[MUSIC PLAYING] (SINGING) When you walk in the room, do you have sway?
I’m Kara Swisher. And you’re listening to “Sway.” My guest today is Ynon Kreiz. He’s the CEO of Mattel, the toy company behind brands like Barbie, American Girl, Hot Wheels, and Fisher-Price. I’ve known Ynon for some time. I followed his career from Endemol, the production house behind “Big Brother” and “Fear Factor,” to Maker Studios, a YouTube multi-channel network of creators of short form videos that Disney acquired for a staggering $675 million. That didn’t go exactly according to plan. TikTok got big. Maker didn’t. But I wasn’t surprised when he brought that content DNA into Mattel. Ynon took over the company in 2018 at a point when it was hemorrhaging money. His plan to save it — he’s sending Barbie, Rock’em Sock’em Robots, and even Magic Eight Ball to Hollywood. So I wanted to talk to Ynon about this playbook and about the future of play. Ynon, welcome to “Sway.”
Thank you, Kara. Great to be here. And thank you for inviting me.
So let’s talk about first, what did you think you could achieve at Mattel where you went in 2018, where you’ve been since 2018, can you talk about why you went there?
Well, Mattel is a very interesting situation in that when I came into the company, I saw an opportunity to transition from being a toy manufacturing company into being an IP-driven, high performing toy company. Mattel is a company that is more than 75 years old, owner of one of the most important and successful children and family entertainment franchises in the world. Yet, it was facing a lot of challenges over a period of time.
You were the fourth C.E.O. in four years, for example. It was struggling financially.
That’s right. Yeah. So —
You laid off 2,000 people. Correct?
It ended up being restructuring, a heavy restructuring of the company. It was more than 2,000 people. And if we look at what we’ve achieved over the last three years, there’s been some significant and substantial progress across all key financial metrics.
So talk about the thesis a little more, this idea that’s driven by intellectual property. Explain in a little more detail what that means from your perspective.
So to me, the opportunity was to take a company that did not fully evolve into the new economy and think of ways to commercialize the core asset — its library — in ways that it has not done before. The company, over the years, became an owner of very heavy manufacturing infrastructure. So the opportunity to me was focused on commercializing the catalog, the I.P. that you own, focus on demand creation rather than invest so heavily in manufacturing.
Right. So toys are not the point. Selling — I mean, you could sell more toys when you do this, presumably. Correct?
So there are two parts to the strategy. Step one is to become a high-performing toy company. And we’re not saying that we’re moving away from being a toy company. We’re not saying that toys is not a great business to be in, because it is. What we are saying is, we have two opportunities for Mattel. One is to become a high-performing toy company. And if we just do that well, there is tremendous value we can create. And this is about running the company well. It’s about becoming more efficient, more productive, and achieve great returns from the toy side of the company.
Right. The core business.
And this is step one. In the second phase, the opportunity is to expand. And there, the one analogy we refer to is what Disney did with Marvel, which used to be a comic book publisher. And Disney was able to reimagine it in exciting ways. We did finish, for the most part, the heavy lifting of the restructuring of Mattel. We took out more than a billion dollars of cost. So we’re now in the thick of the first part of the strategy, which is running the company well.
Your big play is to make movies and TV based on Mattel toys. Why is that so essential?
It is essential because of the upside it represents. We see an opportunity to participate in large industries that in some cases are actually bigger than the toy industry. And the opportunity there is to make films, television, live events, consumer product and merchandise, participate in the growing online video or gaming industry, music, and other opportunities that are driven by big brands. And if you look around, we believe Mattel owns, next to Disney, the strongest catalog for children and family entertainment franchises in the world.
All right. So your competitor, Hasbro, has been making movies for a long time. The first “Transformers” movie came out in 2007. Does that make you a little late to the game? Or does it matter, from your perspective?
Well, we’re not inventing this model. And if anything, we see it as a good thing. You know, we’re not sitting here saying, we are going to do something that has never been done before, and we are going to make it happen anyway. What we are saying is, our strategy is almost obvious. We own such incredible franchises, incredible characters, and have such a large fan base of people all over the world. As an owner of such a strong catalog, why wouldn’t we do that? We often say that, look at Lego, that we’re able to make some great movies out of bricks.
Mm-hmm. They’re really cool bricks, though.
Absolutely. Now, our approach is different to some other companies in that in order to achieve scale, we did not sign an output deal with one studio. Instead, what we do is we partner with the best creative talent in the industry.
Essentially, you’re sort of spreading it around the table, essentially. So there are 13 movies and more than 20 TV shows and works based on Mattel toys in the works. So let’s talk about this pipeline cause you’re everywhere. This is an astonishing amount of projects. There’s films based on Magic Eight Ball, View-Master, Uno. Those toys don’t really scream movie material to me. But how did you decide which toys needed to be made into movies?
Yeah. So the mandate for each of our activities is to make great experiences, great content that people want to watch. The mandate is not to make a movie in order to sell more toys, but to make a movie that will be successful and that people will want to watch.
And a multi-year franchise, correct? Like with Marvel.
Exactly. Exactly. That’s right. And to build franchises. Now, if we’re successful in doing that, good things will happen. And we know what to do. And we, of course, will also know how to sell more toys. And we have been selling toys for Barbie and Hot Wheels for many years very successfully without movies. So we know how to create evergreen franchises. We know how to manage evergreen franchises. This is an opportunity for us to expand into new domains. And this is how we attract the creative talent by saying, let’s make the best movie you can. We are supporting you. And obviously, we have a creative say. We don’t just give the rights away, but we actually participate. We’re co-producers. We work closely with the studios. We join the creators in hiring the writers, making choices on cast, release schedule, and everything else.
Let’s talk about specifics. So let’s start with Barbie because that’s one of the most famous Mattel brands. In development starring Margot Robbie with Greta Gerwig directing. What an interesting pair. Is it going to be a quirkier look at Barbie than we’ve seen before? Cause that’s a pair that I don’t think is going to do your traditional Barbie movie that one might expect.
Well, we are looking to challenge conventions. And when we partnered with Greta we hope and expect that she will have a unique perspective on Barbie that will be culturally relevant and will resonate with people all over the world. And of course, Margot Robbie could not be a better representative of Barbie. She’s a co-producer, very active. And together with Warner Brothers, our partners, we believe that we have creative leaders that will imagine Barbie in a way that is most suitable for today’s generation.
So you — I’m excited for Vin Diesel to appear in Rock’em Sock’em Robots. I still have my Rock’em Sock’em Robots when I was a kid. Are you hoping a movie like this ends up like a “Fast and Furious” kind of scales franchises? Talk a little bit about Rock’em Sock’em.
Yes, this is much more of an action movie. And Vin is very excited about the project. This is another example of how we took a brand that we haven’t commercialized in decades and reimagined it, and now have an opportunity to bring it back in a way that is more timely and relevant today with a great action movie star.
Yeah. It still remains a very satisfying toy. But in your view, can any Mattel toy be a movie? I’m still — I’d like you to sort of address how you’re making one with the Magic Eight Ball. How do you look at that?
You know what? If you had to think about Magic Eight Ball, I think you’d probably come pretty close to what it would end up being. It will be an interesting —
It could be a horror movie.
It’s not going to be a horror movie. It would be appropriate for families. But it will have an edge. And you see, even the sheer fact that you are thinking —
I have six Magic Eight Balls, Ynon. I don’t know what to tell you. I love them. I rely on every major decision of my life is made by a Magic Eight Ball.
But the sheer fact that we have you think about, I wonder how a Magic Eight Ball is going to be like, we are doing something right. We are going to trigger people’s imagination and spark a lot of interest.
O.K. What disagreements do you have with them? Like, you could screw up some of your brands here. What’s the last disagreement you’ve had with a studio over this where you’re like, no, no. You’re not doing that to my toy.
You know, it’s actually been very exciting to see how much we see eye to eye with our creative partners. And the reason is, we have the privilege to find and partner with the people that we choose and prefer. We know what we’re getting into. We know the people that we collaborate with. And with that so far, the conversations are progressing very well.
O.K. No problem in Hollywood. That’s good to know.
No. And it’s not to say that every script is a home run out of the gate. You hone in, and you continue to fine tune and go through multiple rounds until you land the right script, the right story, that you’re looking to greenlight.
But last year was a terrible one for the movie industry. It’s been great for toy sales. It’s increased 16% in the US in 2020. Are you worried about what’s happening in Hollywood now? Do you think it’s going to affect you? You’re obviously a student of Hollywood. And you know I talk about it a lot with streaming. And there’s been a lot of — there’s a lot of tension and pain going on within the Hollywood community over where this is going, especially post-pandemic. How do you look at the landscape as someone who’s coming in with a lot of different ideas?
Well, first of all, obviously, the pivotal times for the industry, I’m actually very positive about this evolution. Giving consumers more choice, more immediacy, I view all as a good thing. In the case of movie marketing, this will evolve, obviously. I think the streaming platforms are doing an excellent job reaching people in terms of marketing in a very efficient way. And there may be less of the hype of marketing towards an opening weekend.
Right. And the high-budget picks, right, the high-budget movies.
But over time, I believe the industry will find the right equilibrium in terms of theatrical windows, whether it’s 45 days or something that will evolve from here then releasing the movie straight into streaming. When it comes to our movies or movies targeting families and children, there is an interesting dynamic in that what we do know is that when a movie is released on streaming directly to give people more access, they will watch the movie more times in the opening window. And there is an element to that that drives engagement in a different way, more intense way, than before.
Probably better for you. Do you have to spend these $100 million films? Or look. “Power Rangers” did not look good, you know. But it was so, so popular. The plot were ridiculous. It looked kind of cheap. But it was a mega hit. Do you need these big budgets for these movies to succeed?
You know, more than anything, it is about the story. It’s about cultural relevance. And it’s about authenticity for our audience. And this is why we say, capture the full value of our intellectual properties. We own a catalog that has its own gravity, its own pull. That is what we are leveraging. Everyone is looking for big brands, big IP. This is not just a Mattel strategy. Every major platform, every major M&A, this is all driven by big brands, big franchises, big I.P. And we, as owner of so many strong franchises, historically have not participated in that opportunity. And given everything that we’re seeing right now, the importance of big franchises, we believe we are facing — that we’re standing in front of an incredible opportunity for the company.
So you noted Lego, the brick maker. It’s the top toy company in the world, which has been really creative at their branding. There’s Lego — not just Lego movie, Lego video games, a YouTube channel with more than 12 million subscribers. Are you thinking about that? I mean, do you think about more than that? Because you don’t want just a Magic Eight Ball movie. You want them to have an entire universe of digital properties around.
Absolutely. We did spend a lot of time talking about movies. But there is Mattel Television, that’s been another thriving part of our business. We just announced that we are launching another “Masters of the Universe” show on Netflix. This is the second show, second animated series, on Netflix of “Masters of the Universe.” This one is more geared to a younger audience. But there’s a lot of activity, a lot of series and specials that we are launching on streaming platforms and broadcasters in the US and all over the world. There’s a lot that we do on digital gaming. It’s more nascent. It’s not as developed, but it’s growing pretty rapidly. It’s already well underway at this point in time.
We’ll be back in a minute. If you like this interview and want to hear others, follow us on your favorite podcast app. You’ll be able to catch up on “Sway” episodes you may have missed, like my conversation with Alamo Drafthouse CEO Tim Lee. And you’ll get new ones delivered directly to you. More with Ynon Kreiz after the break.
O.K. So one of your brands is Barbie, obviously. And I would be remiss if I didn’t talk about gender and inclusiveness. Barbie has been at the center of this discussion for all the time. It’s its biggest brand. It’s been selling really well. It’s kind of the opposite of Lego in a lot of ways. And it’s exciting that you have such interesting people making the movie about it. But let’s talk about it. And before we do, I should disclaim that as a kid, I was given a Barbie. I pulled the head off. And that was the end of my experience with Barbie. I have a young daughter now. I doubt I will give her a Barbie. I think I will not. So you’re trying to reinvent it. And I understand why you’d want to do that. But explain to me why I should buy my daughter a Barbie, or my son.
Well, I’m glad you asked the question because you know that Barbie today is by far the most diverse doll in the market. Barbie, today, is the flag carrier for diversity and inclusivity. Some people have a different perception of Barbie, mostly what Barbie used to be in the past. But today, Barbie represents the world that kids see around them. Barbie has more than 200 careers. There are more than 35 skin tones, almost 100 hairstyles, and 10 different body types. More than half of the Barbies that we sell today are diverse. The product that we sell is not just the classic Barbie that you know, but it’s all —
The one I killed. The one that I cruelly murdered. Poor Barbie.
Yeah. So in 2020, the second most popular fashionista globally was a doll in a wheelchair. And Barbie, in many ways, is the most pronounced example of what it means to create a toy line that empowers kids and that develops them to think in an open-minded way about the world.
So how do you get that idea that they still think of it as a thin, blond woman who, if she were real, would be 5 foot, 9” and size 2, essentially? How do you change that? Or you think it has changed.
It already changed. And Kara, I know you are so far ahead of —
— the world on so many things.
You’re actually behind on Barbie.
Barbie. I just remember they put glasses on her and said she was smart. And I was like, that is not enough, Barbie. The glasses aren’t —
No. So Barbie today is very different from the one that you remember as a child. And I can tell you that Barbie today, there are so many things to empower girls. As one example, Barbie is promoting a dream gap, which is about closing — or dressing perception — that young girls have in their own mind that they will never be as successful as boys. There’s research that is showing that doll play is positive and helpful for young girls or boys. And Barbie is at the forefront of that.
You are talking about that idea that there’s been a movement away from gendered marketing of kids’ toys. Companies like Amazon and Target have stopped designating toys for boys or girls. Mattel released a line of gender neutral dolls in 2019. Is that the future of toys, becoming less gendered than in the past? And I know that’s going to set some people off, but I think it’s a great thing.
Well, we are thinking of toys as gender neutral. And by all means, we always invite children, irrespective of gender, to engage and play with our product. Even internally, we change the definition of the categories and how we organize the company around toy categories, rather than gender. And this is something that we are pretty progressive and thoughtful about. This is not to say that the way product is being bought and consumed has a tendency, and our market kind of gravitates towards, but we as a company think of our products as gender agnostic. We make product for children.
Will you release a transgender Barbie, for example?
You know, I can’t talk specifically about product plans. But I can tell you that Barbie is always thinking about consumers in a way that is progressive, that does represent the world around us, and staying relevant and culturally relevant and timely for children. And this has been the magic of Barbie, of being timeless and timely at the same time. And this is all —
I’ll make you a deal. I will buy a Barbie for my daughter and son if the movie’s good. How’s that? If the movie makes me excited about Barbie.
The movie will make you super excited. But I encourage you to not wait until the movie is out.
I’m gonna wait. So parents, again, are the ones buying these toys. And studies have shown that consumers spend more when they’re nostalgic. How do you balance creating toys that are relevant for today’s kids, taking into account adults’ nostalgia? Cause I have ideas about things. And kids have a very different ideas. I mean, my daughter right now is watching a lot of “Teletubbies.” And by the way, I would love a “Teletubbies” movie cause because I want more depth of these characters, of Tinky Winky, for example, his back story. But how do you do that? And how do you think about the future of play when you have to balance the people who are buying it with the kids finding it relevant?
So we strongly believe that physical play is here to stay. It is an important part of child development. And when we make toys, we think about many different aspects. One thing that is key to what we do is having a brand purpose in our toys. This is something that became one of the core part of the Mattel playbook, which is a purpose, a reason, a set of values that come with a toy so that you’re not just buying something to pass your child’s time. You want to know that there’s an added value, there’s something more than the actual play system in and of itself.
Sometimes. I think the popcorn popper speaks for itself. I don’t want it to do anything but be delightful. Your Fisher-Price and the popcorn popper. I don’t want you to touch the popcorn popper, just so you know. But you are doing — working on something called mixed play, an approach that weaves tech into toys like augmented reality, Pictionary, Hot Wheels with a digitally connected racing system. How do you look at tech and toys? People are justifiably nervous. And at the same time, more platforms like Roblox, which allows kids to make games and play each other’s games. Does that threaten the toy industry? So how do you look at tech overall? And then when you look at some of these new platforms, how do you look at them?
This is not a threat at all. This is a great opportunity to extend the physical play into the connected world. And we see, as I mentioned earlier, that the toy industry is still growing and expected to grow, even as kids spend more time online. Ultimately, as the owner of the asset, it all comes back to the same place. And in the world of unlimited shelf space, unlimited supply, it is all going to come back to big franchises, big brands that people trust, that represent quality, and that have a large built-in fan base. And that is where we see the opportunity to combine all worlds into a place where great product attract engagement and does something positive for our children.
So when you think about virtual reality, for example, are you planning a future of kids play involves using V.R. headsets like Oculus?
We expect that eventually will happen. This is not something that we are currently developing or expect to launch in the immediate future. But over time, we obviously remain very watchful on how this will evolve. And if there are opportunities that are of quality and represent our values, we will explore them.
What’s interesting about the online stuff is, you remember, Disney bought Club Penguin. My kids used it for a New York minute. They used a lot of stuff for a New York minute. And some of them stick, like Minecraft, and others don’t. Essentially, in that universe, I think probably TikTok is the most entertaining thing for certain kids, not very young kids that you’re talking about. So give me one product right now that Mattel’s working on that you’re very excited about that may have just been introduced, or one area that will surprise people. Because it’s not — you can’t just rely on old brands. Although you have some very excellent old brands. What is something new and fresh that you think is important in toy — in play, I guess?
Well, when you say old brands, you need to realize how fresh and progressive —
Fresh. Your fresh old brands. I’m a fresh old brand.
And here’s something that is actually really exciting, even though I’m going to take you back in time somewhat. But we just now are in the process of relaunching three mega franchises — Masters of the Universe, Monster High, and Matchbox used to represent a very large business for Mattel that we are now reintroducing, relaunching, and make them more relevant to today’s generation and as fresh as if we just created them.
Are you thinking of buying anything? Again, I urge you to look at Teletubbies and have Martin Scorsese make a movie with the Teletubbies. I urge you to get that to happen. Could be very dark.
Thank you. I just made a note. But —
You’re ignoring me completely.
You’re like, no. There’s a lot there, having watched hours of it recently.
As a creative company, innovation is part of our DNA. And where we ask our developers to think of new ideas, new creations, some of it is part of an existing framework of our franchises and brands that are already active. Some is to support partner brands. And also, there is the next big thing that no one knows if it will happen or be successful or in what form it will be introduced.
I’ll give you an insight. Paper bags are very popular with two-year-olds. In case you want to make a paper bag and offer it and put a Barbie collar, or whatever on it.
And I really hope, Kara, that you’re going to give Barbie a real opportunity to partner with your children.
I will consider it. I will go to the store and stare upon it and consider the whole thing.
I think you will be impressed. You will be very impressed.
I’m more into Nerf. I’ve still got from my older children hundreds and hundreds of Nerf guns. So I feel like I may just stick with what I got. But I promise you I will take a look at Barbie. And I truly appreciate you talking to me and putting up with my jokes.
It’s been great, as always. Thank you, Kara. [MUSIC PLAYING]