Thursday, December 24, 2009

Avatar merchandising bonanza?

LOS ANGELES -- The Hollywood studio behind Avatar is banking on the film to drive its biggest US product licensing push in years, starting with toy figures and expanding to items from home decor to party goods.

The News Corp.-owned 20th Century Fox is making that gamble even though consumers know virtually nothing about the blue, cat-like characters in Avatar who will be at the heart of the merchandising effort.

Fox has used its Avatar licensing deals, including one with Mattel Inc. for toys, as a way to recoup on what is one of the most expensive films in history, costing at least $237 million to produce, analysts said.

But if the movie, which opened on Friday and tells of a soldier infiltrating an alien race, crashes at box offices, stores may be left with shelves of unpopular Avatar products, literally standing with their tails between their legs.

Howard Roffman, head of licensing for Lucasfilm, the company behind Star Wars, said he would be "very nervous" to launch a retail push now, as Fox has done with Avatar. "The economy is not good, retailers are challenged, licensee companies are challenged, so my hat’s off to people who rise to that and get a program out there," Roffman said.

Last year, the Warner Bros. release Speed Racer bombed at box offices when it was released in May, and analysts say it crippled sales of toys tied to that movie.

But if all succeeds, Fox and its partner companies could turn Avatar into a major merchandising franchise, and perhaps even enter the same universe as the $18-billion retail phenomenon Star Wars, the movie franchise that has long been an inspiration for Avatar director James Cameron.

Is "The Force" with them?

By moving aggressively, Fox stands to avoid what happened to Star Wars when it opened in 1977. Then, no toys were out when parents started clamoring for them and at Christmas, kids received empty boxes with certificates for Star Wars toys.

Fox sees Pandora, the extra-terrestrial globe where Avatar is set, as a rich fictional world that can be mined for retail products.

"In the US market, this is the largest launch that we have had probably in recent memory -- if ever," said Robert Marick, executive vice-president of Fox Licensing.

He declined to give specific sales projections.

For comparison, the recent film G.I. Joe was based on a decades-old brand that consumers already knew, and Hasbro forecast toy sales of $100 million for 2009, said Chris White, analyst with Wedbush Morgan. "Avatar will be a sliver of that, it will be a lot less than G.I. Joe," he said.

Since October, Mattel has been selling Avatar figures with an "i-TAG" that can be held near a computer’s webcam. The computer scans the tag and launches an image of the character moving on-screen, or even fighting with another character.

Last month, News Corp’s HarperCollins published several books on the film, including Avatar: A Confidential Report on the Biological and Social History of Pandora. JEM Sportswear and Awake Inc. launched T-shirts, sweatshirts and fashion tops.

This month, videogame maker Ubisoft released James Cameron’s Avatar: The Game. Fox hopes to one day launch home products such as bedding, as well as costumes, party goods, toy building sets and other products, Marick said.

Still, some analysts wonder if the strange-looking characters of Avatar will connect with children.

Even Tim Kilpin, general manager of Mattel’s girls, boys and games division, acknowledged that because the movie is new "there’s going to be some ramp-up to awareness."

"We think before too much longer, a lot of people will know these [Avatar] stories and these characters," he said. -- Reuters


Avatar leads US box office despite storm
LOS ANGELES -- Titanic director James Cameron’s Avatar, a 3D extravaganza hyped as a giant leap in cinematic prowess, ruled the worldwide box office during its first weekend even as North American sales were hit by an enormous snow storm, its distributor said on Sunday.

The film -- one of the most expensive ever made -- earned an estimated $232.2 million from North America and 106 foreign markets, according to News Corp.’s 20th Century Fox, provisionally the ninth-biggest opening of all time.

Moviegoers in the US and Canada chipped in $73 million, far short of enthusiastic forecasts in the $85-million range. Top contributors to the $159.2 million foreign total included Russia ($21 million), France ($19 million) and the U.K. ($14.2 million).

Avatar edged ahead of 2006’s The Da Vinci Code ($232.1 million) among worldwide openings, while the disaster picture 2012 slipped to No. 11 with $230.5 million. If the number is confirmed when final data are issued on Monday, Avatar will set a new opening record for a nonsequel.

The record for a worldwide opening is $394 million, set in July by Harry Potter and the Half-Blood Prince. The Avatar opening also fell far short of the $275-million opening for The Twilight Saga: New Moon last month.

Blue people wow critics

Avatar garnered almost as much attention for its reported budget of at least $300 million as for its eco-friendly tale of a disabled ex-Marine sent from Earth to infiltrate an alien race of 10-foot-tall blue people in order to save his polluted planet. Inter-species romance ensues between computerized characters representing actors Sam Worthington and Zoe Saldana.

It marks Cameron’s first dramatic feature since 1997’s Titanic, the biggest film of all time before accounting for inflation. He spent the intervening years waiting for movie-making technology to catch up with his vision for the followup. Production took two years.

His new film won breathless reviews from critics. "You’ve never experienced anything like it, and neither has anyone else," said the Los Angeles Times.

Despite the buzz, the weekend haul ranks as merely the sixth-biggest of the year in the US and Canada. The 2009 record was set last month by The Twilight Saga: New Moon, with $143 million. The all-time record of $158 million was set last year by The Dark Knight.

A blizzard along the East Coast crippled business for all movies. Holiday-shopping distractions also had an impact. Fox said Avatar sales in New York fell 18% on Saturday from the previous day. The drop was 86% in Baltimore and 75% in Washington DC. But the studio hoped business would rebound as the weather improved.

Fox distribution president Chris Aronson dismissed the industry forecasts, saying the studio had been hoping for an opening in the mid-$60 million range. He said the 163-minute running time reduced the number of daily screenings.

On the other hand, ticket sales for Avatar were inflated by premium pricing for screenings in venues equipped with 3D technology. Such venues accounted for 59% of the total cinema count and 71% of sales, Fox said.

Exit polling for the film was strong across the board, and he was surprised that 62% of moviegoers were aged over 25. Men accounted for 57% of the audience.

Profit, Oscar hopes

The big issues are whether Fox will make money on the picture, and how it will fare at the Academy Awards. Media analyst Rich Greenfield of Pali Capital last week upgraded News Corp. to hold from sell, saying Fox was unlikely to lose "a massive amount of money" on the film.

The rough rule-of-thumb is that the studio and theaters split the gross evenly. Fox is also on the hook for worldwide marketing costs of $150 million, and must share some profits with Cameron. DVD sales will add to the windfall, although critics sayAvatar is best appreciated in a 3D theater environment.

As for the Oscars, for which nominations will be announced on Feb. 2, the film is making some early headway, picking up key Golden Globe and Critics Choice nominations. -- Reuters

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