What better way for a company to say danke schön to its rising-star creatives than hiring Wayne Newton and a bevy of feather-plumed showgirls to help express its feelings? Any lingering doubts Dan Povenmire and Jeff "Swampy" Marsh might have had about Disney's faith in their animated show, Phineas and Ferb, dissolved when Mr. Las Vegas himself started belting out the theme song for the program's Perry the Platypus character at last June's 2010 Licensing International Expo in Vegas. As Newton gave his own spin to lyrics like "He's a furry little flatfoot who'll never flinch from a fray" and dancers and actors, dressed like the show's characters, circled Newton on stage, Povenmire thought, This has to be the most surreal moment of my life.
The only scenario more unlikely may be the one in which this decidedly quirky cartoon — kiddie MythBusters meets sitcom-sibling hijinks meets classic spy spoof — becomes such a hit for Disney that the company is now trying to turn it into a SpongeBob SquarePants — like cash machine. Second-season ratings so far have made Phineas and Ferb the top cable animated series among 6- to 14-year-olds, attracting 3.5 million viewers overall.
In addition to being Disney Channel's first animated hit, it has helped the company connect with boys, an important demographic that had largely eluded Disney, and the show now anchors the spin-off Disney XD network's tween-boy lineup. It has also shown Disney new ways to create original, humorous animation — a highly lucrative arena where your stars never grow up enough to produce a lap-dance video.
But for all of the creative ferment Phineas and Ferb has inspired within Disney, "if there's an upside to a show, it's because we're able to exploit it off TV," says Gary Marsh (no relation to Swampy), president of entertainment and chief creative officer of Disney Channels Worldwide. That means licensed products. Disney Consumer Products, a $2.4 billion division, typically pushes established brand families such as Disney Princesses or Pixar's Toy Story franchise. But it is heavily promoting this offbeat show, because the merchandising potential seems huge. "This is completely out of the box," says Steven Ekstract, publisher of License! Global.
Is Phineas and Ferb the next SpongeBob? In SpongeBob's 11-year run so far, the man from the pineapple under the sea has set a high bar (see box, right), including selling $8 billion in retail merchandise. "We look at where Phineas is in its life cycle compared to where SpongeBob was," admits Gary, who looks to both ratings and off-TV activity as barometers of success. Phineas and Ferb, he says, is "pacing very well compared to the arc that SpongeBob traveled in its evolution."
Phineas and Ferb takes a simple idea — two high-spirited stepbrothers make the most of their summer vacation by designing and building elaborate creations such as a giant roller coaster, a video game you play from the inside, and a working time machine — and complicates it with two other simultaneous plotlines. One revolves around teen sister Candace's efforts to bust the two (and woo neighbor Jeremy). The other stars the brothers' pet platypus who leads a double life as Agent P, an international spy. His archenemy? Inept evildoer Dr. Doofenshmirtz, who is plotting to take over the Danville Tri-State Area using a series of sinister inventions tagged with an ominous "-inator" ending. (The Mime-inator, for example, is designed to trap the region's mimes inside their own invisible boxes. "I know, the irony," Doof observes.)
All of this happens in 11 minutes that often also contain an original song. The show bubbles with brainy allusions that zing above the heads of the show's target audience. "There are very few kids' shows with references to the villain's dating life, or to the fact that he's funding his schemes with alimony from his wife," says Gary, adding that adult viewers account for about a quarter of the total audience — only half of them watching with a kid. "But if we didn't have a show that appealed to the primary demographic, no degree of ingenuity or smarts for adults would matter."
Swampy and Povenmire are happy the show was given a chance to appeal to any demographic. The team first met at The Simpsons in its salad days and developed the concept while working on Nickelodeon's Rocko's Modern Life in the 1990s. For almost 10 years post-Rocko, the two worked separately on other animated hits, including King of the Hill, SpongeBob SquarePants, and Family Guy, occasionally dusting off their Phineas pitch for one studio after another. Despite strong interest, Nickelodeon, Fox Kids, and the Cartoon Network all passed. "It was a heartbreaking process," Povenmire, 47, recalls.
Even Gary had some reservations, though he found the duo's acted-out version of the pilot's storyboard outline "laugh-out-loud funny." "I was amazed they were able to tell three inter-woven story lines in 11 minutes," he says, comparing the cartoon's structure to that of Curb Your Enthusiasm. "If I had a concern, it was whether they could do it on an ongoing basis."
Other Disney executives felt the show was outside the company mold. In the grand tradition of wrongheaded suits everywhere, they worried about such things as the radically angular look of the characters: Phineas's head is a triangle; Ferb's a rectangle. Some thought the show's story line and jokes might be too challenging for kids. In other words, too smart for Disney.
Gary green-lighted the show anyway. "It was clear that Dan and Swampy had a vision," he says. "They knew everything about their characters. That's what I'm looking for."
Povenmire and Swampy immediately set about further messing with the Disney status quo. The Mouse House has traditionally relied on script-driven animated shows, where a team of writers write an episode, a team of executives obsess over it, and a team of artists animate it. "Dan and Swampy presented a different model we hadn't done in a long time," Gary says. They wanted to do a storyboard-driven show that begins with a detailed outline, bypasses the traditional script stage, and turns things over to a team of storyboard artists to produce a scene-by-scene visual break-down accompanied by key dialogue.
This looser approach, says the pair, encourages more artistic risk taking and funnier, less predictable writing. "It gives us the wonderful insanity of the zebra who calls Candace 'Kevin' and the giant floating baby head that's a recurring in-joke," says Swampy, 49. "You can't write that." In fact, the pair, both of whom have a tendency even in conversation to "improve" one another's ideas, feel that they had no choice but to work in the storyboard style. Two of the show's characters — Ferb and Perry the Platypus — don't really talk, so "writing" for them wouldn't work.
A storyboard show means the creatives would be putting in a lot more man-hours up front. The show now has two directors, a storyboard supervisor, four writers, and 12 board artists, almost all of whom contribute both writing and drawing. Much like Family Guy's Seth MacFarlane, Povenmire and Swampy themselves write, draw, compose songs, and voice characters. "Disney has had to really trust us," Povenmire says.
The Phineas and Ferb pilot aired in August 2007 and the series began its regular run on Disney Channel in February 2008. Although it's difficult to assess the value of a single show to a network, Phineas and Ferb's success has clearly helped strengthen Disney's cable portfolio. XD generates about $325 million a year in revenue, according to David Joyce, a media analyst with Miller Tabak in New York.
Phineas and Ferb has also inspired Disney to loosen the reins on other shows in the hope of creating more fresh hits. The new animated series Fish Hooks is a storyboard show, as is the pilot for Gravity Falls, a toon created by a 23-year-old CalArts grad. "Disney always sort of defined itself by its talent," Gary says. "Maybe there was a bump in the middle there when people got their fingers in the pot too much. For a long time, everyone wanted to make the next SpongeBob. But who can say what part of that show makes it a success? You need to hire brilliant people and allow them to execute."
Many independently produced kids' shows have a licensing plan in place way before the show even airs. Phineas and Ferb, on the other hand, had been on for a year before you could even get a T-shirt. "The merchandise strategy was to launch slow and build," says Lisa Avent, VP and GM of Disney's consumer products division.
Her patience has paid off. To date, retailers have sold more than 1 million Phineas and Ferb T-shirts, and today you can also buy Phineas and Ferb plush dolls, toys, school supplies, stationery, swim trunks, skateboards, Kellogg's fruit snacks, and a Nintendo DS video game that has sold hundreds of thousands of units.
Not only has Phineas and Ferb "filled a white space for us" in the 8-to-20 male demographic, Avent says, but Phineas and Ferb's audience has helped the consumer products division reach new audiences at retailers such as Hot Topic, whose 681 stores target 12- to 20-year-olds. "Our store associates and customers are very vocal when a new property emerges," says Betsy McLaughlin, Hot Topic's CEO. "Our buyers loved the irreverent humor that speaks to teens in a way that is reminiscent of the early SpongeBob episodes. That was a fantastic multiyear property for Hot Topic, and it was successful because Nickelodeon was willing to take chances and surprise consumers on a regular basis." Hot Topic does not break out sales numbers by product, but McLaughlin says Phineas and Ferb apparel is selling well.
Ironically, one advantage Phineas has on the merchandise side is the three-ring-circus complexity that almost kept it off the air. For one thing, the multiple story lines multiply the retail opportunities: T-shirts featuring Perry/Agent P are as popular as those featuring the lead characters. And the show's musical component has not only yielded a top-selling kids album but also makes products like a Phineas and Ferb guitar seem a natural fit. Asked if she's concerned about oversaturating the market, Avent laughs. "No. We've paced ourselves." Aggressively, that is.
Avent is budgeting for 400% growth for Phineas and Ferb licensed products in 2011. (Disney does not disclose sales figures.) Based on their experience with the show, Avent and her team will also be rethinking some of the conventional wisdom about what boys like: A line of Valentine's cards was a surprise hit this year.
It's hard to make exact comparisons with SpongeBob, but certain metrics seem to indicate that Phineas and Ferb is tracking to SpongeBob's success. In 2002, the Nickelodeon show's third full year on the air, SpongeBob generated about $500 million in retail sales with just 75 licensees. At roughly the same point in its run, Phineas and Ferb has nearly twice as many licensees selling product. Disney typically carves out 12% to 15% of wholesale receipts for itself.
Disney does not disclose whether Povenmire and Swampy get a percentage of merchandise sales, but that is a common arrangement in the industry. Whatever the case, they seem genuinely thrilled to be along for the ride, appearing at Disney stores for character-drawing workshops and working closely with Disney Consumer Products on ideas. "Because the big executives loved and got the show, it was important for them not to mess it up," Swampy says. "I see the toys and other products and think, Wow, somebody listened to us!"
A version of this article appeared in the November 2010 issue of Fast Company magazine.