Where Toys Come From

Selling fun to children is one of capitalism's least predictable pursuits

Another possibility might be to prohibit toy companies from creating television programs. But how do you banish Strawberry Shortcake and Care Bears without also banishing Muppets? The Muppets' creator, Henson Associates, is on almost everyone's (including Peggy Charren's) list of top-quality producers, but the Muppets support a profitable stable of more than 500 licensed products, many of them toys. Henson even has its own New York toy store, called Muppet Stuff. Henson Associates, whatever else it is, is an extremely successful toy business, and Henson's shows, whatever else they are, are program-length commercials. Children's Television Workshop, home of the widely acclaimed series Sesame Street, earns back two thirds of the show's production costs from the licensing of toys and other products.

Nor is it possible to make meaningful distinctions according to whether the toys or the shows were thought of first. To young viewers, Mickey Mouse and Strawberry Shortcake are contemporaries. What's more, there's no pattern to the order in which toys and shows appear. Companies now often find it profitable to introduce toy-based shows well in advance of the toys on which they are based.

The real question has to do not with toy companies but with the quality of children's television, which is abysmal. Sitting through a full Saturday or Sunday morning of kidvid, as I dutifully did several times in the course of researching this article, is a pretty horrifying experience. "Speaking of Girza, it's time to move on to Bandasar and take care of Tormac," and so on and so on, hour after hour. Much of ACT's support, I suspect, comes from people who feel the same way: the kids' shows are horrible, so let's do something about the people who make them.

But program quality is a quicksand subject for people who, like Peggy Charren, believe in the First Amendment. ACT's January petition to the FCC, Charren has stressed, "does not seek to ban or impede the presentation" of the toy-based shows but merely to make explicit to young viewers the programs' commercial intent. ACT has also been quick to condemn various right-wing groups that periodically call for the elimination of television shows they find offensive. To confront directly what is genuinely bothersome about children's television—its mindlessness—is to come, uncomfortably close to advocating censorship.

ACT addresses the quality issue only obliquely, by claiming that having to satisfy the requirements of toy manufacturers stifles the creativity of the producers and that children's programming would improve if the toy companies cleared out. In an article last year in PTA Today, ACT's director of development quoted a television producer as saying, "I would love to create shows rather than have someone come in and say, 'This is the golden ashtray everyone's buying; give me a show about it.'" Charren has said, "It's a shame we don't have diversity of producers for children's TV. Certainly they'd like to be there, but it's the money powers that are playing the ratings game who keep them out.

"Money powers" and "ratings game" are buzz phrases calculated to heat the blood of caring persons, but unless one rejects the idea of commercial TV, there's nothing sinister about the people they signify (respectively, advertisers and viewers). In fact, commercial television is one of the few truly democratic institutions around: viewers "vote" by watching, and the shows that don't get enough votes don't stay on the air. Charren has said that the networks could field better programs if they wanted to, because "broadcasters know what quality programming is." Good programs, she says, "are the ones they submit for awards." This is a specious argument. Book publishers must know what good books are (the ones they submit for awards); why don't they print more of them?

The solution to the kidvid problem—the real kidvid problem—is simple: if parents prevented their children from watching the shows, they wouldn't be on. Parents complain about the quality of the shows but don't prevent their children from gluing themselves to the boob tube. In the end, the garbage on TV is probably a fairly accurate representation of what the audience (parents included) really wants. There was a vast outpouring of public protest when CBS canceled Captain Kangaroo, in 1981, but the show's ratings had been microscopic for years. No one wanted to see it go, but no one wanted to see it, either.

The well-known discrepancy between what parents say and what they do arises in this case from a deep ambivalence about television. On the one hand, almost everyone at least pays lip service to the idea that watching a lot of TV is bad; on the other hand, television has become a sort of national babysitting service. According to the A. C. Nielsen Company's 1986 Report on Television, children between the ages of two and five watch an average of twenty-eight hours and fifteen minutes of television a week. Their most active viewing period is weekdays between ten in the morning and four-thirty in the afternoon. Busy parents (or the sitters they hire) are using television to keep their children quiet. This is a great tragedy. But the responsibility for it belongs to parents.

Most of the toy-based shows are crummy, but so are most of the other shows. Scooby Doo, a cartoon show created before the toy companies invaded Saturday morning, is not a better program than Snorks. Sesame Street is reflexively admired by almost everyone, but I suspect that adults would praise it less if they watched it more. Sesame Street may not be schlock, but kids often watch it the way they watch schlock: like zombies. Four hours of television a day is much too much, even if it's Bert and Ernie. ACT for years has paradoxically called upon the networks to provide more television shows aimed at children during more hours of the week. Kids might be better off if broadcasters got rid of children's shows and substituted the one kind of programming most kids can't stand: news.

To fail to be appalled by the connection between toy companies and children's television is not to endorse the shows. But it is possible to find a few nice things to say about them. First, toy-based programs at least encourage children to spend some of their waking hours away from the television set: a child who wheedles his parents into buying him a toy he's seen on TV will presumably play with it once in a while. Second, the new shows have a number of features missing from a lot of other shows—particularly widely admired cartoon "classics" such as Popeye and Tom and Jerry: for example, racial balance, uplifting sentiments, and, for the most part, a conspicuous lack of violence. Third, the substantial cost of creating television shows has encouraged toy companies to favor products that are well thought out, well designed, and not likely to disappear overnight: fad toys don't earn back multimillion-dollar television investments. Fourth ...

Well, three is pretty many.

Staying Power

If Bernard Loomis helped invent the strategy of concentrating on expandable lines of toys, Hasbro has come close to perfecting it. In an industry where violent, unruly expansion and contraction is the rule, Hasbro's rise to pre-eminence has been impressive. The company has lately become a darling of the nation's financial analysts and business magazines, which have praised it for unusually sound management.

Most observers give credit for Hasbro's success to the company's young chairman, Stephen Hassenfeld. Hassenfeld, forty-four, and his brother, Alan, thirty-seven, who is Hasbro's president, represent the family's third generation in the toy business. Unlike Charles Lazarus and Bernard Loomis, Stephen and his brother had lots and lots of toys when they were growing up. Their father, Merrill, was widely admired in the industry, and executives of other companies often showed their affection by showering the Hassenfeld boys with their toys. The head of the company that manufactured Lionel trains even added young Stephen's name to his list of salesmen, which meant that every time a new train or accessory came out, Stephen received a sample. Directing one of the world's most spectacular toy trains around his basement, he knew from a very early age what he wanted to do when he grew up.

Over the past ten years or so Stephen has gone far toward making Hasbro what all toy companies yearn to be: a rational enterprise. Selling toys has always been a fashion business. Companies have scored inebriating successes, alongside sobering failures, all subject to the largely unpredictable whims of children. The goal, seldom achieved, has been to minimize the failures without killing off the creativity that produces successes.

Hasbro's strategy for growth without trauma has focused on diversification within the toy industry. It has done this partly by acquiring other companies (it bought the Milton Bradley Company and its Playskool subsidiary, in 1984, for $350 million) and partly by expanding steadily into new toy categories. The strategy is now nearly universal, or universally aspired to, in the industry. Tonka Corporation, formerly known only, as an unflashy manufacturer of high-quality toy trucks, now offers a greatly expanded selection that includes GoBots, a Cabbage Patch-inspired line of stuffed dogs called Pound Puppies, and Rock Lords, transformable figures described on their cartoon show as "powerful living rocks." Tonka's expansion has been successful. As of last year the company was the sixth-largest toy manufacturer in the country.

Stephen Hassenfeld's first big hit was the 1982 reintroduction of G. I. Joe. Originally marketed, in 1964, as a Second World War-era infantryman, G. I. Joe was turned into a cadre of quasi-military "adventurers" in 1970. In succeeding years the line was expanded to include a figure with what Hasbro called a "Kung-Fu grip," a bionic warrior, a superhuman, and a spaceman. The line was discontinued altogether in 1978, when it was done in by a combination of high oil prices—which made its large plastic body and accessories expensive to manufacture—and a proliferation of smaller, less expensive action figures. When G.I. Joe resurfaced four years later, the line had shrunk (from just under a foot to just under four inches, a size made popular by star wars toys); changed its slogan (from "a fighting man from head to toe" to "a real American hero"), and multiplied itself into an anti-terrorist "strike force" consisting of sixteen separate characters (one of which was female and none of which was actually called G. I. Joe).

The redesigned toy did $49 million in business in 1982, and became the nation's best-selling toy in the second half of the year. Hassenfeld's first reaction to the toy's success was one of joy; his second was one of concern. Forty-nine million dollars represented 36 percent of Hasbro's revenue at the time, making the company dangerously vulnerable to a drop in the toy's popularity. Perhaps the most important lesson Hassenfeld had learned during his lifelong tutelage in the toy business was that profit often goeth before a fall. The mistake that other toy-makers had habitually made, he felt, was in believing that they were immune to the syndrome of booms going bust.

This is not to say that Hassenfeld abandoned his popular new toy. Quite the contrary. But he made plans for the future of the company which didn't depend on G.I. Joe's continued success. Profits from the toy's first year were reinvested in the company's future, primarily as part of the package that financed the Milton Bradley acquisition.

As it happens, G.I. Joe has shown no sign of weakness. The line brought in $86 million in 1983, $132 million in 1984, and $136 million in 1985. But at the same time Hasbro has grown so much that by last year $136 million represented just 11 percent of its total business. The toy's profitability had increased while simultaneously becoming less important.

As sound as it may seem from the sidelines of the toy business, Hassenfeld's healthy skepticism about the longevity of best-selling toys has sometimes not been in evidence in the management of other toy companies. The fastest-selling toy of all time, Coleco's line of Cabbage Patch Kids, surprised almost everyone by remaining a hit toy for three full years (and bringing Coleco more than $1.2 billion in sales from 1983 to 1985). But by the end of 1985 Cabbage Patch still accounted for an astonishing 74 percent of Coleco's business. Last spring analysts were predicting that Cabbage Patch sales for 1986 might decline by as much as 35 percent of what they had been in 1985. Since Coleco's 1986 catalogue is still weighted heavily toward Cabbage Patch, the company could be in serious trouble.

Coleco's hopes for 1986 and beyond may hinge on the performance of its latest excursion into the now crowded male-action-figure category, where it will compete with G. I. Joe, Masters of the Universe, and many, many others. Coleco's entry is a licensed line of toy soldiers based on the R-rated Rambo movies, in which Sylvester Stallone plays a vengeful Vietnam veteran. Coleco has toned down the movie character in the cartoon it has created (the cartoon Rambo doesn't kill anyone), but, like the movie, the cartoon and the toy line appeal to the nation's recent anxiety about terrorism.

Parents and others sometimes complain about the prevalence of lines, and the emphasis on repeated purchases, in the toy business today. Yet the modern way has much to recommend it. Nothing looks more forlorn to the person who bought it than a toy that is used a time or two and then forgotten. For a toy line to remain viable year after year, children have to continue playing with it. When line extensions predominate at the Toy Fair, it means the playroom is safe from revolution for another year. Nobody throws away Lego. The emphasis on lines can help keep prices down, by giving manufacturers longer to earn back their investments. It also helps keep quality up. A line doesn't last simply because it's a line. Children go back for more only if the central concept appeals to them in some enduring way.

Enduring appeal is an idea that covers a lot of territory, of course. Whereas Cabbage Patch sales may slip considerably this year, Barbie may have her biggest year ever, after more than a quarter of a century on the shelf. Toy analysts wonder if her new competitor, Jem, will have anything like that staying power.

Hasbro executives discovered Jem, or rather ur-Jem, several years ago, when an independent toy designer showed them a male rock-star doll. The doll looked promising, and Hasbro took an option on the rights.

MTV, the rock-music television channel, had grown enormously popular. MTV is aimed primarily at teenagers and young adults, but Hasbro knew that a lot of younger kids were watching it as well. Rock videos had introduced little girls to a whole new way of thinking about fashion: eight-year-olds were asking their moms if they could dye their hair pink and cut holes in their sweatshirts and do a lot of other things that Barbie didn't do. It occurred to people at Hasbro that there might be a market for a fashion doll that looked less like Barbie and more like the people on MTV.

The Hasbro executive most responsible for keeping the project going was Maurene Souza, the vice-president of marketing for girls' toys. One of the first things that Souza did was work out a "back story" for the new doll. When my wife was growing up, she had a favorite doll she called Leprosy—the most beautiful-sounding word she had encountered up to that point. Nowadays dolls come not only with ready-made names but also with full-blown biographies. In time the optioned male rock star became Jem/Jerrica, "a woman with a mysterious dual identity," to quote from Hasbro's publicity:

She's Jerrica Benton, a savvy Eighties career woman, co-owner of Star Light Music Company and benefactor of Starlight House, a shelter for homeless girls. But, with the magic of "Synergy," a super-holographic computer that filters power through her Jem Star earrings, Jerrica becomes Jem, a truly outrageous rock singing sensation. With the help of little sister Kimber and friends Aja and Shana, the four become "Jem and the Holograms," the hottest girl group since the Supremes. Exciting adventures unfold as Jerrica competes for control of Starlight [sic] Music against evil co-owner Eric Raymond, while Jem and the Holograms come up against the mischievous "bad-girl" rock band, "The Misfits."

There's also Rio, Jerrica's boyfriend, who, unlike Barbie's Ken, has a snappy wardrobe (the Miami Vice look) and combable hair.

"Changing from Jem to Jerrica gives the toy a great deal of depth," Souza says. "There are clothes for being Jem; there are clothes for being Jerrica. There are things Jerrica can do; there are things Jem can do. Barbie has really been locked into the mainstream American life-style. Jerrica is part of that too, although she's more a woman of the world. Jem becomes the fantasy. It gives us a lot of places to go with both of them." "Synergy" is Jem's key to longevity. If MTV goes out of style, the holographic computer can change Jerrica into something else: Jem, attorney-at-law.

To spread the word about Jem, Hasbro began including seven-minute Jem segments in its syndicated Sunday-morning cartoon show Super Sunday. The segments were so successful that Jem was spun off into her own regular series. Each show contains original songs presented in the form of "videos."

Mattel's response was immediate. Before the Toy Fair, and long before Jem's debut on Super Sunday, Hasbro had begun to run teaser ads of the "Jem—Coming Soon" variety in the trade press. Not long after the first ad appeared, Mattel introduced Barbie and the Rockers (featuring Dee Dee, Dana, Diva, and Derek) and prepared to slug it out. Hasbro had been expecting a rock band, but they hadn't been expecting Barbie to be a member. Truly outrageous! Mattel says that it thought of Barbie and the Rockers before it heard about Jem and the Holograms, but most people I talked to were skeptical. Mattel has always rejected the idea of a cartoon series for Barbie, whose principal strength is that she is Everygirl, but who knows?

Hasbro's hopes for Jem are fairly modest. "We want a piece," Souza says. "There's no way we're going to put Barbie out of business."

I can't make up my mind about Jem. She's a bit taller than Barbie (they can't wear each other's clothes), and she's significantly smaller in the bosom. Rio is more appealing than Ken, who has molded plastic hair and what looks like a thyroid problem. Jem has a radio in her Rockin' Roadster, but Barbie has a shower. Hmmmm.

Then again, it isn't up to me, is it?

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