Lego Bricks: Fit for the Big Screen?

8 Pages Posted: 4 Aug 2017 Last revised: 10 Nov 2021

See all articles by Ming-Jer Chen

Ming-Jer Chen

University of Virginia - Darden School of Business

Jenny Craddock

University of Virginia - Darden School of Business

Abstract

For years Danish toymaker LEGO had turned down multiple attempts from directors and producers to make a LEGO movie. Now the CEO of the Danish toymaker has gotten a movie pitch from Warner Brothers. The entire LEGO brand is at risk if the movie is poorly executed or received. The CEO wonders if attempting to compete with Disney and Pixar in developing a successful children's movie was another case of over-diversification.

Excerpt

UVA-S-0296

Jun. 15, 2017

LEGO Bricks: Fit for the Big Screen?

When JØrgen Vig Knudstorp, the celebrated CEO of Danish toymaker LEGO, and his colleagues welcomed Warner Brothers (WB) producer Dan Lin and screenwriters Dan and Kevin Hageman to the company's Billund, Denmark, headquarters in 2008, it was not the first time the company had fielded a movie pitch from Hollywood creatives. In fact, for years LEGO had turned down multiple attempts from directors and producers to make a LEGO movie. During that day's pitch, Lin explained that his recent observation of his young son playing with a LEGO spaceship was what inspired the WB film proposal. His movie concept hinged on LEGO's active partnership and participation: the idea was “ ”that anything in the movie [could] be constructed using real LEGOs."

Despite the enthusiastic pitch, Knudstorp and his colleagues conveyed their lack of interest to Lin at the meeting's conclusion. Lin summarized their aversion to the idea. “ ”They didn't feel they needed a movie. They were already a very successful brand. Why take the risk [on a movie when] they were doing really well without [one?]." Indeed, by 2008, the iconic toy company had finally recovered from near bankruptcy several years earlier, with its revenues having grown nearly 20% over the past year. Furthermore, starting in 2003, LEGO had released several toy-centric DVDs, but the company's recent course-correcting strategy focused on its core construction products and encouraged children's active play, as opposed to over-diversifying into digital entertainment and screen time. While it was obvious that WB's motivation for attaching itself to the LEGO brand was the brand's pervasive recognition, it was far less clear what was in the deal for LEGO.

As Knudstorp reflected on the pitch later that afternoon, he kept returning to the same nagging questions regarding a potential LEGO movie release. The year 2009 would kick off the growth phase of his long-term strategic plan for the company. He wondered if there was a way to find any positive opportunities within the risky undertaking of releasing a LEGO film. Was the company ready to make its Hollywood debut? Would a movie damage the brand and its quality reputation—perhaps irreparably? In addition, in the making of the movie, how could the story and characters reflect LEGO's mission, and who would be the movie's ideal audience?

. . .

Keywords: over-diversification, entertainment, brand risk

Suggested Citation

Chen, Ming-Jer and Craddock, Jenny, Lego Bricks: Fit for the Big Screen?. Darden Case No. UVA-S-0296, Available at SSRN: https://ssrn.com/abstract=3010604

Ming-Jer Chen (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/chen.htm

Jenny Craddock

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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