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Global retail sales of licensed merchandise, such as products bearing images from or references to TV shows, logos of sports teams and the like, rose 4.2 percent to $251.7 billion in 2015, according to the second annual Licensing Industry Merchandiser’s Association’s Licensing Industry Market Sizing Study.
The data will provide food for thought and discussion as Licensing Expo kicks off in Las Vegas on Wednesday.
Last year’s study had reported $241.5 billion in retail sales worldwide in 2014. While LIMA does not track specific products, NPD Group found that the movies category outperformed the market in 2015, growing by 9.4 percent, boosted by Star Wars, which managed to become the number one property for the year with more than $700 million in sales. It also brought in more sales and contributed more growth than Jurassic World, Minions and Avengers combined, NPD found.
“The 2016 survey showcases the resonance that licensed intellectual properties continue to have among consumers around the world,” says LIMA president Charles Riotto. “The size of the global licensing market is on the rise and is showing strength as our industry expands into new corners of the world.”
“Star Wars was very much the top story of the year,” said Marty Brochstein, senior vp industry relations and information at LIMA. “You take what has historically has been an uber-popular franchise, and this was the first time it was being marketed by Disney. You had that combination of factors, and they leveraged it very nicely, beginning with Force Friday and through the rest of 2015.”
Minions was another big hit in licensed merchandise. “Minions was one of those somewhat surprising hits,” said Brochstein. “In licensing, there are always things that come in at least somewhat under the radar and outperform people’s expectations. [Minions was helped by] the sheer popularity and some of the inventive ways that the color yellow was used — one of the things that caught my eye was that they did a whole Tic Tacs thing, among many others.”
On the TV side, The Walking Dead and Game of Thrones products remained popular among licensed merchandise offers.
Entertainment/character licensing overall remained the top licensing property type, accounting for $113.2 billion, or 45 percent, up from 44 percent in 2014, of global sales of licensed products at retail. Corporate trademarks came in second with $52.8 billion, or 21 percent, down from 22 percent, followed by fashion with $29.8 billion, or 11.8 percent, down minimally, and sports with $24.9 billion, or 9.9 percent, down from 11 percent in 2014.
Among product categories, apparel led the way ($37.9 billion, or 15.1 percent of total global licensed retail sales), followed by toys and fashion accessories.
The $251.7 billion in worldwide sales in licensed merchandise in 2015 translated to $13.9 billion in royalties, up 7.8 percent. The growth was driven by higher retail sales and an increase in the average industry royalty rate from 8.2 percent to 8.5 percent in 2015, according to LIMA.
The U.S. and Canada saw retail sales of licensed merchandise increase 3.9 percent in 2015 to $145.5 billion, but their global market share declined slightly to 57.7 percent from 58.0 percent in 2014. The next biggest regions were Western Europe ($51.8 billion in retail sales) and Northern Asia, including China, Japan and South Korea ($22.1 billion).
The survey was produced for LIMA by Brandar Consulting using “multiple sources of market information and data,” including a survey in six languages in April, which drew responses from 331 firms, 147 licensors, 102 licensees and 82 agents/consultants.
In terms of newer trends, Brochstein said YouTube and other online stars, led by Bethany Mota, are “becoming a source” of revenue in the licensed merchandise business, because “licensing revolves around the popular culture.” He didn’t have any specific data on this part of the business or specific personalities.
Looking at 2016, Brochstein said Finding Dory looks like it will be a key contributor, along with Star Wars again. “Star Wars definitely generated a lot of business into 2016, plus there is Rogue One coming later this year.” He added: “There is a lot going on around Finding Dory. There is a lot of pent-up demand for Finding Nemo characters” amid the release of its sequel.
“With licensees and retailers being approached a year ahead of time in the licensing business, generally the big part of the merchandising business comes with the second film or, in TV terms, the second season, once it has established something of a track record,” Brochstein said. “There are so many franchises and tentpoles that licensees and retailers don’t feel they need to go out on a limb for something.”
When Finding Nemo was released, “there was definitely merchandising done, but not to the extent that you see now,” he explained. “This is the first time that there will be a full-scale merchandising program surrounding the Nemo characters.”
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