Dawn C. Chmielewski is in New York covering Toy Fair, and here's her report on Hollywood's increasing sway over the toy aisles of American retail. 

When Pixar Animation Studios guru John Lasseter was working on the original "Toy Story" movie, he approached the maker of Barbie to include the fashion doll in the film -- and was rebuffed.

What a difference 15 years, and $8 billion in global merchandise sales, make.

As Disney's Pixar prepares to release "Toy Story 3" this summer, virtually every major toy maker -- including Barbie's Mattel Inc. -- has lined up to make dolls, action figures, construction sets, vehicles and board games based on the film. No fewer than 250 toys will begin appearing in stores before the movie's June 18 release -- three times as many as were made for "Toy Story 2." And retailers are expected to clear shelf space for Buzz, Woody and pals, notwithstanding a recession that has slowed toy sales.

Children can be capricious about their choice of playthings, so toy sellers seek to protect themselves by investing in tested concepts.

"Managing risk is a big thing for retailers," said John Frascotti, chief marketing officer of Hasbro Inc. "When an entertainment-backed property has all of the accouterments to go along with a film or TV show, just that cultural presence -- nothing is a sure bet in life -- mitigates the traditional risks."

The toy industry is increasingly reliant upon Hollywood for characters and stories that kids will want to reenact in their homes. Toys tied to Hollywood's publicity machine is one of the few bright spots in a retail industry that has been stagnant: Sales of such toys rose 41% from 2004 through 2008, at a time when playthings without a TV or film hook fell 14%, according to toy maker Hasbro. And toys based on characters found in movies, TV shows or books accounted for $5.4 billion, or 25%, of all U.S. toy sales last year, research firm NPD estimates.

Underscoring that point, a toy based on "Bakugan Battle Brawlers," a show that appears on Cartoon Network, claimed this year's top prize for toys developed for boys -- for the second year in a row.

"Toy Story 3" isn't the only movie attracting the toy industry's attention at the New York toy fair, where performers portraying the film's Green Army Men rappelled onto the stage during the unveiling of the toy line.

Marvel Entertainment's sequel "Iron Man 2" was also sparking interest.

New York-based Marvel, newly acquired by Disney, courts not only older fans who grew up reading its comics but also 6- to 11-year-old boys who gravitate toward big muscles and heroic figures. After the box-office success of the 2008 film, retailers began clamoring to capitalize on toys pegged to the sequel, due out May 7.

"With [shelf space] such a precious commodity these days at retail, the retailers are looking for intellectual property with a tremendous amount of media behind it," said Paul Gitter, Marvel Entertainment's president of consumer products. "Marvel spends pretty aggressively behind its films."

Hasbro, which holds the toy license, will sell a veritable armada of Iron Man action figures, a remote-controlled walking Iron Man and a helmet, gauntlet and chest light, so kids can transform themselves into the metal-clad Tony Stark character.

"The heroic nature of the brand and character . . . the fact that he uses lots of gadgets . . . the high-tech cool stuff that he does, are right in the wheelhouse for little boys," Hasbro's Frascotti said.

Of course, not every testosterone-fueled summer action film makes for a successful toy line. "Men in Black" and "Independence Day" landed with a thud in the toy aisles, said Sean McGowan, a toy analyst at Needham & Co. And an array of movie-derived toys glutted the market in the early 2000s, leading some manufacturers to scale back their plans.

Pixar's Lasseter has long chafed at the reluctance of toy manufacturers and retailers to get behind original movies. In his induction speech to the Toy Hall of Fame on Saturday night, he recalled how North American toy buyers placed a scant 60,000 orders for Buzz Lightyear toys when "Toy Story" was released in 1995. Canadian manufacturer Thinkway Toys subsequently has sold 35 million of the figures.

"Toy Story," though, is no longer an unknown quantity. The first two films raked in a combined $877 million at the box office and went on to sell tens of millions of DVDs, as well as inspire theme park attractions, video games and books that have been translated into 27 languages.

Interest in "Toy Story 3" was so intense that Disney invited competitive pitches, in which the manufacturers presented their ideas for the toy line, said Chris Heatherly, vice president of Disney toys in North America. Disney took the unusual step of not designating a single company as its "master licensee," instead divvying up rights among a who's who of the toy business: Mattel, Hasbro, Jakks Pacific Inc., Lego Group and Thinkway Toys.

Among the new toys are Mr. and Mrs. Potato Head dressed as movie characters Buzz, Woody and Jessie; a Buzz Lightyear Wing Pack with lighted plastic airfoils that extend and retract; a Lots-o'-Huggin' Bear that is strawberry-scented and utters 45 sayings; a Western train set from Lego -- and Barbie and Ken dolls that, like the characters in the movie, are attired in 1980s-era Spandex and leg warmers (for her) and an ascot (for him).

"We look for . . . proven, classic intellectual properties that have longevity," said Soren Torp Laursen, president of Lego Systems Inc. "Toy Story has proven it has a lot of longevity."

-- Dawn C. Chmielewski

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Dawn C. Chmielewski covers Disney for the Los Angeles Times and she recently wrote about the interesting role Pixar guru John Lasseter plays in the Disney toy line. During the course of her reporting she interviewed  Albert Chan, president and CEO of Thinkway Toys, and since we're always interested in the toy aisle here at Hero Complex we bring you a Q&A with the toy master whose company was an early part of the Pixar success story.

DC: How did the relationship between Pixar and Thinkway get started?

AC: Thinkway and Pixar’s relationship began 15 years ago. When Pixar launched "Toy Story" in 1995 it was the first fully computer-animated movie. As such, it was different than traditional 2-D animation and Disney had difficulty convincing any major toy company to develop toys for the world’s first CGI film. For me, it was no risk at all and seemed like an unbelievable opportunity. The first time I met John Lasseter, about five minutes into the meeting, he and I started talking about his toy ideas and that transpired into playing with his toys on the floor in his office. It was a “toyetic” beginning and that’s how Pixar and Thinkway’s relationship began.

DC: What was John Lasseter’s role in the maverick decision to create a foot-tall action figure?

AC: John emphasized that the Buzz Lightyear action figure toy should be 12 inches in size. He explained that Buzz was designed as a 12-inch toy in reality and that’s the scale applied throughout the film. This was different than traditional action figures sizing but I was willing to listen. At that time, the norm in the action figure category in North America was 5-and-a-half inches. I was unsure if retailers would accept the larger size and groundbreaking higher price point. A smaller size prototype had already been made and I would need to go back to the drawing board and start over again in order to create the larger-sized Buzz Lightyear from John’s vision. Adding to the challenge, I was faced with an impossibly short lead time to redesign, produce and ship the products before the movie release in just five months. To this day, I still remember the exact words John said to me: "Albert, just trust me." I gave him my trust and followed his guidance. That crucial decision changed my life with the international success of Buzz Lightyear and "Toy Story." The success also inspired Thinkway to explore many new items with innovative technologies and establish a point of difference in the market. Indeed, John unknowingly changed the nature of the action figure category in the toy industry.

DC: Was there anything unusual or noteworthy about the collaboration?

AC: Collaborating with John Lasseter is an honor and has been a tremendous learning opportunity for me. My company, Thinkway Toys, has been in the business for almost 27 years. As a toy maker, Thinkway is known in the industry as a pioneer and leader in innovative animatronic toys. We have produced many licensed products, including the "Star Wars" interactive talking banks and won numerous design and retail awards along the way. John is considered the best in his field. When our worlds met, we were both excited about the potential of our collaboration and we have a common interest: to make quality toys.

DC: Lasseter has said that you were the only toy maker who would make a Jesse doll based on “Toy Story 2” or Edna Mode from “The Incredibles.” Apparently, other companies thought these films would appeal primarily to boys and that the toy lines should reflect that. What made Thinkway go a different direction?

AC: Over the years working with John, I have learned to follow his instincts in making toys for his movies. For instance, John pointed out that there was a niche for a Jessie and Edna doll. Most Pixar films are family oriented and appeal to both genders. Normally, producing girl's toys for what is perceived to be a boy's movie is risky in the toy industry but I respected John’s advice and took the Jessie and Edna dolls to market. The results? Let’s just say that John’s instincts were right on the mark again. Edna was a complete sellout and Jessie’s sales are now close to Woody’s!

DC: Lasseter said that he traveled to Hong Kong to join you on a visit of a toy factory and to gain greater understanding of the manufacturing process. How did that visit change the nature of the discussions about upcoming toy lines?

AC: After the "Toy Story" movie was released in 1995, John told me he would be in Hong Kong and would like to visit the toy factory that makes the "Toy Story" toys. After his arrival, we took a two-hour car ride to the factory in China. While we were there, he left no stone unturned and went through the entire production process. He looked at and felt the various colored plastic pellets that would eventually form the different color components of the action figures. He studied how the factory workers applied spray paint on the toy figure faces. After going through every production stage, John realized that the manufacturing process was still very labor intensive and not as automated as he had expected. It was a very hands-on process and involved hundreds of workers and man hours. After the factory visit, I believe John’s insight helped him strike a balance between what is essential to staying true to the film characters while being mindful about what is practical at the manufacturing level.

DC: Is there an example where he’s pushed you to change a design to make it more authentic or rejected an idea because it wasn’t true to the film?

AC: Yes, I remember such an incident during a Wall-E product review last year. At the meeting, I presented my company’s key TV campaign item, the “U-Command Wall-E.” It was a remote control toy with hidden wheels under Wall-E’s treads for mobility. John rejected the hidden-wheels design and preferred that Wall-E’s treads be real working treads just like the character in the movie. It was important to him to keep the character’s integrity in the toys. This was a challenge because I had to re-engineer the design and make sure that the treads would not fall off when the remote control toy makes a turn. John spent time to listen to my explanation, asked questions and tried to guide me in finding creative solutions as if he was a toy engineer. I took the time to redesign the treads and this U-Command Wall-E turned out to be the fastest selling product in our line, globally.

DC: Does all of this make him different than other Hollywood creators and executives that you deal with?

AC: Typically a licensee does not work directly with filmmakers. John is both a passionate filmmaker and toy collector and his interest in the toys ultimately led to better products on store shelves and it was a lot of fun collaborating with him along the way. John has endless enthusiasm for toys and is always curious about how they are made and how closely they resemble and function like the original movie characters. He gets excited about the prototypes and like a big child gets down on the floor or table to play with them. When I showed John and other Pixar filmmakers and animators the Definitive Toy Story Collection Buzz Lightyear the first time, they were impressed that Buzz’s wings pop out exactly like in the movie. He studied it closely, left and right, with his filmmaker’s eyes. Then he looked up and educated us with a film fact: Buzz’s wing tips should be red on one side and green on the other, like a real airplane! I am always enlightened by John’s input.

-- Dawn C. Chmielewski

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CREDITS: "Toy Story" and "Wall-E" images from Pixar. Albert Chan photo from Thinkway.

FOR THE RECORD: An earlier version if this post had a typo in the name of the Pixar character Edna Mode. No capes!

Dawn C. Chmielewski covers Disney for the Los Angeles Times and is a frequent contributor to the Hero Complex. Here is her insightful piece on the role that John Lasseter has been playing in the toy design for Disney and "The Princess and the Frog" in particular. This is a longer version of the one that appeared in the Business section of The Times.

Disney Pixar Animation guru John Lasseter found himself tangled in a miniature fashion kerfuffle.

Toy maker Mattel Inc. had made a prototype doll of "The Princess and the Frog's" newly minted princess, Tiana, wearing her bayou wedding dress. But one animator worried that the gown failed to reflect the one in the film, whose multiple layers resemble the petals of an unfolding waterlily.

Lasseter suggested a way to create the illusion of volume without driving up the doll's $10 price tag -- namely, printing a swirling pattern of glitter atop the diaphanous outer layer of fabric.

No detail seems to be too mundane for Lasseter, who after years focusing on Pixar is extending his reach to Walt Disney Co.'s merchandise juggernaut. Immersing himself in the toy-making process, he has visited a plant in Hong Kong to observe how workers applied paint to "Toy Story" Buzz Lightyear figures. The father of five boys has also spent hours in Mattel's showrooms, studying the Disney Princess line, to better understand what little girls want.

The filmmaker is bringing his taskmaster persistence to Disney consumer products, pressing for better-quality toys in a business associated with sometimes shoddy and opportunistic merchandise.

One of the first things Lasseter did was call for an end to "label slapping," in which a toy maker uses a popular movie title to sell generic toys that are otherwise unrelated to the film.

"If we're going to make a movie, it's going to be the best movie that we can make," Lasseter said. "I take that exact philosophy when it comes to every other product that's going to be referencing a [Disney or Pixar] character or movie -- especially when it comes to toys."

Disney's consumer products group hopes to benefit from Lasseter's creative spark.

The group, which operates Disney Stores in North America and licenses toys, clothes, bedding and even food, accounted for 9% of the entertainment giant's operating income in fiscal 2009.

But the division's operating profit fell 22% from a year earlier, in part because of the recession but also because it lacked hot new properties. Lasseter's efforts appear to be paying off.

Dolls, bedding and other items inspired by "The Princess and the Frog" have been selling briskly.

The week of Thanksgiving, Princess Tiana items outsold the perennial favorite, "The Little Mermaid's" Ariel, by $700,000.

Retailers are reporting that "Princess and the Frog" articles account for as much as 19% of sales of all Disney Princesses merchandise, which generates about $4 billion in annual retail sales.

Interest in Tiana has been so keen, Toys R Us stores pulled merchandise off shelves to ensure an adequate supply for the movie's wide release Friday, according to Lutz Muller, president of Klosters Trading Corp., a toy industry consultant.

"We're bringing in orders as fast as we can get it in," said Toys R Us Inc.'s chief merchandising officer, Karen Dodge.

Because Tiana is the only new Disney princess in a decade -- and the first African American one -- it would be surprising if she hadn't been met with a royal reception, said Ira Mayer, publisher of the Licensing Letter newsletter, which tracks retail sales data.

"This is the new kid on the block," Mayer said. "It should be outselling the others by a wide margin."

The only damper on "Princess and the Frog" retail was gloomy holiday sales forecasts.

"The release date was so close to Christmas, the retailers were very conservative in the quantities of product that they bought," said Disney Consumer Products Chairman Andy Mooney. "They really underestimated the demand."

Lasseter's obsession for playthings is reflected in the subject matter for his first full-length Pixar film, "Toy Story." That 1995 movie introduced him to the challenge of interesting toy makers and retailers in merchandise based on original film stories.  The only manufacturer to create Buzz and Woody figures was a boutique Canadian firm, Thinkway Toys. Retailers were similarly hesitant, placing orders for just 100,000 dolls -- which went on to sell millions.

Lasseter's experience with "Toy Story" and subsequent Pixar films, including "Cars," helped inform how he works with toy makers, retailers and Disney's consumer products group. Those practices at Pixar have extended to Disney Studios, whose animators for the first time participated in brainstorming sessions with the toy makers, providing feedback on design proposals and packaging.

Tim Kilpin, general manager of Mattel's Girls, Boys and Games division, said Lasseter argued that the die-cast replicas of "Cars" vehicles be manufactured in 1/55 scale -- instead of the smaller 1/64 scale of Mattel's Hot Wheels -- because the toys needed to be larger to capture the characters' personality and expressions.

"He's a student of what makes toys great toys," Kilpin said. "He's more willing to talk about the details about what makes a product, rather than saying, 'Oh, that's nice. I like how it lights up.' "

Indeed, Lasseter's demand to keep the toys faithful to the film characters led him to reject prototypes with even slight deviations, as was the case with a Wall-E toy that rolled on wheels.

"John rejected the hidden wheels design and preferred that Wall-E's treads be real working treads just like the character in the movie," Thinkway Toys Chief Executive Albert Chan said in an e-mail from Hong Kong. "It was important to him to keep the character's integrity in the toys."

Chan praised Lasseter for thinking outside the toy box.

"Over the years working with John, I have learned to follow his instincts in making toys for his movies. Chan said. "For instance, John pointed out that there was a niche for a Jessie and Edna [from "The Incredbiles"] doll. Most Pixar films are family oriented and appeal to both genders. Normally, producing girls toys for what is perceived to be a boys movie is risky in the toy industry but I respected John’s advice and took the Jessie and Edna dolls to market. The results? Let’s just say that John’s instincts were right on the mark again. Edna was a complete sell out and Jessie’s sales are now close to Woody’s."

Lasseter said his visit to El Segundo, where all the Disney Princess regalia was on display, helped shape his thinking about Princess Tiana. He said he came to understand that each princess has items that are hers alone -- and a distinctive color, so Tiana's accouterments could be easily distinguished from Snow White's.

Tiana's look would reflect her transformation. "From the bayou wedding dress, Princess Tiana became identified with the color light green -- reflecting the lily pads and the frogs," Lasseter said. "That was unique to her."

Once Mattel had refined its ideas for the toy line, Lasseter and the filmmakers weighed in. Mattel's design team focused on capturing key story elements that children would want to re-create, such as Tiana changing into a frog. Lasseter believed the toy company had overlooked the possibilities for minor characters Louis the jazz-playing alligator and Ray the Cajun firefly.

"My job sometimes is to point out to people which characters are going to be great -- and kind of encourage them to pay attention since the audience will love them," Lasseter said. "I pushed to get the Ray and Louis toys made."

The bug-eyed Ray seemed an unlikely object for the toy box, said Mary Beech, general manager of studio franchise development for Disney products. "When you see it in black and white at first, it's hard to say kids are going to want to play with a bucktooth firefly," she said.

But with Lasseter's cajoling, Mattel added the character to an 11-piece set. Ask Lasseter to explain the appeal of the "Princess and the Frog" merchandise, and he points to the enduring appeal of the Disney fairy tale.

"One of the first decisions we made, when [Pixar and Disney Animation Studios President] Ed Catmull and I came to Disney was to return to the sincere fairy tale," Lasseter said. "I never quite understood why Disney hadn't made a sincere fairy tale since 'Beauty and the Beast.' My two nieces would dress up in princess outfits all of the time. I realized there was this huge audience out there for this."

-- Dawn C. Chmielewski

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PHOTOS: Mel Melcon/Los Angeles Times. All images from "The Princess and the Frog": Walt Disney Co.