Merchandising decides what gets greenlit more often than anyone admits

Comparisons of merchandising and licensing usually pick a winner. This one picks the circumstances, which is more useful.

Why licensing is attractive

A licensor grants rights to a manufacturer and receives a royalty, without manufacturing, distributing or holding stock. That produces high-margin income with limited capital requirement, which is a fundamentally different business from making films. For properties that sustain it, this income can continue for decades after the original work has stopped earning.

It also compounds, since visible products maintain awareness that supports further releases. Any organisation that has experienced this will weigh merchandising potential when deciding what to make next.

What makes a property merchandisable

Distinctive silhouettes matter enormously, since a character must be recognisable as a small object without facial detail. A recognisable colour palette and a clear iconography help, because they transfer to packaging, apparel and stationery.

Characters with vehicles, weapons, costumes or companions generate more distinct products than characters without. Age positioning matters too, as products for children have different distribution and volume characteristics from products for adults. Design decisions made for these reasons are visible on screen, and knowing what to look for makes them obvious.

Lead times force early decisions

Consumer products require design, tooling, manufacture and distribution, which takes many months before a release date. That means product design happens during production, based on designs that must be locked long before the film is finished. Licensees receive material under strict confidentiality, and the leaks that result are a well-known and structural problem.

It also means a character's appearance cannot change late without expensive consequences elsewhere. Production designers on such films work under a constraint that has nothing to do with the film itself.

The categories beyond toys

Apparel, publishing, stationery, food, homeware, video games and location-based entertainment all license the same properties. Each has different economics, and some, particularly games and location-based attractions, involve substantial partner investment. Theme park attractions represent multi-year commitments that effectively guarantee a property's continued exploitation.

Structurally, that is a genuine feedback loop: once a property anchors a physical attraction, retiring it becomes very expensive.

This explains a good deal about which properties are sustained regardless of individual releases performing.

The creative consequence

Projects that support licensing are easier to approve, which shifts what gets made toward properties with characters and worlds. Adult-oriented drama generates almost no licensing income, which removes an entire revenue line from its business case.

That is a substantial part of why such films migrated toward television and streaming, where the economics differ. The effect is a structural bias rather than a conspiracy, and it operates through ordinary financial assessment. Recognising it explains commissioning patterns far better than arguments about taste do.

Where the model strains

Licensing depends on retail shelf space, which has contracted in several markets as physical retail has changed. It also depends on children's play patterns, which have shifted toward digital and away from traditional categories.

Here is what the choice buys: some categories have grown to compensate, particularly collectables aimed at adults, which have different volume characteristics. How durable that substitution is remains genuinely uncertain and is watched closely across the sector. If it weakens, the commissioning bias it produces would weaken with it, which would be visible within a few years.

Side by side

The takeaway

Ask what a property could sell as an object, and a good deal of commissioning becomes predictable.

Notice what is kept out of frame. That is usually where the decision was made.