Hasbro 2012 Annual Report Download - page 37

opportunistically enter into or leverage existing strategic licenses which complement its brands and key strengths
and allow the Company to offer innovative products based on movie, television, music and other entertainment
properties owned by third parties. The Company’s primary licenses include its agreements with Marvel
Characters B.V. (“Marvel”) for characters in the Marvel universe, including SPIDER-MAN and THE
AVENGERS; Lucas Licensing, Ltd. (“Lucas”), related to the STAR WARS brand; and Sesame Workshop,
related to the SESAME STREET characters. Both Marvel and Lucas are owned by The Walt Disney Company.
Sales of MARVEL products are dependent upon the number and quality of theatrical releases in any given year.
In 2012, the Company had significant sales of MARVEL products, particularly from sales of products related to
the movie releases of MARVEL’S THE AVENGERS and THE AMAZING SPIDER-MAN. In 2011, the Company
had sales of MARVEL products, including sales of products related to the Marvel movie releases of THOR and
CAPTAIN AMERICA: THE FIRST AVENGER. In 2010, the Company had significant sales of products related to
the Marvel movie release of IRON MAN 2. During 2013 the Company will market products related to three
expected theatrical motion picture releases based on MARVEL properties, IRON MAN 3, THE WOLVERINE and
THOR: THE DARK WORLD. The Company re-introduced BEYBLADE products, another licensed entertainment
property, during the second half of 2010 and had significant sales in both 2011 and 2012. In addition to offering
products based on licensed entertainment properties, the Company also offers products which are licensed from
outside inventors.
The Company also seeks to build all-encompassing brand experiences and drive product-related revenues by
increasing the visibility of its brands through entertainment such as motion pictures and television programming.
Since 2007, the Company has had a number of motion pictures based on its brands released by major motion
picture studios including three motion pictures based on its TRANSFORMERS brand, one motion picture based
on its G.I. JOE brand and one motion picture based on its mega gaming brand, BATTLESHIP. The Company
developed and marketed product lines based on these motion pictures. The next motion picture based on the
Company’s properties is G.I. JOE: RETALIATION which is scheduled to be released in March of 2013 by
Paramount Pictures. The Company has motion picture projects based on other brands in development for
potential release in future years.
In addition to using motion pictures to provide entertainment experiences for its brands, the Company has
an internal wholly-owned production studio, Hasbro Studios, which is responsible for the creation and
development of television programming based primarily on Hasbro’s brands. This programming is currently
aired throughout the world. The Company is a 50% partner in a joint venture with Discovery Communications,
Inc. (“Discovery”) which runs THE HUB, a cable television network in the United States dedicated to high-
quality children’s and family entertainment and educational programming. Programming on THE HUB includes
content based on Hasbro’s brands, Discovery’s library of children’s educational programming, as well as
programming developed by third parties. Hasbro Studios programming is distributed in the U.S. to THE HUB,
other leading children’s networks internationally and on various digital platforms, such as Netflix and iTunes.
The Company’s television initiatives support its strategy of growing its brands well beyond traditional toys and
games and providing entertainment experiences for consumers of all ages in any form or format.
The Company’s strategic blueprint and brand architecture also focus on extending its brands further into
digital media and gaming, including through the licensing of the Company’s properties to a number of partners
who develop and offer digital games and other gaming experiences based on those brands. An example of these
digital gaming relationships is the Company’s agreement with Electronic Arts Inc. (“EA”), which provides EA
the exclusive worldwide rights, subject to existing limitations on the Company’s rights and certain other
exclusions, to create digital games for all platforms, such as mobile devices, gaming consoles and personal
computers, based on a number of the Company’s intellectual properties, including MONOPOLY, SCRABBLE,
YAHTZEE, and BOGGLE. Similarly, the Company has an agreement with Activision under which Activision
offers digital games based on the TRANSFORMERS brand, as well as with other third party digital gaming
companies such as DeNA and GameLoft. The Company continues to seek and develop additional outlets for its
brands in digital gaming, including casual, mobile and online gaming.
The Company also seeks to express its brands through its lifestyle licensing business. Under its lifestyle
licensing programs, the Company enters into relationships with a broad spectrum of apparel, food, bedding and
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