Why Disney's Hercules fails to topple Gromit

It's all about toys and cinema tickets. Vanessa Thorpe and Colin Blackstock on the marketing gambles that accompany children's films

Hercules faces an epic task this autumn. With retail sales of licensed goods from movies and television shows making between pounds 3bn and pounds 4bn a year in Britain alone, the latest Disney cartoon character must woo young consumers and their parents away from such rivals as the Lion King, Wallace and Gromit, Pocahontas, and the dinosaurs of Jurassic Park.

Either that, or he turns up his toes in the merchandising graveyard alongside Budgie, the ill-fated helicopter.

Understanding what makeschildren take one cartoon character to their hearts yet spurn another completely is the question troubling Hollywood as studios increasingly stand or fall on the strength of their income from spin-off merchandise.

If you can produce an animated character with just the right blend of "must-have" cuteness, you are assured of profits that will far outstrip those from an initial film or video release. Get it wrong, however, and the commercial implications are catastrophic.

The Adventures of Hercules will be released in Britain on 10 October, and shops here are already stocking character dolls. But so far sales have been noticeably slow, just as they have been in the US, where toy- shop shelves remain weighed down with unwanted Hercules dolls brought out by Disney well ahead of the release of its newest animated feature.

For while The Adventures of Hercules eventually made pounds 62.5m at the box office, it did not do nearly as well as some of its forerunners, and much of its spin-off merchandise is resolutely refusing to spin.

This commercial blow to Disney follows muted reaction on both sides of the Atlantic to last year's animation of Victor Hugo's The Hunchback of Notre Dame and to the toy model of its mis-shapen hero which was brought out by Mattel.

Both leading characters can now be deemed to have misfired in spite of what James Coleman, of the Disney distributing off-shoot Buena Vista International, has described as a concerted effort to steer Hercules away from the darker, downbeat associations of the Hunchback movie.

"It is disappointing that Hercules didn't do so well, because it's a really good film. But it came out in America at the same time as Men in Black," he said.

Steve Manners, director of European licensing for Twentieth Century- Fox, was also reluctant to lay blame at Hercules's sturdy, sandalled feet. "If there had been more space between the movies coming out then they would have sold more," he said. "It's obviously more difficult to recoup costs if there are lots of movies with tie-ins released at the same time. There isn't enough space to display the products."

In Britain, retailers have been cautious of overstocking new Hercules products. A spokeswoman for Hamleys toy shop said it was buying more apprehensively than was usual with a Disney film, partly as a result of weak sales of Hunchback merchandise last year.

Gary Crook, a manager at the Toys R Us superstore in Brent Cross, agreed that Hercules stock was "not going all that well". He believed this reflected a lack of interest, in comparison with other recent releases. "We sell plenty of Lion King toys. And toys from Jurassic Park II are going well enough. One Hundred and One Dalmatians has also been popular for quite a while."

Disney's The Lion King is still very much ruler of the commercial jungle. The film has grossed more than $312.8m (pounds 202m), but its retail sales have now topped $2bn (pounds 1.29bn). What is more, 80 per cent of British parents of five- to nine-year-olds have bought associated merchandise, according to the consumer analysts Mintel.

Once a character like that wins a popular following, knock-on sales are likely to last for years. Some such as Snoopy and Winnie the Pooh always do brisk trade, but the market is far from sewn up by these established favourites and newcomers can still have a sudden impact.

"We have actually just got a new shipment of Teletubby dolls," said Mr Crook proudly. "We managed to arrange a small, early supply of them, but they are selling out immediately, a bit like Buzz Lightyear from Toy Story did last year."

In the US, toy manufacturers are increasingly involved in the development of animated films. Their input is considered crucial because their products will serve as a key part of the promotion strategy. Kirk Bloomgarden, marketing director of British licensing agency Copyright Promotion, says merchandise is now a driving mechanism. "Toys are an absolutely integral part of a major movie launch and toymakers do have some say in pre-production, even in the script development. They will say, `Do this or that with a character in the film and it will make the toy more appealing to the kids who are going to play with it'. "

The dubious attractions of Quasimodo and Hercules suggest that this method of developing characters is not yet foolproof.

Aardman Animation, the Bristol company behind the Oscar-winning Wallace and Gromit, provides a contrasting version of the right way to build up a fictional property. Initially resistant, Aardman has been slowly drawn into the international market.

Two years ago its head of development, Michael Rose, said he was not keen to see the indiscriminate licensing of linked products. Today he acknowledges the existence of everything from key-rings to bubble-bath ranges, but still insists that creator Nick Park has the final say.

"For Wallace and Gromit we have a production partnership with BBC Worldwide which handles the rights for us. We didn't want it to get too big. We didn't want a Mr Blobby on our hands, but there is a tremendous public demand for this. It is a little bit beyond our control.

"We didn't want to just put Gromit out on a toothbrush. We wanted to put out products that were related to the story, so we put out a knit kit and a Plasticine modelling set.

"We felt it was very important that everything was relatively well-produced, so ultimately everything has to be signed for by Nick. He often turns things down either because he doesn't like the concept, or because the design is not right."

According to Mintel's survey, Aardman is still being commercially very cautious. Its research indicates that Wallace and Gromit are still "under- merchandised" considering their popularity. In its survey, 18 per cent of adults counted themselves fans and yet only 18 per cent owned any associated products.

Mr Rose puts the appeal of Aardman's animated characters down to a purist approach.

"We don't aim to make stuff for the market - if you do that you don't get that spark of originality, you just get something formulaic."

This typically British approach seems to pay dividends. If a character is right, in the way that Sooty, Noddy, and Thomas the Tank Engine are right, it will keep on bouncing back year after year.