Cnn.money: The Muppets Take Madison Ave

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From CNN.com:
http://money.cnn.com/2005/05/19/news/newsmakers/muppets/index.htm?cnn=yes

The Muppets take Madison Avenue

Through merchandise and TV, Disney hopes Muppets reel in $300 million in retail sales by 2009.
May 19, 2005: 6:29 PM EDT

NEW YORK (CNN/Money) - If Disney has its way, Kermit the Frog and his Muppet cohorts will reclaim their position as some of the most recognizable puppets in popular culture, according to a news report.

After acquiring the rights to the stuffed characters a year ago, the company that has long been known as Mickey Mouse's kingdom plans to bring back the characters slowly, The Wall Street Journal reported Thursday.

Friday's airing of "The Muppets' Wizard of Oz" on the Disney-owned ABC network marks the first major effort by the media company to reposition the Jim Henson-created characters in the popular culture landscape.

Through TV specials, T-shirts and other marketing efforts, Disney hopes to market the Muppet characters in a way that will not only attract the young but pull in older audiences who still remember "The Muppet Show" from when it was on the air in the 1970s.

Although the Muppets have been relegated to advertisements and have receded from popularity, Marshal Cohen, a chief analyst at the NPD Group, a marketing and branding consultant, believes that could work in Disney's favor.

"Is it a challenge, but the good news for them is that it has been a sleepier brand, so it's not as if they are trying to maintain a property at its peak," Cohen said.

Gary Foster, a spokesperson for Disney, says the company is confident in the potential of the Muppet brand.

"We probably see more opportunities than challenges -- they have been around a while but fortunately they have a huge unaided awareness," said Foster. "The challenge will be to maker them relevant to this generation."

Foster says Disney is betting that the previous generation who grew up on Fozzie Bear and Miss Piggy will help by introducing the Muppets to their children. The company hopes the Muppets will generate around $300 million in retail sales by 2009, the Journal reported.

Relatively speaking, however, Mickey Mouse and the characters associated with him bring in a significantly larger purse, raking in $5 billion in annual retail sales for Disney.

Michael Nathanson, a global media analyst at Sanford Bernstein & Co., which follows Disney, noted Disney should be able to manage Kermit and company effectively through its various media holdings, especially considering its track record for turnarounds, such as the Baby Einstein Company subsidiary, which produces learning items for toddlers and babies. At the same time, he did not expect this to be a windfall for the company.

"I would not underestimate their ability to market this franchise," Nathanson said. "I don't think it will move the needle that much at Disney, but it's a good fit for them."

While Foster noted that Disney plans to be more selective when it comes to using the Muppet brand in advertisements, he said that the goal is to restore the puppet characters to some of their former glory, even though the entertainment world has changed since their heyday.

"We're not going too come out too quickly or too much," said Foster. "We do want to bring it back to irreverent humor -- that's what made them unique."

Shares of Disney (Research) climbed 1.6 percent Thursday on the New York Stock Exchange before closing at $27.94.

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