Mattel's Filmmaking Strategy

In this podcast, Motley Fool host Mary Long caught up with New Yorker writer Alex Baracsh to discuss his recent piece, "After 'Barbie,' Mattel Is Raiding Its Entire Toybox."

They discuss:

• How Mattel is becoming an IP (intellectual property) company
• Why The Last of Us broke the curse of bad video game adaptations
• Whether big-budget movies really need characters that audiences already know

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on July 22, 2023.

Alex Barasch: Certainly, at Mattel, there was a lot of talk of four-quadrant films. You want to hit all of the possible demographics. You need it to be broadly commercial, theatrical, and really hit all the beads and even the slogan of the Barbie movie; if you love Barbie, this is for you. If you hate Barbie, this is for you. It seems like an almost impossible thing to hold in one film.

Mary Long: I'm Mary Long, and that's Alex Barasch, a writer at The New Yorker magazine. I caught up with Barasch to discuss the IP-to-movie pipeline and Mattel's asset-light approach to filmmaking. The new bargain that directors have to make for big-budget movies and the potential cinematic takes for Hot Wheels, Masters of the Universe, and UNO today kicks off our entertainment-focused weekend of shows. Tomorrow is our next installment of The Motley Fool Money book club; we'll dive into Bob Iger's memoir, The Ride of a Lifetime.

Mary Long: Joining us now is Alex Barasch, a writer at The New Yorker, who specializes in entertainment and culture. Alex, thanks for being here.

Alex Barasch: Thank you for having me; excited to be here.

Mary Long: Of course, we're going to talk about the IP-to-movie pipeline that seems to be taking over Hollywood these days. But first, let's tackle something a bit more timely. The screen actors' guild recently joined the Hollywood writers on strike. How might this affect the IP cycle loop?

Alex Barasch: Yeah, it's a great question. I think we'll see how it affects what's already in the Pipeline. But we've been in this moment of real risk aversion and conservatism in Hollywood generally, and I have to imagine this is only going to compound that as they try to make up for lost time if and when things do resolve themselves. Maybe it makes it worse, but we will see.

Mary Long: But time will tell.

Alex Barasch: Yes.

Mary Long: I would say that you wrote the book or the article on Mattel's plans to raid its toy chest after the Barbie movie hit theaters this summer. Can you lay the foundation for us a little? How did the idea of turning Mattel into an IP company rather than a mere toy maker come to take hold?

Alex Barasch: Yeah, absolutely, so this is essentially the brainchild of Ynon Kreiz, who's the newish CEO of Mattel. He came in in 2018 when the toy maker was frankly really struggling. Toys "R" Us had just gone out of business. They were drowning. They've reported something like $300 million in losses. There'd been four CEOs in four years. It was a bit of a mess.

He came in and made this pitch to essentially reinvent the company and say, OK, we're no longer just a toy company. We are now an IP company. We're managing franchises as much as we're managing these individual brands. We have these assets that we've been sitting on.

He came from an entertainment background, and he felt that Mattel's catalog was, as he put it, second only to Disney in terms of children's entertainment and that they had not really capitalized on that. His pitch was to align themselves with these studios and make films that would then give them the cultural cache and help them turn the ship around.

Mary Long: Barbie is kind of the first, the pioneer of this experiment into content creation and building an IP factory. But it also took a while to bring this movie to live action. The idea for this was first kicked around before Kreiz took the stage in 2008, so what was the path to production of this movie in particular?

Alex Barasch: Oh yeah. I mean, it's been a journey, and I think part of it is Mattel's fear of damaging the brand. This came up a lot in my reporting. There was real anxiety about the message that the film might send and how it might reflect on the toys that they have treasured, and it's their big moneymaker. It makes them $1.5 billion a year now, so it really matters to them, the reputation of the doll, and obviously, it has this very fraud history.

Yeah, there was a time back at Sony when it was attached to Amy Schumer, it was attached to Anne Hathaway, and each of those projects, from what I understand from my reporting, are a bit more critical of Barbie and a little bit more making fun of Barbie. Which is not to say the one that we've arrived at is not mounting its critiques. But in this case, Barbie was the butt of the joke.

When he came in and said we cannot have that, so let's reclaim the rights, or let's let the rights lapse, and let's start fresh with a new team. Then that's the point where Margot Robbie, who had also been watching those rights like a hawk, waiting for an opportunity to pounce, decided to come into the picture.

Mary Long: This suggests that the lengthy timeline and Kreiz's whole plan kind of suggest that Mattel is really set on this strategy. In particular working, you mentioned a little bit about the phase that Mattel was in when Kreiz took the reins as CEO. How badly does Mattel need this pivot to being an IP factory to work?

Alex Barasch: It's an interesting situation for them because they have what they call a capital-light model, where they're not necessarily bankrolling any of these films. The studios are the ones that are bringing the funds, and they're bringing the IP to the table. It's not a question of them losing money on this, but they do really need people to think well of the toys that they make.

They're very insistent that it's not about selling toys. But if you look at the Barbie movie, you can see there are dozens of brand partnerships that have come out of this. They've released a special collection of dolls to go with it. They've got all of these tie-in products. It's just a barrage of all Barbie all the time.

I think in order for them to continue to succeed -- they did well during the pandemic, but then they kind of plateaued -- I think there's a real sense of we need to revive the brand. We needed to change the way people think about these things. Or we need to keep it favorable to the extent that it is. So in terms of reputation management and building a film division that people will take seriously, they really need this to work.

Mary Long: You bring up an interesting point, too: The movie hasn't launched yet, but we've already seen so much media hype and press hype about this. Mattel has already -- like we keep saying, or people keep saying -- we won't know if the strategy works until after the movie launches. But Mattel's already seen some success in press pickup but also in partnerships. There's a progressive partnership with Mattel, random stuff that we wouldn't even expect. So we're already seeing the inklings of success, even if the movie itself hasn't posted massive box office numbers yet.

Alex Barasch: Yes, absolutely. It is trending to post pretty massive box-office returns, so it seems like it is going to pay off in every respect, but you're right. It's given them this air of cool and relevance that definitely was not present this time three or four years ago. Like Xbox doing a Barbie partnership is not something I would have guessed about.

Mary Long: No, never. Your article mentions that Mattel allegedly has 45 other films in development. What does "in development" actually mean for like a late?

Alex Barasch: That's a great question. It means different things, which is a very capricious term of the word. There are things that are pretty far along at this point. They have a He-Man and the Masters of the Universe film that is pretty much poised to enter production. They have scripts for a lot of these things, but there are other things that are a twinkle in the eye of JJ Abrams.

There's no script yet for Hot Wheels, and so we'll see what happens there. They are rummaging the very bottom of the toy box in ways that may or may not pay off ultimately. It's been pretty interesting to see the range of IP that they're trying to convert into something with real dramatic and cinematic potential.

Mary Long: Yeah, and, obviously, there's an easy comparison here with what Mattel is trying to do to Disney's existing Marvel Cinematic Universe (MCU). But that came with its own well of existing stories and lore. Mattel doesn't have that same storytelling foundation. But as you mentioned earlier, some of its toys, like Barbie, do carry a lot of baggage. So how does that history impact what Mattel is trying to do here and set it apart from other cinematic universes?

Alex Barasch: I think it's a really fine line to walk. I mean, something like Barbie is appealing because of that baggage. I think that's something that you can mine and then use for its cinematic potential. But there are other toys and toy boxes, like the card game UNO, they're trying to turn into a film, and I simply don't know how that's going to happen to them.

Mary Long: Yeah, same.

Alex Barasch: But it's an interesting double-edged sword because the nostalgia is the thing that they're selling. It's the thing that is the asset in their minds, but it's also a curse. Like if you have something that people care deeply about, then the expectations are much higher, or their emotions are already running high about that subject, and so they're much more forceful as custodians of those brands.

When Greta Gerwig signed on to do Barbie, they brought her in for what they call a brand immersion. They took her to the toy workshop, which I also went to as part of my reporting, and they basically walked her through the entire history of Barbie, and they said, here are the highs and lows in the history. Here are the characters that have been introduced through the years. Here are the historical Barbies, and she incorporated a lot of that into the plots.

In that case, it was probably useful. But in other cases, the fear of venturing beyond what would be acceptable to the brand might actually be a hindrance. Or if you have something that's less known or more inert, then it's tough to say whether that will be able to translate to something real on-screen.

Mary Long: Okay, you went to the toy workshop. What can you tell us? 

Alex Barasch: There's pink as far as I can see; it's just they have the machines that they use to fix the head to the dolls. They have life-size hot wheels; they have multi-story tracks -- it's crazy. That is a pilgrimage that JJ Abrams had to make for Hot Wheels. We've got Tom Hanks doing Major Matt Mason, which is this toy from the '60s that's actually no longer on shelves.

I also sat in on a development meeting, which was very revealing, where these executives were sitting together and talking about the ideas that might work for various properties and trying to match a toy to a genre. They're trying to make the Magic 8 Ball into a horrid comedy.

They have all of these ideas in the tank, and that was very instructive in terms of the likely trajectory of this cinematic universe. But it's not quite mobile in the sense of them. They're not trying to do any crossover. Maybe they really only need a few of these to succeed in order to prove themselves, but they're really throwing everything at the world at the moment.

Mary Long: There's a moment in your article where you mentioned, I think, the CEO increased talking about Masters of the Universe and saying, there's endless content here; I can see sequel after sequel. I understand why endless content is appealing to a studio executive. But as a consumer, again, I think of the MCU, and I think there are 84 movies and TV shows now that make up the MCU. I can't help but think there's a point when the well runs dry, even if the well keeps going, and there can be too much of a good thing. Are we seeing that play out in this space?

Alex Barasch: Yeah. I think that the exhaustion is real for the MCU and possibly soon for Mattel, even though very few of these things have actually come to fruition yet. Again, we're in this moment in Hollywood where it seems that on the studio side, these are the things that they're willing to green-light. There's a real emphasis on this notion of pre-awareness and the idea that audiences need to know what they're getting into going into the cinema, or they simply won't show up.

I have to say, I don't know if that's reflected. It is reflected in the box office in the sense that the top-performing films of the last year were all reboots and sequels. The top 10 at the box office in 2022. But I think that there is a real desire for original filmmaking, and I hope that we have not seen the last of that.

But there is this bugging that it seems increasingly filmmakers need to strike. Particularly if you want to take a big swing. If you want to do a big-budget film, you need to marry that ambition to a piece of IP, particularly for an early career filmmaker. I spoke with the Nee brothers, who are working on the He-Man film for Mattel, or even someone like Greta Gerwig, who has this fantastic filmography, but she's never worked with a budget anywhere near the size. In those cases, it seems increasingly that this is the deal you have to make.

Mary Long: When it comes to executives sitting at their desks and deciding what gets green-lit, what information are they using to make those decisions? Is it just looking back and saying what's worked well previously? What have been the big hits in the past year, or is there more of a formula?

I was talking to a friend who works in the tech industry about this the other day. He asked, is there any testing that happens in this industry? The whole point in the tech industry is to fail as fast as possible. If you know something's not going to work, you pivot, and you actually put money behind what you know, with some degree of certainty, will land. How are executives deciding and determining what will land? How are they backing up their bets?

Alex Barasch: I'm sure that this varies from studio to studio and streamer to streamer. But certainly, at Mattel, there was a lot of talk of four-quadrant films. You want to hit all of the possible demographics. You need it to be broadly commercial, theatrical, and really hit all the beats. Even the slogan of the Barbie movie, if you love Barbie, this is for you. If you hate Barbie, this is for you.

It seems an almost impossible thing to hold in one film, but there is this desire to play to as broad a base as possible and to inoculate against those critiques in ways that will draw people to the theaters because we're in this mode. Particularly we've seen this with the MCU, where it used to be the case that you had individual actors who could really draw people, drawing audiences.

At this point, it's the characters who are the draw-ers. We've had, what, five Spider-Mans in the past 15 years; it just keeps cycling through people. But it's the character and the law and the storylines that are apparently bringing everyone back, or at least that's the calculus in Hollywood. This idea that we need to lean on what people already know and have been proven to carry both.

Mary Long: But it also does seem star power carries huge weight here. Yes, it's the character of Barbie that draws people in, but Margot Robbie is playing Barbie.

That's interesting how much of it is the IP and how much of it is the existing brand of the actor that's pulling someone in.

Alex Barasch: That's a great point. I do think -- particularly for Mattel because they need to prove themselves in this space, and they wanted to have that era of prestige and show that serious contenders in the entertainment realm -- they do need these A-listers, these heavyweights to align themselves with, which is why they're recruiting people like Margot Robbie and Greta Gerwig and Tom Hanks and Daniel Kaluuya.

If you don't have those names, maybe you don't go to see a Barbie movie. I don't know that I would have seen it if it were not for Greta Gerwig and Margot Robbie and Ryan Gosling. I think that, particularly for them as the new companies in this space with something to prove, they really do need to lean on nowhere a serious operation, look at who's working with us, and I think that's part of what started this flood of unlikely partnerships.

Mary Long: This isn't such an unlikely partnership, but an adaptation that did recently land with viewers came not from toys but from video games. Late last year, you wrote about the making of HBO's The Last of Us and how its creators were aiming to turn this video game into prestige television. In the spring, Nintendo pairs up with Illumination Studios to make the Mario Brothers movie. How did these productions break what you call the curse of bad video game adaptations?

Alex Barasch: I think a lot of it, particularly in the case of The Last of Us, was about choosing the right source material. Video games are very difficult to adapt to the screen. They are often nonlinear so much, but it's about the active emotion, the experience of being in it in that way. All of that is lost when you become a passive viewer who's experiencing these things. If there are branching pads in the game, and you went one way, and the film went the other, then you, as a fan, might be disappointed.

Video game fans are notoriously people with very strong feelings. It's this question of fidelity and also of creating an experience that is distinct from what you've got in the game because you know that you're never going to have that exact experience replicated in a film as a passive viewer. But it was also to this point about Greta Gerwig being the one to do Barbie. It's about choosing the right talent, having someone like Craig Mason who did snowball and who is a great fan of the game but also has proven himself to be capable of something with real emotional heft and intensity to it of that type.

You felt in safe hands, and now it's swept the Emmys in terms of these nominations. I think they got 24 just a couple of days ago. I think it really is about finding the right partners and finding the right material that actually does have that dramatic potential. In that regard, Barbie seems it's going to do well, but I don't know that the partnership around UNO or something else will be as effective because that is not necessarily the property that has cinematic potential.

Mary Long: For sure, I'm with you on the skepticism about UNO, but I'm so ready to be proven wrong. Everyone is talking about AI and Super Buzz-worthy, whatever. And that's also a huge cause behind the writers and actors in Hollywood striking. But all this talk brings up an interesting point. It seems this IP strategy is based on Hollywood executives almost looking for a copy-and-paste formula. Something that comes from an existing well of content that can just be replicated and is going to bring in guaranteed dollars.

But where we've seen success with that pulling from the well is when you have, like you said, really strong creative partnerships, things that are, yes, pulling from existing worlds but are pretty wholly original in their attempt at building that world. What do you think of this talk about AI and how that could impact the entertainment industry? Does that support this IP strategy that we've been talking about, or does it actually undercut it a little bit?

Alex Barasch: I do think that the best results are the ones that diverged more wildly from what you'd expect. I think filmmakers having the flexibility to take that creative license is the thing that makes these things great, as you were saying. The Last of Us was pretty faithful, but the episode that everyone talks about is the third episode, where you have this bottle episode. It's a gay love story inside the universe of the game, and that was a plot line that was barely hinted at in the game, basically doesn't exist.

It was created wholesale for the show, and it's the most successful moment, but one of them. I think AI is simply going to be used to replicate what's come before, and certainly, there is that executive tendency to speak in comps. If you're in the room with these people, they'll all be saying, "We wanted a film that book smarts meets Bill and Ted." It's about mashing together the sensibilities of these previous titles. I don't know that that's a successful formula. I think you do need the freedom to innovate and to take a hard left turn, which Greta Gerwig can certainly do with this one.

Mary Long: As always, people on the program may have an interest in the stocks they talk about. The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Mary Long, thanks for listening. We'll see you tomorrow.