Hasbro 2010 Annual Report Download - page 20

There is no guarantee that:
• Any of our brands, products or product lines will achieve popularity or continue to be popular;
• Any property for which we have a significant license will achieve or sustain popularity;
• Any new products or product lines we introduce will be considered interesting to consumers and
achieve an adequate market acceptance;
• Any product’s life cycle or sales quantities will be sufficient to permit us to profitably recover our
development, manufacturing, marketing, royalties (including royalty advances and guarantees) and other
costs of producing, marketing and selling the product; or
• We will be able to manufacture, source and ship new or continuing products in a timely and cost-
effective basis to meet constantly changing consumer demands, a risk that is heightened by our
customers’ compressed shipping schedules and the seasonality of our business.
In developing new brands, products and product lines, we have anticipated dates for the associated
product introductions. When we state that we will introduce, or anticipate introducing, a particular product or
product line at a certain time in the future those expectations are based on completing the associated
development, implementation, and marketing work in accordance with our currently anticipated development
schedule. Unforeseen delays or difficulties in the development process, significant increases in the planned
cost of development, or changes in anticipated consumer demand for products may cause the introduction date
for products to be later than anticipated or, in some situations, may cause a product introduction to be
discontinued.
Delays or increased costs associated with the development and offering of entertainment media based
upon or related to our brands, or lack of sufficient consumer interest in such entertainment media, can
harm our business and profitability.
As part of our strategy of offering immersive brand experiences, we look to offer consumers the ability to
enjoy our brands in as many different forms and formats as possible. Entertainment media, in forms such as
motion pictures and television, can provide popular platforms for consumers to experience our brands and the
success, or lack of success, of such media efforts can significantly impact demand for our products and our
financial success.
The success of our products is often dependent on the timelines and effectiveness of media efforts.
Television programming, movie and DVD releases, comic book releases, and other media efforts are often
critical in generating interest in our products and brands. Not only our efforts, but the efforts of third parties,
heavily impact the launch dates and success of these media efforts. When we say that products or brands will
be supported by certain media releases, those statements are based on our current plans and expectations.
Unforeseen factors may increase the cost of these releases, delay these media releases or even lead to their
cancellation. Any delay or cancellation of planned product development work, introductions, or media support
may decrease the number of products we sell and harm our business.
Similarly, if our and our partners’ media efforts fail to garner sufficient consumer interest and acceptance,
our revenues and the financial return from such efforts will be harmed. In 2009 we entered into a joint venture
with Discovery Communications, Inc. (“Discovery”). Through that joint venture, we launched a children’s and
family entertainment channel called THE HUB in October of 2010. In connection with this joint venture
effort, we also developed a wholly-owned studio, called Hasbro Studios, which is responsible for developing
and producing television entertainment media, primarily based on our brands. The television programming
developed by Hasbro Studios is offered in the United States on THE HUB and will be distributed on other
networks internationally. THE HUB is competing with a number of other children’s television networks in the
United States for viewers, advertising revenue and distribution fees. There is no guarantee that THE HUB will
be successful. Similarly, Hasbro Studios’ programming distributed internationally competes with programming
by other parties. Lack of consumer interest in and acceptance of THE HUB, programming appearing on THE
HUB, other programming developed by Hasbro Studios, and products related to that programming could
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