The playbook has changed. Retail is concentrated, margins are tighter, and risk sits earlier in the cycle. So how are serious operators actually making decisions right now? For this Melbourne Toy Fair edition, senior leaders from privately owned businesses speak plainly about leverage, discipline, and what will separate winners from survivors in the next phase.
What has fundamentally changed in how you assess opportunity today versus three years ago?
Since 2006, Stella Projects has primarily been involved in exploiting the commercial off-screen rights to children’s entertainment properties broadcast on TV.
Prior to Covid, the most essential key for a property to have off-screen success in Australia was that it had to have a free-to-air Australian TV broadcast partner.
Post Covid, this has been turned on its head, and we have witnessed dramatic declines in traditional broadcast viewing and an equally dramatic increase in the popularity of online creator-made content on platforms such as YouTube, TikTok & Roblox.
It’s now increasingly rare to have a popular show with only a free-to-air TV broadcast to successfully drive off-screen consumer product sales.
Today, and in future, you need multiple touchpoints with an audience to find off-screen success including not only free-to-air TV, but additionally a streaming channel, FAST TV, YouTube, gaming on Roblox, music on TikTok & Spotify, audience interaction on multiple social media services, your own website, live events, location based experiences and consumer products, which all end up making a 360-degree flywheel.
With retail so concentrated, where do you now see genuine leverage—product, brand, relationships, or execution?
Creator-made properties on digital platforms like YouTube, Roblox & TikTok are now developing so quickly, iterating their content based on immediate audience feedback and adapting to what their audience wants more of and less of, that the traditional model of licensees slowly developing products to sell into mass merchants will struggle to keep up.
For popular creator-made online properties, opportunities abound in the direct-to-consumer space either using existing online retailers like Amazon or by selling directly to their superfans and underlying fanbase from their own touchpoints with their audiences.
Are we in a defensive cycle, or the early stages of a new growth model for the industry?
Given the volatility in world markets for at least the next three years, caused by the current US government’s erratic trade policies, combined with the rush to adopt AI technology come what may, I’m pessimistic about how the overall consumer product retail business will track in Australia and the rest of the world.
But irrespective of the state of the overall economy, the superfans and the general fanbase of popular creator-based online properties will buy all products relating to their favourite properties. So for these properties, it will be a continual growth model.
Looking ahead 3–5 years, what capability will most clearly separate winners from survivors?
The flexibility to react quickly and understand what their audiences want from them and allowing their superfans to input directly into the content creation process with ideas that are used to iterate their future content and so continually expand their fanbase.
Combine this with the capacity to develop location-based experiences, live events and consumer products that reflect the true DNA of their brand and these will be the properties that are rewarded the most. For properties relying on traditional media and not adapting to the demands of being a part of the creator economy, these properties will be the ones left behind.
This article also appeared in Edition 53 of The Bugg Report Magazine
