Why do animated action shows need to sell tons of merch to stay afloat? Isn’t the ad revenue enough?

Submitted by sgavary t3_yzgjvr in television

I hear about a lot of animated action shows that are canceled due to low toy sales, however isn’t the ad revenue more than enough? I mean worst case scenario, the show will cost 2 million per episode, that’s actually less than a lot of other shows like Friends, and Yellowstone, which don’t rely on merch to continue funding. Is there a deeper reason for this?

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mugenhunt t1_iwzrjvq wrote

From a network side of things, if I could choose between an animated action show that is getting money from advertising and from merchandising, or one that is only getting money from advertising, I know which one I'll pick. From a network point of view, it's the logical choice to cancel the show that isn't making merchandise sales on top of the advertising money to free up room for a new show that might do better in that regard.

From an artistic point of view that's awful, but if you're looking at things from just the financial perspective, networks have limited amount of resources and they want to maximize the profit they make from those resources.

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TheSeventhAnimorph t1_iwzzw3l wrote

And then there's Disney Channel, which doesn't even try to make merchandise for most of their shows.

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OneGoodRib t1_ix0xqzl wrote

And don't they still not have ads on Disney Channel other than for other Disney things?

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Bobby_Marks2 t1_ix2t0gg wrote

That's the point. Disney Channel is just a place for Disney to capture the audience into the ecosystem. You watch Disney Channel, and you're likely to go see Disney movies in theater. You watch Disney Channel, then you go to Disneyland which in turn drives you to go buy Disney merch and see Disney movies. You see Disney movies, then you go to Disney Channel to watch bonus content and spin-offs and sequels. Disney+ is doing all of this now.

Granted, they do produce merch for their successful content. Mickey Mouse Clubhouse, Hanna Montana, etc. all got plenty of merch out there - we just don't see it because it doesn't have broad enough appeal to sit on Walmart shelves next to Marvel and Star Wars and Pokemon.

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sgavary OP t1_iwztjey wrote

But isn't there kind of a trade off, like you lose money in merch sales, but you'll get more money with increasing viewership?

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mugenhunt t1_iwztquk wrote

The big thing is that you would need to have a massive increase in viewership to balance out the loss of merchandise sales, and that rarely happens on a large enough scale for the network to feel that keeping the show alive is worth it.

Merchandise sales are huge, and advertising only goes so far.

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sgavary OP t1_iwzxwx6 wrote

Then how are shows like Yellowstone able to thrive off of it when every episode costs 3.5 million?

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mugenhunt t1_iwzyeam wrote

Different expectations for different genres of shows. No one is expecting a drama aimed at adults to be selling lots of toys.

It's not that a show can't make enough money to support itself through advertising or streaming subscription fees alone. But that if a network has to choose between paying for a show that isn't selling a lot of merchandise, and one that is, they will pick the one that makes them more money.

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CableCoShow t1_ix150vc wrote

A show or film that sells a lot of merch will dwarf the ad or box office revenue. Disney discovered this after Pixar had a few hits and they shifted their strategy to put out stuff that would sell merch. The box office from Pixar's biggest hit is like 1/10th or maybe even 1/100th of what they make in consumer products. That's why they only make Pixar, Disney Animation, Marvel, and Star Wars movies these days. Those films sell merch.

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trialrun1 t1_ix2b72a wrote

You throw in merch sales, and Cars is the biggest Pixar movie of all time. It's not even close.

Marvel's Spider-man deal with Sony was basically them realizing that they made so much money on merchandise every time a Spider-Man movie came out that the actual prophet on the movie itself is kinda irrelevant. So Sony gets to keep Spider-man rights forever as long as they put out a Spider-Man movie every three years or something like that.

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Bobby_Marks2 t1_ix2t70m wrote

>You throw in merch sales, and Cars is the biggest Pixar movie of all time. It's not even close.

Toy Story still has the edge.

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trialrun1 t1_ix69g4g wrote

Last time I checked was pre Toy Story 4 so it's totally possible that Toy Story as a franchise has overtaken Cars. I know that each Toy Story has out grossed the previous one in terms of toy sales while I think it goes the other way for Cars and the first Cars movie might still be the highest grossing individual movie in terms of merch for the company.

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Agent_Angelo_Pappas t1_ix30bdp wrote

The core demographic for these animated shows isn’t all that discerning. Most kids aren’t looking for complex storylines, character depth, and multi-layered dialogue, they’re fine with cheap jokes and seeing things hit other things

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qtx t1_ix3q5ib wrote

Not a lot of people watch cartoons. It's a niche genre. It just seems like it's bigger than it is because of the people you surround yourself with.

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aw-un t1_ix1tol2 wrote

Often times, the network is not the one benefitting from the merchandising (unless the show is made in house)

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tf2hipster t1_ix0ahpl wrote

Any “animated action show” that is cancelled due to low toy sales isn’t an “animated action show”. It’s a commercial for toys.

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Jaguarluffy t1_ix0dmxq wrote

friends and yellowstone had far higher viewership than any animated show likely ever will

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jogoso2014 t1_iwzs6uv wrote

They’re probably co-productions with toy manufacturers.

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admiralvic t1_ix2ppq6 wrote

> Why do animated action shows need to sell tons of merch to stay afloat? Isn’t the ad revenue enough?

There are a lot of reasons, many of which I haven't seen mentioned.

> the show will cost 2 million per episode, that’s actually less than a lot of other shows like Friends, and Yellowstone, which don’t rely on merch to continue funding.

First and foremost, the audience size is completely different, both in viewership and range. Since you brought up Friends, the viewership for the final season averaged 53 million and basically never dipped below 30 million a season. Since you mentioned Young Justice, I'll use that for a kids show. Unfortunately, numbers are limited, but I can find numbers mostly in the 1 to 2 million range, which is also about where Sym Bionic Titan was as well. So, just in terms of views Friends had at least 15 times more viewers. In addition to that, an episode of Friends in the final season, which is about 25 times more views, was only 5 times more than your 2 million estimate. This basic math shows you how much more value the series alone had.

From there, range is massive. There are laws and other things that determine what you can advertise with a children's program. You simply aren't going to see depression meds, Adam & Eve, and equally inappropriate commercials with an episode of He-Man. Not only do laws prevent certain things, there are a lot of companies that see no value. Would you market a car if almost every viewer is a kid? How about HR Block? R rated movie? Shows also tend to have a lean, so even if girls watch He-Man, and boys check out My Little Pony, odds are you'll see ads that make sense for the average viewer. So, even they have views, the slots are worth a lot money. You have like 20 companies that might air a commercial, fighting for channels with over a hundred hours to air things with, fighting for the same group of people.

Finally, as others have said, some cartoons are actually a commercial, along with others getting supplemental value. Young Justice wasn't cancelled because of poor sales per se, it was cancelled because Mattel, who had the license, withdrew their financial support after failing to make enough money off their toys.

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leuno t1_ix04cjo wrote

Sometimes the toy idea comes first and the show comes second. And if they go to the trouble of making the toys in the first place, that's a serious investment as making the pipeline for their production is very expensive.

So if the toy tanks, that's a lot of wasted money, and the show could be replaced by one that both gets good viewership and also sells toys, and that's the real goal. If the network never bothered with merch and the show did well, then that might be fine, but it will still be preferable to replace it with something that can sell toys. More revenue streams per idea is better, and at the end of the day these people are out to make money for their investors, not good TV.

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PloppyTheSpaceship t1_ix0uuqd wrote

$2 million per episode? I'm sure a lot of animated shows would kill for that money.

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reddit455 t1_iwzv0yq wrote

>I hear about a lot of animated action shows that are canceled due to low toy sales,

such as?

>Friends, and Yellowstone, which don’t rely on merch to continue funding. Is there a deeper reason for this?

how much $$ does super mega corp pay for a 30 second television ad in the middle of Friends? (tons of people going to buy the beer they saw an ad for anyway)

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how much $$ does super mega TOY COMPANY pay for a 30 second television ad in the middle of Scooby reruns? (toys don't sell like beer)

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sgavary OP t1_ix02kuw wrote

Young Justice (before the revival), Sym Bionic Titan, Pirates of Dark Water, etc.

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Tyster20 t1_ix0ax6e wrote

Animated Shows made in the 90s were just 30 min toy commercials.

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sgavary OP t1_ix0k3tq wrote

Only Pirates of Dark Waters was a 90’s cartoon

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Bobby_Marks2 t1_ix2tipu wrote

The broadcast era was quite different for this stuff. Networks were looking for shows that would maximize profit for highly unpopular time slots. If it wasn't primetime, it needed a gimmick, or else it needed to be the cheapest thing to produce that television had ever seen, or else it needed to capture a small market very intensely. That's how daytime TV gave us talk shows, Judge Judy, soaps, and kids shows that sold merchandise.

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tocilog t1_ix5wnu2 wrote

Speaking of TV ads on the Disney channel. I've been on business travel the past two weeks and am watching a lot of cable TVs. I think I could count in one hand the number of different commercials the Disney channel has. There was even an ad break where they showed the same Wakanda Forever Lego set 3 times! In one ad break! Kinda makes me wonder if these few advertisers are paying a premium or if there's just not a lot buying ad spots for regular programming anymore.

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OneGoodRib t1_ix0y73b wrote

It's wild that there's this whole "animated shows are made to sell toys" thing when almost every animated show I still enjoy has little to no merchandise for it - and the merch that exists is hard to find. I'm not arguing, I know networks prefer animated shows to sell merchandise, it's just weird that a lot of them then don't have merchandise or barely have any at all, and the stuff they have is incredibly cheap - like so cheap that even though it's affordable I'd bet most parents wouldn't buy it because it's cheap cheap and not just inexpensive.

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Saucelujah t1_ix1jptf wrote

Animated action shows are very expensive ads.

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sgavary OP t1_ix1t315 wrote

Not as expensive as Yellowstone

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aw-un t1_ix1u8rp wrote

No, but Yellowstone also isn’t made with the intent of selling merchandise.

Also, the viewership of Friends in its hay day and Yellowstone absolutely dwarfs any action cartoon.

If the shows you’re referencing (Young Justice, Sym Bionic Titan, Et al) had high viewership, they would continue. The issue is they weren’t pulling in the Ad revenue OR merch sales

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Bonezone420 t1_ix1lry6 wrote

Because capitalism exists on the promise of perpetual and infinite growth, most capitalist entities consider something breaking even to be a waste of resources. Toy sales matter because they're an avenue of profit. If they aren't meeting whatever arbitrary number is set as the acceptable amount to signify growth, then it's a failure. Welcome to capitalism.

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Sochan_Solo t1_ix5gkzw wrote

Do you like money?

Yes?

Do you like having more money by doing literally nothing?

Yes?

Congratulations! You now understand the philosophy behind licensing IP.

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