Hasbro 2015 Annual Report Download - page 13

Franchise Brands are Hasbro’s most significant owned or controlled properties which we believe have the
ability to deliver significant revenues and growth over the long-term. Our seven Franchise Brands are LITTLEST
PET SHOP, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH and
TRANSFORMERS. As reported, net revenues from Franchise Brands declined 2% in 2015 but grew 31% and
15% in 2014 and 2013, respectively. Absent the impact of foreign currency translation in 2015, net revenues
from Franchise Brands grew 7% in 2015 compared to 2014. Furthermore, in 2015, 2014 and 2013, Franchise
Brands were 52%, 55% and 44% of total net revenues, respectively.
Challenger Brands are those owned or controlled Hasbro brands which have not yet achieved Franchise
Brand status, but which the Company believes have the potential to do so over time with investment and further
development. Challenger Brands includes BABY ALIVE, FURBY, FURREAL FRIENDS, KRE-O,
PLAYSKOOL and PLAYSKOOL HEROES.
Hasbro continues to revolutionize traditional game play through its strong portfolio of Mega Gaming
Brands, digital integration and the introduction of new gaming brands and play experiences. Mega Gaming
Brands specifically include CONNECT 4, ELEFUN & FRIENDS, JENGA, THE GAME OF LIFE,
OPERATION, SCRABBLE, TRIVIAL PURSUIT and TWISTER; however, Hasbro’s games portfolio also
includes many other well-known game brands. Games offerings include face to face, trading card and digital
game experiences played as board, off-the-board, digital, card, electronic, trading card and role-playing games.
Partner Brands include those licensed brands for which Hasbro develops products. Significant Partner
Brands include MARVEL, including SPIDER-MAN and THE AVENGERS, STAR WARS, DISNEY‘S
DESCENDANTS, JURASSIC WORLD, and SESAME STREET. 2016 marks the first year of our license
agreement with The Walt Disney Company (“Disney”) to market DISNEY PRINCESS and FROZEN small and
fashion doll product lines. Partner brands MARVEL, STAR WARS, DISNEY’S DESCENDANTS, DISNEY
PRINCESS and FROZEN are all owned by Disney.
In 2015, Hasbro sold product supported by three major motion picture releases by our partners. These major
motion picture releases comprised THE AVENGERS: AGE OF ULTRON, JURASSIC WORLD and STAR WARS:
THE FORCE AWAKENS. The financial impact of these major motion picture releases on our results is discussed
in detail in the management’s discussion and analysis section of this report. In 2016, Hasbro expects to sell
product lines supported by the following expected theatrical releases from Disney: CAPTAIN AMERICA: CIVIL
WAR in May 2016, MOANA in November 2016, and ROGUE ONE: A STAR WARS STORY in December 2016.
We also expect to sell products related to the expected Dreamworks Animation theatrical release of TROLLS in
the fall of 2016. Aside from these major brand categories, we continue to seek growth opportunities by
imagining, inventing and igniting new or archived brands and by offering engaging branded-play experiences.
Storytelling and Other Entertainment Initiatives
Our brand blueprint focuses on reinforcing storylines associated with our brands through several outlets,
including television, motion pictures and digital media.
As part of our brand blueprint, we seek to build our brands through entertainment-based storytelling. Hasbro
Studios LLC (“Hasbro Studios”) is our wholly-owned production studio, which is responsible for brand-driven
storytelling across mediums, including the development and global distribution of television programming
primarily based on our brands. This programming currently airs in markets throughout the world. Domestically,
Hasbro Studios primarily distributes programming to Discovery Family Channel (the “Network”) which is a joint
venture between Discovery Communications, Inc. (“Discovery”) and ourselves which operates a cable television
network in the United States dedicated to high-quality children’s and family entertainment and educational
programming. Beginning in 2015, Hasbro Studios began distributing certain programming domestically to other
outlets, including Cartoon Network. Internationally, Hasbro Studios distributes to various broadcasters and cable
networks. Lastly, Hasbro Studios distributes programming globally on various digital platforms, including
Netflix and iTunes.
During 2014, we formed Allspark Pictures, Hasbro’s film label, which is producing both animated and live
action theatrical releases based on our brands. The Company’s storytelling initiatives support its strategy of
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