Name: LEGO’s Comeback: From Nearly Bankrupt To $6 Billion
Uploaded: 2021-05-27T06:11:47.000Z
Duration: 11 min 27 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

You could step on a nail and it's less painful than stepping on a LEGO in the middle of the night.

It may not look like much, but it's the building block upon which LEGO built its $6.25 billion dollar company.

Today, LEGO's blockbuster portfolio includes collaborations with the Beatles, Star Wars and Harry Potter, a mega hit movie franchise, and

The Danish company's fan base has dramatically changed since they hit the market.

A toy that was once thought for little boys is seeing its largest growth coming from girls and adults.

And LEGO has a super fan community of AWOLs or adult fans of LEGO, which include members like David Hall, who's been posting LEGO

content to his YouTube channel for 12 years.

It is my job, but at the same time, it's what I'm passionate about.

It's my hobby. It's kind of my life as well.

Lego's revenue increased by 14 percent in 2020.

They're actually growing faster than any other toy company in the globe.

But in the early 2000s, the company made several missteps and came extremely close to declaring bankruptcy.

Here's how LEGO reclaimed its status as one of the most successful toy companies in the world.

LEGO was created in 1932 by a Danish master carpenter, Ole Kirk Kristiansen, out of necessity.

As the Great Depression decimated his carpentry work, he needed to create something that would withstand the ups and downs of a turbulent

economy. So he thought that the last thing that people would pull back on in a depression is spending on their kids.

Kirk Kristiansen named the company LEGO, which is an abbreviation of two Danish words, meaning play well.

The privately held company is still owned by the Kristiansen family and is sold in over 130 countries with 650 stores worldwide.

But in the early 2000s, LEGO was facing a bleak outlook.

Its analog toys struggled against the oncoming tidal wave of digital entertainment.

Video games were becoming much more popular at the time.

You had a lot more engagement in digital media in the form of things like cable television and so forth.

There was technology that was being incorporated into toys, things like Furby.

Kids didn't seem to have the time or interest for LEGOs.

The company made a drastic shift away from manufacturing its plastic bricksand invested heavy sums in producing its own entertainment

content. The toymaker began releasing LEGO-themed video games and even started its own production company.

But the pivot did little to improve its bottom line.

In fact, it almost took the company under.

Things just only got worse, as you might imagine, after that heavy diversification.

LEGO's, heavy debt load and lackluster sales, forced its leaders to reevaluate.

The company had drifted too far away from what made its customers fall in love with LEGO.

We did a lot of really heavy duty research and what we realized is that the LEGO brick was still incredibly relevant.

Rather than digitalization being a threat to us, we realized that it could actually be an accelerant to our business.

LEGO needed to reposition its products as an extension of digital culture rather than its antithesis.

A really well crafted video game experience could actually inspire kids to build more in 3D because it's a different expression of the brand.

So LEGO put its flashy side ventures on pause to focus on what made it successful in the first place: The LEGO brick.

LEGO knew its core product had value, but it needed to find ways to attach itself to pop culture.

Star Wars fans may need to use the force to assemble Lego's latest release.

Ultimately, I'd say I'm a bigger LEGO fan than I am a Star Wars fan.

But they really go hand in hand, for me personally.

Star Wars was the first license that we had actually contracted with, and that really helped us understand the power

of reframing our brand to a group of people who have a particular passion around a property or an IP.

Since its debut in 1999, Star Wars themed sets are the company's most popular products in its entire catalog.

This year, LEGO Star Wars is number one across many different metrics.

It's the number one property for LEGO and I can't imagine that they could be any happier with its performance.

A big reason for the collaboration success is that Star Wars and LEGO have one big thing in common: diehard fan

bases. LEGO and Star Wars is like peanut butter and chocolate.

Evan, the 15-year-old video star behind the popular YouTube channel EvanTubeHD started his channel at just six years old.

He says the Star Wars sets are some of his favorites to build, from Baby Yoda to the $800 LEGO UCS Millennium Falcon.

If you're a fan of the franchise, you can kind of see it like get some of the details that they put into them.

These movie themes sets posed a new challenge for LEGO.

Sales were strong when a new movie hit theaters.

But waiting on a film release wasn't a sustainable business model.

The experience of that led to an interesting point around entertainment content in developing entertainment content on our own.

So LEGO tried its hand at content creation for a second time.

But instead of going all in right away, LEGO leaned on a partner with vast experience in the world of entertainment.

We actually went to the to the folks at Lucasfilm with an idea for how we might be able to create LEGO

Star Wars content, some animated content using the Star Wars characters in a LEGO world, in a LEGO universe.

And so they agreed to a pilot, it was a five minute episode that we aired on Cartoon Network.

And that was the first foray that we had into the world of entertainment content.

With the success of LEGO Star Wars in 2013, LEGO decided to move into creating an original line of characters and narratives.

The following year, The LEGO Movie premiered in theaters, and it's instant success was a big win for the company.

I was already a fan of LEGO before that movie, you know, came out when I was younger.

So I was really excited for that and watched it like we have the one right behind me right there.

The movie grossed $468 million worldwide, won the BAFTA for Best Animated Feature film, and was nominated for a

Golden Globe. As an adult LEGO fan watching that movie, I came away very, very happy because the filmmakers Phil Lord

and Chris Miller really catered to the adults in the background.

Since we've gotten into many of these entertainment initiatives, our business has roughly grown about six fold within, you

LEGO's long-term growth no longer centered on battling for children's attention.

It had its eye on another core group of LEGO fans: grown ups and collectors.

Despite LEGO being considered a children's toy, the largest growth for the company in recent years has been with adult consumers.

And we are actually creating products that are really more specifically geared toward adult collectors.

These tend to be higher price point products, products that tap into more adult passion points.

In 2019, LEGO even acquired BrickLink, an online adult community with one point one million members where fans can buy or sell LEGO parts

Adult fans of LEGO are behind some seriously impressive creations, and although they'll splurge on products from the creator

expert series like an Aston Martin from James Bond, or Manchester United Football Stadium or even the Taj Mahal, AFOLs get their

clout from showing off their MOCs or My Own Creations online.

David Hall started his YouTube channel when he was 11 reviewing LEGO products.

Hi.This is a review on LEGO seven, six, seven, five, or as we know it, LEGO

Now at 23, he has 365,000 subscribers and shows off his impressive MOCs.

We're Solid Brix Studios and today I'm going to be taking a full on walk through through my LEGO Mandalor