The movie is a wonderful surprise, cleverly written and executed brick by brick with a visual panache. January 3, 2015 | Lord and Miller's sensibilities are continually clever, and The Lego Movie works hard to gradually deliver surprising payoffs to what seem to be throwaway bits. The Lego Movie has enough wit and wisdom to send a recession-age message to families on the importance of thinking through problems with creativity. As a rule, movies about toys need to be approached with extreme caution; March 3, 2014 | This is truly a movie that children and their parents can both enjoy for different reasons. February 10, 2014 | The Lego Movie: Merely a great film, or the greatest film ever in the history of cinema? February 9, 2014 | So when exactly did the brightly colored building blocks we played with as kids transform into a wildly successful multimedia entertainment platform? On February 7, the Lego Movie stormed theaters and notched one of the top opening weekends ever for a non-sequel animated film.
Outside the cinema, Lego-themed video games and building sets featuring licensed properties have become incredibly popular with both children and adults. The most obvious indicator of the company’s recent success is its new position as the most valuable toymaker in the world. So how did they do it? Some of the success can be attributed to a forward-thinking business model that managed evolve the brand while honoring tradition. But mostly the new Lego is the product of lucrative licensing. Lego’s breakthrough with licensed intellectual property began in 1999 with an agreement to license Star Wars characters and vehicles. Since the closing of that deal, Lego has sold over 200 million Star Wars Lego boxes and negotiated a new deal in 2012 that will allow the company to produce Star Wars themed products until 2022. On the heels of the Star Wars success, Lego smartly committed itself to obtaining licensing arrangements with established brand universes, including Harry Potter, Lord of the Rings, DC Comics, Marvel and Disney.
The move paid off. In 2012, royalty expenses amounted to $263 million while profits reached $4 billion. Licensing intellectual property has been a backbone of the toy business for decades, so why is Lego’s model making such a huge difference to its bottom line? For starters, the screening process for determining which properties Lego licenses is incredibly detailed, and its managers turn down far more licensing opportunities than they accept. By partnering exclusively with brands of wide global appeal, Lego has been able to ensure that the quality of its own brand isn’t diluted via association. Smart property selection helps, but what really sets Lego apart from other toymakers is the way it blends licensed properties with its own style to create what are essentially new properties. As a result, Lego’s Star Wars platform is more than mere reproductions of iconic Star Wars characters and vehicles in Lego form. It has become its own brand, Lego Star Wars. Additionally, many Lego interpretations of classic characters have assumed their own personality, and are often far different than their film or comic book counterparts.
For example, the original Batman is dark and brooding, but Lego Batman is comedic and suitable for children. Lego has also been able to secure separate licensing deals from brands that are themselves fierce competitors. While Warner Brothers and Disney engage in an arms race of intellectual property acquisition to order to bring ensemble blockbusters to the big screen, Lego works behind the scenes knowing that it stands to benefit from the success of both companies. In 2015, Disney will launch Avengers 2: Age of Ultron, and Star Wars Episode VII, two of the most highly anticipated movies of all time. In the same year, WB–who distributed the Lego Movie –will launch the tentatively titled Batman v. Superman, it’s own long-gestating ensemble act featuring a slew of globally recognized comic book characters from the DC comic book universe. With the necessary licensing agreements already in hand, Lego will be ready to capitalize on the success of all three, suggesting an even brighter future for the brightly colored building bricks.
“The Lego Movie” premiered last Friday and made $69 million in its opening weekend, giving it the largest debut of the year so far. Yet only 10 years ago, the company was on the brink of bankruptcy, and such a massive undertaking (let alone a successful one) would have been out of the question. When Jorgen Vig Knudstorp came in as Lego CEO in 2004, the company was struggling to give consumers what they wanted and effectively manage costs. Knudstorp finally brought fiscal responsibility to the Danish toy maker. He also tried something novel — handing over creative direction to the core fans of the brand.Creativity combined with smart management ultimately saved the company. Lego Designer Mark Stafford, a fan who was recruited to help rethink the company’s products, recently took to Reddit to share some of the behind-the-scenes details of the turnaround. When Stafford attended an AFOLCon (Adult Fans of Lego Convention) event in the United Kingdom a couple years ago, he heard Lego’s chief marketing officer Mads Nipper speak about the terrible period between 1999 and 2003.
Stafford writes of it: The LEGO company at that stage had no idea how much it cost to manufacture the majority of their bricks, they had no idea how much certain sets made. The most shocking finding was about sets that included the LEGO micro-motor and fiber-optic kits — in both cases it cost LEGO more to source these parts then [sic] the whole set was being sold for — everyone of these sets was a massive loss leader and no one actually knew. Here’s an image from eBay of one of those motorized kits. The “fiber optics” are actually clear plastic tubes that connect to a battery-operated LED-light pack: This was combined with a decision to ‘retire’ a large number of the LEGO Designers who had created the sets from the late 70′s through the 80′s and into the 90′s and replace them with 30 ‘innovators’ who were the top graduates from the best design colleges around Europe. Unfortunately, though great designers they knew little specifically about toy design and less about LEGO building.
The number of parts climbed rapidly from 6000 to over 12,000 causing a nightmare of logistics and storage and a huge amount of infrastructure expansion for no gain in sales. Products like Znap, Primo, Scala and worst; Galidor all came out of this period. That “Galidor” series he mentions with such disdain was based off a kid’s show of the same name. It involved so many new parts exclusive to each individual set that it resulted in awkward kits that did not comfortably fit into the Lego brand. Here’s one being sold on eBay: The only reason Lego survived during this difficult time was due to the success of the Bionicle and “Star Wars” series. The first “Star Wars” Lego kits launched in 1999 and represented the company’s first foray into licensed series, many of which became integral to the company, as this infographic from Wired illustrates. But Lego could not survive on several big sellers alone. Knudstorp, a former McKinsey consultant, took charge of the foundering company in 2004 and immediately got to work.
Jorgen Vig was put in charge, he made the hard call and made redundancies, they slashed the number of parts down to 6000 (a figure that has grown, but we’re still below well below the 2003 total) — the company reorganized and analyzed all costs, design was finally linked to manufacturing cost and re-focused on the core business of making construction sets. The unprofitable LEGO Computer games business was shut down. (Some of these guys returned to the UK and started their own company called Travellers Tales, they then licensed the LEGO computer game business and freed from LEGO management (who know nothing about computer games) they still make the LEGO computer games today — making good money for all involved — including LEGO.) After consolidation and streamlining, Knudstorp led a charge to put creative control into the hands of hardcore fans of the brand rather than in those of top designers who had skills but lacked a real understanding of Lego’s history. The company held its first designer recruitment workshop in Sept. 2006.
I was one of the 11 designers hired at that time, new managers were in place in the Design building, all developed inside the company, these guys loved the product, they knew the customers as they had grown up playing with LEGO and they had ideas that had been restrained for years. They hired several kid focused design graduates and a few AFOLs (adult fans of LEGO), of which I was one. Stafford is one of the designers of the “Legends of Chima” series, which has an accompanying animated television show. The kits feature plenty of new parts and characters but never venture beyond the classic Lego “feel” that designers like Stafford helped bring back to the brand. Here’s an example, from Lego’s website: For Stafford, the best proof of Lego’s turnaround is captured by the new movie: For me it’s been an absolutely fantastic seven years so far and I see all of the work and principles these guys have created as the message of The LEGO Movie, it’s not just a toy, it’s a tool for creation and imagination and getting LEGO bricks into the hands of kids is the only aim of everything we do.