When you've got a smash hit on your hands, you've got to monetize it. And that's just what Netflix (NFLX 0.43%) is doing with its surprisingly successful KPop Demon Hunters franchise.
The streaming juggernaut has announced it will partner with both Hasbro (HAS 0.06%) and Mattel (MAT 0.21%) to offer all kinds of themed toys, games, and collectibles to consumers. But does it really require multiple toymakers to monetize a single film? And will it make a difference to the company's share price?
Image source: Netflix.
Not just any streaming film
KPop Demon Hunters isn't just any film. It's the most-viewed movie in Netflix history, racking up more than 325 million views after just three months on the streaming platform. Netflix said its third-quarter revenue popped (K-popped?) 17% year over year in part due to the success of the animated film.
The score, which naturally features K-pop style music, has also been wildly successful, with HUNTR/X's single "Golden" topping the Billboard pop charts for eight weeks between August and October. A "sing-along" two-day limited theatrical release in the U.S. and Canada in August is estimated to have grossed about $18 million.
But like all pop culture phenomenons, this one seems to have largely run its course. "Golden" was eclipsed on the Billboard charts by Taylor Swift's "The Fate of Ophelia" on Oct. 18, and it'll take time for Netflix to negotiate with Sony -- which owns the rights to future movies in the franchise -- about a sequel. However, merchandising opportunities can fill that gap and keep the franchise active (as well as keep franchise-related dollars flowing in). But will it work?
The best of both worlds
Given that the initial burst of enthusiasm for the film seems to have already run its course, why does Netflix need two toymakers to manufacture merch for this franchise? The answer lies in one of the secrets of the film's appeal: a wide fanbase that includes multiple age brackets, genders, and cultures.
Although Hasbro and Mattel are both toy companies, each has specific strengths within the toy market. Hasbro -- augmented by its Wizards of the Coast division -- excels at board games, roleplaying games, and electronic games, while Mattel has a wealth of experience making dolls and doll playsets and accessories through its Barbie, Monster High, American Girl, and Polly Pocket brands.
In assigning its KPop Demon Hunters Netflix has basically divvied up the spoils to play to each company's strengths: Hasbro will manufacture plush, electronics, roleplaying items, and board games, while Mattel produces dolls, action figures, accessories, and playsets.
This takes into account the wide variety of the KPop Demon Hunters fanbase. At the sing-along screening, I sat between my 11-year-old daughter and a mixed group of college students, and I'm not sure which was more excited to be there. The college students had made their own light-up HUNTR/X wands (which feature in the film), and one mentioned that she had used Mira as the basis for a Dungeons & Dragons character.
I'm sure Hasbro, which owns the Dungeons & Dragons franchise, would love to sell them light-up wands for roleplaying and an out-of-the-box HUNTR/X D&D campaign setting, while Mattel sells my daughter a Rumi doll and a plush of Derpy the lovable cat demon.
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Will it make a difference?
This sounds promising, but will it make a difference to Netflix's bottom line?
The good news is that Netflix isn't bearing the costs of manufacturing these items. It's made Mattel and Hasbro "global co-master toy licensees," meaning Mattel and Hasbro are paying Netflix for the right to slap the KPop Demon Hunters brand name on toys they produce. Merchandise licensing can be incredibly lucrative: Disney (DIS +2.37%) made an estimated $1 billion in 2023 from Star Wars merchandise, despite a lack of Star Wars theatrical releases that year. Considering much of this KPop Demon Hunters merch won't even be available until spring 2026, though, Netflix better hope the brand has staying power.
That said, a successful merchandise rollout that generates hundreds of millions of dollars in licensing fees at hardly any additional expense to Netflix would make a meaningful impact on the company's bottom line, which was just $8.7 billion in 2024.
But we probably won't even be able to estimate the scale of that impact until at least Q2 2026. Despite the potential future impact, Netflix investors will probably focus on near-term issues for now.
