The online app from Finnish company Rovio, that has been downloaded more than 500 million times worldwide, is now a line of plush animals, balls, pillows, key chains and more that are expected to be hot sellers this holiday.
Tim Whitby/Getty ImagesWhen Licensing Expo 2012 kicks off its 32nd annual convention at the Mandalay Bay Resort in Las Vegas on June 12, the mood is likely to be upbeat with the announcement that licensing in North America generated about $5.3 billion in royalty revenues, which is up 5 percent – marking the first year to year increase since 2006.
Those royalty numbers translate into estimated total retails sales in North America in 2011 of $109.3 billion, according to the annual study by the International Licensing Industry Merchandisers Association (known as LIMA).
“As we come out of the soft economy everybody is feeling pretty optimistic,” says Marty Brochstein, senior vp of LIMA. “It’s a very exciting business because you don’t know where the next hit is going to come from. Everybody is looking for the next Angry Birds or whatever the film is that is unexpectedly big that they can leverage with licensing.”
Angry Birds is an example of a trend toward licensing properties starting from the digital world, and not the traditional route of launching from a TV show or movie.
“You’re starting to see licensing opportunities around the app based program whether its Angry Birds or Annoying Orange,” says Amy Taylor, executive vp of Universal (Studios) partnerships and licensing. “You’re starting to see merchandising program development around things that traditionally would have been just a game. I think that’s great. It provides more opportunities for retailers to tap into not only TV and film, but also other things consumers are focused on now.”
Angry Birds, as well as Marvel’s The Avengers (from Disney, the largest single entertainment licensing company) and Fox’s The Simpsons are all part of the largest licensing category in 2011, as it has been for some time, which is what they call entertainment/characters. It generated royalties in 2011 of about $2.48 billion, or 46.6 percent of all licensing royalties. That produced North American retail sales of $48 billion, up 4.4 percent from 2010.
“Digital entertainment is now the freshest area of the licensing business,” says Brochstein. “It’s so new and there is such a variety of forms of digital entertainment that the business models are still being built.”
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Brochstein says more than ever before the crossover between traditional properties and those emerging from digital will be evident. “Licensing is a reflection of pop culture,” adds Brochstein, “and at the upcoming trade show, the tremendous impact that digital entertainment is making on our culture will be clearly evident. We’ve certainly reached the ‘tipping point’ and it’s a game changer.”
This category in dominated by major studio licensing – from Disney Princesses to Harry Potter collectables – along with video game related properties like Angry Birds, Moshi Monsters and Cut the Rope, and celebrity brands like those from Jessica Simpson, Gwen Stefani and Kathy Ireland, who will give the keynote speech at this year’s show begining at 8:30 a.m. on Tuesday, June 12.
Ireland will be speaking on “Brand Building Through Licensing – My Journey From the Beach to the Boardroom and Beyond.”
“Brands of all sizes that are looking to increase their reach will be able to take something away from Kathy’s address,” says Chris DeMoulin, president of Advanstar Licensing Group, which is one of the organizations behind the show.
According to the study, the biggest contributor to the estimated entertainment properties revenue was from toys and games (25.5 percent, $632 million), followed by Software/video games (13.5 percent, $334.1 million) and then apparel (10 percent, $248 million), which includes things like Anchorman apparel licensed by Paramount, which can be found at outlets such as Macy’s, Old Navy Target and Urban Outfitters.
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“We take a boutique approach to each title,” says LeeAnne Stables, president of Paramount Consumer Products, “and partnering directly with specialty retail is the key.”
While digital is the buzzword, much of the offerings from some 400 exhibitors, especially among the many Hollywood studios who will be on hand, will be from the sources that have produced revenue for years. “For Warner Bros. the trend we continue to lead is offering our partners around the world universally-recognized, tried-and-true, powerhouse properties that are supported with global awareness and buzz-building content,” says Brad Globe, president, Warner Bros. Consumer Products.
At Warners, that includes the new Superman movie Man of Steel and the two films based on The Hobbit that are coming.
Universal is offering a mix of the kind of boutique items that are aimed at adults from films such as Les Miserables (opening Dec. 14) and the sixth Fast and Furious, which has created a bonanza of eight different video games over the years since the first film opened in 2001.
However, the biggest licenses for Universal will likely spring from the upcoming sequel to the surprise animated hit Despicable Me, which is also the subject of a theme park attraction opening at the Universal Resort in Florida this summer.
For the first movie in 2010 Universal made “a strategic decision to have a very focused, limited merchandise expression,” says Taylor.
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Now that Despicable Me is a hit, however, they have a grander strategy. “The second film (summer 2013) is really when merchandising and consumer products kicks off in a big way,” says Taylor. “On the second film we are working with major retailers around the globe.
”Universal has already set Thinkway Toys as its master toy licensee and Hybrid Apparel as its master apparel license but now will look to expand their program. “Typically what we do is lock our anchor partners fist and then license others,” says Taylor. “We don’t look for a lot of partners, however. Universal’s approach to the business is that we try to have partners who take on a broad scope and really dig in and develop a line that is effective without overwhelming retailers with 70 choices in one category. We think it makes more sense to find two, three or four anchor partners in each category and let them go deep into the line.”
For more adult movies, and some kids movies, Universal also does promotions along with licensing, often tied to a cause that makes sense. This helps the cause and builds the movie’s profile with consumers. An example is The Lorax, for which Universal did a campaign with the U.S. Forestry Service that talked about the need for people to get out and enjoy the forest and the trees.
Globe says that they are seeing more competition, however, from the many emerging platforms. “In the entertainment licensing space,” says Globe, “there are certainly more players in the market right now. We are seeing Internet and apps created to broaden a property’s reach, while also continuing with the more traditional licensed content.”
Here are some of the entertainment companies who will exhibit and their key offerings:
WALT DISNEY COMPANY- Both Disney and Marvel brands continue. Disney properties include Disney Princess, Cars and Mickey Mouse; along with new properties based on upcoming films including The Lone Ranger, Oz, Frozen and Pixar’s Monsters University. Marvel has The Avengers, The Amazing Spiderman and more.
HASBRO – It will have new versions of its longtime brands including Transformers, My Little Pony and Nerf.
MATTEL – It will offer its lines tied to Barbie, Monster High, Hot Wheels and Fisher-Price’s Little People and Laugh & Learn, among others.
PARAMOUNT PICTURES – Among new properties tied to upcoming movies which it will offer are Hansel and Gretel: Witch Hunters, World War Z, Anchorman 2: The Legend Continues, and Fun Size, about teens and the endless challenge to be cool and popular.
SONY PICTURES ENTERTAINMENT – Sony Consumer Products will present film and TV related properties including Hotel Transylvania, After Earth, The Smurfs 2, Cloudy 2: Revenge of the Leftovers, Ghostbusters (classic), Wheel of Fortune, Jeopardy and Breaking Bad.
TWENTIETH CENTURY FOX – Twentieth Century Fox Consumer Products will promote the return ofAlvin and The Chipmunks, after sales were boosted by 2011’s Alvin and the Chipmunks: Chipwrecked , which added The Chipettes to the line. This summer brings another sequel in the Ice Age franchise, which is a global powerhouse – Ice Age: Continental Drift. 2012 also marks the debut of Ice Age Dawn of the Dinosaurs – the 4-D Experience at the San Diego Zoo, and an arena spectacular – Ice Age Live! A Mammoth Adventure. Other film properties include Rio, Planet of the Apes and Steven Spielberg’s Robopocalypse. The Simpsons, long a licensing power, will be boosted by the shows 25th anniversary celebration. Other TV properties include Family Guy, Sons of Anarchy and the licensing show debut of New Girl.
UNIVERSAL STUDIOS – Universal’s Partnerships & Licensing division will show licensing opportunities tied to upcoming movies including Les Miserables, 47 Ronin, Oblivion, Fast & Furious 6, R.I.P.D., Despicable Me 2 and Jurassic Park 3-D.
WARNER BROS. – Warner Bros. Consumer Products will be showing Man of Steel, The Hobbit, Looney Tunes – That’s Not All Folks, DC Comics DC Nation, Harry Potter, Scooby-Doo, Thunder Cats and apparel related to such shows as Gossip Girl, Pretty Little Liars and The Vampire Diaries.
