What do you do when your retail distribution point isn’t growing -- or worse, headed in the other direction? Go more digital -- and perhaps strike some good entertainment licensing arrangements.
Big toymaker Hasbro estimates revenues for its crucial fourth-quarter period will be down, largely due to the Toys ‘R” Us recent filing for Chapter 11 bankruptcy. The company’s CFO is now expecting revenues to be up 4% to 7% -- much lower than Wall Street analysts' estimates of 11%.
Hasbro, like other big toymaker Mattel, has other distribution points: Wal-Mart, Target, online retailer Amazon and other ecommerce sites. Still, physical stores are a major piece of the puzzle when selling physical products.
When it comes to TV networks, there are easier ways to shift your product line -- especially when it comes to all things entertainment, which can be digitally delivered.
That is why TV networks need to be in the digital space, with as many variations as possible. TV executives say: “We need to be everywhere our viewers are.”
All of this is true. But more importantly, they need to be everywhere without knowing what specific platform might command the greatest share of the program/network viewership in, say, five years from now.
Networks need to create their own suite of individual TV network apps -- CBS All Access and HBO Now, for example -- as well as to find ways to be part of older traditional pay TV providers’ new digital packages, such as Dish Network’s Sling TV or DirecTV Now.
They also need to be on new, promising digital TV platforms that have had no relationship with traditional pay TV providers: YouTube TV, PlayStation Vue, or Hulu with Live TV.
Whether you are a consumer product manufacturer for toys or a consumer entertainment producer of TV shows, finding a big mix of diverse retail distribution points seems to be more important right now than finding the right mix.
For its part, Hasbro continues to perform well in sales overall. Ironically, this is because it makes major licensing deals for big entertainment movie/TV brands, including Walt Disney’s “Star Wars” franchise and Marvel’s “Transformers” brand.