Barbie may be pink, but Mattel is seeing red

Sascha: [00:00:03] I'm Sascha Kelly and welcome to The Dive, the podcast that asks whoever said business news needs to be all business. Did you know there's a Barbie movie about to be released? If your answer is no. Well, you've clearly not got the same social media algorithm as I do because that weekend is firmly circled in my calendar. I am going to the movies as soon as it comes out. 

Audio Clip: [00:00:28] This summer, it's time for Barbie to discover the real world. No, no, no, no, no. 

Sascha: [00:00:34] Personally, I've found it hard to avoid the owner of Barbie. Mattel has inked more than 100 partnerships in the lead up to the film, which just in case you missed, is coming on the 21st of July. And it's everyone and everything from Target to Microsoft to Airbnb. They're all collaborating with the toy company in preparation for the release. But there's actually a bigger story at play here. Barbie's colour might be pink, but Mattel is seeing red in 2017, 2018 and 2019. It lost money. The toy business is really hard and Barbie is now at the centre of their plans to turn it around. It's Monday, the 3rd of July, and today I want to know just how big are Mattel going for the summer of Barbie? To talk about this today, I'm joined by my colleague and the co-founder of Equity Mates. It's Alec Renehan. Alec, welcome to The Dive. 

Alec: [00:01:29] Thanks, Sascha. Good to be here. We know that when Barbie comes up on the run sheet, there's only one name to call, and that is me so excited to be here today. 

Sascha: [00:01:39] Yeah. After seeing all images of Margot Robbie in my Instagram feed pitching the idea and you're just like, Yes, let me at it. I want to talk about this today. 

Alec: [00:01:48] But watch me turn a story about a Barbie movie into a story about a falling share price. 

Sascha: [00:01:53] Excellent. I'm looking forward to it. What a great day. Okay. So I'm going to acknowledge the irony of this straight off the bat. But, Alec, I'd love you to give me the elevator pitch of Barbie. She's probably the most iconic toy. I certainly had a few. I'm not sure how many you owned. I'd love to know a bit of backstory about the company. 

Alec: [00:02:13] Yes. So first, introduced in 1959, Barbie took the toy world by Storm. Barbie, Most children's dolls were of babies, and Barbie changed the game. And in the six decades since, has become probably the most iconic toy in the world. By 2006, it was estimated that over a billion Barbie dolls had been sold worldwide across 150 countries. At that time, Mattel claimed that three Barbie dolls were sold every second. In 2022, Barbie accounted for about 27% of Mattel's total business. And these days, Barbie brings in over $1,000,000,000 a year for the toy company.

Sascha: [00:02:59] Wow. But Barbie isn't just universally adored. Some people do find her a little bit controversial. 

Alec: [00:03:06] Yeah, very divisive toys. Some parents say Barbie inspires their children to imagine themselves as astronauts and politicians. I think Barbie over the years has had almost every job imaginable. But on the other hand, others refuse to buy the doll because they say she's set an impossible beauty standard for their daughters. Now, that critique led to a major revamp and change of Barbie's look and The Diversity of Barbie in 2016. But she still comes in for a lot of criticism, even these days. 

Sascha: [00:03:43] So we're talking about this today because of this upcoming film. But that in itself isn't new. Barbie's had TV shows and movies before. In fact, we actually checked. She's had 42 movies before this one. 

Audio Clip: [00:03:56] Barbie is a cultural icon, a pop icon. And this movie is really shaping up to be what we believe would become a societal moment. 

Sascha: [00:04:07] So why is this such a big deal, Alec? 

Alec: [00:04:10] Well, Sascha, this is bigger than your average Barbie movie. This is chock full of A-list celebrities Ryan Gosling, Will Ferrell and led by Australia's own Margot Robbie. It's also directed by Greta Gerwig, who you may know from the Oscar nominated Lady Bird and Little Women.

Audio Clip: [00:04:31] Wow. This is the real world. What's going on? Why are these men looking at this?

Alec: [00:04:36] But this movie is bigger than just the A-list celebrities headlining it. It's part of a much bigger pivot for Mattel as it tries to turn around its fortunes. 

Sascha: [00:04:46] Because America's most iconic doll is facing fierce competition. I mean, I think I've seen in the trailer already there's a joke about Bratz dolls, which kind of came for them in the 2000s. MGA owned them. But there's also a streaming giant. It's like Disney making toys and other consumer products to complement their shows. There's also YouTubers debuting toys of their own. So Mattel is now looking to just expand beyond the toy business, aren't they, Alec?

Alec: [00:05:13] Yeah, that's right. So to set the scene in 2018, Mattel's share price was down almost 60% over the five years before that, shareholders had lost more than half their money. The toy business is hard, but this was a brutal business story. They were unprofitable in 2017. They were also unprofitable in 2018 and 2019. But it got to the point where something had to change. In walks a new CEO in on creating and he pivots their strategy and he wanted to put Hollywood right at the centre. He revived a division of Mattel that had been shuttered a few years before Mattel films, and he had grand ambitions to put Mattel's toys on the big stage.

Sascha: [00:06:00] But this isn't a new idea. We hear more and more about this. Disney is the best at it. You know, they've got Marvel, Star Wars, Disney princesses in everything from theme park rides to consumer goods. And crucially, many other companies are starting to follow this. Warner Brothers are trying to do the same with their DC Comics. So now Mattel are trying to take toys where comic books have done so well over the past ten years. Is that what we're looking at, Alec? 

Alec: [00:06:28] Yeah, that's right. Much like Bob Iger and Disney created the Marvel Cinematic Universe, which has created billions of dollars. And, you know, who knows how many different toys and rides and shows and everything else. Mattel want to create the Mattel Cinematic Universe based on their toys after this baby movie. They have 14 other feature films in development. Richard Dickson, the president and chief operating officer of Mattel, told The Wall Street Journal. The bigger opportunity for us is to be going outside of the toy aisle. That is the drive for where we see monetisation for the brand going forward. So they re-establish Barbie's cultural credentials with this A-list cast and hundred million dollar budget movie. And then that creates a whole new world of monetisation opportunities. And they're not the only toy maker to embrace this strategy that Disney have done so well. Mattel's biggest competitor, Hasbro, has recently put out a Dungeons and Dragons film to try and grow the profile of their iconic board game and find other ways to monetise it as well.

Audio Clip: [00:07:41] Here's the thing. We're a team of thieves and when you do this. You're bound to make enemies. 

Sascha: [00:07:50] Did you see that film, Alec? 

Alec: [00:07:52] I honestly didn't even know it existed until we were researching this.

Sascha: [00:07:57] I know Hugh Grant signed it, so it's been on my like, when it gets to streaming, I'll watch it. But I didn't actually go to the movie. So this is big for Mattel and it's a big test for the CEO's vision of the company. You know, following Disney's business model, because where Barbie is going, one small step for Barbie might be a big step for many of their other toys, including a magic eight ball. We're going to talk about that after the break. Welcome back to The Dive. We're talking about the Barbie movie. I am so excited. We managed to find the business story in this today because really, this is a big test for their new CEO. He pinned the revival of Mattel and it really is a revival on the strategy of big films. Alec, you mentioned before the break, Mattel had 14 other feature films in development after Barbie. What comes next?

Alec: [00:08:58] Yeah. Now, Sascha, this is where this story gets very interesting. As we said on cruise, he put his whole strategy around big feature films and getting his line of different toys in pop culture. So here are some of the movies that they have in production. Well, here are some of the toys or, you know, different bits of intellectual property that are going to star in an upcoming Mattel film. We have Barney the Dinosaur, Hot Wheels. The cars are getting their own film, The American Girl Doll, Polly Pocket, the Rock of Stockholm Robots, Thomas and Friends. But the two that are most out there and most surprising for me, there is a film in development for the Magic eight ball. You know, the ball that you asked a question.

Sascha: [00:09:51] Oh, yeah, I think I have one somewhere in my covid, but I wouldn't want to look at it on television. 

Alec: [00:09:57] Well, you don't know what movie they're going to make with it. But then perhaps the most surprising for me, the card game UNO has its own feature film in development. 

Sascha: [00:10:07] So, Alec, 14 in development. But of course, Barbie is the first one off the line. And so there is so much pressure on this film to deliver if it flops, I think. I mean, we're already saying it's hard to see the magic-able and earner films in development, but it'll be really hard to imagine them ever making it to the screen. So to get this Barbie film across the line, they've really thrown everything at the wall. They recruited A-list stars. They've put together a $100 million film budget, and it's supported by one of the biggest film marketing campaigns we've ever seen. I think I saw the Shameless podcasters say whoever is doing the marketing PR needs a right start. This is incredible. 

Audio Clip: [00:10:50] It's the first day of summer and there's only one way to celebrate. Don't miss out on the biggest. And the pinkest movie of the year. It's time. To strap on your neon roller blades. And get your tickets now with Barbie. 

Sascha: [00:11:02] How big exactly is this campaign, Alec? 

Alec: [00:11:06] So we're about a month out from the film's launch date, 21st of July, as you told us earlier, and we've seen more than a hundred Barbie collaborations come to life so far, and I think that's important to stress. I wouldn't be surprised if there's more coming in the next few weeks, but some of the more notable ones, Microsoft have produced a hot pink Xbox and a suite of Barbie themed controllers. There's a lot of clothing, collaborations, t shirts at the Gap, cardigans at Hot Topic, handbags at Neiman Marcus, at Bloomingdales, a department store in the US. There are life sized Barbie Dreamhouse installations. 

Sascha: [00:11:47] Oh, that sounds cool. So that one's got me interested. 

Alec: [00:11:51] Ulta Beauty has hot pink Barbie, electric toothbrushes, Target and Amazon have Barbie pole floats and Italian footwear brand Superga have debuted sky high pink platform sneakers. Rugged Bull has a line of Barbie rugs and doormats. There are Malibu Barbie cafes opening Crocs have introduced their Barbie line. Impala is selling Barbie and Ken's neon yellow inline skates and then a few more out there ones. There is now a themed Barbie boat cruise in Boston to celebrate the lead up to the movie listed on Airbnb. There is a Barbie dream house in Malibu that people can book and stay at. And Sascha, I don't know if this is just the cynic in me, but recently Kim Kardashian threw her daughter a Barbie themed birthday party. Probably nothing to do with the movie. Barbie is already very big, but who knows these days? 

Sascha: [00:12:51] I won't make any comment on that. But I've got to say, if you're looking for Barbie content, the Architectural Digest tour with Margot, Robbie was my favourite and she did a tour of the set and it's pretty great. 

Audio Clip: [00:13:03] Welcome to Barbie's Dream house. Come on in. This is my breakfast table and the kitchen. And we're in the living room right now. 

Alec: [00:13:09] You know, it's not a 2023 marketing campaign without some form of AI. So Mattel have launched a Barbie selfie. Generate a Barbieselfie.ai. And, you know, I had to upload a photo of myself and get that Barbie selfie.

Sascha: [00:13:26] I'm glad it got you in like we might. I have to first out on our socials. I don't know if we get enough requests. Well, put that forward. And also here in Australia, we're seeing the city turn pink as well. I think Bondi got a makeover last week. 

Alec: [00:13:39] Yeah, Margot Robbie, Greta Gerwig and some of the other cast members are in Australia at the moment promoting the film. They were at Bondi, doing the rounds at different Westfield's and meeting people. The studio is going all out for this film. The reason is that this is the film that the new CEO, while not it's not a new CEO anymore, has really pinned his hopes on. 

Sascha: [00:14:04] Well Alec, last question. Are you going to be at the cinemas on the 21st of July? 

Alec: [00:14:09] Yeah, I feel like I'm maybe not on the 21st of July, but I feel like Oppenheimer is opening on the same day Barbie is coming out. And then there's a third movie that is getting a lot of buzz all year. Indiana Jones So yeah, I feel like this winter for us. Summer for the Northern Hemisphere is going to be a big one for movies. So I haven't been to the movies since before COVID. So I'm excited to go back. 

Sascha: [00:14:36] Oh, what a great triple bill you've got lined up for yourself. I think that sounds like an excellent day at the movies. All right. Well, we'll leave it there for today. Alec, thank you so much for joining me. If you've got a friend who might be interested, well, send this to them and show them how important it is that they go to the Barbie movie for Mattel's sake and then remember to give us a five star review in your podcast player wherever you're listening right now. I'll be back in your feeds on Wednesday. Until next time.