Every week seems to be bringing news about changes and challenges in the worlds of entertainment and toys. A summer that has seen box office numbers trailing last year by 11 % with a prediction that year end will see that number hit 15%!
Mattel seems to be in free fall, LEGO (the performance envy of the toy world) is laying off 8% of its workforce and even Hasbro, the licensing kings of the industry, are reporting lower projections attributing it to entertainment timing. These declines are happening during a time when the toy industry has grown by 3% this year but is down from the 6% growth of last year.
Each company, each industry, is claiming different reasons for this malaise. Unrelated? In part..maybe… but underlying these shifts are some very permanent, immediate and profound changes in audience behaviors that are having a big effect. Collectively, they create a powerful imperative to move away from business as usual.
Millennials (born 1980 to 2000) have become the new American family. They have more preschoolers and young kids than Xers and all of us are becoming a lot more millennial in our behaviors. That is because the factors that have formed their generational ethos are factors that are working on all of us. They are simply the first and the most native to the life changes created by those factors and those changes are permanent.
Rather than unbox all the causes and reasons for the behaviors (I give yearly seminars to do that), I’m going to cut directly to the behaviors themselves and what that means for entertainment and toys.
1. Millennial families adopt ONLY A FEW carefully chosen and personally meaningful stories to “live into” (lifestyle) long term.
a. if you’re not one of them then welcome to the world of expensive ups and downs
b. Choosing what IP to invest in, that is meaningful and connective to Millennials, is key. This isn’t trivial because the themes, heroic structures, ethos and challenges are all evolving. This can be big opportunity for new IP and Brands who get it right and is clearly a re-invention imperative for some legacy IP and Brands.
2. Millennials want a relationship vs a transaction for their dollars
a. IP that only engage in a single format are at a profound disadvantage. Most of the entertainment industry treats these considerations as something their consumer products groups must sort out. By the time the entertainment is set and turned over to the CP groups, it's largely too late to significantly impact how an IP/Story is capable of engaging its audience.
b. Toy product lines that are “one and done” single activities or don’t have aspects that connect and support the audience moving to and from other expressions are higher friction, less satisfying and don’t rise to the level of the lifestyle IP and goods that Millennials lean into. (remember they are filtering out a lot of purchasing)
3. Millennials BUY LESS BUT ARE WILLING TO SPEND MORE on things that are “meaningful” to them.
a. The IP must create real, useful, meaning or the consumer products won’t sell
b. The Products and toys must understand what the meaning is and fully deliver that as well. The license itself doesn’t necessarily carry the sale anymore. Millennials and Gen-Z are super savvy when it comes to play value and want the purchases aligned with their beliefs.
4. With Millennials It can be much HARDER TO ENGAGE THEM WITH A LEGACY IP or brand (unless you are part of their childhood play and entertainment nostalgia)
a. Beware of celebrating big brand/IP anniversaries. You can easily become grampa’s brand to millennials. There have been brands that celebrate anniversaries and have seen their sales drop.
b. An IP’s or Brand’s past strength means little to Millennials. You must make it meet them in their world and the themes and ideas must become relevant to the lives and desires they are living with.
c. Some of the medium and smaller toy companies are having big successes with relatively new IP.
5. Millennials are the experience economy. They want CONSTANTLY EVOLVING AND PROFOUNDLY IMMERSIVE EXPERIENCES from dining, to shopping to the rare vacation or special occasion.
a. A lot of IP doesn’t lend itself to experiences. The IP needs to be built to do so. Millennials see experiences as part of the story, not as a separate “ride” or “trip.”
b. Having “pinnacle experiences” for you IP are important. These are experiences that anyone who is becoming a fan of your brand can engage with that takes them to ultimate immersion.
c. Toy companies need to be more successful at developing using “experience design” so that the play is richer and deeper and much more connective to all the other things happening with the IP in other formats. This doesn’t necessarily mean it all has to be connected toys. It’s about depth and expansion of the IP in ways that connect to the bigger picture easily.
Net.net, these 5 altered behaviors describe a marketplace that rewards millennial relevance and IP/Brand/Product forethought to create a seamless landscape that the audience can expand into. A new/young IP doesn’t need to activate across all these efforts on day #1 but…if it doesn’t have the meaning, ideas, characters and worlds to drive those future events, it’s going to struggle getting off of first base. The business of franchise is so much more than great entertainment.
Shameless Plug: On November 13th in Santa Monica, we are performing our latest seminar on "Creating A Franchise Story." Come and join us to learn about insights, process and tools to help create the kind of IP that can become a true franchise. LINK