Before concerns over child obesity and the unhealthiness of junk food reached their current heightened level, character licensing was a straightforward proposition. On the release of a children's film, its producers would strike a deal with a brand - usually a fast-food chain, chocolate bar or sugary breakfast cereal.
Things have changed. Last year, regulator Ofcom restricted the TV advertising of food high in fat, sugar and salt to children. While the rules only apply to broadcasting, many character owners have become choosy about the brands with which they are prepared to associate. Similarly, on the promotions side, some advertisers have shifted their strategy to target families rather than children, or to create their own characters.
Richard Pink, managing director of Pink Key Consulting, says the licensing industry is yet to find a consistent approach. "The landscape has changed beyond all recognition in some sectors, and in other categories it hasn't changed at all," he explains. "You've got the promoters on one side of the fence not wanting to do a deal with licensors targeting children, and the licensors on the other side avoiding promotions because of corporate social responsibility."
With marketing budgets shrinking as a result of a wider economic downturn, the reluctance of brands to spend money on promotions is likely to increase.
Nickelodeon is the latest character owner to introduce a no-junk-food policy for its promotions, while Disney introduced a similar rule in 2006. Many food brands are changing their ways accordingly. Pink says the Yum Group, which owns Pizza Hut, KFC and Taco Bell, has stopped promoting its products to children, focusing instead on families.
Meanwhile, Kellogg, the biggest cereal brand owner, has moved away from licensing deals in favour of its own characters, such as Tony the Tiger. McDonald's has followed suit with its acquisition of the Fairies and Dragons characters.
Elsewhere in Europe, promotions with fast-food chains and confectionery brands are still common, particularly for family and teen films, according to Andy Duff, managing director of sales promotion agency Atom. For example, Burger King had a global deal with Sony Pictures on Spider-Man 3, and is currently working with Warner Bros on The Dark Knight. "Spider-Man 3 had more of a young adult audience, so the TV ads targeted a demographic (not related to Ofcom's restriction)," Duff says.
There are no restrictions on advertising unhealthy food to the over-16s in the UK, but Duff says the older the audience, the less likely it is that a film will license a character to a food brand. The main promotional partners for a James Bond film, for example, include alcohol and electronics brands.
Vickie Holtom, partnership manager at Chorion, which manages characters such as Paddington Bear, says character licensing has descreased in some sectors and increased in others. "Over the past five years, cereal promotions have declined quite distinctly," she says. "But travel promos are increasing."
Chorion recently announced a deal for British Airways to use Paddington Bear for the airline's children's activity packs. Other clients include P&O Ferries, which uses Noddy and Mr Men, and First Great Western, which uses Chorion's furry Peruvian marmalade eater.
Pink says the industry is uncertain about how to develop the licensing model, and character owners need to lead the process. An example of more lateral thinking is Blu-Tac's partnership last year with Spider-Man 3. "We need a matching up of brand values," Pink says. "Licensing people must understand their own brand values and how they can benefit another brand."
CHARACTER-OWNER RULES
The licensing policies of character owners vary. Some, such as Disney and Nickelodeon, have an explicit ruling against association with food high in fat, sugar and salt. Nickelodeon announced its policy, which does make provision for "special occasion" food such as birthday cakes, in July, while Disney set a strict nutritional standard in 2006, both for Disney-branded products and third-party promotions using Disney characters.
Other character owners consider each brand on its merits. Vickie Holtom, partnership manager at Chorion, says the appropriateness of the brand is vital. She argues that Marmite's recent use of Paddington Bear was appropriate because the character is famous for eating sandwiches. Holtom, who is in discussions with fast-food chains about promotional link-ups with Noddy, says: "We would consider a fast-food brand if it is appropriate and works on the basis that its products are a treat."
Andrew Carley, head of licensing at film distributor Contender, which owns pre-school brand Pepper Pig, says children's diet is a matter of parental responsibility. "It's not for us to dictate to parents what their children should and shouldn't eat as long as the licensing programme has balance," he adds. "I would have no problem at all with Pepper Pig being associated with chocolate."