For more than three decades, Hollywood studios have benefited from their happy marriage with fast-food restaurants: movie-themed trinkets have become a staple of kids’ meals. But last month, in a bid to fight childhood obesity, Santa Clara County, Calif., passed a law to keep toys out of meals that don’t meet basic nutritional standards, becoming the first U.S. jurisdiction to restrict the relationship. “This ordinance breaks the link between unhealthy foods and prizes,” county supervisor Ken Yeager told CNN. So what could this mean for Hollywood?
When it comes to marketing movies, “licensing revenue is a critical part of the whole strategy,” says Jack Plunkett, CEO of Texas-based Plunkett Research. Since 1979, when McDonald’s first joined forces with a family-oriented film—Happy Meals featured packaging and games based on Star Trek—part of that revenue has come from the toys that accompany a child-size burger and fries. Hollywood giants don’t say how much they make from such deals, but it’s significant: when Disney ended its decade-long pact with McDonald’s in 2006, for instance, the arrangement was reportedly worth $1 billion to the studio.
There are no McDonald’s restaurants in Santa Clara County, which makes the ruling more of a “political statement” than anything else, says Plunkett. “If this was a city that was really important to McDonald’s,” he says, “I would be surprised to see it go unchallenged.”
Still, this local initiative is evidence of mounting public pressure. Before Disney ended its Happy Meal deal, the company’s largest shareholder, Apple’s Steve Jobs—the head of Pixar Animation Studios—said he was concerned about the fast-food tie-ins “as our society becomes more conscious of some of the implications.”
Rather than resist the call for change, says Michael Mulvey, assistant professor at the University of Ottawa’s Telfer School of Management, studios would be wise to jump on the healthy food bandwagon—an opportunity to “stand out and get some extra buzz.”