NewsWire: A magic formula to print cash - The Daily Telegraph, London

Thanks to James F. for the heads up on this article!

A magic formula to print cash - October 3, 2001

Of the many thoughts going through J K Rowling's head when she wrote Harry Potter and the Philosopher's Stone, few can have involved Coca-Cola. Yet you may soon find the famous adolescent wizard impossible to disassociate from the even more famous fizzy drink. As a press release earlier this year proudly declared, "The Coca-Cola company will combine its worldwide resources and geographic reach to bring the specialness of Harry Potter and Coca-Cola to communities around the world", while "reinforcing the core values and attributes shared by Harry Potter and Coca-Cola".

Since when did Harry and Coca-Cola share "core values"? And why does he need Coke's help with his "specialness"? The answer is that, in an epic cinematic head-to-head, Harry and Hogwarts School of Witchcraft and Wizardry will soon be competing for supremacy with another fantastical world - that of JRR Tolkien's Lord of the Rings trilogy. All involved with the movies are determined to make as much money from them as possible.

Both Harry Potter and the Philosopher's Stone ("Sorcerer's Stone" in the US) and The Fellowship of the Ring are being given a simultaneous US/UK release. Rumour has it that the films' opening dates, too, were originally to coincide, but that the studios feared eating in on each other's audience (Harry Potter opens on November 16, and The Fellowship of the Ring on December 19).

Both films are based on books with followings of rare size and devotion (Lord of the Rings has sold 50 million copies worldwide, and has been translated into 26 languages; Harry Potter currently stands at 30 million copies, in 30 languages). They also promise special effects of unprecedented quality and quantity, and have cost a stupendous amount to make. Directed by Chris Columbus, Harry Potter stars newcomers Daniel Radcliffe (as Harry), Emma Watson and Rupert Grint, as well as such distinguished names as Maggie Smith, Alan Rickman, Richard Harris and Robbie Coltrane. Warner Bros, the studio behind it, remains clam-like about figures, but the film is believed to have cost about 100 million pounds.

Even that, however, is dwarfed by New Zealand director Peter Jackson's adaptation of Tolkien's trilogy. His rendering of Frodo Baggins's adventures in Middle Earth is the biggest single film project ever undertaken. In an unprecedented effort to maximise funds, all three movies - The Fellowship of the Ring, The Two Towers and The Return of the King - were filmed on a single 438-day shoot, in Jackson's homeland, for something in the region of 180 million pounds. (The second two films open in 2002 and 2003.)

To judge by the internet trailers, Jackson's film is far darker than Columbus's - which comes as no surprise, given not only the source novels, but also the directors' CVs (Columbus made his name with the featherlight Home Alone; Jackson did so with the pitch-black Heavenly Creatures). But The Fellowship of the Ring has a cast at least as distinguished as Harry Potter's - including Elijah Wood (as Frodo), Ian McKellen, Sean Bean, Viggo Mortensen, Ian Holm and Cate Blanchett - and makers New Line are hoping that it will be the biggest-grossing film series ever.

And so, it is spending a reported $US50 million worldwide on marketing each film, via posters, trailers, adverts and so on. (Warners, once again, is refusing to divulge figures.) This is a vast sum, intended, of course, to boost ticket sales - but Warners and New Line are also going all-out for a share of the dlrs 150 billion global market for merchandising tie-ins. And this is where both Coca-Cola and a vast array of other "licensees" come in. Very soon - and just in time for Christmas - wizardly trinkets will be everywhere.

The range is staggering. With 25 companies granted a licence to produce Lord of the Rings products, Tolkien fans can soon find their heroes on, for example, Cadbury's chocolate bars; Alternative Software mouses, mouse-mats and screen-savers; Samuel Eden socks and slippers; Ravensburger jigsaw puzzles; Electronic Arts interactive games; and Downpace "sculpted plastic and ceramic drinkwear" and "resin sculpture combined with waterfalls and light effects". Remarkably, nearly all the Fellowship of the Ring merchandise is aimed at "adult males", which reflects the perceived age and sex of the trilogy's readers (and perhaps suggests that many of them should get out more). New Line is also hoping, however, that youngsters will discover Frodo and friends, through the first film, in time to covet goodies relating to the second two.

Warners, by contrast, appears to be going straight for the youth market. Deals with Mattel, Hasbro, Lego and many more are yielding at least 150 Harry Potter "lines", including clothes, trading cards, watches, electronic spell-books, video games and build-your-own Hogwarts. Like New Line, Warners will almost certainly have charged each manufacturer for the use of the film's title and characters, as well as requiring a royalty of 10-15 per cent of the wholesale price of most toys and clothes.

Film merchandising on this scale was unheard of until 1977, which saw the arrival of Star Wars. When director George Lucas asked 20th Century-Fox to raise his $US150,000 director's salary, they famously refused, but said he could have the merchandising and sequel rights for free. The resulting products have since grossed $US4-5 billion, more than $US1 billion of which is believed to have gone to Lucas himself.

The potential rewards, then, are vast, but neither Warners nor New Line have any room for complacency. In 1999, $US500 million worth of new products were sold on the back of Lucas's Star Wars prequel The Phantom Menace - but $US150 million worth was left on the shelves. When the online satirical newspaper The Onion reported on the "80 billion tons" of Star Wars merchandise that failed to sell, it was barely joking.

As a result, both companies are being careful. "The Phantom Menace left a bad taste in retailers' mouths," says Jeremy Saul of the Licensing Company, the agent for the UK merchandising of Lord of the Rings. "We didn't want to 'overcook' the property. We want to be very focused, to create magical, mythical products for the fans, which is why we aren't licensing, say, ironing-board covers."

The global marketing rights for Harry Potter cost Coca-Cola a reported $US150 million, with a request from Rowling that the company also fund community reading schemes - or, as the Coca-Cola release has it, "broad-based reading initiatives". All the execrable marketing-speak aside, it sounds perfectly reasonable. Any project that promotes reading deserves praise. And, according to Andrew Levy, managing director of the UK office of the International Licensing Industry Merchandisers' Association (Lima), "Licensing is a positive thing. It expands the awareness of the film, so it's good for the licensor and the licensee, and its good for the public because it gives them things they want to buy."

What Levy won't, however, comment on is the suggestion that fans might resent seeing their beloved characters turned into "brands", to be squeezed for every possible penny. And what the Coca-Cola missive coyly fails to mention is the millions of cans or bottles that - it is reasonable to assume - will soon be emblazoned with the faces of Harry and co. Does the global passion for Harry Potter - and, indeed, for all things medieval and magical - not stem at least partly from a desire to escape from precisely the sort of modernity that Coke represents?

In both cases, only time will tell. A small but more immediate spanner in the works came last Monday, when the Entertainer, Britain's largest privately owned toy retailer, announced that it would not be stocking Harry Potter merchandise in its 28 stores. Owner Gary Grant expressed concerns over the concentration on sorcery in the products - but, way back in March, other Entertainer representatives were already nervous Harry Potter, apparently fearing another Phantom Menace. One cannot help wondering if this, too, has played a part in the chain's decision.

And yet, one recalcitrant toy chain aside, everyone seems happy: the films are promising, the fans are thrilled, and Warners, New Line and their many licensees both stand to make millions. Isn't it churlish to raise objections?

Perhaps - but, as the novelist and semiotician Umberto Eco once suggested, the world's larger amusement parks could in fact be be seen as vast, trinket-filled shops disguised as amusement parks. It would be a pity if, similarly, movies were inexorably to become little more than convenient advertisments for countless "products".

However, this is unlikely to happen yet. As Andrew Levy puts it, "Marketing and merchandising is never the major driving force behind a film. If the film's no good, no one will buy the products."

And that, thankfully, is still the bottom line.

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