Licensing revenue declines again

Licensing International Expo gets under way in Las Vegas

NEW YORK -- Amid continuing sluggish consumer spending, North American licensing royalty revenue declined in 2009 for the second year in a row, including in the biggest segment of film, TV and other entertainment characters.

Kicking off of the Licensing International Expo in Las Vegas on Tuesday, the International Licensing Industry Merchandisers' Assn. said brand owners collected about $5.2 billion in licensing royalty revenue in North America in 2009, down 8.7% from the prior year, which had declined 5.6%. The figure had previously risen steadily each year since LIMA began collecting data. This is the trade group's 12th annual survey.

The character segment, which makes up 46% of total licensing industry revenue, did slightly better than the overall business, recording a decline of 7.9% in 2009 to $2.4 billion. That followed a 3.9% drop in 2008 from $2.71 billion in 2007.

Entertainment giants have in recent years increasingly focused on building their high-margin licensing operations amid challenges in the DVD sell-through market and other parts of the business. As retailers have become more conservative about how many and which  merchandise promotions they bring into their stores, entertainment giants are betting on fewer, but bigger campaigns that they hope will build longer-term relationships.

"These results are not surprising as consumers continued to limit their spending on nonessential products for most of 2009," said LIMA president Charles Riotto about the 2009 licensing revenue figures. "Looking ahead, however, as the economy continues to improve and retailers' inventories come back into balance, I am optimistic that we are poised for improvement as we see our members exploring new and different opportunities and partnerships to ensure future growth."

In LIMA's survey, the organization found respondents reporting success in expanding their licensing business internationally and into more specialty stores, drug stores, dollar stores and other locations to diversify their retail presence.

Other key segments of the licensing field include trademarks/brands (down 9.7% to $880 million, or 17% of the overall business), fashion (down 9% to $705 million in 2009, or 14% of total revenue) and sports (down 10.8% to $660 million, or 13% market share). The 2008 declines for those segments had amounted to 8%, 4.3% and 9.2%, respectively.

Here a look at some other key announcements at the licensing expo Tuesday:

-- Time Warner's Warner Bros. Consumer Products and DC Comics unveiled a partnership with adidas, the official apparel provider for the NBA, to produce a Superman-inspired line of merchandise featuring NBA star Dwight Howard of the Orlando Magic. The adidas line will include footwear and apparel co-branded with the DC Comics superhero and Howard, who has been compared to the "Man of Steel."

"Superman is the universal symbol of strength and speed, not to mention he has one heck of a vertical leap," said Brad Globe, president, Warner Bros. Consumer Products. "Dwight's super-heroic feats on the court make this partnership with adidas an ideal collaboration for basketball and comic book fans alike."

-- CBS Consumer Products announced new video game titles based on CW and CBS primetime hit shows "America's Next Top Model" and "NCIS."
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