Columbia Facing ‘Little’ Shortage
Big things may come in small packages, as the tagline for Columbia Pictures’ hit film “Stuart Little” says, but the studio is facing the problem of not having enough of the small packages to go around.
Stuart Little toys were almost completely sold out nationwide by Christmas Eve, according to retailers and industry observers, with the exception of small plush versions of Stuart the mouse scattered at some toy stores around the country.
Industry observers say the studio, its licensees and retailers may have underestimated the appeal of the movie and its characters. Because of the cost of rolling out new merchandise and the risk of the underlying movie doing poorly, manufacturers have been more cautious about shipping novelty toys and retailers about ordering them.
Miscalculation of demand for movie tie-ins has become more common in recent years--and more important to studios’ bottom lines as merchandise licensing fees figure prominently in profit calculations for many films.
Columbia’s experience resembles one faced by Walt Disney Co. in 1995, when it failed to anticipate demand for merchandise tied to the original “Toy Story” and its plaything-stars. Universal Pictures also underestimated demand for items from “Babe” (although it overestimated the potential of that film’s sequel, the disastrous “Babe: Pig in the City,” last year when it lined up some 100 licensees).
But it may also reflect the lesson Columbia learned from one of its more heavily hyped releases that failed to deliver at the box office and retail cash registers. That was “Godzilla,” which landed with a thud in 1998.
“ ‘Godzilla’ did suffer from too much hype and did pitifully in terms of toys and the box office,” said John Taylor, a toy analyst for Arcadia Investment Co. in Portland, Ore. “The studio can say that it was in the black on merchandising by the third quarter, but the stores were not. There was plenty of stock lying around. The licensees had to close that one out.” “Stuart Little,” based on E.B. White’s children’s book about a mouse born to a human family in Manhattan, has posted $40 million at the box office after 10 days in release and is one of the few films holding steady, grossing $3 million to $4 million at the box office each day of the holiday break.
The picture is expected to gross about $100 million for Columbia, a unit of Sony Pictures Entertainment, in its domestic theatrical run, making it a near-certain moneymaker once revenue from overseas, videotape and other tie-ins is tallied.
Paul Dergarabedian, president of box office tracking firm Exhibitor Relations, expects the film to gross $60 million by the week’s close “if it continues to perform like it has been. That is very good for this picture, but in truth it’s really the only real family film out there this season and that’s obviously helped,” he said. “It’s the one that kids will keep seeing over and over with their parents’ permission.”
That’s why Columbia and its licensees are scrambling to produce more merchandise to fill the retail pipeline by late January.
“This started early,” said David Niggli, executive vice president of merchandising for toy retailer FAO Schwarz. “The Christmas window of our flagship [Manhattan] store was all Stuart Little, which we had up the Monday before Thanksgiving. The week of Thanksgiving we literally sold out, from backpacks to books to CDs to all plush toys. We, like the studio and every other retailer, were facing sellout before the film was released and way before Christmas.”
Radio Shack also sold out of a battery-operated model of the little red roadster Stuart Little drives in the movie, according to studio executives.
As it happens, studios and retailers more often face the problem of overestimating demand for tie-in merchandise.
“Over the past few years, there have been more disappointments than upside, particularly with toys tied to a single-character-driven movie,” Taylor said.
Successful merchandise campaigns, he said, are more often tied to films with numerous popular characters or to long-running entertainment franchises.
“When it works well, it’s usually something like ‘Rugrats,’ where you have a recurring series, there’s a TV show or more characters are added. But lately, a lot of toy companies have been backing away from being the licensee on any single-character-driven movie. If [Columbia] wants to keep this going, they should think about that.”
Columbia says it believes Stuart Little will have continuing appeal.
Peter Dang, executive vice president of Sony Pictures Consumer Products, said he believes that a planned animated television series, an expanded Internet site and a sequel that will introduce additional characters and expand existing roles such as Snowbell the cat’s, will all drive the popularity of merchandise.
Dang defended Columbia’s caution in rolling out Stuart Little merchandise, arguing that overstocking is more dangerous to retailers.
“Columbia doesn’t have store chains to hold merchandise on the shelves for a long time like some of the other studios,” he said, referring to Disney and Warner Bros., which own their own retail chains. “We have to rely on [independent] retailers, and a lot of [them] are nervous because they, like many of the licensees, have been burned in the past, taking on too much product based on too much hype.”
Nevertheless, Columbia’s caution may have led to permanently lost sales, as shelves were bare during what may have been the period of peak demand.
According to one employee at Zany Brainy in the Glendale Galleria, “we could have done so much more. But we only received two cartons of the small plush dolls, a total of 48.”
The product sold well in upscale stores such as FAO Schwarz and Zany Brainy and on Internet sites such as EToys and Amazon.com.
Mass retailers such as Wal-Mart took a very limited amount of merchandise, waiting to see if “Stuart Little” proved to be a seller, said one studio marketing executive. Dang said Wal-Mart has placed orders for more of the toys.
