“We acquired the book and record properties for the purpose of licensing the evergreen, iconic characters of the licensing world. We intend to become fairy tale headquarters by bonding with consumers,” said Billy Phillips, president. “There is nothing like music and books to touch a child’s soul, and we have so many assets we need to make use of. Building the bond will build our brand.”
The Toon Studio began about five years ago and functions as a lean, virtual organization with less than 10 employees. Phillips had a background in the music industry as president and executive producer with Marshmallow Entertainment Company, which produces a variety of audio and DVD programming aimed at toddlers, teens, and adults. After being approached by a copyright attorney with access to classic fairy tale-themed artwork, Phillips partnered with David Shamouelian, the former CEO of Sharagano, a Paris-based fashion label.
“We thought the artwork would be great for high-end T-shirts, and we locked up the exclusive rights to the art. We then tracked down heirs to a number of other children’s book publishing companies, such as the original Rand McNally Junior Elf books,” Phillips said. “We worked for a year to secure more and more properties.”
In addition to obtaining fashion apparel rights, Phillips and Shamouelian saw an opportunity for a full-fledged licensing venture, amassing what could grow into the largest source of authentic fairy tale art in the world and negotiating the rights to every consumer product category. Today, the company has nearly 1,000 books and albums in its archive with multiple renditions and illustrations of many beloved characters.
After acquiring the titles, The Toon Studio classified its properties into three distinct areas: vintage, classic, and rebel. Because its rights allowed the company to update artwork, there was lots of room for innovation. The original artwork is the vintage category. Classic is a contemporary take on the original art. Rebel is an edgy, hip take on the artwork. After defining the categories, it was time to go to market, but in an unusual way.
“When we went to market, we were putting the cart before the horse. Normally with a brand there is a movie, book, or TV show that drives licensing efforts. We didn’t have that luxury,” Phillips said. “We relied on the strength of characters that are the celebrities of the fairy tale world.”
Zero to 50
The Toon Studio set out to attend trade shows in Las Vegas and New York, hiring brokers and licensing agents around the world and inviting buyers and manufacturers to view the artwork for themselves. In 24 months, the company went from zero to 50 licensees.
Its many licensees include Junk Food, Trinity Products, Sony Creative, Trau and Loevner, and Smiffy’s, which at more than 100 years old is Europe’s largest party goods and costume company. Licensees are creating everything from toys and blankets to backpacks and beyond. Phillips said vintage category fashion apparel is doing well with adult consumers, classic is seeing traction with toddlers of all ages, and rebel-branded items are speaking loudly to the tween market.
Now the company is working to create the fairy tale headquarters online universe. From a creative standpoint, The Toon Studio aims to build an online world where children can find the many fairy tale, nursery rhyme, and Mother Goose characters in its arsenal and interact with them through games and social networking.
“Anything is possible online. Dorothy from Oz can visit Alice’s Wonderland, and Tinker Bell can go to Snow White’s Enchanted Forest. Sleeping Beauty can have a Facebook page,” said Phillips. “We have a schematic for a fairy tale universe with games, music, and storybooks, and kids will be able to interact with it through iPad apps. Eventually, we’ll have in-app purchases so products can be purchased right from the app as the games are played. This is our major thrust for the next five years.”
In addition, the company is exploring ways to bring the characters back to life through books, TV, and movies. The Toon Studio is developing physical and digital graphic novels and books as a method to segue to TV and movies. By starting with the written word, which Phillips said is the DNA of the company, the company can then create multimedia interactive experiences and use strong stories as the foundation for the natural next step to movies and TV.
What’s remarkable is The Toon Studio’s ability to get all this done in only five years with a very small staff. From the beginning, Phillips said it was clear that The Toon Studio had to be a virtual company. On the creative side, it works with illustrators, graphic designers, and creative people all over the world.
Whether they are in Russia, India, the Philippines, or Brazil, when the company needs poses, style guides, backgrounds, character art, or any kind of creativity, all it takes is an e-mail or phone call. Artwork is uploaded through FTP servers, allowing the company to remain lean with creative resources thanks to the connectivity and power of the Internet. This virtual reality extends to licensing as well. The company meets with licensing agents a few times a year, but the rest of the time communication is handled through e-mail, Skype, iChat, and video conferencing.
Growth has come at a great pace for The Toon Studio, and Phillips said they haven’t really yet scratched the surface of its potential. Growth has come without things like new TV shows or recent book releases to drive the brand, but the next five years will see the company bringing its library into the media. Phillips said The Toon Studio will pursue additional properties as well.
The company aims to maintain its service levels no matter how fast it grows. The Toon Studio prides itself on offering licensees a 48-hour turnaround time on approvals. It also is looking for ways to add value to products in stores for both licensees and consumers. With so much music and so many book titles associated with its characters, the company sees opportunity in the form of adding gifts to purchases.
“Every purchased product should have a book, CD, or both packaged along with it. That is going the extra mile to give consumers value, and that is a value-add for licensees as well,” said Phillips. “Most companies can’t offer CDs because they have to pay publishing royalties for songs, but since I own Marshmallow, we can waive that fee. That is a huge advantage and helps us build that bond with consumers.”