®
Spring 2014
Features 18
TV Licensing: Something for Everyone
TV series of all kinds can produce dynamic characters and alternate universes that make consumers fall in love with them. Licensing partnerships for TV-based properties bring the characters, settings, and themes to life in the real world. This year, licensees are producing some of the most creative and innovative TVlicensed products yet.
32
Taking It to the Next Level
A licensing program can help expand the reach of a video game, but how does that relationship change as the game evolves into a franchise? A leading licensor, as well as a top licensee in the multi-billion-dollar video game industry, offer their insights.
41
Exploring a New Frontier
Digital properties are relatively new to the licensing scene, causing licensors and licensees alike to carefully consider how partnerships can build their brands in new ways.
Departments 7 Editor’s Point
8 Licensing News
10 LIMA Update 12 Stat Shot We take a look at the top licensed toys and top growth licensed toys for 2013 and Q1 of this year. 14 Look Inside: Universal Check out the coming attractions from this blockbuster film studio. 17 Talking Social Media Learn how to boost your search engine optimization using social media. 28 Property Profile: Game of Thrones HBO’s Game of Thrones series has branched out into licensed products for everyone from casual fans to serious collectors. 31 Blogger Bash Laurie Schacht announces a brand new conference connecting bloggers and brands. 46 Licensing 101 Jim Sachs offers tips for licensees on selling product into retail. 48 Of Counsel James Kipling discusses the ins and outs of negotiating Minimum Royalty Guaranties and how to navigate the seemingly unavoidable penalties associated with them. 50 Directory THE LICENSING BOOK, Spring 2014 “THE LICENSING BOOK” (ISSN-0741-0107) is published quarterly, by Adventure Publishing Group, Inc.®, 307 Seventh Ave., Room 1601, New York, New York, 10001. Periodicals postage paid at New York, NY 10001 and additional mailing offices. © 2014 Adventure Publishing Group, Inc®. All rights reserved. No part of this publication may be reproduced or transmitted in any form, or by any means, electronic or mechanical, including photocopying, recording on any information storage and retrieval system, without permission in writing from the publisher. Printed in U.S.A. Subscription rates: $48 per year. THE LICENSING BOOK, THE LICENSING BOOK INTERNATIONAL, WORLDWIDE LICENSING, and the “WLE” design are trademarks and service marks of Adventure Publishing Group, Inc.® registered in the United States Patent & Trademark Office Postmaster: Send address changes to THE LICENSING BOOK, c/o Adventure Publishing Group, PO Box 47703 Plymouth, MN 55447.
Volume 31, NumbeR 2
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ADVENTURE PUBLISHING GROUP INC.® Vol. 31, No. 2, Spring 2014 President/Co-Publisher Laurie Schacht laurieschacht@aol.com
Co-Publisher Jonathan Samet jsamet@adventurepub.com
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Entertainment licensing used to refer almost exclusively to TV and movie licensing. Top licensed films, such as Star Wars, and TV shows, such as Sesame Street, were at the top of manufacturers’ wish lists 30 years ago, and still are today. And while TV and movies continue to occupy the top spots for licensed consumer products, these categories are not all that’s out there. Video games and the rapidly expanding category of digital licensing are pervading the consumer products space and offering manufacturers more opportunities for licenses that draw consumer attention. While Disney’s Frozen and Sofia the First are among the top new licenses for kids’ products, Nintendo’s Super Mario Bros. continues to engage a new generation of kids looking for licensed products, from backpacks to fruit snacks to radiocontrolled vehicles. So called “new media,”—not so new to today’s kids—is seeing tremendous success across categories with properties drawn from apps, YouTube, and Internet memes. Rovio’s Angry Birds broke the threshold, showing that an app can be an in-demand property, and Activision’s Skylanders demonstrates that a relatively new video game can top the charts not just for toys and video games, but for categories such as soft goods, health and
beauty, food and beverage, etc. In this issue, we explore several avenues of entertainment licensing, from feature films from Universal (page 14) to HBO’s Game of Thrones TV series (page 28), as well as the worlds of video games (page 32) and digital properties (page 41). What smart manufacturers have learned is that it’s not the platform that dictates a property’s success, but rather the prevalence in consumers’ lives. Any type of entertainment property can become the next Star Wars or Skylanders—you just need a little intuition and a feel for which properties consumers have a desire to interact with on every level, from their breakfast cereal in the morning to their pajamas at night. Once you have found the perfect license, how do you negotiate the Minimum Royalty Guaranty to ensure that (in case your intuition was a little off) you won’t be penalized if your sales aren’t as high as you’d hoped? Check out Jim Kipling’s advice on page 48. Once negotiations are through, licensees face a new challenge: getting product into retail. Jim Sachs offers advice to those who are trying to get their first licensed product onto retail shelves. (Hint: you don’t have to go it alone!) See page 46 for valuable tips on getting your foot in the door. •••• The Licensing Book • 7
Licensing News MOVIE LICENSING
Warner Bros. Consumer Products Signs Deals for Godzilla Film Warner Bros. Consumer Products has signed multiple partners to support Warner Bros. Pictures’ film Godzilla, including master toy partner Bandai America, alongside Jakks Pacific, Rubie’s Costume Co., NECA, Sideshow Collectibles, and more. The global licensing and merchandising program will include a vast product line of toys and figures, apparel and accessories, costumes, and more. Bandai’s Godzilla-inspired toy line will feature a Godzilla Atomic Roar Action Figure that brings Godzilla to life with realistic sounds and movements. A Godzilla 2014 Pack of Destruction will also be available. Additionally, Jakks Pacific will bring fans and collectors a 43-inch-long Giant Size Godzilla figure and Rubie’s Costume Co. will offer Godzilla costumes for kids and adults. NECA and Sideshow Collectibles will offer a variety of novelty and collector toys, while numerous apparel licensees will bring fans branded T-shirts, backpacks, and more.
TV LICENSING
Giant Size Godzilla, from Jakks Pacific
BRAND LICENSING
HIT Entertainment, Universal Studios Home Entertainment Enter New Partnership
Candlewick Press Celebrates 20th Anniversary of Guess How Much I Love You
HIT Entertainment and Universal Studios Home Entertainment have entered a multi-year partnership for Thomas & Friends, Angelina Ballerina, Barney & Friends, Bob the Builder, and more. Universal has aquired the rights to distribute, sell, and market hundreds of titles from HIT’s extensive preschool portfolio in the U.S. and Canada across Blu-ray, DVD, electronic sell-through, and video-on-demand platforms. Universal will begin to distribute and market the HIT Entertainment catalog on October 1 and the two companies will distribute the upcoming Thomas & Friends feature-length special, Tale of the Brave, this fall.
A year-long program of celebrations for the 20th anniversary of Guess How Much I Love You, written by Sam McBratney and published by Candlewick Press, will kick off this fall. Candlewick will execute an extensive global marketing and publicity campaign. Marketing highlights include global trade and consumer advertising campaigns, widespread media coverage, a dedicated website launching this fall, and social media promotions. Candlewick Press seeks new licensing partners to build on the brand’s 20th anniversary. Guess How Much I Love You-licensed products in the U.S. include soft and plush toys, bath and body care products, recordable books, fabric, and more. In addition, kids can watch the Guess How Much I Love You: The Adventures of Little Nutbrown Hare animated TV series, which was just approved for a second season on children’s networks worldwide.
8 • The Licensing Book
Spring 2014
ENTERTAINMENT LICENSING
BRAND LICENSING
Vandor Expands Marvel Entertainment Paws Inc. Signs Wicked Cool Toys as Master Toy Licensee for Garfield Product Offering Vandor LLC will expand its Marvel Entertainment lineup with new iconic superheroes including Spider-Man, Captain America, Iron Man, Wolverine, and Marvel’s Guardians of the Galaxy characters. Additionally, there will be nearly 30 new items, such as Tritan double wall water bottles, recycled shopper totes, and travel cups, all featuring images of the Marvel heroes. Vandor will also highlight marketing and promotional initiatives specifically designed to increase sales for its retail customers this year.
MOVIE LICENSING
Dylan’s Candy Bar Celebrates 75th Anniversary of The Wizard of Oz with Candy Collection Dylan’s Candy Bar, in collaboration with Warner Bros. Consumer Products (WBCP), has launched a limited-edition candy collection to celebrate the 75th anniversary of The Wizard of Oz. The collection features special-edition items of nostalgic, character-themed confections to celebrate The Wizard of Oz film. Fans of Dylan’s Candy Bar and The Wizard of Oz can enjoy chocolate bars created for Dorothy, Scarecrow, Cowardly Lion, and Tin Man, and hand-decorated cookies shaped like Toto and the classic rainbow. The treats will also include lollipops fashioned as Ruby Slippers and the Wicked Witch. The Wizard of Oz Dylan’s Candy Bar collection is available at Dylan’s Candy Bar stores, online at dylanscandybar.com, and at a select number of specialty retailers nationwide.
Spring 2014
Wicked Cool Toys has been appointed master toy licensee for the Garfield brand from Paws Inc. in a deal brokered by Bulldog Licensing Inc. The agreement grants Wicked Cool Toys the worldwide rights to develop and market a line of figures, plush, vehicles, play sets, role play, and seasonal products based on Garfield. The Garfield product line is expected to launch this holiday season.
TV LICENSING
Peter Rabbit TV Series Inspires Plush Products Nickelodeon and Nordstrom will debut a new specialty plush toy line inspired by the Nickelodeon animated preschool series Peter Rabbit. Along with plush from Gund, two brand-new books, The Start of Spring and Peter and Friends Sticker Activity Book, published by Penguin, will also be available. The line includes 12-inch plush and 6-inch beanbags featuring all three series characters. These plush products will be available online and in nearly 100 Nordstrom stores nationwide.
Get the latest licensing industry news delivered straight to your inbox each week for free! Subscribe to The Licensing Book’s Total Licensing Report by sending an email to subscribe@adventurepub.com, and add that address to your address book to ensure delivery. For up-to-the-minute news, follow The Licensing Book on Twitter: twitter.com/LicensingBook, “like” The Licensing Book on Facebook: facebook.com/LicensingBook, and visit our blog at www.licensingbook.com.
The Licensing Book • 9
LIMA Update
Licensing University Martin Brochstein provides a peek at the upcoming workshops at Licensing University, LIMA’s educational program held at Licensing Expo by Martin Brochstein, senior vice president of industry relations and information, Licensing Industry Merchandisers’ Association (LIMA) n any business, as the saying goes, “If you’re standing still, you’re falling behind.” Throughout the year, LIMA offers educational programs that give licensing professionals the chance to keep up with the latest trends, business knowledge, and industry developments—a chance to develop or maintain an edge on the competition. The chance to gain that knowledge reaches a crescendo at Licensing Expo, when LIMA presents the annual Licensing University, with more than 25 seminars and presentations stretching over four days in Las Vegas. An all-access pass that lets you attend as many sessions as you want costs $169. Members of LIMA can get the pass for $149. The highlight, which is free for all show attendees, comes at 8 a.m. on Tuesday, June 17, when DreamWorks Animation CEO and media visionary Jeffrey Katzenberg delivers the opening keynote address. He’s sure to provide thought-provoking perspective on the entertainment and media industries. The Licensing University program actually begins the day before, when we present a series of three “Basics” sessions: Basics of Licensing (moderated by JJ Ahearn of Licensing Street), Basics of International Licensing (moderated by Ciaran Coyle of Electrolux Group), and Basics of
I
“
LIMA offers educational programs that give licensing professionals a chance ... to develop or maintain an edge on the competition.”
10 • The Licensing Book
Licensing Law (moderated by Jed Ferdinand of 24ip Law Group). Here’s a sampling of some of the other sessions. To see the full schedule, visit www.licensingexpo.com and click on the Licensing U tab. From Good to G’RATE: What Every Licensing Professional Should Know About Royalty Rates This course will offer a 360-degree view on royalty rates—what they are, how they differ by category, and how they relate to margins and cost of goods. We’ll explain the risk/reward effect, demystify the “net sales definition,” tell you when to escalate or de-escalate, and, if there’s time, heck, we’ll even get our F.O.B. on! Moderator: Adina Avery-Grossman, partner, Brandgenuity Presenters: Paul Bessinger, director of innovation, Quill.com/Staples; Dana Kuperman, director of licensing business development, Weight Watchers International; Teri Niadna, director of business development, National Football League (NFL); and Steven Shweky, top dog, Fetch … for pets! Smart Design: The creative tools you need to build a focused and flexible consumer products program In the last five years, the licensing and retail landscape has changed dramatically. With direct-to-retail and non-traditional strategies on the rise, gone are the days of overambitious style guides and other
Spring 2014
one-size-fits-all approaches. Smart brand owners are trending toward a more targeted path, focusing on exactly what licensees need in specific categories. This session will cover how the licensing and retail landscape has changed and impart the creative tools necessary for your brand to be a success. Presenters: D. Thomas Froberg and Alaina Caldwell, partners, creative directors, StyleWorks Creative How Retailers and Licensees Look at Licenses Before a licensed product actually appears on a store shelf or an e-tailer’s website, the property owner has to convince a licensee to take the brand, and (perhaps together) they have to get it sold into retail. This seminar will give insight into how merchants and manufacturers evaluate the properties and products that come across their desks. Moderator: Marty Brochstein, senior vice president, LIMA Presenters: Adam Beder, executive vice president global licensing and business affairs, Spin Master; Lorne Bloch, vice president licensing, Junk Food Clothing; Sean Bunner, vice president new business development, HSNi; and Ed Labay, senior buyer, Hot Topic Like, Link, Follow Me—Making Sure Licensor and Licensee Are on the Same Social Media Page The promise of social media is fantastic—engaging exposure for products and brands that fosters the kind of relationship with consumers that any marketer craves. But in a licensing relationship, who owns that relationship? And how can you make sure that licensor and licensee are on the same wavelength about the message? We’ll have a variety of stakeholders giving their thoughts. Moderator: Michelle Alfandari, president and CEO, MODA Licensing Presenters: Elise Contarsy, vice president brand licensing, Meredith; David Favela, business development and licensing manager, Hewlett Packard; and Alan Kravetz, president and COO, Leveraged Marketing Corporation of America (LMCA) What to Do When Things Go Wrong What do you do when things don’t work as planned? This session will provide an essential update on topics people rarely talk about—best practices and lessons learned for handling the unexpected. We’ll help licensing professionals—licensors, licensees, agents, and others—understand how to handle licensing challenges and, more importantly, how to recover from them. We’ll discuss such areas as bad relationships with partners, bankruptcy,
Spring 2014
licensor or licensee being sold, recalls, unapproved submissions, embarrassment from celebrity spokespersons, and many others. Moderator: Stephen Reily, managing director, chairman, general counsel, IMC Licensing Anatomy of a Licensing Agreement A clause-by-clause discussion of a typical merchandising license agreement with an explanation for the purpose of each clause and suggested negotiation points for both licensors and licensees. Be prepared for active class participation. Presenter: Greg Battersby, principal, Battersby Law Group Advanced Licensing Strategies Building upon the Beginner Licensing basics class, this seminar will explore some of the different strategies utilized by licensors, licensees, and retailers to grow their businesses. We will explore some of the current trends and discuss why some of the old licensing strategies are not very effective today. We will explore the new retail landscape and new methods to maximize your licensing programs. We will also look at best practices in licensing strategies from some of the leading companies in the licensing industry. Our expert panel will discuss their own strategic approach to licensing and share many ideas that are sure to make your licensing endeavors more lucrative. Moderator: Stuart Seltzer, president, Seltzer Licensing How to Maximize the Effectiveness of Your Intellectual Property Through Promotions A look at examples of effective use of IP for increasing revenues and the effective use of promotions as an overlay for increasing the effectiveness of a license—for licensees, how to get the most from the licensor, and for licensors, how the get the most royalties from a licensee. Moderator: Russell Brown, president licensing, promotions, and ad sales, Valiant Entertainment. •••• Marty Brochstein joined Licensing Industry Merchandisers’ Association (LIMA) in 2008. Brochstein was a business journalist for more than 20 years, covering the consumer products and retail industries. He spent five years as senior editor of Television Digest and was the founding editor of Consumer Multimedia Report. He was also editor of Consumer Electronics Monthly and Electronics Merchandising, and spent time with Discount Store News, Chain Store Age, and Home Furnishings Daily.
The Licensing Book • 11
Stat•Shot
S TAT S HOT Top Licensed Toys and Top Growth Licensed Toys Based on Annual 2013 and Q1 2014 Dollar Sales
2013
2014: Q1
Top 5 Brands Barbie Monster High Nerf Hot Wheels Little Tikes
Top 5 Brands Barbie Lego City Hot Wheels Nerf Little Tikes
Top 5 Growth Brands Lego Legends of Chima Nabi Nerf Rebelle Cra-Z-Art Lego Ninja Turtles TMNT
Top 5 Growth Brands The Lego Movie Pokemon Lego City Ever After High My Little Pony Equestria Girls
Top 5 Licenses Disney Princess Star Wars Teenage Mutant Ninja Turtles Mickey & Friends Disney Pixar Cars
Top 5 Licenses Disney Princess Star Wars Teenage Mutant Ninja Turtles Disney Frozen Mickey & Friends
Top 5 Growth Licenses Teenage Mutant Ninja Turtles Doc McStuffins Sofia the First Disney Planes Despicable Me
Top 5 Growth Licenses Disney Frozen Minecraft Sofia the First Disney Planes Despicable Me
Annual 2013
Percent Change in Dollar Sales vs. Last Year
Brands Licenses All Other
Millenial Females Ages 25 to 34 -14.9 percent -1.0 percent -2.2 percent
All Other Buying Segments 0.7 percent 3.0 percent 6.2 percent
Percent of Sales Online
Brands Licenses
Brands Licenses
Annual 2012 49 percent 25 percent
Annual 2013 47 percent 23 percent
Brick and Mortar 45 percent 43 percent 28 percent 29 percent
Annual 2013 Percent of Licensed Sales Total Census Region 100 percent 15 percent Northeast 20 percent Central 43 percent South 23 percent West
Percent of Total Sales 100 percent 17 percent 22 percent 40 percent 21 percent
Source: The NPD Group/Weekly Retail Tracking Service
12 • The Licensing Book
Spring 2014
U
Coming Attractions from the Blockbuster Film Studio
niversal Studios is behind film classics such as Jaws and E.T.: The Extra-Terrestrial, as well as modern hits including Bridesmaids and The Fast & the Furious series. The studio has already announced its summer of 2015 slate, and it features plenty of new installments to popular franchises. Minions is a spin-off of the highly successful Despicable Me franchise that centers on the zany sidekick characters introduced in 2010’s Despicable Me. First teased during the ending credits of last year’s Despicable Me 2, the new film places the unpredictable Minions in unexpected settings, alongside human characters voiced by Sandra Bullock and Jon Hamm. Minions represents the fifth collaboration between Chris Meledandri’s Illumination Entertainment and Universal. It is helmed by Pierre Coffin, who codirected Despicable Me 2, which topped $970 million worldwide, and co-directed by Kyle Balda from Brian Lynch’s script. It feels like a glacial period has elapsed since the dinosaurs of Jurassic Park last appeared on the big screen, but the wait is finally over. Steven Spielberg returns to produce the latest installment of the blockbuster series, Jurassic World. Colin Trevorrow will direct from a screenplay written by Trevorrow and Derek Connolly. The original Jurassic Park still stands as one of Spielberg’s highest-grossing films ever, at more than $1 billion in box office receipts.
14 • The Licensing Book
Though it began as a 2001 niche genre film, The Fast & the Furious series keeps revving along. In the latest installment, Fast & Furious 7, Vin Diesel and Paul Walker headline the returning cast, while James Wan settles into the director’s seat. Not every film needs cutting-edge special effects or adrenaline-fueled car chases to earn a sequel. Pitch Perfect, a musical romantic-comedy about a university allfemale a cappella group, was a surprise hit in 2012, earning $113 million worldwide. Elizabeth Banks, who co-starred in the first film, returns to direct Pitch Perfect 2, while Kay Cannon, who wrote the first film, returns for screenplay duties. In 2016, Universal and Illumination will collaborate yet again, this time on The Untitled Pets Project, starring Louis C.K., Eric Stonestreet, and Kevin Hart. This comedy-drama centers on Max the terrier, Snowball the bunny, and other pets living in a Manhattan apartment building. Trouble ensues when Max’s owner adopts Duke, a slovenly mongrel with poor interpersonal skills. Chris Renaud—who co-directed Despicable Me and Despicable Me 2—helms with Yarrow Cheney from a script by Cinco Paul and Ken Daurio. Finally, the children’s book favorite, Curious George, celebrates its 75th anniversary in 2016. George will reach his milestone in style, thanks to an all-new movie, Curious George 3: Back to the Jungle, arriving on home video next year. ••••
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Release Date: April 10, 2015
Fast & Furious 7 has a number of licensees already lined up, including Mattel and Greenlight, both of which will provide die-cast replicas of the film’s key vehicles. Meanwhile, NKOK is on board for R/C vehicles, and RMS will bring construction kits to the program. Fifth Sun and ACCO Brands will provide apparel and calendars, respectively.
Franchise Facts:
• The series has earned more than $2.3 billion at the box office. • Fast & Furious 6 was the No. 1 action Blu-Ray title of 2013. • It stands as the most successful movie-based and racing franchise in gaming history.
Release Date: June 12, 2015
Among licensees for Jurassic World, Hasbro returns as the master toy partner, continuing the relationship enjoyed by Universal and Hasbro ever since the first Jurassic Park film, which was directed by Steven Spielberg and released in 1993.
Franchise Facts:
• Jurassic Park and its two sequels, Jurassic Park: The Lost World and Jurassic Park III, have earned more than $2 billion at the box office worldwide. • Currently, the first Jurassic Park is Universal’s top-selling catalog DVD.
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7
Release Date: July 10, 2015 Minions’ licensing program features a number of returning licensees from Despicable Me 2. Thinkway Toys, the company behind last year’s Talking Minion Action Figure, serves as master toy partner, while Hasbro and Hybrid JEM will provide games and apparel, respectively. Franchise Facts:
• With earnings in excess of $970 million, Despicable Me 2 was the fourth highest-grossing animated film of all time. • Despicable Me 2 was the No. 1 DVD/Blu-Ray title last year. • Universal’s worldwide promotional campaign for Despicable Me 2 was its largest ever, with more than $283 million in media value. • The Despicable Me: Minion Rush mobile app game has more than 225 million downloads to date. • The brand has more than 27 million Facebook likes.
The Licensing Book • 15
Chris Meledandri’s Pets Project
Curious George 3: Back to the Jungle
Release Date: February 12, 2016
Universal Partnerships & Licensing is available to contact regarding available categories and licensing opportunities.
Release Date: 2016
Curious George will celebrate his 75th anniversary in 2016, and when it comes to celebrating this achievement, Universal isn’t monkeying around. The studio will mark the occasion with a licensing program that spans a number of product categories. Gund will provide plush toys, while Pottery Barn Kids has signed on for a line of licensed home furnishings. Junk Food and Stride Rite will provide apparel and shoes, respectively, and both Houghton Mifflin Harcourt and Chronicle are on board for new books.
Franchise Facts:
Franchise Facts:
• 70 million books in 17 different languages have been sold worldwide.
• To date, Chris Meledandri’s films have totaled more than $4.5 billion at the box office worldwide. • Comedy stars Louis C.K., Eric Stonestreet, and Kevin Hart all make their animated feature debuts.
Pitch Perfect 2
Release Date: May 15, 2015 Potential licensees are encouraged to contact Universal Partnerships & Licensing for available categories and licensing opportunities. Franchise Facts:
• Pitch Perfect successfully captivated a core audience of young women. • The platinum single “Cup” was listed on iTunes’ Hot 100. • In Pitch Perfect, co-star Rebel Wilson established herself as a fast-rising comedy star.
16 • The Licensing Book
Spring 2014
5 Ways to Boost SEO Using Social Media
Talking Social Media
by Ben Stewart, co-founder and chief technology officer of Social Rebate
1 Choose the Right Net work
Facebook is great for search enging optimization (SEO) when the posts are public, but when users engage and reshare your public content, it is usually only viewable by friends of that user. Twitter, Google+, and Pinterest are better for mass distribution of a message. Remember, if you can’t see it without logging into the network, then the search engines can’t either.
2 Format Content per Net work
Each social network is unique, so why would you use the exact same content on each one? Make sure your content is formatted to play well with the network you plan to share it on. I often see posts on Twitter that were copied from another source and the message is broken. If I post something to Facebook that is more than 140 characters, I can’t expect it to show up on Twitter in the same complete fashion (it will be truncated). If you are going to tie your accounts together for convenience, make sure your posts are formatted to be uniform on as many networks as possible.
3 Start a Conversation
Search engines love conversation threads. When people ask questions on a specific topic a thread of opinions forms around it. With multiple sources all weighing in on the same topic, the topic becomes much more relevant. Reddit is a great social forum that can generate great SEO when a topic gets traction. Ask questions that are relevant to your brand or product, take a unique stance that will elicit more opinions, and make sure your profile points people directly to your site.
4 Join Groups and Gatherings
There are keyword-rich conversations going on
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around the social sphere that the search engines have already found. Forums, public Facebook pages, Twitter trends, and Facebook group pages are a great place to start looking. By jumping in on conversations relevant to your brand and weighing in with your opinions, you can establish yourself as a valued resource. Not only is this a good way to reach new potential customers directly, but if links to the conversation already have solid placement on the search engines, anyone who visits will be exposed to your brand as well.
5 Use Hashtags
Hashtags (#) have become the standard way to single out talking points in social media posts. Whether you are posting #pictures on Instagram, #tweets on Twitter, or #statuses on Facebok, using popular keywords along with the right trending topics can help your content get noticed. Search engines such as Google have been forced to pay attention to things trending on social networks ever since they became up-to-the-minute sources for news. By tagging your posts with not only what is #trending and relevant to your content, but also adding tags in the form of #keywords you would typically use for search, you can help take your posts beyond the social realm and into the organic search listings. This tactic works especially well when you have lots of people re-sharing it, so offering additional incentives such as a coupon or promotion to get people to redistribute your content is always recommended. •••• Ben Stewart has an extensive background in web development and design for large-scale e-commerce companies. Before launching Social Rebate, Ben was head of creative media and web development for DDC Internet and director of development for Out of Pocekt Films at Sony Pictures.
The Licensing Book • 17
TV Licensing
Children’s TV Licensing hildren are highly influenced by the characters they see on TV, and this is no secret to licensors or licensees. Manufacturers are eager to create engaging products that reflect the shows and characters kids see every day before and after school. Disney’s Doc McStuffins, Nickelodeon’s Dora the Explorer, Hit Entertainment’s Thomas & Friends, and Sesame Workshop’s Sesame Street were all among the top 20 toy licenses of 2013, according to the NPD Group/Retail Tracking Service. But licensed products for children’s TV properties extend far beyond the toy space. Hasbro has created a 3-D ride at multiple Universal Studios locations for its Transformers brand, with the Transformers: Prime series enjoying a strong viewership on the Hub Network. Additionally, Sesame Workshop has partnered with the Produce Marketing Association and Partnership for a Healthier America to encourage healthy eating habits in kids. Brand partnerships frequently extend into additional forms of entertainment, such as comic books, novels, soundtracks, and movies. Creative partnerships like these, as well as traditional brand extensions in categories such as apparel, bedding, and back-to-school gear, bring the characters kids love into their everyday lives. ••••
C
Hasbro Extends Existing Brands into New Original Series
TV series based on original brands from toy manufacturer Hasbro, including My Little Pony and Transformers, continue to air through this year on The Hub network. Launched in 1983, the My Little Pony brand has sold more than 250 million ponies to date. The brand continues to be a worldwide fan favorite with more than 200 licensees spanning 15 categories in 71 countries, creating merchandise for fans of all ages in multiple categories, including apparel, digital gaming, plush, role play, publishing, accessories, food and beverage, health and beauty, and housewares. Building on the momentum of the My Little Pony Friendship is Magic animated series, Hasbro continues to grow the My Little Pony franchise with the launch of the My Little Pony Equestria Girls brand. Hasbro Studios premiered My Little Pony Equestria Girls as a full-length feature film, introducing a whole new dimension into the world of My Little Pony. The film was accompanied by a full line of fashion dolls, which featured teenage girl versions of the pony characters that fans worldwide know and love. A sequel, Rainbow Rocks, will hit theaters this fall. The Transformers brand will celebrate its 30th anniversary this
18 • The Licensing Book
year. Over the past 30 years, more than 7,500 robots have been introduced in multiple animated TV series, comic books, and four live-action feature films. Content continues to lead the way for the Transformers brand, led by the Transformers: Prime animated series seen in more than 180 markets by kids ages 5 to 10. In addition, the Transformers: Rescue Bots animated series, produced by Hasbro Studios and created especially for younger Transformers fans, follows a group of Autobots as they team up with a human family to keep peace in their community. More than 200 licensees have brought high-value, age-appropriate Transformers merchandise across multiple categories to market, including toys, apparel, sporting goods, and publishing. New York Times best-selling author Matthew Reinhart has brought the quintessential Transformers pop-up experience to fans with the Transformers: The Ultimate Pop-Up Universe by Little, Brown and Co. Transformers: The Ride—3D is currently open at three Universal Studios locations. This ride is an action-packed experience that pushes the limits of technology and places guests in the middle of a larger-than-life battle.
Spring 2014
Sesame Taps Classic Furry Friends for New Series
Sesame Workshop has signed new licensing deals for the classic Sesame Street brand and The Furchester Hotel, the new children’s series featuring the furry friends kids have known for decades. Sesame Workshop has partnered with the Produce Marketing Association (PMA) and Partnership for a Healthier America (PHA) to promote fresh fruit and vegetable consumption to kids, making healthier choices a little easier for families. The agreement allows PMA’s community of growers, suppliers, and retailers to take advantage of the Sesame Street brand’s strength and the influence of the Sesame Street brand without a licensing fee—using iconic characters such as Big Bird, Elmo, and Abby Cadabby to help deliver messages about fresh fruits and vegetables. Sesame characters are expected to be on produce shelves this fall. The Furchester Hotel has begun filming at BBC Children’s home in MediaCityUK, Salford. The new series is about a close-knit family of cheerfully incompetent Muppet monsters who own and operate an “almost” world-class hotel. The proprietors are Funella
Furchester, the welcoming monster owner, her loving husband Furgus Fuzz, and their daughter Phoebe Furchester-Fuzz. The Furchester family is joined at the hotel by Elmo, Phoebe’s cousin who is on an extended visit, and Cookie Monster, who has landed his dream job as room service and dining room waiter. Sesame Workshop is currently developing a comprehensive licensing program around this new series, which will debut in the fall on CBeebies. This year will see a whole new line of Sesame Street toys, including Playskool’s Let’s Imagine Elmo, which was unveiled at the American International Toy Fair in February. This 13-inch Elmo pal comes with three different hats that unlock different imaginary themes and play modes. Kids can place the crown on Elmo’s head to play a game of “Prince Elmo Says,” pop on the cowboy hat to learn about numbers in the “Countin’ Cowboy” game, or put on the sea captain hat for a fun “Sounds of the Sea” game. Kids can also tickle his belly, squeeze his nose, or bounce him for fun and interactive play.
Sprout Product Line Supports Day-to-Day Moments
Sprout, a 24-hour preschool destination available on TV, ondemand, and online for kids ages 2 to 6 and their parents and caregivers, offers a variety of character-based products under the Sprout brand. The licensed product line is designed to provide the opportunity for products to grow with kids and to support the day of a preschooler. Built around everyday moments, products include toys with classic play patterns, such as imagination/role play, pretend environments, wooden toys, plush toys from Fiesta, digital learning toys, crafts and cre-
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ativity products, and ride-alongs. Sprout also offers products within the publishing category, as well as those within bedding and bath, apparel, meal time, health and beauty, and food. Available in more than 55 million homes with programming structured to follow the day of the child from morning to night, Sprout features original programming, including The Chica Show and Noodle and Doodle, a library of gold standard series, including Caillou Sesame Street, and Thomas & Friends, and U.S. exclusive series, including Lazytown and Tree Fu Tom.
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TV Licensing
Disney Junior Powerhouse Properties Top the Charts
Disney Junior, the multiplatform brand for kids ages 2 to 7 and school Toy of the Year nominee Sofia the First Talking Doll and their parents and caregivers, recently ordered new seasons of its Animal Friends, from Mattel. Additionally, Lego Duplo animated series Sofia the First, Doc McStuffins, and Jake and the launched three SKUs for Jake and the Never Land Pirates last Never Land Pirates. Disney Junior is TV’s No. 1 preschool-dedi- year, including Jake’s Pirate Buckey Ship. Mattel and Jakks Pacated network in the Nielsen demographic for kids ages 2 to 5. cific each launched a line of Sofia the First toys at mass retailers, and more than 1 million Doc McStuffins Doctor Bag play The Sofia the First series, which follows the advensets have been sold to date. tures of Disney’s first little girl princess, and the Beyond toys, licensing programs for Emmy-nominated Doc McStuffins, which centers four shows, as well as Minnie’s Bowall around a 6-year-old girl who runs a clinic for toons shorts, include apparel, her stuffed animals and toys, have each room décor, seasonal items, party been picked up for a third season. The supplies, and much more, allowing Emmy-nominated and Annie Disney Junior to more than double Award-winning Jake and the Never its shelf space at retail last year. Land Pirates, featuring a crew of Combined, the series have more kid pirates alongside classic Disthan 900 book titles, including the ney characters such as Captain Times best-seller Sofia the First, York New Hook and Mr. Smee, has received which was released as an e-book and in an order for a fourth season. Mickey Mouse Lego Duplo Disney Jake’s Pirate Ship Bucky accompanying Sofia the First: Story Thethe Clubhouse also remains on Disney Junior, introducing a new generation of preschoolers to Mickey Mouse ater app, which has been ranked the No. 1 kids iPad app on the App Store in 43 countries worldwide. Disney Junior characters and his lovable band of friends. Disney Consumer Products offers robust product lines in- are also featured in multiple soundtracks and DVD releases spired by each of these series, including award-winning toys, from Disney Studios and in Disney Junior magazine from Disney such as 2013 Preschool Toy of the Year winner Doc McStuffins Publishing. Disney Junior will continue to expand its licensed Get Better Check Up Center, from Just Play, as well as 2013 Pre- offerings this year.
Thomas & Friends Stays on Track
Thomas & Friends is the No. 1 preschool toy license in the U.S., according to The NPD Group, and enjoys global popularity, entertaining families in more than 185 territories and in 30 lan-
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guages. Thomas the Tank Engine and his friends invite kids to enter a world of imagination through the tracks of a train and the words of a story, introducing timeless life lessons of discovery, friendship, and teamwork. The Thomas & Friends brand delivers a 360-degree brand experience through toys, licensed products, and experiential partnerships. Its animated content reaches more than 100 million households per month in the U.S. alone through its distribution with PBS Kids. Thomas & Friends licensed product assortments include books, games, engines, play sets, apparel, bedding, accessories, and more. Part of the Mattel portfolio of brands, Thomas & Friends—and all of the HIT Entertainment properties—continue to make tracks into the hearts and homes of preschoolers and their families.
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TV Licensing
Reality TV Licensing
Duck Dynasty
he world of reality TV took a turn to the South last year, with new series focused on “hillbilly culture” popping up on multiple networks. From gator hunters to bootleggers, the down-and-dirty lifestyles of families from southern Louisiana and Georgia have captured the attention of many viewers. A+E’s Duck Dynasty made waves early in the year, with consumer product deals signed for categories from toys to apparel. The network will continue to capitalize on the trend moving into this year with Swamp People, which has an immersive consumer products line, including original hot sauces. Discovery Consumer Products signed multiple licensing deals in 2013 for TLC’s Here Comes Honey Boo Boo, but this year the TV giant will focus more energy on the Animal Planet series Tanked, which also has its own piece of the South in the form of Robbie Redneck, the resident technician and plumber of a family-owned aquarium manufacturing company. While it’s no secret that the redneck-inspired humor has a lot to do with the success of these series, the all-in-the-family element is similarly important, and licensees will look to capture this component with creative consumer products this year. ••••
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TLC Takes the Cake
Discovery Consumer Products has made Cake Boss the one-stop destination for everything baking with product in more than 26,000 retail doors nationwide. The property is based on the success of TLC’s reality series Cake Boss, which follows New Jersey-based master baker and cake decorator extraordinaire Buddy Valastro. Novice or master of their own kitchen, consumers can create a Cake Boss-approved dessert using the arsenal of tools by Cake Boss. The line includes bakeware, serveware, decorating tools, cookbooks, cake mixes, buttercream frostings, and packaged fondant. The Cake Boss brand will expand this year with the launch of eight coffee flavors, a bakeware line for kids, edible cake decorations, and more. Discovery Consumer Products will continue to grow the property and actively seek partners for both Cake Boss and the new Cake Boss Junior brand, geared specifically toward young bakers and fans.
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Animal Planet Gets Fishy
The Animal Planet brand recently debuted two new products for the series Tanked, which follows brothers-in-law Wayde King and Brett Raymer as they run the largest aquarium manufacturing company in the nation. The Tanked Aquarium app debuted in November on iOS devices, allowing players to become the proud owners of a virtual fish tank and providing the opportunity to choose their favorite fish, decorate the tank, and keep their new pet swimming and happy. Players can also play mini-games and connect with their friends to share successes via Facebook, SMS texts, and email. Additionally, Tanked: The Official Companion hit shelves in March, providing readers with detailed overviews of Wayde and Brett’s top builds, never-before-told stories from behind the scenes, celebrity testimonials, and an official “Get Started” aquarium guide. Discovery Consumer Products will continue to seek additional opportunities to bring the Animal Planet original series to retail shelves.
Spring 2014
Top Chef Takes to the Sea
Celebrity Cruises and Bravo’s Top Chef invite fans on a global culinary adventure with the new Top Chef at Sea partnership. The premium vacation brand and the Emmy Award-winning culinary competition series unveiled an exclusive licensing partnership that offers fans custom Top Chef experiences onboard Celebrity’s modern luxury ships. Building on last year’s popular Top Chef: The Cruise charter, fans can enjoy an exclusive taste of the well-known series with enhanced culinary experiences for foodies and globetrotters alike. This marks the cruise industry’s first Top Chef-themed licensing partnership on a large scale as well as Celebrity’s first exclusive Top Chef-inspired experiences available onboard 10 Celebrity cruise ships. Celebrity will launch four cruises featuring former Top Chef contestants departing July 27, August 15, September 19, and November 15. While vacationers sail away to dream destinations, such as Bermuda, Alaska, Europe, and the Caribbean, they will have the opportunity to participate in complimentary cooking demonstrations, the show’s famous, interactive Quickfire Challenges, and other activities. For a more exclusive experience, guests can enjoy private cooking classes and events hosted by former chef’testants at an additional cost as part of their vacation experience. In addition to the four exclusive cruises with Top Chef alums, Celebrity will also introduce Top Chef-inspired menu evenings to its modern luxury vacations onboard 10 ships for all sailings departing July 2014 through June 2015.
Top Chef: The Cruise charter, photo by Justin Segura
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A+E Gets Down and Dirty with Swamp People
Swamp People, a reality series from A+E now in its fifth season on the History Channel, is consistently one of cable’s top-performing programs. The show follows “King of the Swamp” Troy Landry and a group of alligator hunters in the swamplands of Southern Louisiana during their month-long hunting season. These intrepid pioneers have become ever-present staples in the outdoor arena. A+E Consumer Products has partnered with select manufacturers to ensure the licensing program maintains the integrity of the show. For the outdoor category, it has focused on established brands and specialty retail outlets with marketplace leaders, such as Gander Mountain, Cabela’s, Bass Pro, and Academy Sports & Outdoor. A+E Consumer Products has also partnered with Zebco, the leading purveyor of fishing rods in the U.S., for branded rod-and-reel combos. Additionally, Ameristep has hunting blinds and hunting chairs for the brand. For those inspired by Louisiana’s rich culture and cuisine, Braswell’s has created a line of Swamp People-branded sauces and seasonings, including Tree Breaka Cajun Steak Sauce; Mudda Fricks Horseradish BBQ Sauce; No Guts, No Gator Habanero Salsa; Tree Shaka Cocktail Sauce; and Pierre Part Inhospitable Hot Sauce. Rounder Records has released a Swamp People CD with 13 foot-stomping songs that showcase the music that’s rooted in Cajun country. The CD features the Neville Brothers, Tony Joe White, Buckwheat Zydeco, Jumpin’ Johnny Sansone, Hank Williams, and Beausoleil with Michael Doucet. MJC has created Swamp People-branded loungewear and Club Red, Isaac Morris, and Paramount have signed on for apparel featuring images and catch phrases from favorite characters. Well-wishing can even be extended beyond gator season with American Greeting’s line of branded Father’s Day cards in the U.S.
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Cult Classic TV Licensing
TV Licensing
hile some series become fast favorites and licensees jump on opportunities to capitalize on hot— but fleeting—trends, other series have astounding longevity. Twentieth Century Fox’s The Simpsons celebrates its 25th anniversary this year, while Family Guy is in its 11th season. Brands this strong have robust consumer products offerings, with fan bases spanning multiple generations and products reaching from mass to specialty. Additionally, some series’ popularity outlasts their time on the air, launching them into “classic” status, such as CBS’ Star Trek, which originally aired in 1966 and still has a robust consumer products line, as well as multiple spin-off entertainment brand extensions. Fan events, such as Comic-Con International: San Diego, New York Comic Con, and Chicago-based C2E2, play a huge role in these cult classic properties. New to the genre is Warner Bros.’ The Big Bang Theory, now in its fifth season, with a product line revolving around key catch phrases and quirky themes from the show about nerd culture. HBO’s Game of Thrones has also been a fast-rising star in recent years, with fans seeking consumer products that bring a piece of the original fantasy world to real life. While both of these brands are new by comparison, they are expected to remain in the licensing world for years to come as evergreen properties. ••••
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Big Bang Theory Blasts into Retail
Warner Bros. Consumer Products (WBCP) and Warner Bros. Television Group (WBTVG) continue to build the global licensing and merchandising program for The Big Bang Theory, the No. 1 series on TV among adults ages 18 to 49. A strong roster of more than 70 U.S. licensees and a growing contingent of international partners support the fan-favorite with products inspired by the show, reaching across an array of categories including games, apparel, and home goods, as well as niche product lines that are designed for the devoted fan base. Cardinal Industries has created The Big Bang Theory Fact or Fiction Trivia Game: Fan Edition and UNO Big Bang card game, which are available now. The licensee will build on the existing line of games this year with the Ultimate Genius Party Game and the Trivia Party Game. USAopoly launched Clue: The Big Bang Theory Edition late last year, allowing fans to figure out who betrayed Sheldon, and will bring The Big Bang Theory Monopoly game to retail this year. Ripple Junction, one of the first licensees to jump on board with the franchise, has been a strong partner across multiple categories, with products including T-shirts, sweatshirts, plush, and
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accessories featuring key catch phrases and nerd-culture themes from the show. This year, Tonner Doll will launch Sheldon, Penny, and Amy character dolls. Additionally, Wonderland Toys will feature a genius assortment of The Big Bang Theory gifts and novelty items, including talking Sheldon and Howard dolls. The Big Bang Theory also proved its strength overseas with a global licensing program that expanded across North America, Europe, and Australia, among other regions, in 2013. In Australia, M.A.C. Group Pty. Ltd. will develop apparel; Ikon Collectables Pty. Ltd. will release a series of board games, gifts, novelties, and decorative accessories; and Kinnerton Confectionery created an array of products and confectionaries inspired by the hit show. In the U.K., Forbidden Planet produced apparel and accessories, and Pyramid Posters Ltd. released The Big Bang Theory-themed posters and calendars. Dist., S.L. launched a line of gifts, novelties, and decorative accessories in Spain; Copag da Amazônia S.A. launched themed games in Brazil; Aurimoda S.A. de C.V. had an apparel collection in Mexico; and NTD Apparel Inc. produced apparel in Canada.
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The Simpsons Celebrates 25 Years with New Deals
The longest-running scripted show in TV history, Twentieth Century Fox’s The Simpsons, created by Matt Groening, exploded into a cultural phenomenon in 1990 and is now airing its 25th season and is in production on its 26th season. The Simpsons: Tapped Out is a top grossing mobile app and has ranked No. 1 around the world on the App Store charts. The Simpsons Movie had worldwide acclaim and the virtual coaster rides at Universal Studios Florida and Hollywood are a continuous hit, along with the new Springfield experience at Universal Studios Florida. The Simpsons brand continues to expand in 2014 with new partnerships in the toy and fashion spaces. The Lego Group has signed with Twentieth Century Fox Consumer Products to produce a construction set and licensed Lego minifigures inspired by the series. The line includes the Simpsons’ family home as well as the entire family and neighbor Ned Flanders in minifigure form. The Simpsons family will take on the runway with new fashion collaborations this year. A Bathing Ape will have a wide variety of apparel and accessories for men, women, and children including trendy varsity jackets,T-shirts, hoodies, sweatpants, beer glasses, and baby bibs. Drop Dead has created the first boutique apparel collection, including T-shirts, sweats, leggings, knit pullovers, hoodies, and bags, all focusing on Itchy & Scratchy. Additional fashion partners include Joyrich, Threadless, Uniqlo, Eleven Paris, H&M, Topshop, Topman, Zara, and Zara Kids. The Simpsons Varsity Jacket from A Bathing Ape
The Star Trek-iverse Expands with Brews, Games
CBS Consumer Products will expand its Star Trek consumer products program into new categories this year, allowing fans worldwide to engage with the brand in new ways. Soft Stuff Creations has produced plush Star Trek golf club covers. Gary Gurmukh Sales introduced a selection of branded souvenirs, including apparel, headwear, and giftware throughout Canada. Icon Heroes introduced its line of Star Trek office accessories at the American International Toy Fair in February. Icon Heroes and A Crowded Coop also introduced a line of bags and accessories at Toy Fair, including cut-and-sew bags, messenger bags, backpacks, purses, coin purses, and more. Other international Star Trek deals include 21 Trends Private Ltd. for T-shirts in India; Mitch Dowd for men’s outerwear, sleepwear, and underwear in Australia; and Lady Sandra Home Fashions Inc. for cuddle wraps and cozy wearable blankets in Canada. In addition, The Federaton of Beer has teamed up with CBS Consumer Products to create a new Star Trek-branded beer, Klingon Warnog. The brew was revealed at the Nightclub & Bar Show in Las Vegas and is set to ship in the U.S. and Canada this year. Tin Man Brewing Co. in Evansville, Ind. will brew the beer under license from CBS Consumer Products. Also new is Disruptor Beam’s plan to produce a Star Trek strategy role-playing game, Star Trek Timelines. The game is a story-driven social game where fans can build their ultimate starship and crew and explore the Star Trek-multiverse with characters across many of the franchise’s eras. Star Trek Timelines will include content and characters from Star Trek: The Original Series, Star Trek: The Next Generation, Star Trek: Deep Space Nine, Star Trek: Voyager, and Star Trek: Enterprise. Players will explore numerous galaxies, planets, and distant lands; interact with various technologies, cultures, and races; and resolve problems through combat, diplomacy, and science. The game will feature original artwork and 3-D graphics. Klingon Warnog Beer, from The Federation of Beer
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Property Profile
Consumer Products Are Coming
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HBO’s Game of Thrones series inspires an innovative product line for fans of all kinds.
by Marissa DiBartolo
t has war, it has drama, it has dragons—and now, it has a wealth of licensed products. Now in its fourth season, HBO’s Game of Thrones series, based on the books by George R.R. Martin, follows kings, queens, knights, and noblemen who are engaged in a deadly game for control of the Seven Kingdoms of Westeros. HBO Global Licensing has signed on more than 60 different licensees for the fantasy fan-favorite, resulting in hundreds of consumer products. Going far beyond branded T-shirts and coffee mugs, licensed products for the property include soundtracks, pop-up books, jewelry, mobile games, and even an official line of beer. But HBO is careful when choosing licensing partners to represent the property in the consumer products space. “We are always on the lookout for innovative partners that make great product, demonstrate the ability to market that product, and have strong distribution at retail,” say Diana Pessin and Jeff Peters, directors of HBO Global Licensing. “They must exhibit a proven track record of success and demonstrate a strong understanding of our brand.”
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Products aren’t limited to the U.S., either. The series has grown rapidly on an international level, with products at specialty, grocery, high-street fashion, and direct-to-retail levels. “The show airs in more than 200 markets around the world, and we approach the brand as a global phenomenon. We’re very strong in Western Europe and Australia, and we see emerging opportunities in Asia, South America, and around the globe,” say Pessin and Peters. With each new season of Game of Thrones comes an even larger fan base and more licensed products. The volume of products created for the release of the fourth season is double what was created for season three. The show appeals to both men and women, and has both cult fans and casual fans. “Game of Thrones is still growing its audience around the world, which provides us with a substantial number of avenues to expand our licensing opportunities,” Pessin and Peters explain. The fantasy element of the show also plays a huge role in the success of the licensed products. The land of Westeros is completely unique, making fans eager to bring a piece of the fiction into their own lives. “The fans simply love the look and feel of this show, which translates beautifully into product across all facets of the industry,” say Pessin and Peters. The fantasy world also attracts cult fans, and allows Game of Thrones to have a home at consumer fan events, such as ComicCon. HBO uses such events to unveil new products and make exciting brand announcements. While physical products are extremely important to the brand, HBO also recognizes the growing importance of fan engagement in the digital space. According to Pessin and Peters, mobile gaming is an active space for Game of Thrones, and they expect new announcements to be made for this category in the coming months. ••••
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Brewery Ommegang
HBO has partnered with Brewery Ommegang to create a line of beer inspired by the Game of Thrones series. The third beer in the line, Fire and Blood Red Ale, was launched in the spring. Inspired by House Targaryen, this brew features a collectible series of labels, one for each of the three dragons on the show: Drogon, Rhaegal, and Viserion. The first beer in the series, Iron Throne, flew off retail shelves and poured through tap spigots at a rapid pace, leading to two additional production runs. The second beer, Take the Black, enjoyed similar results.
Cersei Baratheon
Dark Horse
Dark Horse Comics has produced a series of highquality, affordable, molded-plastic figures of the most in-demand Game of Thrones characters. Five new figures were on display at the American International Toy Fair in Februrary and are set for release in July. Cersei Baratheon, Arya Stark, Robb Stark, Jaime Lannister, and the White Walker figures stand approximately 7.5 inches tall and each is based on the likeness of the respective actor. In addition to the newest figures, fans can also collect Jon Snow, Daenerys Targaryen, Tyrion Lannister, Khal Drogo, and Ned Stark. Dark Horse has also created the Hound Collectible Bust, which features realistic detail right down to the buckles and chainmail. Designed for collectors and serious fans, the bust depicts the character in his iconic Hound helmet that flips up, revealing the true Sandor Clegane and showing impeccable attention to detail. Fans can add the limited-edition creation to their Game of Thrones collection this July.
4D Cityscape
Fans can build Westeros from the ground up with 4D Cityscape’s Game of Thrones jigsaw puzzle. Starting with a first layer of more than 1,000 jigsaw pieces, 4D Cityscape has used its patented multi-layer jigsaw design in collaboration with HBO to recreate the iconic map from the award-winning TV series. The second layer features more than 200 jigsaw pieces that replicate the 3-D topographical landscape of Westeros, while the third and most exciting layer highlights the multiple painted miniature 3-D replica models of the famous cities and castles, including King’s Landing, Winterfell, Eyrie, and the Wall. This puzzle comes loaded with information and fun facts about the Seven Kingdoms of Westeros.
Pyrrha
Pyrrha and HBO have partnered for an official line of Game of Thrones jewelry. Whether fans support the house of Stark, Baratheon, or Lannister, they can show their allegiance in style. The unisex collection of talisman necklaces and rings, emblazoned with Pyrrha’s distinctive interpretation of the six sigils of Westeros’ leading clans—Stark, Baratheon, Lannister, Tyrell, Greyjoy, and Targaryen—are now available for purchase. The handcrafted pieces are available in reclaimed sterling silver or bronze. The initial collection includes two styles of necklaces and a ring, but new designs are in the pipeline and will be released over the coming months.
Robb Stark
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Insight Editions
Inspired by the Emmy Award-winning credits sequence that opens each episode of Game of Thrones, Insight Edition’s Game of Thrones: A Pop-Up Guide to Westeros features stunning pop-up recreations of several key locations from the series, including the formidable castle of Winterfell, the lavish capital city King’s Landing, and the Wall’s stark majesty. Designed by renowned paper engineer Matthew Reinhart, the book takes fans into the world of the series like never before. Game of Thrones: A Pop-Up Guide to Westeros features five spreads that fold out to create a remarkable popup map of Westeros that is perfect for displaying. The book also contains numerous mini-pops that bring to life iconic elements from the show, such as direwolves, White Walkers, giants, and dragons. All the pops are accompanied by insightful text that relays the rich history of the Seven Kingdoms and beyond, forming a dynamic reference guide to the world of Game of Thrones.
Funko
Funko has launched a new line of highly articulated Game of Thrones action figures. The first license released in the Legacy Collection, the first wave of the collection features some of the series’ most popular characters. Each action figure has more than 20 points of articulation and its own removable accessories. Jon Snow, Daenerys Targaryen, The Hound, Tyrion Lannister, the White Walker, and Ned Stark are included in the line, which is designed for fans ages 17 and up. In addition to the action figures, Funko will keep the element of surprise alive with Game of Thrones Mystery Minis. The vinyl figures include Tyrion Lannister, Joffrey Baratheon, Jon Snow, Daenerys Targaryen, Khal Drogo, Drogon, Viserion, Rhaegal, Arya Stark, Robb Stark, Ned Stark, Jaime Lannister, The King White Walker, Ghost, and Shaggydog. The figures are all in blind packaging, so fans can try their luck to collect the whole set. Mystery Minis
The Noble Collection
Rhaegal Baby Dragon
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No one can take the Khaleesi’s dragons from her, but now fans can have one of their own, thanks to The Noble Collection. The Game of Thrones Viserion Baby Dragon is a 4-inch resin statue that is a perfect replica of Daenerys’ dragon, down to the vibrant golden eyes. The line also includes the Rhaegal Baby Dragon and the Drogon Baby Dragon. Fans can also pay homage to Ice, a Valyrian steel greatsword and heirloom of House Stark, used by Lord Stark for war and ceremonial occasions, with the Ice Letter Opener. Made of a diecast metal handle and a stainless steel blade, the Ice Letter Opener measures 9 inches in length.
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by Laurie Schacht, Toy Insider Mom, founder, Blogger Bash or the past four years, The Big Toy Book’s Sweet Suite event has been the go-to event for bloggers looking to connect with the top toy companies. During Sweet Suite, each toy company gets a designated play area where it can share its latest products with the top bloggers nationwide. The bloggers get to directly interact with company representatives face-toface, while also getting hands-on experience with amazing new products in advance of the holiday season. With hundreds of bloggers attending the event and a growing wait list year after year, we will expand this year’s Sweet Suite into a two-day conference called Blogger Bash. Parent bloggers have become some of the most influential voices when it comes to promoting brands and new products across all industries. Over the past five to seven years, we’ve seen influential leaders emerge in this space, garnering thousands of followers and creating complete online communities. These women (and often men) are far beyond the basics of blogging, and Blogger Bash will provide them with the next tier of their professional development. With
Spring 2014
events, parties, round table forums, speed dating sessions with brand representatives, and, of course, lots of swag to enjoy and review, Blogger Bash will give bloggers everything they need to establish new connections with leading manufacturers. Held in New York City on July 17 and 18, this event will draw hundreds of bloggers nationwide. The conference will kick-off on Thursday evening with Sweet Suite, where bloggers will play with new toys, indulge in sweet treats, and leave with tons of swag. From a brand standpoint, why is Blogger Bash for you? Because social media matters, and these bloggers have a lot of influence on Facebook, Twitter, Pinterest, and more. The power lies with the consumers—and that’s exactly what these bloggers are. Sweet Suite generates millions of impressions annually, and bloggers talk about all of the great things they saw well into the holiday season—prime time for manufacturers. If you are interested in learning more about Sweet Suite ’14 and the new upcoming Blogger Bash event, please contact me at thetoyinsidermom@gmail.com or (212) 575-4510, or visit www.bloggerbash.com. ••••
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Video Game Licensing
Taking It to the Next Level The Relationship Between Video Game Licensors and Licensees Can Evolve with the Franchise by Phil Guie t’s never been enough to have a top-selling video game, or a licensing program that helps transform that game into a global brand. Eventually, a hit title gives birth to a sequel (or multiple sequels), and with that must come an updated licensing strategy. But as a video game franchise’s longevity increases, both the licensors and licensees involved face new challenges. Activision Publishing’s Skylanders franchise launched three years ago with Skylanders Spyro’s Adventure, and since then it has grown into a commercial juggernaut. Last year, Skylanders Swap Force, the third console entry in the series, ranked as the No. 1 best-selling kids video game franchise in the U.S., and enjoyed partnerships for apparel, building toys, home products, and more. This year will see the launch of Skylanders Trap Team, which looks to be the most ambitious Skylanders adventure yet. At this time, the franchise also has its most extensive licensing program to date, at more than 175 third-party licensees and growing. The latest first-time partners include Crayola and General Mills—both market leaders in arts and crafts and food products, respectively. Skylanders Trap Team features a never-before-utilized game play mechanism, in which villains can be transported out of the game using new Trap crystals. When placed on the new Traptanium Portal, the Traps act as prisons, and they light up and make noise once the villains are trapped (virtually) inside them. This new game mechanic is expected to excite Skylanders Trap Team Snap Shot figure, from Activision Publishing the series’ fan base, and subsequently add to the franchise’s
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bottom line. To date, Skylanders has grossed more than $2 billion worldwide. “The imagination that [Trap Team] fires within kids—the ability to grab something from the digital world and bring it to the physical one—it’s as powerful as being able to bring something to life,” says John Coyne, senior vice president of consumer marketing at Activision Publishing. But as powerful as that creative energy is, from a licensing point of view, the major challenge is to find partners that can convey the magic of the new mechanism. While Josh Taub, senior vice president of product management at Activision Publishing, would not name any specific licensees, he confirmed many are taking inspiration from the new game. “We have partners that are looking at, ‘How do we involve ourselves in the trapping game?’ ‘How do we create a holder that allows storing Traps in a unique way?’ So they’re looking at the game and then utilizing it,” says Taub. He says one of Activision’s best partnerships so far this year involved Frito-Lay Inc., which hosted a contest to name a character in the upcoming game (later revealed to be Skylanders Trap Team). Along with helping keep the brand fresh in consumers’ minds, he said it made audiences feel invested in the future of the franchise. Similarly, he lauded the most recent Happy Meal partnership with McDonald’s, which re-introduced the Skylanders Swap Force characters through an exclusive assortment of toys. The freedom to be selective among licensees is a notable contrast from only a few years earlier, when Spyro’s Adventure was still in development. “When something is unproven in the marketplace, it is, of course, more difficult than when you’ve got the No. 1 kids’ video game and action figure,” says Coyne. “But we’ve had partners that have been with us since the
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largely centered on a few major software developers, though that has slowed of A Marriage Tested Over Time On the other side of the looking glass, licensees want late, as both licensees to know that licensors are doing their part to keep the and licensors have brand at the forefront as well. Michael Aratan, presi- become more selecdent and CEO of K’NEX, a company that makes con- tive regarding games struction toys based on a number of different video to adapt into mergames, says the company considers several factors chandise. In the before entering into any licensing partnership. The fac- meantime, with the Skylanders Swap Force juvenile valentines, from American Greetings tors include the size of the existing fan base, the amount recent releases of of investment planned by the licensor for future con- Microsoft’s Xbox One and Sony’s PlayStation 4 nexttent and expanding the brand’s reach, and whether the generation consoles, software developers find themselves competing on some less-crowded fields. Under game meshes well with K’NEX’s products. K’NEX also enjoys longtime partnerships with video these circumstances, a strong licensing program can game publishers such as Nintendo, for which the com- help keep a title on top of consumers’ minds. Aratan says there is definitely more sharing pany worked on a mechansim to replicate Super Mario’s jumping ability for its building sets. According between content creators and licensees in recent years. In the case of Titanfall, Respawn offered to Aratan, keeping these kinds of partnerships digital assets early in the game’s develfresh can be challenging. “You must continue to opment, and even shared beta tests so add innovation, whether that’s different play K’NEX’s designers could get an patterns, features, or collectibility,” he says. idea of how the game play works. He adds that the third year of a prod“For us to be successful, it has uct line tends to be the trickiest, since to look like a natural extenthe audience will not yet have turned over, sion of the brand,” says but the initial novelty of the product may Aratan. “Now we always ask, have worn off. However, Aratan says that ‘When are we going to get assets, and with a franchise that has staying power, there how immersed can we be in what will likely be new characters introduced by you’re doing?’” year three, which can become part of the For its part, Activision also views its K’NEX line. licensing partnerships as assets worth One of K’NEX’s newest video leveraging. Indeed, Taub says that game licenses is Titanfall, a science ficwhenever a new licensee comes on tion-themed game developed by K’NEX Titanfall: board Skylanders, they do so with a Respawn Entertainment and published by IMC Atlas Titan Building Set multi-year and multiple title relationElectronic Arts (EA). For its toy line, K’NEX focused on capturing a key element of the actual ship in mind. “I think everyone wants to enjoy the video game: the interplay betwen giant robots, known longevity of the franchise, and they see the long-term as Titans, and their armored pilots. As such, each pilot potential,” he says. And while Activision currently does not have any can be placed inside the larger Titan. deal with K’NEX in place, Coyne’s mission statement This past March, Titanfall ranked No. 1 in video game software sales according to The NPD Group, for Skylanders would likely satisfy Aratan’s criteria for which bodes well for the future of both the franchise a partner. “Innovation is at the heart of everything we do with the franchise. It would be relatively easy to just and K’NEX’s licensing partnership with EA. add more [Swap Force] characters, but we’re really pushing ourselves to drive that, ‘Wow,’ factor,” Coyne says. Sharing Means Caring “That’s what’s important.” Over the past few years, video game licensing has •••• first game, and continue to innovate their own categories with every iteration of our game.”
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The Licensing Book • 33
Video Game Licensing
Splinter Cell Activates in Comic Book Form
Tom Clancy’s Splinter Cell video game franchise, from Ubisoft, has sold more than 27 million copies worldwide since its introduction in 2002. Now Ubisoft has teamed up with Dynamite Entertainment for a new comic book series, Tom Clancy’s Splinter Cell Echoes, set between the two games, Splinter Cell Conviction and Splinter Cell Blacklist. The new series follows Sam Fisher, a retired NSA operative who returns to action in order to stop deadly terrorists. Written by Nathan Edmondson and illustrated by Marc Laming, the mini-series will be published as four issues from July to October, with a collected edition to be published later. Each issue will include bonus behind-the-scenes material from Ubisoft.
Skylanders Is Ready to Soar with New Trap Team
The Skylanders franchise, from Activision Publishing Inc., returns this year with Skylanders Trap Team, which lets fans reverse the previous formula of bringing physical toys to life inside a game. This time, characters are brought out of the game through new Traps, which can be placed onto the new Traptanium Portal to capture special villains. The portal includes a built-in audio speaker that allows players to hear the villains travel from the game into the real world and vice-versa. Players can then use the captured villains in the game as new, rehabilitated heroes, and can switch back and forth between playing as a Skylanders hero or villain, tag team-style. Skylanders Trap Team introduces more than 50 new playable Skylanders heroes, including new Trap Master Skylanders, new core characters, and fan favorites in new poses. The game is also compatible with all characters from Skylanders Swap Force, Skylanders Giants, and Skylanders Spyro’s Adventure. Skylanders Trap Team will be released this October across all major consoles in North America, the European Union, and the Asia-Pacific region. A worldwide licensing program of more than 175 licensees includes Crayola, which will introduce a Skylanders-branded line featuring Crayola’s signature Color Wonder, Giant Coloring Pages, and Xtreme Coloring formats. The new Crayola products will be available this holiday season.
34 • The Licensing Book
New licensee General Mills will release Skylanders-shaped fruit-flavored snacks in North America starting this June, and Fruit by the Foot, yogurt, and cereal products early next year. Other new and returning licensees include Power A with carrying cases and game accessories, Mad Dog Concepts with sleepwear, ABG Accessories with headwear, Thermos with lunch kits and FUNtainers, and Fab with a line of backpacks and school supplies. For seasonal, Rubie’s Costume Co. will provide new Halloween products, while American Greetings will release Skylanders roll wrap and bags as part of a line of licensed stationery. The line will also include party decorations and supplies with the characters Hot Dog, Jet-Vac, and Spyro. For birthdays, there will be a greeting card with real sound. In the world of non-video games, USAopoly will release a new Skylanders Monopoly game in which players buy, sell, and trade 22 Skylanders locations, each featuring one of the franchise’s characters. Earlier this year, Activision and Frito-Lay teamed up for a special promotion that let fans name a character for Skylanders Trap Team. This month, one fan-created name for each of three potential heroes will be selected by a panel of judges and announced as finalists.
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Video Game Licensing
Sega Kicks Off Licensing Program with a Sonic Boom
This year, the fastest rodent in video games for more than two decades gets a makeover, as well as a new title. Sega has launched Sonic Boom, a new branch of the Sonic the Hedgehog universe, accompanied by re-designed characters and the franchise’s first CG-animated TV series. Co-produced by Sega of America and OuiDO! Productions, the TV show, Sonic Boom, will air this year in the U.S. and France. Big Red Button Entertainment and Sanzaru Games will develop Sonic Boom video game titles for the Wii U and Nintendo 3DS, respectively, which will combine traditional elements of the Sonic franchise with new mechanics and types of scenarios. Tomy International has been named master toy partner for Sonic Boom, and has developed a comprehensive toy range that includes plush, action figures, R/C, role play, vehicles, and novelty items. Tomy’s line includes figures of Sonic, Knuckles, Amy Rose, and Tails; a 12-inch talking plush; and a 3-inch figure with a launcher. There is also a Sonic Blur Mask that transforms
kids into Sonic the Hedgehog whenever they put it on. Sega has launched a broad licensing program across multiple categories, enlisting current partners that had tremendous success with Sonic over the past years, while seeking new licensees as well. Current partners on Sonic Boom include Bio World for lifestyle products, Isaac Morris and Fifth Sun for apparel, J Core for sleepwear in Canada, Rubie’s Costume Co. for costumes, Funko for toys, and Archie Comics for comic books. Lagardère Active TV Licensing & New Business handles the licensing and merchandising of Sonic Boom in France. Sonic Boom Sonic the Hedgehog action figure, from Tomy International
Titanfall Rises Across Multiple Categories
Titanfall, from Electronic Arts Inc. (EA), is a new first-person shooter game that lets players engage in action sequences as elite pilots or as 24-foot-tall armored giants known as Titans. Developed by Respawn Entertainment, the game premiered in March and took the No. 1 ranking in software sales for the month. Respawn has a wide range of official Titanfall merchandise planned for release, including toys, books, gaming peripherals, apparel, and more. This fall, toy partner K’NEX will introduce new building sets that let fans construct their favorite Titans. The Titanfall: MCOR Ogre Titan Building Set and the Titanfall: IMC Atlas Titan Building Set include more than 160 pieces for a 12-inch replica Titan, while the Titanfall: Ultimate Angel City Campaign Building Set recreates the game’s war-torn setting, and includes enough pieces to build two Titans. All sets are suitable for kids ages 8 and up. K’NEX also has two upcoming sets, the Titanfall: IMC Pilot
36 • The Licensing Book
Strike Building Set and Titanfall: MCOR Pilot Attack Building Set, which let kids ages 8 and up construct war zones for the pilot characters to fight their way through. Each set includes more than 80 K’NEX pieces, and features walls that “explode” just like in the game. Threezero will also have a line of Titanfall figures, including 1:12- to 1:6-scale models of both the Titans and the pilots. Other licensees include MadCatz for headsets, mice, keyboards, and other gaming peripherals; Turtle Beach for headsets; Jinx! and Level Up Wear for a line of apparel and accessories; Trends International and GB eye for posters; and EP Memory for USB drives and cases. Prima will provide both standard and collector’s edition strategy guides, and Titan Publishing will release the book The Art of Titanfall.
Spring 2014
Watch Dogs Has Products to Watch Out For
In Watch Dogs, from Ubisoft, players assume the role of Aiden Pearce, a vigilante hacker who, with the help of his smartphone, can control almost every element of Chicago. The game arrives in May, and, on the same day, Ubisoft will publish Watch_Dogs //n/Dark Clouds, an e-book that picks up after the game. Written by John Shirley, it lets fans further explore the game’s universe. For Watch Dogs’ licensing program, Ubisoft has partnered with Bioworld and ThinkGeek on T-shirts inspired by the game. The front of the ThinkGeek shirt features white and blue horizontal stripes behind a mainframe-style font with the message, “Everything is under CTRL.” Other licensees include Astro, which will provide Watch Dogs speaker tags with art from the game. Ubisoft Motion Pictures will also collaborate with Sony Pictures Entertainment and New Regency on a Watch Dogs film. Watch Dogs T-shirt, from ThinkGeek
Minecraft Keeps Getting Bigger
Developed by Mojang, Minecraft is an open-world game that allows players to build and share geometric structures, as well as go on monster-fighting adventures. The game became a massive commercial hit, with 100 million registered users for the PC version of Minecraft to date. On home consoles, the game has sold more than 12 million copies for Xbox 360. One of Minecraft’s top licensing partners, Jazwares, expands its Minecraft action figure line with a new series this spring. Series two includes core-scale figure packs of characters, such as Diamond Armor Steve, Iron Golem, and Blacksmith Villager, each with its own accessories. There is also a deluxe Animal Mobs six-figure pack that features the in-game creatures Cow, Sheep, Tamed Wolf, Pig, Ocelot, and Chicken.
Jazwares’ Minecraft Series 2 Iron Golem action figure
Pokémon Builds on Smash Video Games
When Pokémon X and Pokémon Y launched last October, they became the fastest selling video games for the Nintendo 3DS system with nearly 12 million copies sold worldwide. On the heels of that success, the popular froglike character Greninja will be playable in Nintendo’s upcoming Super Smash Bros., which is scheduled for release on the 3DS and Wii U systems later this year. Tomy International, the global toy partner for Pokémon, will debut an allnew line of action figures, plush, and more. New play sets include the Pokémon Battle Arena, which lets players select Pokémon figures to set up battles among each other or versus the computer. Tomy also has new
Spring 2014
Trainer Gloves with Sound, which are motion-activated, so kids can pretend to throw their Poké Ball, resulting in four different sound effects. New Tomy plush includes 3.5-inch clip-on characters inspired by Pokémon X and Pokémon Y, as well as 8- and 18-inch varieties. Other licensees include USAopoly for a Pokémon Monopoly game. This variation has a game board that features a beautiful map of the Kanto Region and six custom-sculpted metal tokens of Pikachu, Bulbasaur, Charmander, and more.
Pokémon Trainer Gloves with Sound, from Tomy International
The Licensing Book • 37
Video Game Licensing
Blizzard’s Heroes of the Storm Brings the WoW Factor
The upcoming Heroes of the Storm is a PC game that lets players bring together characters from some of Blizzard’s best-known game franchises, including World of Warcraft, Diablo, and StarCraft. Though still in the testing phase, Heroes of the Storm has already piqued the interest of third-party licensees, including Turtle Beach, which will develop gaming headsets based on three of its own recent models. The new headsets will appeal to both casual and intense gamers. Blizzard has also entered an agreement with NetEase Inc. to bring Heroes of the Storm to mainland China, marking the fourth Blizzard game introduced to the Chinese market. Previously, the two companies collaborated to bring World of Warcraft, StarCraft II, and Hearthstone: Heroes of Warcraft to Chinese audiences. Among Blizzard’s individual licenses, one of the more unique World of Warcraft tie-ins this coming year is World of Warcraft: War Crimes, a new novel from Simon & Schuster’s Gallery Books imprint. Written by Christie Golden, it centers on the character Garrosh Hellscream, the former warchief of the Horde faction, on trial for atrocities perpetu-
ated against the land of Azeroth. Scheduled for release this month, the novel will be available in multiple formats, including hardcover, e-book, and audiobook. This August, Funko will introduce several new World of Warcraft figures, including stylized, 3.75-inch figures based on the characters Thrall, Lady Sylvanus, and Murloc for the Pop! Vinyl line. Deathwing also joins Funko’s line of 6-inch super-sized Pop! Vinyl figures. For fans of the latest installment of Blizzard’s popular role-playing game, Diablo III, NECA has a limited-run prop replica of the sword El’Druin. Each durable replica measures 3.5 feet long and is crafted out of acrylonitrile butadiene styrene and polyvinyl chloride. In addition, each sword features a blue, pulsing LED light inside the hilt, similar to its in-game counterpart. This December, Sideshow Collectibles’ Jim Raynor: Terran Space Marine figure, based on the character in StarCraft II, arrives in stores. It measures 15.5 inches tall and features more than 525 individually engineered components, light-up armor, and weapon accessories that include multiple rifles.
Diablo III El’Druin prop replica sword, from NECA
Halo’s Winning Aura Still Attracts Licensees
More than a decade after the first Halo was released, the franchise is still going strong, with more than 50 million games sold, and more than 5 billion hours of gameplay logged by Xbox Live users to date. Toward the end of the last year, the latest chapter in the saga, Halo: Spartan Assault, arrived for Xbox
38 • The Licensing Book
One, followed a few months later by the Xbox 360 version. Halo’s licensing program for the coming year will include toys and games from leading toymakers. Recently, NECA entered a partnership with 343 Industries, one of the developers of the Halo series, for a worldwide merchandising program, which includes action figures, mini-figures, motorcycle helmets, prop replicas, board games, and HeroClix miniatures games. These items already appear in retail stores, and in June, NECA will debut an 18-inch scale action figure based on the series’ main character, Master Chief Petty Officer John-117. Other licensees include USAopoly, which offers Halo Legendary Risk. This new version of the classic game features custom maps inspired by the Halo series. Mega Bloks also returns as a key licensee with a line of micro action figures, collectible helmets, and vehicles, including a new R/C Mantis Attack Walker. Rubie’s Costume Co. will provide both Deluxe Red and Deluxe Blue Spartan Mark VI costumes.
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Toys and Games Take Nintendo to a Whole New Level
After more than three decades as Nintendo’s top mascot, Mario and Figure Three-Packs. Each Super Mario Mystery Figure Bag is still going strong. Last year’s Super Mario 3D World—the latest includes a buildable figure compatible with K’NEX’s entire Mario in the Super Mario series—sold nearly 2 million copies in just two line, while Figure Three-Packs feature collectible and buildable Super Mario characters. The line months, and this year the character remains busy with the will also include buildable karts upcoming Super Smash Bros. title for the Nintendo 3DS and Wii with characters based on U, and the racing game, Mario Kart 8. Mario Kart 8, suitable for kids K’NEX has long partnered with Nintendo on ages 6 and up. Super Mario-themed building sets, and the USAopoly will introduce newest additions to the line are inspired by new games, including Super recent games, Super Mario 3D Land and Mario Connect 4, which features New Super Mario Bros. U. Available custom Mario and Luigi checkthis fall, each set is suitable for ers. Disguise has Super Mario kids ages 8 and up, and costumes for toddlers all the way includes a buildable Mario up to adults, as well as new figure, jump panels that can female interpretations of Mario propel Mario, and more. and Luigi. K’NEX will also release new series for its Super Mario Mystery Figure Bags Super Mario Bros. U: Layer Cake Desert building set, from K’NEX
DC Collectibles Continues Infinite Products Strategy
This October marks the release of Rocksteady’s Batman: Arkham Knight, the final entry in the Batman: Arkham video game series, and the latest in a line of DC Comics-based titles published by Warner Bros. Interactive Entertainment. The other titles include the upcoming Infinite Crisis, developed by Turbine Inc., and Injustice: Gods Among Us, developed by NetherRealm Studios. There will be new Infinite Crisis action figures in stores throughout the year courtesy of DC Collectibles, while Injustice: Gods Among Us will receive a new Batman and Joker Two-Pack, featuring 3.75-inch scale action figures. It will arrive in stores this July. For the Batman: Arkham licensing program, NECA will release an 18-inch Batman action figure this month, featuring a real fabric cape, while Rubie’s Costume Co. will introduce a Robin costume with muscle chest jumpsuit and eyemask. Batman: Arkham action figure, from NECA
Spring 2014
Assassin’s Creed Grows Beyond Belief
Each year since 2009, Ubisoft has released a new entry in its successful Assassin’s Creed series. The latest installment, Assassin’s Creed IV: Black Flag, was released last October, and went on to sell more than 10 million copies by year’s end. The next sequel, Assassin’s Creed: Unity, will arrive during the latter part of this year. To date, the franchise has sold more than 73 million games worldwide. Mega Brands has partnered with Ubisoft to create a line of collectible construction sets based on the Assassin’s Creed franchise, while Cryptozoic has a new board game, Assassin’s Creed: Arena.
The Licensing Book • 39
Video Game Licensing
Rabbids Wreak Havoc Beyond the Small Screen
The meteoric success of Rabbids is enough to make a person go, “BWAAAAH!” After starting out as a video game franchise from Ubisoft, Rabbids evolved into an animated TV series, Rabbids Invasion, which debuted last August on Nickelodeon. The hit show centers on the Rabbids, furry little creatures who invade Earth and are on a mission to cause mayhem wherever they go. Along with a planned feature film announced this year by Ubisoft and Sony Pictures Entertainment, the rambunctious rodents will expand into a full line of books from Simon Spotlight, an imprint of Simon & Schuster Children’s Publishing. The line will include Rabbids chapter books; beginning reader books; joke books; and novelty books in hardcover, paperback, and ebook formats. Available for both the U.S. and Canadian markets, the books will be released this summer.
This spring, McFarlane Toys released its new line of Rabbids toys, including six collectible Rabbids mini figures available as either a blind bag or a boxed set. The toymaker will release more products this fall, including plush with sound; the 14-inch Rabbids Deluxe Interactive Dancing Rabbid, which dances to music from any musical or media device; and Rabbids Silly Swaps, a line of figures with swappable pieces.
Rabbids Mini-Figures Series 1, from McFarlane Toys
Pac-Man and the Ghostly Adventures Goes Global
Since its debut in 1980, Pac-Man has become the highest grossing video game in history and is one of the most influential gaming brands of all time. This year, Pac-Man returns in the animated TV series Pac-Man and the Ghostly Adventures, which launched on Disney XD last year. The second season will begin broadcasting in the U.S. later this year. This year also marks the international rollout of the TV show, coinciding with new toys from Bandai and K’NEX. So far, the TV series has performed well in Spain, France, the UK, Russia, and other key international markets. It will launch in the Nordics, Benelux, Portugal, Italy, Australia, Mexico, Brazil, Latin and Central America, and Germany throughout the year. In France, new licensees include Hachette with a full publishing line, Delcourt with comic book albums, Alcara with charms, and Best with a line of footwear. In France, the UK, Iberia, and Benelux, Play by Play has signed on to design and distribute a line of beanies. In the UK, Sambro will have bags and stationery, More for Your Store will have money tins, and Palamon International will introduce dress up and accessories. In Spain, Portugal, and Andorra, Copywrite will introduce backpacks and bags, Comercial
Mercera will have patches and zipper pulls, Hot Shots will offer candy and other snacks, and Educa Borras will produce puzzles and distribute the K’NEX line. In Mexico, Carvajal will have notebooks, Granmark will introduce party supplies, Union Kids will launch apparel, and Multimusic will handle home entertainment. Fabricas de Productos (Frito Lay) will have a Pac-Man and the Ghostly Adventures promotion in Central America for both its Cheetos and Tazos brands. In Brazil, Xeryus will handle backpacks, Tilibra will have notebooks, Diplomata will have backpacks and lunch boxes, and Editora Alto Astral will have magazines and sticker albums. For the more classical-looking Pac-Man, international licensee Paladone will introduce new household items, including hand warmers, bottle openers, and an alarm clock. This holiday season will see the home console release of Pac-Man and the Ghostly Adventures 2, Bandai Namco Games America Inc.’s sequel to its 2013 game. 41 Entertainment serves as the worldwide master agent representing Pac-Man and the Ghostly Adventures on behalf of Namco Bandai Games.
Pac-Man Hand Warmers, from Paladone
40 • The Licensing Book
Spring 2014
Exploring a New Frontier
Digital Licensing
Digital properties are relatively new to the licensing scene, causing licensors and licensees alike to carefully consider how partnerships can build their brands in new ways. by Christine Duhaime
oday’s culture of apps and Internet memes has spawned a new category for licensees. These new digital brands have inspired products that carry the excitement, reference, or joke of a digital property beyond its original state and into the physical world. Smartphones, apps, and the Internet have allowed people of all ages to swap images, play games, and contribute to digital communities faster than ever before. The appeal of a licensed item can largely be attributed to an emotional connection—such as victory, challenge, or humor—to the property by a consumer. Awkward Family Photos began in 2009 as a blog, inspired by an awkward family vacation photo. Since then, it has become a brand with nearly 2 million Facebook fans, up by almost 600 percent from last year. Awkward Family Photos credits its success to its relatability. “From our perspective, family will always be relevant,” says Mike Bender, co-founder of Awkward Family Photos. “There will never be a shortage of awkward family photos.” When it comes to exploring new markets, Bender sees a global reach in the future. “We are always looking to expand, but we always want to make sure it fits our brand organically. Most recently, we opened a museum exhibition in Santa Monica, Calif., and are planning a tour around the country, and then, hopefully, the world. We definitely think globally, since the concept of awkward family is a universal one.” As Awkward Family Photos’ popularity increases, licensees have taken notice and are signing on for products ranging from apparel to games. The property’s greeting card line, one of its strongest sellers, is featured in its own section at Target stores nationwide. This year, 30 Watt will produce drinkware, invitations, gift bags, and more bearing Awkward Family Photos images. Manufacturers have noticed the success of digital properties and are capitalizing on the opportunities they offer. Michael Aratan, CEO at K’NEX, explains that when choosing a property to license, there are three considerations: “We look for three or four big things. One is the size of the install base that they’re serving. So with Plants vs. Zombies, for example, there are an average of 150 million users
T
Spring 2014
using it around the world, and growing. You look at what investments they’re going to be making in future content, because we know for digital properties in particular it’s important to keep the content fresh ... and what investments the licensor’s going to be making in building the brand more broadly beyond just our licensed piece of it,” he explains. Once the brand is deemed solid and reliable, Aratan says the licensee has another important element to consider. “Then, we go back into our world and say, OK, can we make cool K’NEX toys with it?” As of January, 90 percent of American adults own a cell phone, with 58 percent of those being a smartphone, according to a survey by the PewResearch Internet Project. Another 42 percent own a tablet computer. These devices combined have downloaded more than 50 billion apps, and that number continues to soar. With the Internet literally in hand, consumers are playing more games, sharing more memes, and clicking more links than ever before. Brennan Townley, director of business development for Plants vs. Zombies, has a similar set of criteria to Aratan’s, but being on the other side of the fence allows for partnerships with smaller companies. Proving that bigger isn’t necessarily better, Plants vs. Zombies has teamed up with Dark Horse Comics for an art book. “We’re looking for the best possible adaptation of our brand. I think the sales and distribution will come from there,” says Townley. “There are smaller partners that we work with, such as Dark Horse, but they really understand our brand, they love the game, and they put content out there that makes us laugh and really fits within the overall Plants vs. Zombies world— which, when you’re talking about publishing, is the No. 1 most important thing to us. We’re not going to just put out millions of products unless it’s a good quality product and it fits within the brand.” Digital licensing is a relatively new frontier, and one worth exploring—if it fits the brand. With consumer demand on the upswing and more and more people owning smartphones, tablets, and having Internet access, the time has never been better to venture into this digital space and forge partnerships. ••••
The Licensing Book • 41
Digital Licensing
Talking Tom & Friends Expands Licensing Reach
Outfit7, the entertainment company behind Talking Tom and Friends, has appointed nine licensing agents to expand the reach of its licensing business worldwide. Exim Licensing Group is now on board to support the Talking Tom and Friends brand in Latin America, while Bulldog Licensing will push opportunities for the entertainment property in the U.S. and Canada. In Western Europe, Enjoy Licensing represents Talking Tom and Friends in Spain, Portugal, and Andorra, while J&M Brands has been charged with handling the brand’s licensing and promotional rights in Belgium, the Netherlands, and Luxembourg. The rights for Germany, Austria, and Switzerland will sit with Team! Licensing. Plus Licens will manage the Talking Tom and Friends licensing program in the Nordics and CEE as the brand continues to gain traction in these markets. Icon Promotion now covers Russia, Ukraine, and CIS, while Brand Is Real will oversee the rights in Israel. Significant partnerships with Promotional Partners Worldwide for Greater China, TIGA for Thailand, and Empire for Southeast Asia will allow Outfit7 to spearhead its licensing program for Talking Tom and Friends in major cities througout Asia. In less than four years, Talking Tom and Friends has moved beyond second screen entertainment to chart-topping YouTube singles, an animated web series, innovative merchandise, and the impending release of its first TV series. The brand has now surpassed 1.7 billion global downloads, has permeated more than 230 territories, and has more than 800,000 subscribers to its YouTube channels and more than 17 million fans engaging on Facebook.
42 • The Licensing Book
TextPride Launches on Mobile Apps
TextPride, a leader in mobile branded content, will launch content on four popular mobile messaging apps—Viber, Kik, GroupMe, and Cubie. Collectively, the apps represent more than 500 million users worldwide—more than any single platform or messaging app. Officially licensed content from more than 200 top sports and entertainment brands, such as the Auburn Tigers, Florida State Seminoles, and Wiz Khalifa, are available as paid “packs” in dedicated content stores within each app. The packs typically include 24 to 40 emojis and/or stickers, and start at $1.99 per pack. According to a report from research firm Ovum last November, the number of messages sent on social messaging apps will grow from 27.5 trillion last year to 71.5 trillion by the end of this year. Ovum expects messaging apps to exceed 2 billion collective users by the end of this year. Despite the exploding growth of the industry, messaging apps face increasing pressure to generate revenue in order to improve the experience they provide to users and effectively compete with other offerings. Traditional tactics, such as mobile banner ads, disrupt the personal feel of the mobile messaging experience and are unlikely to gain widespread adoption, says TextPride, so apps must look toward other opportunities. Branded emojis and stickers present one such opportunity—40 percent of messaging app users incorporate stickers into their messages, and 11 percent buy at least two paid content packs.
Spring 2014
Temple Run Hits the Books
Listle International Licensing has a new deal with Egmont UK to create an action-packed and adventure-filled publishing program for Temple Run this year and beyond. Egmont’s range of titles will cover fiction, e-books, activity books, and a magazine that will see the brand come to life on the page for its many fans worldwide. In addition, Temple Run has licensed annuals and non-fiction magazines to complete the global publishing offering. The partnership with Egmont will see the development of brand new story content for the endless runner game with a Choose Your Own Adventure fiction series launching this year. Readers will be able to choose their own twists and turns within the story, just as they would when playing the game. In addition, Egmont will launch a new range of activity books featuring the best app brands for children, and Temple Run will be a flagship title in the launch of its Downloaded activity book series, which will have puzzle and game content directly inspired by the game itself. Products across the range are expected to be in stores as early as this summer.
Doodle Jumps All Over
Doodle Jump has added licensee Crayola for games and activity products, and Dynamite for comics. The company’s current focus is on its toy line, manufactured by Goldie Marketing and available at Toys “R” Us in June. The success of Doodle Jump’s arcade and board games, which resonate with families and have cross-generational appeal, is indicative of consumer demand in the toy space. Doodle Jump recently added Sega to manage interests in Japan, and INK Licensing for the Nordics and Eastern Europe, bringing the brand nearly complete global licensing representation. Doodle Jump has a number of projects that will launch this year. Highlights include its Series 1 Minifigurine collection, called Minidoodles, which are manufactured and distributed by Goldie Marketing. Other projects include co-branded Doodle Jump mobile games with Nickelodeon, Warner Brothers, Crayola, and CBS, as well as a range of physical goods. Minidoodles
Badland Is Open for Business
Badland is a side-scroller located in a gorgeous forest full of various inhabitants, trees, and flowers. Although the forest looks like it’s from a fairytale, there seems to be something terribly wrong. The player controls one of the forest’s inhabitants who sets out to discover what’s really going on. Through the journey, the player discovers imaginative traps and obstacles. Badland takes side-scrollers to the next level with its innovative, physicsbased gameplay combined with immersive graphics and audio. The game also features an original local multiplayer mode for up to four players with the same device. The multiplayer mode is all about survival of the fittest, with no rules in the forest. Badland uses one-touch controls to give the player the best possible control mechanics. Badland is available for iOS and Android devices, and is downloadable for Amazon and BlackBerry World. Digital specialist agency 5th Wave Brands will collaborate with Frogmind to develop a consumer products program for the action adventure game. 5th Wave Brands is pursuing global licensing opportunities for Badland, as well as focusing on building the program in the UK region. Launched last September, 5th Wave Brands specializes in creating and executing global licensing programs for mobile games and entertainment brands. 5th Wave will work with licensing agency Tinderbox to strategically extend Badland to create new consumer touch points for fans of the atmospheric action game. Badland won the Apple Design and iPad Game of the Year Awards in 2013.
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The Licensing Book • 43
Digital Licensing
Plants vs. Zombies Continues to Grow
The release of Plants vs. Zombies Garden Warfare for Xbox in February has further bolstered the mobile game property. Plants vs. Zombies Garden Warfare features fan favorites in the series, such as the Peashooter and Sunflower, along with a new cast of characters. Players can jump into three distinct modes, including two 12 vs. 12 competitive multiplayer modes or a four-player cooperative mode. Customization options give players an opportunity to personalize plants and zombies with costumes, items, hats, and more, some of which give each character new abilities. Two additional modes will be available exclusively on Xbox One. The first allows for local cooperative split screen so players can team up, while the second, Boss mode, allows a third friend to join via a SmartGlass device and support their teams with a top-down view of the battlefield, from which they can drop health, artillery strikes, and more. Boss mode is also available on Kinect for a fullscreen experience. The release of Plants vs. Zombies Garden Warfare saw the title climb the sales charts in Europe. With major retailers throughout the region seeking a wide range of Plants vs. Zombies merchandise, these sales statistics and the consumer fervor are further increasing the brand’s sales potential. The licensing program continues to grow, with top licensees in key categories throughout Europe. Worldwide partners include K’NEX for construction toys, Jazwares for plush and toys, Penguin for a publishing range, Titan for magazines, Character World for homewares, A4T for digital peripherals, Cooneen for nightwear and underwear, Smith & Brooks for apparel, Cookie Co. for apparel and accessories, and GB Eye for posters. Merchandise is selling well at retail, with bedding, apparel, toys, and accessories proving to be strong for major retailers. A significant slate of product releases is planned throughout Europe this year at all key retailers.
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MovieStarPlanet Ventures into New Categories
Last year was a successful year for tween online game and social network MovieStarPlanet, as the brand exploded among its target group, currently reporting more than 160 million registered user profiles worldwide. The MovieStarPlanet community has expanded into five new markets, bringing the network’s presence to 16 countries in 11 different languages worldwide. MovieStarPlanet has been successful in identifying what its users love, and, based on these insights, several new features have been added to the game. Available on both mobile and tablets, fans can experience the MovieStarPlanet universe on multiple platforms. Kids’ safety online is at the top of MovieStarPlanet’s agenda, which is why valuable thirdparty relationships with leading local and global Non-Government Organizations (NGOs) have been established. MovieStarPlanet has expanded into a variety of avenues in terms of licensing, working together with licensing agent Tinderbox. New ventures in consumer products include licensees for the publishing, apparel, stationery, and home décor categories. MovieStarPlanet magazines, distributed in several countries, have proven successful with the site’s fans. Publishing allows the company to continuously engage with its users by interlacing both the virtual and physical worlds. MovieStarPlanet seeks to expand its licensing program, with a focus on apparel and home décor. Creativity and expressing oneself through personal style are some of the core elements of the brand. This year, MovieStarPlanet will continue to actively advertise on all major kids’ TV channels in most of its markets. The brand also has plans relating to social media marketing for its tween target group, as the fan base in that space continues to grow.
Spring 2014
Domo Expands Digital Footprint
One of the Internet’s most viral memes is ready to expand his digital footprint. Big Tent Entertainment has reached new deals with Bare Tree Media and PicoCandy designed to make Domo an even larger force across social media and digital platforms. Both deals are designed to offer a unique way for users to create pre-existing and user-generated Domo-branded digital images for use on digital stickers, enhanced emoticons, and digital decorations. Under the agreement with Bare Tree Media, which previously launched the successful Domo Photo Bomb mobile app, Domo images can be selected and used within messaging, chat, and social network-centric online and mobile apps such as Cubie, KIK, MessageMe, Viber, and others, providing reach to more than 1 billion global users. PicoCandy’s deal allows for similar images to be distributed through its own unique platform, which can be accessed by computer, mobile phone, tablets, and mobile apps. Domo’s unique look and personality as the mascot for Japanese public broadcaster NHK quickly catapulted the character into one of the Internet’s biggest sensations. Domo is a pop culture icon with more than 6 million Facebook fans and hundreds of thousands of fan-made images, websites, and videos posted to websites such as YouTube, Instagram, Pinterest, and Flickr. More than a decade after his debut, the lovable fuzzy brown character’s cult status continues to grow. The Domo Jump app has expanded its rights into Asia. Created by Konami Digital Entertainment Inc. and Kung Fu Factory for iOS, Domo Jump features Domo in a lush 3-D environment where he bounces up platforms to earn points, costumes, and rewards. In Domo Jump, players play as Domo, jumping as high as they can while collecting gems, diamonds, and food to unlock costumes and items that give Domo special powers and boosts. Fun and challenging goals put players’ skills to the test, as they have to navigate various obstacles to earn rewards. Domo Jump utilizes intuitive gyroscope technology so players can seamlessly guide Domo during his ascent, avoiding dangers and picking up as many rewards as they can.
Spring 2014
New Agents Sign Up for Subway Surfers
INK Licensing has appointed four new sub-agents for Subway Surfers. The 3-D platform game puts the player in the role of young graffiti artist as they evade the attentions of a railway security guard and his dog. Challenges involve dodging oncoming trains and other hazards while picking up coins and useful objects. Developed by SYBO Games and distributed by Kiloo, the app’s combination of exciting gameplay and animation-style graphics has captivated users worldwide. Subway Surfers is now the second most popular game, and the most downloaded game on Android devices. Monthly updates keep the game fresh for its 135 million monthly users, and it is expected to hit the half-billion download mark before the end of the year. New agents for the brand include Planeta Junior (Italy and Greece), Biplano (France, Iberia, and Andorra), Max Licensing (Turkey), and Tycoon (Latin America, excluding Brazil). This adds to an existing team of sub-agents across the Americas, Western Europe, Oceania, Asia, and the Middle East. Ink represents the brand across the Nordics, Eastern Europe, and Russia. This fall, Fashion UK will create a range of licensed apparel for boys ages 5 to 12, including branded T-shirts, hooded tops, joggers, swimwear, and socks. Skyjack Publishing will produce two Subway Surfers magazines, which will launch in June. The magazine will feed the interest and imaginations of Subway Surfers fans in the UK and Ireland, and will offer readers the opportunity to learn more about the characters and their adventures.
The Licensing Book • 45
Licensing 101
Selling It by Jim Sachs, partner at Harris-Sachs LLC Licensing n this continuing series that addresses a myriad of licensing issues for the previously uninitiated, we are now at the point where we own the license and have to sell the licensed product. Now one needs to address how a manufacturer can best position its licensed products in the market to successfully secure retail placement. Having been a licensing consultant (and previously a manufacturer/licensee) for many years and inhabiting the “middle ground” between manufacturer and licensor, I can accurately say the licensee is probably the weakest link in the chain. This certainly is paradoxical considering all of the time, negotiations, and It is essential that manufacturexpenses the licensee has to ers’ reps who represent multiple go through just to secure the lines are well-trained, informed, license. Why bother going through the process in the and vested in the licensed first place if you don’t have product’s success. Otherwise... the resources or know-how they will simply move on to to sell the product? Compounding the problem, other products that seem to retailers in this economy are pique a buyer’s interest.” reluctant to take any chances on a new license or even on tried-and-true licenses on new products. The job of selling becomes even more critical. If the licensee (manufacturer) has done its due diligence, it should understand exactly what is
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46 • The Licensing Book
required to bring the newly licensed product to market. Unfortunately, most licensees simply take the position that because they have a license, retailers will buy it and simply add it to their current mix. Regrettably, the licensee often does not take advantage of all the ancillary resources and connections that accompany the acquisition of the license. Furthermore, licensees often neglect to train their inhouse sales people or factory representive force to present a compelling multi-platform program to retailers supporting the addition of a new product to their existing mix. It is essential that manufacturers’ representatives are well trained, informed, and vested in the licensed product’s success. Otherwise, because they often represent multiple product lines, they will simply move on to other products that seem to pique a buyer’s interest. Before the selling process begins, there are some pertinent questions that a licensee needs to ask the licensor and itself to help develop a meaningful and successful presentation. Aside from the obvious merit of the product, all of the questions listed below should be considered when making a presentation to the retail buyer: 1. Does the licensor make presentations to retailers on behalf of its licensees? 2. Can the licensor help with introductions to retail buyers to which the licensee does not currently sell? 3. Will the licensor include licensees in promotions?
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4. Does the licensor maintain a database of customers or an e-commerce enabled-website on which the product may be marketed and sold? 5. What type of social networking do both the licensor and the licensee do? Can they sync their networking efforts? 6. Where are fellow licensees selling product? How successful are they? 7. Can the licensee participate in co-op advertising programs? 8. Does the licensor have a calendar of events and promotions planned out during the next two years to which the licensee can sync? 9. What trade shows does the licensor attend? Does the licensor include licensees in its booth? 10. Ask the licensor what retail partnerships are currently in effect so the licensee can contact the buyer to participate. Licensees should also consider reaching out to fellow licensees to: 1. Develop cross-promotional programs. 2. Ask current licensees how they have been presenting the line and what support they have received
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Having been a licensing consultant (and previously a manufacturer/licensee) for many years and inhabiting the ‘middle ground’ between manufacturer and licensor, I can accurately say the licensee is the weakest link in the chain.”
from the licensor/brand holder. 3. Ask them about their promotions regarding the license and about the success of these promotions. 4. Determine how long it took them to secure retail placement. Now, with all of this information, craft your buyer presentation. Demonstrate to the buyers the “power behind the property” and how they can capitalize on it. Find out from the licensor if the license appears in other categories in a specific retailer’s store and how it performs. Buyers realize that the more visibility the license has in multiple departments, the greater inclination consumers will show to buy. This encourages add-on sales—buyers love that! Show the buyer the trajectory of the license and its successful history. Explain how the licensor is going to directly or indirectly help promote sales in their stores. Use images of product from other licensees to demonstrate, if appropriate, the prevalence of the license in all categories of retail to engender confidence in the pervasive acceptance and viability of the license. Bring in the licensor to help you with your presentation. He or she understands the big picture and will educate the reps in just one sitting with a buyer. Explain to the buyer how the product and license will drive more traffic into their stores by addressing a demand. Last but not least, it’s imperative that the licensed product is in the hands of talented sales people. I will address this topic in my next article. •••• Jim Sachs has 30 years of licensing business experience and has served as vice president of sales, marketing, and licensing at Chein Industries. He spent the past 10 years in partnership with Steve Harris at Harris-Sachs LLC Licensing.
The Licensing Book • 47
Of Counsel
Minimum Royalty Guarantee:
C R EATIV E APPROACHES
Licensing 101, Part 72 by James Kipling, Of Counsel This is the 72nd article in a series directed to the creation and documentation of the licensing relationship and to elements of a typical license agreement.
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n an earlier installment (Part 71) of this series, we dealt with a hypothetical situation in which the licensee suffered surprising and significant financial discomfort as a result of believing that a $100,000 Minimum Royalty Guaranty for each of three years added up to a total of $300,000. Since its sales of licensed products were significantly uneven from year to year, our licensee discovered that its total financial commitment significantly exceeded $300,000 because the three annual increments could not be cross-collateralized.
Alternative Approaches
Having suffered through this initial experience with license agreements, our licensees might vow “Never again!” to enter another license agreement. Alternatively, the licensee might decide not to forfeit the benefits of marketing licensed products, but instead, to be more circumspect in approaching its next license negotiation. So, our licensee has decided to test the waters once again. Based on its prior experience, our licensee now realizes that dividing the total guaranty into increments can cause the net effect to be much more costly. Speaking with its licensor about a possible new deal, and being presented with the same numbers as the last time, our licensee might peremptorily resist the licensor’s anticipated efforts to divide that total number into annual increments. After all, the licensor presented the Minimum Royalty Guaranty as “totaling $300,000”
48 • The Licensing Book
during preliminary talks, just as it did during the last time. Therefore, as an initial negotiating tactic the licensee might question the justification to make any such division at all.
The “Cash Flow” Rationale
“If I pay less than $300,000 in total royalties over the term, I will pay any deficiency at the end. That way, $300,000 really does mean $300,000” says the licensee. “We can’t agree to that,” says the licensor, “because we must have cash flow assurances. That’s why we divide the guaranty into three equal annual amounts.” To this argument, our licensee might reply, “All right, then I will agree to pay at least $100,000 in each year provided that any excesses in one year offset any deficiencies in other years so that I am not penalized for uneven sales.”
The “Aggresive Exploitation” Rationale
To this the licensor might respond, “We can’t agree to that, because we must have assurance that you will pay attention to our property throughout the term of your rights. If you recoup the entire guaranty in the first year, what incentive do you have to continue to pursue our property aggressively during the rest of your term? If you have a hotter property in your product line, you could abandon your efforts to exploit our property and allow it to die. No, we can’t agree to that either.”
Rationality?
It might seem that the licensor has an answer for everything, and that not one of those answers is more than a camouflage for taking advantage of any oppor-
Spring 2014
tunity to increase the guaranty without changing the numbers. The original purpose of the Minimum Royalty Guaranty in license agreements was the establishment of a “floor” upon which the licensor might base its revenue expectations in connection with a specific grant of merchandising rights to a particular licensee. Doubtless this came in response to licensees’ exaggerated expectations, real or otherwise, in presenting their cases to licensors when pursuing a license. Doubtless licensors learned to demand that licensees “put their money where their mouth is” and guarantee the success they were pitching.
Unavoidable Penalties?
At some point, however, the process was perverted so that minimum guaranties were structured in a way that almost unavoidably penalizes licensees. By agreeing to a guaranty amount which subsequently is divided and subdivided into discrete guaranties, an unwary licensee might undertake commitments that it is unlikely to fulfill without extraordinary good fortune. The result of having less-good fortune is having to make punitive payments against which no royalties will be generated by sales of licensed products. As we saw in Part 71 of this series, the cumulative effect of such penalties can be severe. When a multi-year license is undertaken, the licensee cannot predict its ability to generate consistent sales. The initial year of operation might be affected by ramp-up delays. Subsequent years might be affected by fluctuation in the popularity of the licensed property or by the introduction of competitive properties. A stark example of the latter circumstance occurred with the initial theatrical release of the motion picture Star Wars in 1977, which sucked the oxygen out of all other boydirected properties. Properties that were generating successful product sales on May 15, 1977 became paperweights on retail shelves by June 15, 1977. This is an extreme, but instructive, example of the difficulty a licensee faces in trying to fulfill individual minimum guaranties under a multi-year license agreement.
Spring 2014
Some Justification
Nevertheless, there is something to be said for each of the arguments made by the licensor in the examples above. The “cash flow” rationale certainly justifies the licensor’s taking precautions against having to wait until the end of the term to receive its guaranty. The “aggressive exploitation” rationale is similarly reasonable in giving the licensee incentive to make continuous efforts. However, even taking these arguments into consideration, a licensee can still seek reasonable concessions on a basis that would not threaten the licensor’s legitimate purposes. For example, if it has ramp-up concerns, the licensee might bargain for a reduced minimum in the first year with the reduction spread over the remaining years of the term. Similarly, in anticipation of inevitable fluctuation of demand during the term of the license, the licensee might reasonably bargain for the ability to cross-collateralize some fraction of its annual minimum (perhaps 10 percent or 20 percent) among the individual years. In the example, if $300,000 is payable in three equal annual increments over the term, perhaps $10,000 or $20,000 of deficiency in one year might be “covered” by excess payments in another year. Such a concession by the licensor would not impinge either the “cash flow” or the “aggressive exploitation” rationales to a material degree. Additionally, the licensor would show good faith in minimizing the licensee’s “penalty payments.”
Coming Soon!
The above are a couple of reasonable concessions that a licensor ought not be reluctant to consider. In future articles, additional concepts for “softening” the impact of the Minimum Royalty Guaranty will be suggested. •••• James Kipling has represented licensors and licensees for more than 20 years, negotiating entertainment, sports, artwork, brand, invention, and technology agreements. He is Of Counsel with Dinsmore & Shohl LLP in Cincinnati, and can be reached at (513) 977-8536, or jim.kipling@dinsmore.com.
The Licensing Book • 49
Directory of Properties, Products and Services STATEMENT OF OWNERSHIP, MANAGEMENT, AND CIRCULATION: REQUIRED BY 39 U.S.C. TITLE OF PUBLICATION: THE LICENSING BOOK. PUBLICATION NO. 716-730. FREQUENCY OF ISSUE: QUARTERLY. NUMBER OF ISSUES PUBLISHED ANNUALLY: 4. ANNUAL SUBSCRIPTION PRICE: $48. COMPLETE MAILING ADDRESS OF THE HEADQUARTERS OF GENERAL BUSINESS OFFICES OF THE PUBLISHER: 307 7TH AVE, ROOM 1601, NEW YORK, NY 10001. FULL NAMES AND COMPLETE MAILING ADDRESSES OF PUBLISHER AND EDITOR: PUBLISHER, JONATHAN SAMET, 307 7TH AVE, ROOM 1601, NEW YORK, NY 10001; EDITORIAL DIRECTOR, JACKIE BREYER, 307 7TH AVE, ROOM 1601, NEW YORK, NY 10001. OWNER: ADVENTURE PUBLISHING GROUP, INC., 307 7TH AVE, ROOM 1601, NEW YORK, NY 10001.
EXTENT AND NATURE OF CIRCULATION:
Total No. Copies Ligitimate Paid and/or requested Distribution 1. Outside Counrty Paid/ Request Mail Subscription 2. Sales Through Dealer and Carriers, Street Vendors, Counter Sales, and other Paid or Requested Distribution outside USPA Total Paid and/or Requested Circulation 1. Outside Counrty Nonrequested Copies 2. Nonrequested copies Distributed Outside the Mail (include Pickup Stands, Tradeshows, Showroom, and other sources) Total Nonrequested Distribution Total Distribution Copies Not Distributed Total Percent Paid and/or Requested
Avg. No. Copies Each Actual No. Copies Single Issue Issue During Preceding Published Nearest to Filing 12 Months (6 issues) Date 8,857
5,547
7,730
5,286
30
23
7,760
5,309
197
195
688
0
885
195
8,645
5,504
212
43
8,857
5,547
90%
97%
ADVERTISER INDEX Activision ...........................................................................................................................................................................4, 5 CBS ...................................................................................................................................................................................1, 2 Gateway Licensing................................................................................................................................................................50 GM Licensing .......................................................................................................................................................................50 Harris-Sachs ........................................................................................................................................................................50 HBO ....................................................................................................................................................................................23 Skechers ..............................................................................................................................................................................27 The Toy Insider .....................................................................................................................................................................35 Universal ...........................................................................................................................................................13, 21, 51, 52
50 • The Licensing Book
Spring 2014