of Paramount Pictures] called me into his office. He said, 'The show will debut on Jan. 14--go to work.' Basically, go out there and secure as many deals as you can," says Ovadia, who left Fox in 1995.

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"The Simpsons" became ubiquitous on key chains, caps, toys and T-shirts. "By June [1990], there was almost nothing else you could license that was in good taste," Ovadia says.

Says "Simpsons" creator Matt Groening, who retains publishing rights to the show and gets a cut of Fox's 8% or so (retail) licensing fee on all other merchandise: "Fox controls the merchandising. . . . I couldn't control the wave, but I've tried to surf on it." He adds, "To this day, I'll go into a store and see something [with "The Simpsons" on it] and say: 'What the hell is that? We did swizzle sticks?' "

"The Simpsons" uniqueness made it somewhat tricky to merchandise.

"Things like 'Buck Rogers' and 'Star Trek' have had a real play value," says Charlie Lippincott, president of Creative Movie Marketing. Lippincott worked on the merchandising of "Star Wars." " 'The Simpsons' has a limited play factor. It's a satirical cartoon show that appeals to an older audience."

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An early warning sign came in June 1990. Low-end merchandise had become so ubiquitous that people yawned at a Burger King promotion offering Simpsons dolls for $3.50.

The company that made the dolls, Beverly Hills-based Equity Marketing (where ex-Fox executive Ovadia is now a senior vice president), ended up taking back thousands of dolls; they unloaded them for sale in Eastern European bazaars and as carnival prizes in small-town America.

In early 1991, Simpsons merchandise began a free fall. Toy giant Mattel, reportedly angered by the Burger King dolls that they felt were too similar and less expensive than their own, dropped the license. Retailers, sensing a cooling of Simpsons mania, backed off.

"In early 1991, retailers bolted at the first sign of the market turning," Ovadia recalls. "A buyer from Target told me, 'I thought it was going to be a 10, and I bought accordingly. It turned out to be an 8.' So in his mind, it was a big flop, even though it had done better than most other properties ever do."

Today, Fox is still trying to resuscitate merchandise, under new consumer products head Pat Wyatt (previously of Mattel). The international market--where the show is fresher--may have the greatest potential. Some analysts think that if she succeeds in the U.S., it will be a feat bigger than Homer Simpson's appetite.

For one thing, though the show remains popular with viewers and critics, it was slipping in the ratings last season until the new animated hit "King of the Hill" was scheduled behind it. Household ratings are down about 33% from the show's height.

Acknowledges Wyatt: "There was an enormous exploitation of merchandise early on; there was a big glut. You have to pay for that for a while."

In Australia, as in Britain and other overseas locales, "The Simpsons" is relatively new. The show has only recently started airing on free TV. It has about 80 overseas licensees, which make more than 1,000 products.

Australia's Target department stores (not connected to the U.S. Dayton-Hudson chain) have embarked on a three-year commitment to carry Simpsons housewares, apparel and other items. A similar Simpsons "boutique" tested in some U.S. Kids R Us stores earlier this year flopped.

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There is still Simpsons merchandise in the U.S., but it's now more narrowly focused than in the show's heyday. Since Mattel quit making Simpsons toys, there has been no master toy licensee--the backbone of broad merchandising programs. But some licensees say that suits them fine.

"Classic, nostalgic licensing is really our focus," says American Greetings Corp. licensing director Betsy Novack, who acquired the Simpsons license two years ago. Based on its success with cards, American is branching out into stickers and kids' Valentines in upcoming months.

New Fox merchandise in the offing includes "Virtual Springfield," a just-released CD-ROM game. Fox took Simpsons interactive products in-house last year after doing a number of games (some successful, some not) with Acclaim Entertainment. Its first offering, "The Simpsons Cartoon Studio," has sold slowly.

There's still money to be made on Simpsons promotions. The CD-ROM inspired a recent "Simpsons house" giveaway, the focus of a big tie-in with Subway and Pepsi. Subway restaurants offered Simpsons cups, toys and watches and Pepsi decorated 15 million packages of soft drinks with Simpsons characters. Each contained a game piece to win the house outside Las Vegas.

Wyatt hopes this promotional buzz will spark sales of Simpsons merchandise. But today's restless climate makes that difficult. Even the Simpsons house is doomed for extinction: After the winner takes possession of the wildly decorated home, they are contractually required to redo the exterior to match all the other beige stucco houses in the sprawling development.

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