The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Disney Using The Force Of Unboxing Videos To Hype Star Wars Merchandise

By Shan Li, Los Angeles Times (TNS)

Long ago in a galaxy not so far away, selling toys was a lot simpler. Put a commercial on TV. Lure shoppers to Toys R Us.
Today, it’s not so easy to attract the attention of digital-savvy kids and their parents, who are watching less television and more online programming.

In a major departure from the usual movie/toy tie-in, Walt Disney Co. is heading to YouTube with an audacious marketing ploy to promote products tied to the upcoming film “Star Wars: The Force Awakens.”

Disney, already known as a merchandising machine, will kick into hyperdrive for an 18-hour online marathon starting Sept. 3 designed to whip fans into a frenzy.

The event — mixing the power of YouTube stars with the oddly popular phenomenon of watching people open toy boxes online — underscores how mainstream entertainment giants are trying to adapt to the Internet and attract tech-loving young customers.

YouTube personalities around the world will be shown unboxing toys tied to the movie, and that will be combined with other content such as movie trailers and commentary. The online event will end when retailers throw open their doors as Sept. 3 ends at midnight — Disney is calling Sept. 4 “Force Friday” — to start selling the new Star Wars merchandise.

By heading online in this way, Disney is taking a page from the modern playbook of celebrities and politicians who have discovered the power of speaking directly to a target audience. The company is betting that its online extravaganza will create the same buzz as elaborate product debuts from the likes of Apple Inc. and Tesla Motors Inc.

If Disney succeeds, it could inspire more companies to go digital first when launching products, experts said. But the Burbank, Calif., company also runs into the potential danger that its customers could tune out what is essentially a nearly daylong ad.

“YouTube is something which allows a brand like Disney to have a very elaborate and detailed and extended infomercial,” said James Dix, senior media analyst at Wedbush Securities. “TV networks really can’t do that. They can’t just turn over a channel for 18 hours to a brand.”

That’s especially important as children increasingly gravitate toward tablets and smartphones instead of dolls and action figures, analysts said. Traditional toymakers have to scramble to entice kids and their parents, and Disney is simply going where they are.

“We have a mobile, on-demand society,” said Jason Moser, toy analyst at the Motley Fool. “Companies are utilizing technology in such a way that they can meet consumers on their own terms and their own timeline.”

With YouTube, Disney can harness the growing appeal of unboxing videos, in which YouTube personalities remove gadgets, clothes or toys from their packaging and sometimes give a quick initial review.

YouTube said 1 in 5 users admits to having watched an unboxing video. Eighteen of the top 100 most-watched channels on YouTube globally are focused on toys and toy unboxings, attracting 8.1 billion views in the first quarter of 2015, according to Tubefilter.

“Children love watching them,” said Jim Silver, editor in chief of toy review website TTPM.

The most popular toy unboxers on YouTube, with handles such as DisneyCarToys and DC Toys Collector, rake in substantial revenue as viewers watch ads, Silver said. YouTubers have varied styles: Some show only the hands with voice narration, while others rely heavily on the charisma of the unboxers themselves.

“It’s almost like watching a show,” Silver said.

Josh Silverman, executive vice president of global licensing at Disney Consumer Products, said the company went the YouTube route partly because the unboxing phenomenon is “huge.”

“It’s grown exponentially over the past few years,” he said. “It’s the perfect opportunity and marriage for us to take these Star Wars products and connect directly to fans.”

Disney’s digital marathon, which can be viewed on the Star Wars YouTube channel, kicks off in Sydney, Australia, on the morning of Sept. 3 (which, in Burbank time, is the afternoon of Sept. 2). A family of YouTube stars, known as Bratayley, will unwrap the first toy on live stream. That will be followed by other unboxings, staggered over the 18-hour stretch, from 13 other digital personalities, speaking their native languages, in cities including Tokyo, Paris, New York and Rio de Janeiro.

In between, Disney will air other content, including observations from two hosts based at YouTube’s sprawling Los Angeles production studio. They will show off the same toys as the YouTubers and also will chat with guest stars such as writers of the Star Wars books. Movie trailers and footage from recent Star Wars events will also air.

The entire 18-hour event will also be streamed on Disney-owned ABC’s website and mobile app. In addition, “Good Morning America” will broadcast the unboxing in New York live on its show.

The online showcase concludes in San Francisco at Lucasfilm with an expanded lineup of Star Wars merchandise such as apparel and accessories.

Then, as Sept. 4 begins, retailers such as Wal-Mart, Toys R Us and Target will open with shelves stocked full of Star Wars merchandise. The power of the Star Wars franchise should translate into good sales on the new product line, regardless of how the YouTube endeavor goes, analysts said.

Disney is smart for trying to carve out another way to reach potential customers, analysts said, but there is a trade off. Although the company will be able to reach a global audience, they will likely attract a narrower demographic: kids who like unboxing videos and hard-core Star Wars fans.

“This is definitely an effort to go for that generation that didn’t grow up with Star Wars and is less familiar with it,” Moser said. “They are reaching out to a much smaller window, plus the die-hard enthusiasts.”

The YouTube personalities come from the network of Maker Studios, the digital media company that Disney bought last year for at least $500 million. The company, which is behind online hits such as “Epic Rap Battles of History,” is one way Disney is trying to its reach younger viewers.

Chris M. Williams, Maker’s chief audience officer, said toy-related Maker content generates 1.5 billion views a month, mostly on YouTube.

“Many of these artists got started by being fans themselves,” he said. “That is extraordinarily compelling to audiences. They see it’s made for them.”

The latest installment of the Star Wars saga won’t premiere until Dec. 18., nearly four decades after the Star Wars brand began in 1977 with the first Harrison Ford-starring film. In addition to the six movies, waves of merchandise have kept the George Lucas space opera alive and also served to introduce the franchise to new generations of film buffs.

Disney — which acquired “Star Wars” producer Lucasfilm in 2012 — is expected to expand the brand with the same merchandising zeal that has spun hit films such as “Frozen” into billion-dollar franchises. Disney’s products generate $40 billion plus from licensed merchandise sold each year at retailers.

Roughly three years after the Lucasfilm deal was announced, Disney’s strategy for the company is coming into focus. Besides a slew of films — this year’s “Star Wars: The Force Awakens” will be followed by several planned sequels and spinoffs — the company has worked to integrate the franchise across its businesses.

At the company’s forthcoming theme park and resort in Shanghai, for example, visitors will be able to tour a Star Wars-themed attraction. Star Wars Launch Bay will allow guests at Shanghai Disney Resort to meet the heroes of the space opera, tour set pieces and view props from the latest film.

Also, this month at the company’s D23 Expo in Anaheim, the company announced it would build 14-acre “Star Wars”-themed areas for Disneyland in Anaheim and Disney’s Hollywood Studios in Orlando, Fla.

Even if Disney has a huge hit with YouTube, many experts are skeptical that the same formula can be repeated to introduce entirely new franchises or other, less-beloved brands.

“If they were introducing a new science fiction franchise, that would be different,” Wedbush analyst Dix said. “Why would anyone by interested in watching?”
___
(Reporter Daniel Miller contributed to this story.)

Photo: Stars Wars means tie-ins. R∂lf Κλενγελ via Flickr

At American Apparel, New CEO Aims To Bring Order, Culture Shift

By Shan Li, Los Angeles Times (TNS)

LOS ANGELES — The alterations underway at American Apparel Inc. are evident in its advertising. Gone are the half-naked young women splayed on billboards and print ads. These days, the models tend to be fully dressed in the company’s hip basics.

The salacious images were part of the freewheeling style of founder Dov Charney. His tenure was also marked by loose corporate operations, financial losses, and sexual harassment allegations that sparked a board revolt and Charney’s ouster last year.

American Apparel ads will still have an edge — some incorporating social issues such as gay rights, bullying, or women’s equality — but they won’t be “sexual for sexual’s sake,” new Chief Executive Paula Schneider said in an interview with the Los Angeles Times.

Schneider, a longtime clothing executive who took over in January, hopes to transform more than the advertising at the Los Angeles clothing firm, which employs nearly 10,000 people and operates almost 250 stores. In nearly five years, American Apparel has lost $310 million. Its debt totals more than $200 million.

Beyond toning down the oversexed image, Schneider aims to install a more grown-up structure and culture to replace Charney’s eccentric micromanagement. Schneider is focused on the boring-but-important details of hiring — and empowering — experienced managers and drawing up evaluation protocols and organizational charts.

Schneider, 56, has spent decades at clothing retailers and manufacturers. She has held senior executive positions at retailers such as BCBG Max Azria and Laundry by Shelli Segal. At BCBG Max Azria, she helped steer the company to profitability, and at Warnaco Group, she aided in a corporate restructuring.

Since arriving at American Apparel in January, Schneider has sought to order the corporate chaos without sacrificing the brand’s soul.

“It’s getting everybody in their lane and understanding we have a common goal,” she said. “There is tremendous energy here; there is tremendous love for the brand; there are tremendous ideas. It’s just a matter of saying: What do we do with them? How do we harness it? What do we do to move it down the road?”

Schneider’s management style is sharply different from Charney’s, who often inserted himself into the smallest details. Charney handpicked models for ads, selected fabrics, and even cleaned retail stockrooms.

American Apparel’s new chairwoman, Colleen Brown, said Schneider was tapped in part for her ability to instill organization.

Under Charney, the company didn’t have many of the formal controls common at public companies, she said. There was no standard method for performance reviews, for example, and department heads had no regular meetings.

“The really easy things are hard at American Apparel,” Brown said. “Just basic systems and processes that allow you to make decisions easily.”

Schneider has a track record of boosting ailing companies, Brown said.

“She has driven several turnarounds in her career, and that was an important thing to consider when we were looking for a CEO,” she said. “The company has not made money for a while, so we needed someone who could get a strategic plan and put it into place.”

Schneider still has until April fifth before she is required to present her operational plan to the board, according to a security filing that detailed her contract. Barely two months into the job, Schneider has already started making changes.

One example: She has bulked up the planning department, which orders raw materials to keep the factories humming. With better forecasting, the company can save money by buying more yarn overseas or can ship supplies and products by ground instead of air, Schneider said.

Another focus is design and marketing.

Last month, the company fired its two longtime creative directors, Iris Alonzo and Marsha Brady, both Charney allies. Schneider said the firings weren’t a result of poor performance but merely a shift in creative direction.

“We have a lot of really talented people, but young,” Schneider said, adding that some lack the formal training and education typically found at a major manufacturer.

She has already made product changes too.

Fewer styles will be offered in the fall season, Schneider said. Instead the company will concentrate on offering styles in more color variations, a move to avoid a problem that analysts say plagued American Apparel: offering too many products, many that didn’t sell well.

E-commerce will also get a close look. Among the new hires is American Apparel’s first chief digital officer, who will be in charge of improving the online shopping experience and boosting digital sales, Schneider said.

The company currently gets only 15 percent of its sales from e-commerce. By comparison, teen retailer Abercrombie & Fitch’s online side accounted for 20.2 percent of net sales in the first three quarters of its 2014 fiscal year.

“When we look at it compared to our peers, there is a lot more room to grow,” Schneider said.

Each department was also tasked with coming up with its own budget for the year, in sharp contrast to the “top down” approach of the past, she said.

Schneider said she has no choice but to push decision-making power down through the ranks.

“When you have a founder that knows everything about the business…you come in and you are not that person,” she said. “You have to have some people in each area that are going to be the leaders in order to function.”

Ilse Metchek, president of the California Fashion Association, said Schneider may struggle to win over employees and institute a more traditional corporate culture.

“Everyone there was hired by Dov — and everyone is still probably loyal to Dov,” she said.

One core feature of American Apparel — its made-in-USA model — will remain firmly in place.

Walking through the factory filled with the steady hum of sewing machines, Schneider marveled at the scale of the operations, in an 800,000-square-foot salmon-colored building in downtown Los Angeles.

Echoing Charney, Schneider bragged about the company’s ability to quickly whip up new garments and get them to its shops.

The company can get a new product into stores on a Thursday and know if it’s a strong seller by Monday, she said. Then the local factory can immediately respond.

“We can make that same version, we can make it in colors, we can make it longer, shorter, long sleeved, short sleeved, and we can put it into our stores in a week,” she said.

Schneider compared American Apparel’s main factory, which employs more than 3,000 cutters, sewers and other workers, to “a city.”

The facility also includes an on-site medical clinic and masseuses that offer free massages. The operation is so vast that Schneider said she prefers to think of slices of the company individually.

“Otherwise,” she quipped, “I’d be up all night.”

Photo: Mark Boster via Los Angeles Times/TNS

Biofuels May Be Worse For Environment Than Gasoline In Short Run, Study Says

By Shan Li, Los Angeles Times

LOS ANGELES — Biofuels are known as an environmentally friendly alternative to gasoline. But two recent studies call into question how green they really are.

According to one study published in the journal Nature Climate Change, fuels derived from corn stover — or the leftover corn leaves and stalks following a harvest — can actually emit more carbon dioxide than gasoline.

Researchers found that removing the corn scraps for fuel ended up releasing about 7 percent more carbon dioxide than regular gasoline over the short run.

Over the long haul, biofuels are still better for the environment than gas, the report said. However, the study concluded that these kinds of biofuels should not qualify as renewable fuels as defined by the 2007 Energy Independence and Security Act.

In another strike against biofuels, a separate report from the Intergovernmental Panel on Climate Change found that some biofuels release indirect emissions — including those from crops planted and harvested — that can contribute to total emissions that are worse than those of gasoline or diesel fuels.

Those reports have amped up debate among environmentalists, lawmakers and the energy industry about the relative benefits of biofuels, which have received millions in federal funding.

Photo via Wikimedia Commons

Investors More Open To Business Pitches From Handsome Guys, Study Says

By Shan Li, Los Angeles Times

The George Clooneys and Jon Hamms of the world have an easier time getting a table at a crowded restaurant or arguing for a promotion. Turns out, a pretty face also helps when pitching investors on business ideas.

Handsome men are much more likely to convince investors to back their business proposals, according to a new study. And men in general tend to do better than women at getting financing for their ideas.

Researchers from the business schools at the Massachusetts Institute of Technology, Harvard University and the University of Pennsylvania took a look at business pitches in real life at “entrepreneurial pitch competitions” and also in controlled experiments where men and women presented the same content.

“Attractive males are particularly persuasive,” the study concluded.

The study, published online by the journal Proceedings of the National Academy of Sciences, also found that the attractiveness quotient does not hold for female entrepreneurs. Women — no matter what they looked like — have a tougher time getting investor support.

“Investors prefer pitches presented by male entrepreneurs compared with pitches by female entrepreneurs,” the study said. “Physical attractiveness did not matter among female entrepreneurs.”

Photo: Tax Credits via Flickr

U.S. Judge Sides With Chevron In $9.5 Billion Ecuador Case

By Shan Li, Los Angeles Times

A U.S. judge ruled in favor of Chevron Corp. and declared that a $9.5 billion judgment in Ecuador against the oil giant for environmental damage was obtained by fraud and racketeering.

U.S. District Judge Lewis Kaplan in Manhattan ruled Tuesday that the 2011 judgment against the San Ramon, California, company on behalf of thousands of villagers living in the Lago Agrio region of the Amazon rain forest was procured by “corrupt means,” including coercion and money laundering.

Kaplan said that Steven Donziger, a New York lawyer, along with attorneys in Ecuador, poisoned the case by promising money to a judge for a favorable ruling and submitting faulty evidence, among other actions.

The judge barred Donziger and two Ecuadorean co-defendants from profiting from the judgment or collecting money via courts in the United States. That could complicate efforts to enforce the judgment in other countries besides the U.S.

“It is distressing that the course of justice was perverted,” Kaplan wrote in his ruling.

The original multibillion-dollar judgment stretches back to a 2003 lawsuit filed on behalf of Ecuadorean villagers for years of environmental damage stemming from oil operations in the area by Texaco, which Chevron later purchased.

In 2011, a judge in Ecuador slapped an $18 billion judgment against Chevron. In a later ruling, the verdict was upheld but the judgment was reduced to $9.5 billion.

Chevron said there was “overwhelming evidence of fraud” in the original judgment and lauded the new ruling as a “resounding victory for Chevron and our shareholders.”

“Any court that respects the rule of law will find the Lago Agrio judgment to be illegitimate and unenforceable,” the company said in a statement Tuesday.

Donziger said he plans to appeal the decision, which he deemed “wrong on the law and wrong on the facts.”

He said the judge was influenced by “implacable hostility” toward him, the country of Ecuador and the Ecuadorean villagers.

“Nothing in Judge Kaplan’s ruling will prevent my clients from pursuing the judgment’s enforcement in other countries,” Donziger said in a statement.

Photo: Rainforest Action Network via Flickr

Bill Gates Predicts Almost No Poor Countries Left By 2035

By Shan Li, Los Angeles Times

LOS ANGELES — Billionaire and former tech mogul Bill Gates predicts that there will be almost no poor countries left in the world by 2035.

Almost all nations will be either lower-middle income or wealthier, and most will have surpassed the 35 countries that are currently defined by the World Bank as low-income, Gates says in his annual letter for the Bill and Melinda Gates Foundation.

In the letter, Gates and his wife try to dispel what they say are myths about global poverty that hinder development: Poor countries are destined to stay that way, foreign aid is not helpful and saving lives leads to overpopulation.

The first myth, about poverty-stricken countries staying down, has been negated by the jumps in income of countries around the world, the letter says. Gates points out that since 1960, China’s real income per person has gone up eightfold, India’s has quadrupled, and Brazil’s has almost quintupled.

“In the next two decades, desperately poor countries will become the exception rather than the rule,” Gates wrote. “Billions of people will have been lifted out of extreme poverty.”

The billionaire also says that critics of foreign aid tend to cite examples about waste and ignore the overall good that such aid has delivered to people in need through goods and services.

As for the Mathusian notion that saving lives ultimately will lead to overpopulation, Melinda Gates writes that countries with high child-mortality rates — such as Afghanistan — actually have high birth rates as well. Families in nations where children tend to survive to adulthood usually decide to have fewer kids, she said.

Photo: Batmoo via Flickr