Translating Visual Appeal into Brand Appeal-The Business of Brand Licensing

A shopper is spoilt for choice today! Any category that you can think of today has umpteen players vying for the shopper’s attention. The USPs that they offer to compete includes variation in price or perhaps the customer service that they extend. More or less, otherwise it is a similar story everywhere. But one way of standing out of the crowd with your brand is by means of opting for ‘brand licensing’. This not only multiplies the appeal value of the product multi-fold but also attracts the right kind of target audience that you have in mind. Jiggy George, founder and chief executive officer, Dream Theatre Pvt Ltd.simplifies the business of brand licensing for us and also takes us through his entrepreneurial journey into the business.

 

Let’s begin with understanding what ‘brand licensing’ implies. Licensing is the process of leasing the rights to a trademark or copyrighted entity. The entiry- known as the property-could be a name, likeness, a logo, a saying or a combination of these elements. The rights are given for a purpose (usually to be sold at retail stores) for a limited time, in return for a negotiated payment- as explained in the licensing handbook by Karen Raugust

Globally, the licensing industry is worth $ 200 odd billion at retail and character license comprising T.V. and theatrical properties forms practically half of the pie. The rest of prominent licensing forms include – Corporate, Sports and Fashion Licensing. In India the licensing business is approximately is just over US$ 400 million dollars  at retail with character licensing contributing to about 200 million dollars. Character, Sports, Art, Fashion Music are some of the leading categories in licensing.
Expert_Speak__brand_licensingThe vast majority of licensing programs in this sector emanate from major films, television shows and classic characters. However, as the digital world becomes more a central part of consumers’ everyday lives – and a vital part of popular culture – there is a notable rise in the number of licensing programs being built on the intellectual property contained in apps, online worlds, videogames and social games. Angry Birds for example derives 30 per cent of its revenues from licensing! Toys are the largest licensed category of products for children followed by apparel and back to school supplies and food.

Licensing provides a great opportunity – both in the form of products and services – for connect with consumers and for extending their reach into new product categories, territories and distribution channels. Not only does it provide touch points for a consumer to actually experience the brand in its glory, it also generates revenues in billions of dollars worldwide.

Scope of Licensing Industry in India:
Character licensing leads the way in India. Though licensing business in its embryonic stage   (approximately US$ 400 million at retail.) It still is a huge opportunity as India has a vibrant entertainment market and a captive consuming class, which consumes the brands via television, theatricals and events.

One of the most critical pre-requisites that is unfortunately missing in India is the penetration of organized retail. The single largest differentiating factor in India and developed licensing market is retail and the opportunities it holds for exponential growth of the licensing business.

Television is the key driver of character licensing and has driven short-term phenomenon like Beyblade to the longer sustainable ones like Tom and Jerry, the Disney properties, Power Rangers, Ben 10 and WWE. Another trend is an acceptance of consumers of Indian content. Chotta Bheem leads the way and has a robust consumer products program. A phenomenon in recent times is Angry Birds. In a very short time, Angry Birds has become a leading licensing programme is India as well, with popularity cutting across age groups and products across categories.

Another trend is licensed merchandise for theatrical releases. Marvel with Spiderman, Kung Fu Panda with DreamWorks and Disney Cars are good examples.Two new forms of licensing that are emerging are sports licensing and fashion / lifestyle licensing. IPL, EPL, the Grand Prix have fueled interest across cities and so to with the fashion weeks, which are creating the base for the emergence of fashion licensing in the near future.

Theatrical releases have seen limited success in India and have are driven largely by toys and apparel even with large franchises like Superman, Batman, Spiderman, Hulk etc.

Expert_Speak__brand_lice4nsingChallenges and Issues facing the Licensing industry:
The growth of the licensing industry is intrinsically tied to the growth of retail, which is the delivery mechanism for licensed products. With organized retail at its nascent stage, the best is yet to come. De-regulation in retail will go a very long way in providing the impetus for licensing to grow.

To share a personal example from my journey into the business of brand licensing; while I was with Cartoon Network, I was offered the role of running the Cartoon Network licensing business and I set up and ran Cartoon Network Enterprises managing the gamut of brands on consumer products owned by Cartoon network and the Warner Bros. brands for promotional licensing. The big challenge then was retail being fragmented and even the major retailers did not have more than a few stores. So, we focused our energies on promotional licensing where FMCG brands leveraged the iconic brands like Tom and Jerry, Superman, and Batman on their consumer promotions. At that stage, the challenge was to educate clients on the value of an intellectual property and tackling ways to monetize the same. The usual refrain from big clients was “our brand reaches more people than yours: you should pay us and look at it as brand building.”We thankfully transcended these discussions with partnering with a few majors like Britannia and Cadburys and their case studies and partnerships established that the model worked and licensees benefited by both the financial upside and the brand rub-off. My team launched Cartoon network Enterprises consumer products program and India was the pilot for the Global business and I was fortunate to be part of learning to set up processes and systems to operate a system that could technically transcend geographies and work in any market. The core team was responsible for launching the Power-Puff Girls .The brand had seen a decline globally on consumer products and the network worked zealously to resurrect the brand and we launched a successful consumer products programs. The other highs were launching the Pogo licensing program, launching Beyblade- the biggest selling licensed toys, the Spiderman movie with Marvel and ofcourse the launch of Ben 10 and MAD.

Returning to the other set of current challenges, the problem of piracy is humongous!The law of the land does not actively support the Intellectual Property Rights Act, so a sizeable grey market exists in India.

Talking about Dream Theatre
I set up Dream Theatre with a core group of experienced professionals. Dream Theatre is an Entertainment Company that uses the power of licensing to create content, build new brands, represents companies on syndication, licensing and merchandising thereby creating delightful experiences for its audience. We own the pre-school brand Beebop and represents Warner Bros.  Based on my experience setting up the brand licensing division for MTV and Cartoon Network, I was clear about our focus on being the first professionally run entertainment company which uses the power of licensing to both build our own brands and represent iconic brands in entertainment, art, sports and celebrity licensing. We started with entertainment brands in the kids and a couple of youth segments. In the near future, will see us foray into new areas of licensing like fashion, lifestyle, sports, film, celebrity and more!

Expert_Speak__brand_lic4ensingTo conclude, for the business of brand licensing to succeed, I believe that brands need to be built before it is licensed. It is imperative that they need to be backed by performance. So, you may license the likeness of a prominent celebrity or character but if the celebrity / character is not performing in their core business- whether on the field or at the box office or on TV; it is an irritant value and is counter-productive for the extended businesses.  Extensions will be short lived and licensees can burn with softening of consumer demand.

 

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RAI
Retailers Association of India (RAI) is the unified voice of Indian retailers. RAI is a not for profit organization (registered under section 25 of Companies Act, 1956), works with all the stakeholders for creating the right environment for the growth of the modern retail industry in India. RAI is the body that encourages, develops, facilitates and supports retailers to become modern and adopt best practices that will delight customers. RAI has a three charter aim of Retail Development, Facilitation and Propagation.