(Bloomberg) -- Angry Birds creator Rovio Entertainment Oyj wants to even out the bumps in licensing sales and turn its scowling fowls into a dependable, long-term brand, starting with a second animated feature film this August.
Ahead of “The Angry Birds Movie 2,” the Finnish mobile gamemaker has revamped its licensing program, extending deals with merchandise producers to two or three years from much shorter agreements previously. Rovio plans a regular flow of new content, said Simo Hamalainen, head of brand licensing.
“We want continued, steady activity that is not focused on one single event,” Hamalainen said in an interview at Rovio’s seaside headquarters in Espoo, Finland. “Our licensing aims at making Angry Birds an evergreen brand and we have now the strongest content plan we have ever had, and it spans several years, which is new for us.”
For Rovio’s investors, it looks like all the eggs are in one basket. The gamemaker has failed to repeat the success of its bird brand, and its shares have slumped by half since an initial public offering in 2017. The stock rose 1.3 percent to 6.07 euros at 10:45 a.m. in Helsinki on Monday.
The revenue Rovio expects from the second movie won’t be as much as from the first, which led to proceeds of 36 million euros ($41 million) for the company in 2017, because the production model is different.
As the new movie starring Peter Dinklage as the voice of Mighty Eagle hits theaters, shops in roughly 100 countries will already be stocked with merchandise from plush toys to T-shirts and from sandals from Crocs Inc. to Chupa Chups lollipops. While it makes for a “huge” licensing event for the company, Rovio needs other opportunities to monetize Angry Birds and keep the flightless creatures top of mind with children and their parents.
Rovio’s licensing revenue has fluctuated heavily. The studio last year made 30.8 million euros from consumer products and content licensing, or about 11 percent of total revenue, down from 30 percent in 2014. The focus is now to even out those bumps.
After the movie, Rovio plans to bring fans 10-year anniversary goods, and next year, a TV animation with dozens of 15 to 30-minute episodes.
The brand licensing industry, the plumbing that links the retail and entertainment industries, generates $270 billion in annual retail revenue, and grew more than 12 percent over four years to 2017, according to the International Licensing Industry Merchandisers’ Association.
For industry participants, it’s a complex web of contracts and a lot of back-and-forth on product design. For Rovio, that entails thousands of approval rounds just for the movie-related goods, Hamalainen said.
To cut complexity, Rovio has revamped the way it licenses its brand, moving away from emails and excel sheets to specialist software to reduce the time-to-market for products. It also ensures that unapproved or inferior-quality products don’t slip through the process to the shops and tarnish its reputation, said Hamalainen.
“Quality is absolutely central to us,” Hamalainen said. “That’s where we have the most to lose and the most to gain.”
(Updates with share trading in fourth paragraph.)
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