 |
Entertainment a dominant category. |
The single most profitable licensing sector over 2001 was
cause-related licensing, which jumped 5.5% to US$38 million.
Such licensing includes non-profit museum and charity licenses
- these and all other types were present at Licensing 2002
International, the industry's top annual trade show, which
closed a three-day conference and exhibition at the Jarvis
Center in New York.
Despite unsettling economic and
political news, attendance was up by 16% at the show. More
than 18,000 attendees from 72 countries representing licensors,
manufacturers and retailers scoured the show's 5,000 properties,
looking for the next Spider-Man, Pokemon or Barbie.
The show was a reflection of the commercial success that
is the licensing business, now generating more than US$96
billion in the US and US$177 billion in retail sales worldwide.
Blockbuster properties along with 130 newcomers were among
the 400 exhibits at this year's event.
 |
Favoured figures make the best licensed
goods. |
The licensing industry continues to be dominated by entertainment,
corporate, fashion and sports categories, according to the
most recent study sponsored by the International Licensing
Industry Merchandisers' Association (LIMA). These four sectors
accounted for 93.5% of the US$5.6 billion generated in royalty
income in 2001, according to the study, conducted jointly
by the Yale School of Management and the Harvard Business
School.
By all accounts, entertainment will still drive the licensing
business, as studios release new films. Coming for Holiday
2002: Treasure Planet (Disney); Fat Albert (Fox); Pokemon
and Pinocchio (Miramax); Lord of the Rings (The Two Towers)
(New Line Cinema); Harry Potter and the Chamber of Secrets
(Warner Bros.).
And for 2003: Winnie the Pooh (Disney); Cat in the Hat,
Sinbad (Dreamworks); Bulletproof Monk (MGM); Lord of the
Rings (New Line Cinema); Charlie's Angles 2 (Sony) and The
Hulk (Universal Studios).
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Major licensing characters for promotion. |
A classic example of how entertainment licensed works is
the new Scooby-Doo movie based on the vintage cartoon TV
series, and featuring a talking dog. The movie was released
on 14th June, and registered as the biggest June opener
in history, with a total of US$56.4 million in weekend sales.
Tied to the movie opening was the launch of a special promotion
by Mervyn's department store on 2nd June, featuring its
Cartoon Network Shop. The promotion through 264 stores in
14 states featured Scooby-Doo merchandise, including an
assortment of children's apparel, backpacks, bedding and
Scooby-Doo toys and accessories.
Also included in the promotion is merchandise featuring
The Powerpuff Girls, as well as many of the Cartoon Network's
other favourite characters.
The LIMA report disclosed that total licensed revenues
declined by 4.4% compared to 2000, it also revealed that
art licensing increased 4.2% to US$147 million dollars while
cause-related licensing took top position for generating
profits.
 |
Entertainment category rebounds. |
"During these economic times, when most related industries
have experience some business decline, a small decrease
in licensing revenues was not unexpected. A closer look
at the study, however, shows that business held up very
well in most categories during last year's difficult economic
period, the industry remains strong, and is increasingly
regarded by many companies as an important and powerful
tool in their marketing mix," said Charles Riotto,
LIMA president.
"While entertainment experienced a slight dip in 2001,
we're already seeing signs of a turnaround this year with
the immediate success of the Spider-Man and Star Wars franchises.
Early reports are also pointing toward strong growth in
the brands and sports categories," he added.
The LIMA study found that entertainment character licensing
continues to be the strongest overall category in the licensing
business, maintaining a 44% share of the market. The trademarks/brands
category is next in line at 17%, followed by fashion at
16%.
Royalty revenues by property type
(Figures in US$ millions)
Category
|
2000
|
2001
|
% Change
|
Entertainment |
2,588
|
2,484
|
-4.0%
|
Trademarks/Brands |
982
|
963
|
-1.9%
|
Fashion |
980
|
911
|
-7.0%
|
Sports |
721
|
707
|
-1.9%
|
Collegiate |
182
|
175
|
-3.8%
|
Art |
141
|
147
|
+4.2%
|
Music |
138
|
117
|
-15.0%
|
Publishing |
44
|
42
|
-4.5%
|
Non-Profit |
36
|
38
|
+5.5%
|
Others |
35
|
22
|
-37.1%
|
Total |
5,847
|
5,606
|
-4.12%
|
 |
Applications continue to expand. |
Included among the new exhibitors this year were Disney Consumer
Products, Better Homes & Gardens, FDNY, First Flight Centennial,
Masterfoods USA (M&M's and Mars), NYPD, the rock band Phish,
Revlon and Almay, plus apparel-based brands PJ Salvage and
Woolrich. In addition, a number of UK based firms were present,
made possible by a special government subsidy.
"As the licensing industry has matured, it has become
more complex and multifaceted. New and innovative ideas
and applications continue to expand the scope of the industry
and create new opportunities each year in all segments of
the business. This growth is further proof that the future
of licensing is very bright. Both here and abroad the prospects
for business expansion become more significant every year,"
observed LIMA President Riotto.
Continuing a feature initiated in 2001, the show contained
a Product Sourcing Zone, an area designated to feature manufacturers
who are often licensees already and capable of providing
contract manufacturing resources to licensors, licensees,
retailers and promotional partners.
 |
Chow of Postbox.com: different promotion
channels used. |
Postbox.com Limited was a Hong Kong firm that produces
licensed miniatures of postboxes from around the world.
The firm has enjoyed significant success, selling more than
US$10 million of these replicas since the firm was founded
in 1996 - mainly as souvenirs and collector's items. Samson
Chow, senior vice president, sales and marketing noted that
these items can be used as clip dispensers or coin banks.
The postboxes have been distributed through post offices,
souvenir shops, airport stores, stamp collection shops and
promotional channels, he said.
Another exhibitor was David Halsall International, which
is celebrating its 50th anniverary. Originally launched
to distribute toys and seasonal products in the UK, Halsall
now has sales approaching US$100 million and distributes
in 40 countries. Halsall is the official licensee of Barbie
Sports toy items and a large category of Simpsons toys and
gifts.
Another Hong Kong company present was Asian Licensing Partners
Limited. President Jay Smith said his firm is a full service
brand management and licensing agency, connecting Western
brands with Asian manufacturers, distributors and retailers.
 |
Asian Licensing Partners: connecting
parties. |
"We work with brand owners, master licensees or licensing
agents who hold worldwide rights, but lack personnel to
execute strategies in Asia," said Smith. "Our
extensive network of contacts ensures that licensees with
the resources and expertise necessary will be building the
client's brand in the region."
Hong Kong-listed Magician Industrial was another company
taking part in the 2002 Hong Kong exhibit. Rona Yang, noted
that the firm, a producer of plastic and metal houseware
products, carries over 6,000 product items. In the past
25 years, the firm has averaged more than US$85 million
in sales annually she said.
William Tang, general manager of Hong Kong's Alpha Creative
Manufacturing displayed a collection of hats, caps, backpacks
and gloves and scarves. The firm produces Walt Disney clothing
accessories within the trademarks of Mickey Mouse, Winnie
the Pooh, Monster Inc. and Lilo & Stitch.
"For several years we have possessed the licenses
in manufacturing consumer products of Formula One Michael
Schumacher, Ralf Schumacher and other brands of US car racing,"
he said. His firm offers Formula 1 racing caps. He noted
that a new racing backpack will be produced in the US in
July 2002.
 |
Tang of Alpha Creative with
company products. |
|
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Neat applications are making
waves. |
|
from special correspondent Ira P. Schneiderman,
New York
|