A host of licences have been taken up for this year and 2002. One of the biggest is Harry Potter, a franchise which has turned into quite a bandwagon well in advance of the first movie in November. Major companies have snapped up Harry Potter from Warner Bros ­ Coca-Cola, Mars, Mattel, Hasbro, to name but a few, and these will benefit from the full weight of the film studio behind it. One of the beneficiaries, Mars, has a multi-year product deal which will enable it to develop a range across sugar and chocolate confectionery. Brand manager Jenny Williams says: "This is a first for Mars. We've dabbled with licensed characters in the past but this is different. We will develop the brand and bring out new lines and seasonal opportunities next year. We are not going to stop at bean and frog sweets." Determining a character's staying power and at the same time pleasing both parents and children can be a risky business. But the power of character licensing can be staggering, and is additionally fuelled by the internet. Character licensing can uniquely tap the pester power factor as well as tempt parents to buy for children often on the strength of the characters alone. Arla's consumer marketing manager Isla McGuckin says: "The beauty of character licensing is that you are buying into an established brand and a good marketing resource. Licence owners are well established in what they are doing and have a good support programme so you can get good volume deals." Arla's licensed characters include Bob the Builder, Thomas the Tank Engine, Looney Tunes and its newest, Hoobs. Two more targeting older children will be introduced next year ­ Dexter's Laboratory and the Powerpuff Girls, both from Warner Bros. "The Powerpuff Girls have a primary and secondary target as even into the early 20s girls buy into T-shirts, key rings and stationery with them on," says McGuckin. "Parents are buying into character licensing because they know kids will eat food with characters on them. Even young kids are into peer pressure, and if there's something naff in the lunchbox, they won't eat it in front of their friends." Arla thinks Hoobs and the Powerpuff Girls, will both be big because the merchandise has this broad appeal. Arla will use PoS to announce new lines and price promotions where it can get slots. Richard Hollis, head of licensing at BBC Worldwide, says that its children's brands and properties accounted for £90m in retail sales for 2000/2001. Before the launch of major children's brands in 1997, this business generated less than £10m. Tweenies has been a staggering success. It's now in its third year and is the BBC's top performer, amassing £110m retail sales by Christmas 2000. Christmas 2001 is looking rosier. However Hollis warns that the whole licensing industry is contracting. "There are fewer retailers to approach and you have to get listings with those retailers. There is also contraction in the number of characters and the manufacturers. We can't get away with licensing a portfolio of 20-30 characters. Only the three strongest will make it on shelf. We have pre school with Tweenies and Teletubbies where there is obviously competition with Bob the Builder, but it's a sector we are strong in." St Ivel yogurts and Heinz pasta shapes were both on board for Tweenies this year, and BBC Worldwide has just done a global deal with Pez, which handles dispensers of hard candy sweets. "One of the criteria for choosing good licensees is their distribution and we see the multiples as the biggest for expansion," says Hollis. This spring the new Bill & Ben was launched on BBC TV and the first merchandising is just hitting the shops. Next year BBC will see the return of Andy Pandy and the launch of a boys' action TV show called Ace Lightning, a US global series which is a mixture of live action and computer animation. "You have to be careful you don't over licence and over hype a product. That leads to over-stocking which doesn't do the industry any good. It happened with Star Wars and we are looking with interest at Harry Potter," says Hollis. One company which has capitalised on the success of Tweenies is Cheviot Foods. In June it launched Tweenies fun potato shapes into the £46m children's frozen potato specialities sector. Six shapes ­ Doodle's Bone, Flower, Star, Messy Time, Tweenies Clock and Tweenies Boot ­ aimed at pre school ­ fall into line with the BBC's criteria of no artificial colours or flavours. The company feels it has been well worth the effort and plans to introduce on-pack offers to coincide with BBC's rebranding exercise on the Tweenies planned for next year. Kinnerton Confectionery is a staunch supporter of character licensing and has an ever increasing range. Its newest are Angelina Ballerina, starting this month on CITV and followed by Merlin the Puppy in November. Kinnerton says a considered decision has to be taken as to whether a character will make a good licence taking into account what the marketing budget is, what channel it's going on, what age it's aimed at, and what success rate the licence has already. Marketing divisional director Rachel Grice says: "It's very difficult to make a decision on which one is going to be hot. When Bob the Builder came out he was on TV just once a week. No one could have guessed how big he was going to be." Kinnerton has high hopes for Merlin and Angelina, and for its Spiderman licence next year which coincides with the movie release in May. "It will be up against the second Star Wars movie but there will be wariness with that because even though it is a multi-million Lucasfilm, some licensees got stung before," says Grice. More and more retailers are opening the doors, says Jon Keeble, head of licensing for Enid Blyton at Chorion. "We have ranges in Tesco and Sainsbury, and we've just launched our first Noddy clothing in Asda which is also testing a Noddy cake," he says. Classic characters are the safety net for businesses wanting to take the cautious route into character licensing, and Noddy, according to Keeble, has blossomed in the past 18 months and is set to grow further following the £10m investment in a new computer generated TV series which is is currently in production. "We are careful who we work with because there is a lot of criticism about characters going on to food. The last thing you want to do is mislead mum. "I was pleased with Bob. That was based on 13 x 10 minute programmes, and consumers went for it. "Up until then there was a belief that you had to have 100 episodes to make the high street. It just shows that if you have good programming, you can make it. We know we will suffer from Harry Potter and even from Star Wars and Pokémon because retailers stock them in such vast quantities and have to reduce their ranges. Something has to go and its usually the classics. The good thing is we come back as soon as its passed." More than 50% of Mr Lucky Bags confectionery business is in character licensing. Lucky Bags are priced up to a maximum of £1.99 and the price is important particularly when, MLB says, you are in a volume driven market at a fairly low retail price. Previously its bestselling lines were its own creations, Dick Turtle and Trixie Lucky Bags, plus the Sorcerers Secret bag on the strength of the Harry Potter hype. However marketing director Carl Richardson says these are under pressure from characters such as Rugrats and Barbie. "Dick Turtle started our business but the way the market is going, that sentiment is fast being eroded. We are coming up against other characters and if we don't have them, we don't get in." MLB's top character licence is Rugrats which has a strong UK following, followed by Barbie, Digimon, Winnie the Pooh, Action Man and Scooby-Doo. It has just been successful in signing Disney for another year. But Richardson's money is on next year's new Disney movie Monsters Inc, as well as Scooby-Doo and Noddy which will all be well supported with promotional activity. One of the dark horses on the character licensing front is the Lord of the Rings. The first movie comes out in December and industry experts believe character merchandising is being held back until the second film to avoid the stiff competition it would face with Harry Potter et al. But with wizardry popular it could be huge, and is one to watch. {{FOCUS SPECIALS }}