Covid-19 Series: Genius Brands Talks Adaptability and Weathering the Storm
Jon Ollwerther, EVP, Global Brand & Business Development, Genius Brands International spoke to Total Licensing about the challenges, strengths and long-term effects that the crisis will have on the industry
It is very early days in the crisis, of course, but could you outline the measures you have put in place to ensure business keeps moving?
JO: “One of the most important factors that determines whether a person or a company survives a crisis or emergency is how quickly they identify it as such. Months ago, our current reality was hard to even imagine. At Genius Brands we watched closely as the crisis unfolded in China, and we were very on guard so we were in a position to react quickly when it became clear it was heading towards a global crisis.
Our first priority was the safety of our employees. At the same time, we focused on liquidity—this is not a secret formula, companies that have strong balance sheets fare best in recessions. We also made early and frequent check-ins with our key media and licensing partners on the consumer products and distribution sides of our business. Keeping a frequent and open dialogue with, specifically, our licensees and the retail community has helped us maintain a strong position and up-to-date awareness in an ever-evolving situation.”
What initial effects is the virus and the ‘global shutdown’ having on your business?
JO: “The first and most apparent effect of COVID-19 and the ‘global shutdown’ is our corporate cultural and habit shift from a primarily office-based culture to an entirely work-from-home culture, but that is not unique to Genius Brands. We were able to adapt very quickly to this change and quickly shifted our focus back to our own IPs, our content partners, licensees, and tv network partners.”
How are you still managing to engage with fans?
JO: “We’re a global children’s media company which produces animated content so we have ramped up the volume of content we offer on YouTube and through our own network of digital channels, which reaches over 100M US TV Homes), as well as content across our social media channels. We’ve also increased the number of DIY activity guides and coloring activities we post online.
Finally, and most importantly, we are very proud to have swiftly produced a series of animated PSAs teaching kids how to be safe during this pandemic, starring Jennifer Garner (Netflix’s Llama Llama and Warren Buffett (Amazon Prime’s Secret Millionaires Club), both of whom donated their time to the project, as well as the team of producers. Genius Brands is offering the PSAs for free to any and all broadcasters, educators, and parents to use to improve child and family safety. You can check them out at https://www.gnusbrands.com/PSA.”
Conversely, are there any areas of strength that have surprised you?
“Genius Brands has always fostered a very entrepreneurial spirit; for example, we don’t have a culture of assistants, and we outsource our IT. There is no culture of “pass the buck.” This mindset has served us well as we’ve transitioned quickly to a work-from-home organization. We made this transition with virtually no disruption to our workflow. This enabled us to be on email and phones right away, and setting video conferencing meetings to keep our clients and our partners updated on the business.”
What do you see as both the immediate and long-term challenges of this?
JO: “The long-term challenge is without question the macroeconomic shift that has occurred as a result of COVID-19. I have no doubt that the global community will pull together and take control of the medical challenges, though, sadly there will no doubt be much more suffering before that happens, both in the human too and economically. The economic challenges, however, will take much longer to course correct.
As I write this, in the last two weeks in the United States alone, 10 million people have filed for unemployment. Those hard-working people fuel the economy. Many others still have suffered reduction in pay. These people watch TV, they eat out in restaurants, and they spend money for consumer products in stores. For the last ten years, we’ve been in a period of economic expansion, where consumers have felt extra money in their wallets for discretionary spending. There also seemed to be a “sugar high” mentality in the United States, where the average household savings is under $9000, yet the average car loan stretches for over 70 months. The scary thing is that we will inevitably see even greater unemployment figures in the weeks to come.
Yes, these people will get back to work, but that will not happen overnight. Just this week, for example, Macy’s furloughed the vast majority of its 125,000 employees. It will take time to get these employees back to work and time still for them to recover from their financial loss and hardship before they can even consider discretionary spending. Further delaying recovery will be the fact that many jobs that existed just a few weeks ago may not exist again. There will be enduring shifts in our economy following COVID-19—will shopping among large crows bear as much appeal as it used to? Will going to a crowded concert feel as fun? I live in both New York and LA, where large, long, communal dining tables have been a growing trend for the last decade. This is great for restaurateurs who can make each square foot of their restaurant more productive, but will diners continue to embrace it? How much consumer spending will shift online and stay online?
The good news for many in the licensing industry, however, compared to dining for example, is that many of the goods we market to consumers at a lower price point than a meal, and unlike a meal or an experience, there is a greater measure of practicality in a durable good like a garment, or a toy, that can be used again and again. This, in my opinion, will minimize the damage to these categories and will also make them early to bounce back.”