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Black Panther Gearing Up to Take $250 Million in 2018

It’s not carrying quite the same level of earning potential of Disney’s last breakout film, Frozen, but Marvel’s Black Panther is one of the few properties set to carry the 2018 merchandising narrative. A box office wunderkind, the film is expected to break the $1 billion mark at the global box office any day now. And, unsurprisingly, consumer demand for the property is strong at retail.

If licensees and retailers can keep pace, Black Panther could generate up to $250 million in licensed retail sales this year, according to TLL estimates. The figure largely depends on a robust, sustained interest during the back-to-school and holiday seasons. At the very least, the NPD expects that Black Panther’s retail strength will continue through March.

Black Panther was Disney’s largest merchandising push for a non-franchise Marvel film—and for good reason, because it isn’t exactly a stand-alone title. The titular character will reappear on the big screen for Avengers: Infinity War, bowing April 27th; he debuted in 2016’s Captain America: Civil War. And following the movie’s success, Marvel Studios President Kevin Feige has hinted that there will be a sequel.

To some extent, this property will follow in Frozen’s footsteps as Disney’s latest franchise. Maybe the world of Wakanda won’t be featured on the Broadway stage or on ice, but at the very least there will be tie-ins within Disney’s theme parks, new content for the smaller screen, and, of course, merchandise.

The problem with all of this? The film’s success caught too many industry insiders—who all should have known better—off guard. At least, that’s what it looks like. According to the NPD Group, Black Panther was the No. 3 toy license in the U.S. during the week of Feb. 18–24, or the first full week after the film’s release. The research group reported that U.S. retailers were somewhat prepared for the brand’s initial success, with movie tie-in toys available in 87% of stores.

But the number of toys didn’t quite match up to other big-action superhero movies—on average, retailers carried 11 toys. According to NPD toy industry analyst Juli Lennett, that’s roughly half as many toys as Justice League and a third of Power Rangers. The number was on par with 2017 films Beauty and the Beast, Wonder Woman, and Thor. (But it was still more than Moana, the film that will help pave the road to Black Panther’s success by preparing Disney in avoiding a major scandal.) Lennett stated that the lack of broader Black Panther toy offerings is a sign of just how much the film industry still underestimates the on-screen role of women and minorities.

Jefferies analyst Stephanie Wissink estimated that retail sales of Hasbro’s licensed Black Panther merchandise, alone, could generate as much as $100 million because retailers are “aggressively chasing inventory.” (Again, timing.) She noted that “Hasbro was one of the only licensees that had deep consumer insights that pointed to a breakout success. They built a robust product line to support the film based on those insights. But getting the product placed and into the market is more reliant on retailers’ collective confidence and excitement … Hasbro was more optimistic than the marketplace and they were right.” But Hasbro could also afford to be optimistic and had the data-driven insights to drive executive confidence.

As respondents to TLL’s Annual Licensing Business Survey repeatedly noted, retailers are no longer willing to take any sort of risk. Even established franchises are no longer a sure bet—and with more entertainment licenses than ever on the market, it’s becoming increasingly difficult to separate the wheat from the chaff. It’s no surprise that franchise properties like Transformers and Jurassic World see strong retail support despite questionable box office returns—the toys sell, to the point where it seems like regular movie releases are simply a vehicle to pitch action figures and play sets to buyers. So why would a licensee invest heavily in developing underappreciated properties, especially when licensors are demanding higher royalties and/or minimum guarantees?

Add on to that certain A-list licensors’ reluctance to share any details about plot or product, and there are no tools left to educate increasingly closed-off buyers—or even licensees who must choose which properties to develop. Licensees and agents are being spread thin in more ways than one. They are pressured to stick their fingers in more pies to spread their risk, and at the same time, also face the pressure of thinner margins from partners on all sides.

In Disney, we also see a behemoth whose caution has made it so slow, it’s giving the rest of the industry whiplash. Remember Moana? Although the film’s merchandise had relatively little retail placement, it sold well wherever it appeared. Disney had to navigate broader social concerns regarding commercialization of a culture by a megacorporation. And early on, it faced backlash regarding the titular character’s role play costume—it had skin-colored sleeves. The licensee quickly released a sleeveless version of the costume. But looking back, Disney largely avoided social scandal— the controversy over representation of women in merchandise for large franchises like Star Wars (#wheresrey) was more poignant. (Even then, the pressure was also spread to licensees who either didn’t know or weren’t authorized to release who the top-secret main character was.) The giant banked on building up consumer demand, for which it would carefully time and choreograph a massive release.

But that kind of game plan runs many risks—of backfiring into consumer fatigue or more generally, in stifling creativity and innovation. It largely ignores micro and localized trends. The good news is that it gives others room to run circles around the competition. The bad news? It looks like the floor is made of lava.


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