Roundtable - Navigating a Covid World

Regular readers of Total Licensing will remember that each year we run an Industry Roundtable, asking a selected group of licensors, agents and others how they see the industry and asking them for their take on some of the key issues of the day.

This year is no exception but, of course, there’s really only one issue up for discussion that most people are concerned about – that of the COVID-19 pandemic.

How has it impacted on the licensing industry and how are companies finally beginning to be able to plan for the future.

We asked various licensors, agents and others in the USA, UK and Australia for their take on the situation, how they have handled business over the last year and a half. It is interesting to see how businesses reacted to restrictions and lockdowns and how they compensated for the lack of personal contact with clients.

We also asked them for their objectives moving forwards and what they feel they learned from their experiences over the last year and a half - how they dealt with swift changes in retail and, of course, the inability to travel which is such an integral part of the global licensing community. We also asked if they see life returning to pre-pandemic normal or not.

Their answers and thoughts are outlined on the following pages.

THE PANEL

Rob Corney,

Group Managing Director, Bulldog Licensing, UK

Ciarán Coyle,

President and COO, LMCA, USA

Bethan Garton,

Commercial Director, The Point 1888, UK

Mark Kingston,

Senior Vice President, International Licensing ViacomCBS, UK

Ted Larkins,

Global Head of Licensing, Brainbase, USA

Jeff Lotman,

CEO, Global Icons, USA

Robert Marick,

EVP Global Consumer Products and Experiences, MGM, USA

Alan Schauder,

Group CEO, Merchantwise Group, Australia

Jamie Stevens,

EVP Worldwide Consumer Products, Sony Pictures Entertainment, USA

First of all, how have you and your company fared during the pandemic?

Rob Corney: It’s been a remarkable sign of the resilience of the licensing industry that, despite being a sector entirely reliant on the sale of non-essential goods in a world in which those sales are largely restricted by law, many of the key stakeholders are able to say that the last eighteen months have been less terrible than feared and, in some cases not bad at all. Of course, many areas have been decimated by the restrictions – events, live performances and many of the other areas which we took as a standard part of brand building and entertainment have been left with no possible revenue stream whilst lockdowns have been in place. But the industry is one which supports its own and it has been great to see everyone pulling together to bring plans back on track in double-quick time as things begin to open back up again. The pandemic has served to reinforce the long-standing industry dynamic that it is at its strongest when all of its parts work together and it is this unusual industry-wide cohesion which has been at the heart of its ability to respond to unprecedented challenges with astonishing robustness.

Ciaran Coyle: Like most businesses, inside and outside licensing, we had a very uncertain first half of 2020 but then had a good second half including a very strong last quarter of 2020. As we know, consumer spending on products and services in-and-around the home was high during the pandemic so licensed product sales in these categories were high.

Bethan Garton: Personally I was very lucky as my 5 year old was able to keep going to school as a ‘key worker kid’ and therefore I was able to keep working throughout and did not have to worry so much about home schooling. I honestly have such admiration for all those who had to home school and juggle work or even just do the home schooling - none of us are trained teachers. The Point.1888 has fared well and we put that down to the brands we represent and being kind. Our brands cover a wide spectrum of areas from Battersea Cats and Dogs Home to Barratt confectionery - both of which had their best year ever in licensing. Our Entertainment portfolio saw the positive impact of kids watching more digital content and so brands such as Cocomelon, Morphle, and Moomins are all going into what will be a bumper AW. Our design brands such as MissPrint also performed well as people were at home more and purchasing more homewares and home decoration. Kids publishing properties Percy the Park keeper and Tom Gates which we had just started working on pre-pandemic have also weathered this storm with great success and we have retail partnerships launching this year. With all of this we actually hired people during the various stages of lockdowns and have grown the team to 28 people and also partnered with 14 sub agents across EMEA, Japan and the US which has proven really successful.

Mark Kingston: It’s been a challenging time for everyone around the world but we feel like we’ve mastered the art of the pivot. We have delivered solutions for our partners to ensure that our fans were able to access and purchase products across our franchises and adapted to the changing needs of the consumer over the past year and a half. It’s been a very collaborative process.

Ted Larkins: As a technology company with online and cloud-based products, Brainbase did quite well during the pandemic. We found that people had time to look at and evaluate current processes with the downtime. They also realized that unifying their global licensing business with a product like Brainbase Assist was needed in the changing times brought on by the individual working situation.

Jeff Lotman: Surprisingly well – actually we closed 8 new clients… our highest for the duration of the pandemic. The pandemic also taught us to adapt, communicate, and work harder together, to execute some big licensing deals despite the challenges.

Robert Marick: During this past year, we heard from many licensees and retailers that during the early days of the pandemic, consumers were looking for a comfort outlet such as a favorite food, song or movie to stay positive. Fortunately, many MGM movies filled that niche including Rocky, Pink Panther, Legally Blonde and more. Many of our properties were viewed as inspirational. I will never forget reading about the hospital staff who helped celebrate the strength and resilience of recovered COVID-19 patients. Announced as “Code Rocky,” health care workers gathered in the hospital lobby while the Rocky Balboa theme song was played in the background. Classic brands felt new again. We used this renewed demand on our classic properties to stay relevant with new product ideas and ways to interact with our customer. MGM Consumer Products was fortunate to come through in good form.

Alan Schauder: The pandemic has generally been well handled by the Australian and NZ governments. We are lucky to have lived in one of the few places in the world to have low infection and death rates. Long periods of lockdown and border closures have taken their economic toll on many businesses, particularly in industry segments such as live entertainment, tourism, food service and hospitality. Nevertheless, government subsidies have helped to maintain employment and spending through the worst period. Our licensing businesses have been fortunate to enjoy a strong year bolstered by the surprisingly robust performance of the retail sector, which grew by 9.7% in 2020. Many retailers have enjoyed their best sales in years, particularly in segments such as food and beverage, video games, toys, puzzles and games, leisurewear and all areas of home improvement including household appliances and homewares. Merchantwise Licensing has enjoyed strong growth from gaming giants such as Minecraft and Xbox, as well as local heritage brands May Gibbs and Blinky Bill. Asembl Brands is also enjoying strong consumer demand for new food extensions such as Hershey’s ice cream and Golden Gaytime popcorn, as well as non-food extensions of beloved global icons such as Coca Cola.

Jamie Stevens: While the past year had its challenges, I would say that we were able to overcome and even find new ways of managing our business despite many roadblocks. Our film and TV operations were able to restart production after developing state of the art protocols and

we delivered a variety of new distribution strategies for our content. Employees quickly and efficiently switched to working remotely and all of the teams really banded together despite the disruption.

What steps were you able to take to mitigate the issues caused by the pandemic?

Rob Corney: At its foundation 14 years ago, Bulldog was the first agency to launch with a ‘retail first’ approach, ensuring from the outset that our brands and activities are all geared towards support for the gatekeeper to the consumer. This close alignment with retailers enabled us to re-work long-agreed plans to happen at a point in the future when restrictions were lifted, rather than seeing them written off altogether. We were able to support our Licensees through an open dialogues surrounding contractual terms and plans to help ensure that the least possible damage was caused throughout the stakeholder chain. But most of all, our recognition several years ago that onlines would become an increasingly important part of our business meant that the optimisation work, the brand stores and the marketing plans we already had in place at the start of lockdown could be rapidly scaled to help support sell-through as the brick and mortar estates were forced to close.

Ciaran Coyle: As with most companies, our first step was to carefully manage cost and eliminate all discretional spending. All agency staff also agreed to a temporary pay cut as part of the cost management initiative. It was essential to respond early to the situation, not knowing at that time what was ahead.

Bethan Garton: As a company we did a number of things during the first few weeks of the pandemic including creating our own version of the government R rate - ours was the S rate (Survival Rate) and we tracked this week on week and have done ever since. It’s an excellent way of tracking how we are performing as a business and meant that although we did not thrive during covid (no one did); we did survive. As a business who employs a lot of parents we made use of the furlough scheme to ensure that they could get through home schooling without the pressure of trying to juggle work and home schooling - it was a lifeline for many of them.

Mark Kingston: It was all about adapting creatively and staying connected to one another, our partners and the consumer. We remained in regular dialogue with our colleagues, licensees and retailers leading to swift changes to adapt to our new remote way of life. One of the solutions was to create multiple ‘virtual’ partner presentations at a global, regional and local level which helped keep our partners fully updated on our franchise plans and performance while keeping everyone engaged including acoustic performances with our social stars -- Nickelodeon’s That Girl Lay Lay and Johnny Orlando for MTV.

Ted Larkins: Since we’re a technology company to start, the new work-fromhome format worked well, and we didn’t experience any issues. Of course, nothing beats in-person meetings, and we’ve already had a gathering at our new office in Santa Monica, California, which created some great synergy as a team.

Jeff Lotman: During these uncertain times, flexibility became key in our business model. It triggered a sudden transition to a fully remote and more flexible working environment which was a big shift from our physical 9-5 office environment - no landlord relief unfortunately Due to travel reductions, we had to cancel numerous marketing initiatives such as our annual Licensing Expo, which we showcase at, and other industry trade shows.

Robert Marick: We saw how the pandemic had an immediate impact on our licensees, retailers and end-user consumers, and knew we could not just wait for time to pass. Instead, we needed to quickly pivot. Whether it was agreeing to modify some licensee terms; fast track new COVID related product development and agreements or creating new ways to interact with our customers through one of the industry’s first virtual summits, every day was new business challenge or better yet, a new opportunity to think differently. Alan Schauder: Most of our staff and clients quickly adapted to working from home, and video conferencing tools have been critical to keeping business going. Working with retailers, we have tried to shift emphasis and spend from physical in-store marketing to digital marketing. We exhibited digitally for the first time at the recent Australian Toy and Licensing Show. It has also been important to monitor and try to maintain the morale and motivation of our team during this strange time.

Jamie Stevens: When we knew we were going to have to move film release dates due to the pandemic we worked with our licensees, agents and retailers to pivot either moving our programs to new dates or working on strategies for new distribution models. Since we are a diverse company we were able to rely on the success of our TV content such as Cobra Kai and leaned into that business globally.

Retail, with the exception of online, was severely affected. Do you think the online trend will continue upwards? Why do you think this?

Rob Corney: The pandemic has undoubtedly provided a catalyst for an existing trend towards the convenience of online shopping. When SARS and MERS hit the Asian markets, traditional retail channels were hit hard, but online commerce grew at a huge rate, helping to give rise to the dominance of etailers such as Alibaba… and the trend didn’t reverse when the epidemic ended. In a similar way, Covid has seen many consumergroups move to online for whom brick and mortar shopping was the norm prepandemic. Whilst there will undoubtedly be a shift back to some degree, the convenience of online will prove too alluring for many. In some respects, this can be an opportunity for the licensing world… by its very nature, licensed brands deal in entertainment and theatre as well as an opportunity for measures of exclusivity. As retailers turn their attention to driving footfall back into store, the opportunity for experiential events and in-person exclusives can form a key factor in encouraging people out of their homes and into the stores, marrying the interests of brand owners and retailers.

Rob Corney, Bulldog Licensing

Ciáran Coyle, LMCA

Bethan Garton The Point 1888

Ciaran Coyle: The trend to shop more online and for brands to sell directly to consumers was already there before the pandemic. The effect of the pandemic was to accelerate that trend and those brick-and-mortar retailers that maintained a strong online offering (e.g., WalMart, Target, Best Buy etc.) weathered the storm well.

Bethan Garton: Yes it will continue. I myself rarely shopped online pre-covid; I love going into shops and experiencing that buzz of seeing the product before I buy it. Browsing is almost a hobby of mine. I think it’s part of being in licensing - you can’t help but look at what’s going on instore so there is no such thing as popping in just for milk. During lockdown there was a real uptake in supporting local businesses and I hope this continues - click and collect from a local cafe or butcher for example. The pandemic has meant many shops have had to move with the digital times and implement things like click and collect or delivery which is great as they can in some small way compete with the big guys.

Mark Kingston: In reality, the last 1218 months have accelerated online migration. Research has shown that ecommerce adoption over the past year was the equivalent of what would happened over the course of five years under normal circumstances. And in particular in regions where online penetration was low, for example Southern Europe, we are seeing significant investment from retailers in improving their omni-channel and online capabilities. Online sales will continue to be strong but brick & mortar retailers that offer destination retailing and a point of difference versus the online option will flourish as markets re-open. There’s a balance to be worked out.

Ted Larkins: The pandemic pushed online to the forefront in a way that had been several years away. Online commerce is in its infancy (yes, even in 2021). But the exponential growth of Amazon, and even providers like Shopify, show that things are only going to grow more. I live in Orlando, Florida, and the number of shopping malls that are deserted, if not completely closed, can’t be ignored. For example, my sister went to buy a sofa the other day. It was $1,500 at the retail store. She got online and found the same product, with free delivery, for $1,000. She went to the store owner and asked if they could price-match. They agreed, but can they stay in business as this type of request becomes more prevalent?

Jeff Lotman: Definitely, as convenience matters – but so does experiences and connections. So, stores will always matter too. It is true, the pandemic has accelerated online sales even more rapidly, especially with non-essential physical stores forced to close. E-commerce platforms such as Amazon and AliBaba came out as the big winners and will continue to take over. Consumers were forced to adopt shortterm behaviors that in many cases will become permanent. With the flexibility and convenience of online, it will be difficult for some to return to old habits. That is why stores will have to begin to adapt, and offer new experiences to create new connections.

Robert Marick: Yes, I do. Online shopping was already trending prior to the pandemic. These past 15 months only expedited online shopping preferences. As a consumer, I can see it with my own shopping habits. Whether it manifested itself through discovering broader assortments, quick price comparisons, or easily discovering products and services I didn’t know I needed, all impacted my purchase decisions and I am certain it did with others as well. That being said, nothing replaces the shopping experience when you can touch, feel or view more closely a potential purchase. This can only be done in person. Again, as consumer, I had several online shopping experiences, that felt disappointing once I opened the package. Bottom line, brick & mortar shopping will never go away, but it’s the in-store experience that will need to adapt. The bigger question to me is how can the online shopping enhance the brick & mortar retail experience and vice versa.

Alan Schauder: In Australia, the sale of online goods has grown by a staggering 57% in just one year, now accounting for 16.3% of total retail spend. We expect this trend to continue strongly, mirroring uptake rates in the rest of the world. All major Australian & NZ retailers are investing heavily in their ecommerce and digital marketing capabilities as consumers develop more confidence and familiarity in online shopping. According to a recent survey from Australia Post, Australian shoppers expect their online shopping frequency to remain 28% higher than before the pandemic.

Jamie Stevens: Research suggests that people are shopping more across channel. Consumers now more than ever want choices. Online shopping can be great for certain purchases but I don’t think brick and mortar retail is dead. People will always want to touch, feel and try on a product. I think it is up to the retailers to provide the best experience in store for their consumers and also offer an omni channel experience to give people options to how they shop.

It has been said that the pandemic accelerated changes in retail which were already happening? Do you think this is right? What changes do you see in retail moving forwards?

Rob Corney: Aside from the shift from brick and mortar to online retailing, one of the key trends to emerge from the pandemic will be a greater focus on licensed ranges with key messaging. From out of times of adversity, there always arises an opportunity for classic brands as consumers look for comfort from the familiar – brands like Care Bears with its overt message of caring will thrive as the consumer looks for a way to express their emotional and sympathetic responses to the challenges of the last year. But it’s also an opportunity for licensing as retail recognises that brands which have not over-proliferated provide a healthier margin to the bottom line. Retailers who have been forced to mark-down generic lines in order to achieve sell-through will recognise the more robust nature of licensed brands which require far lower elasticity in the pricing model to sellthrough. The opportunity for driving interest, sales and footfall through the predetermined purchase decision of licensed

ranges will see a significant focus moving forwards as shoppers look to fill the latency created by having consumed more content than ever before without the commensurate supply of product availability at the time… there is appetite amongst consumers and an opportunity for retail.

Ciaran Coyle: As already mentioned, the trend for increased direct-to-consumer online business was already there before the pandemic. However, I think that traditional retail will see a significant bump post-pandemic and consumers feel the need to get out and shop, but the longterm trend is still for the growth of online over offline. Global online retailers like Amazon will continue to mix their offering between digital and brick-and-mortar acquisitions (e.g., Wholefoods).

Bethan Garton: With retailers such as Topshop being bought by Boohoo, Debenhams closing, and JLP closing stores, it’s sad but the writing was on the wall in many ways. Online competition is fierce and whilst many of these retailers used to hang a lot on customer service, once they started struggling this went out of the window and that leaves them with very little to differentiate.

Ted Larkins: Brick & mortar retail is not going away. I took my 13-year old daughter to Ross (which was trending on TikTok) last night, and she wants to go to Barnes & Noble today. But the trend toward online means that stores must be incredibly savvy in ordering, store location, and incorporating online (if they haven’t already) into their mix. As online pricing can be more competitive, traditional retailers must strategize on sourcing the lowest price (without sacrificing quality, lest they be “canceled”) to compete. That means a more vertical process of manufacturing, distribution, and sales. And it means more “store-owned brands” so they don’t need to pay licensing royalties.

Jeff Lotman: I do agree, it has accelerated changes that were inevitable. At the same time, new trends are also emerging; For example, grocery retailers… online order volumes from full-assortment grocery merchants rose exponentially. Innovation in customer service with video chats and investment in fulfillment and delivery are all trends for 2021 and beyond. Covid-19 is also forcing consumers beyond their preferred brands like never before. Those consumers could emerge from the pandemic with entirely new brand preferences and lower overall brand loyalty. This could have a huge impact on our industry as companies invest more in brand collaborations and partnerships to capture awareness. The key for retail moving forward is experiential. Consumers want to see shopping as an event or destination experience post-Covid. This is something Fred Segal has done for quite some time now, and will implement more in the future with activations, launches, and events. An alignment of in-store and online experiences will also be key, particularly as consumers might be reluctant to return, so the connection ensures a smoother transition.

Robert Marick: Absolutely! It’s not just at retail, but every aspect of our lives has changed. All of us just participated in a global “focus group”. Whether it’s brick & mortar or online, there is a lot to be learned on both ends. Specifically, for brick & mortar, infusing more experiential elements, elevated customer service, product customization and bridging the online shopping discovery with the brick & mortar immediate gratifications can all make a difference for the future.

Alan Schauder: The pandemic has certainly accelerated pre-existing trends in ecommerce and digital migration, as well as continued consolidation of the industry amongst market leaders. We are also seeing new retail trends arising from the pandemic, such as a greater focus on buying local, and changing consumption patterns towards home and leisure categories.

Jamie Stevens: Retail like all businesses needs to evolve. I think these changes were happening but the pandemic probably made retailers move faster. Retail has to become a more personalized experience. I want to feel like I have a relationship with the store and the associates, that they know me and reward me for my business. Which elements really affected your business specifically - eg retail closures, trade show cancellations, factory and supply chain delays, logistical distributions, travel bans, etc?

Rob Corney: Undoubtedly retail closures were the biggest challenge through 2020 as we re-worked plans which had been agreed a year earlier and looked for ways to help our licensees find alternative distribution channels. But the subsequent logistics chaos is proving the biggest issue through 2021 and is likely to be problematic for some time still. As the lockdowns hit and factories closed, the enormous shipping vessels were forced to hibernate in any convenient location, meaning they were in the wrong parts of the world once the factories re-opened. This has caused huge knock-on effects and the pent-up demand has driven a need for containers far greater than the available supply. Stories coming out of Asia of gazumping of containers at the docks as companies looking to ship high value items pay higher and higher prices for shipping, keeping the costs artificially high and out of the reach of purveyors of lower margin items were only compounded when the Ever Given undertook an unplanned three-point turn in the Suez… it’s a mess at the minute and is likely to take several months yet to fully unwind.

Ciaran Coyle: There were 3 key areas that impacted our business: (1) retail closures and slow-downs affected the sale of licensed products, (2) manufacturing shut-downs, supply chain, and logistics issues also significantly slowed the product development and go-to-market timelines and, (3) licensee confidence was greatly affected and resulted in a reluctance to take on further risk in the form of new licenses

Bethan Garton: All of the above - as an agent we were indirectly hit with all of these through our many partners. Not a day goes by where we don’t talk about one of these issues with a partner.

Mark Kingston: We had many factors to contend with including factory and port closures in the Far East and retail closures. However, once retailers started

Mark Kingston, ViacomCBS

Ted Larkins Brainbase

Jeff Lotman, Global Icons

pivoting and licensees were able to open new channels of distribution, in particular in the discount, convenience, online channels, the impact has been less severe. Not being able to physically meet with people, and see what is happening in different markets has taken its toll as well but again, we have gotten creative with a lot of success.

Ted Larkins: The only real issue for us was the lack of in-person meetings. Presenting a demo live in person is much more effective than on a Zoom call. Of course, there were decreased budgets, but we could offer reduced pricing to help people out.

Jeff Lotman: All the above have really impacted our licensing business in one way or another, and we’ve seen an impact on licensing deals, the terms, the re-negotiation process and payment schedules. Travel bans also showed us that we don’t need to travel as much, and a lot can be done by Video. Honestly, trade show cancelations did not hurt us, they are so expensive, and we never really see the cost benefit of these from displaying. Logistics will continue to be a huge issue, as supply chains are a nightmare on anything that is not made locally. Even when it is, if an ingredient, part or fabric has to come from overseas – the issue is still there, and delays are very common.

Robert Marick: They all did in one form or another, but from your list, I believe the factory, supply chain and distribution impacted the business the most. It was a waterfall effect. If you don’t have products to sell, it hurts everyone.

Alan Schauder: Major theatrical properties such as Sony’s Ghostbusters Afterlife and Paramount’s Top Gun 2 have been severely affected by cinema closures and release date changes, making it almost impossible to plan product launches. Some major films have shifted to distribution via Netflix and other streaming services, which is an interesting trend to monitor. Travel bans have clearly made life difficult for the licensing industry. Australia and NZ still largely remain closed to the outside world and that is not likely to change until 2022 at the earliest. Not visiting other markets or attending international tradeshows makes it harder to identify new trends and opportunities that are the lifeblood of our business.

Jamie Stevens: For our film business the theatre closures resulted in us having to shift on shelf dates around the world. We have fantastic partners who were extremely collaborative and we were able to work with them to move our programs to a later dates.

And do you think this will specifically apply to e-commerce vs traditional retail?

Rob Corney: Although ecommerce is immune from the effects of retail closures, they are still faced with huge logistics challenges in getting hold of goods in the first place. The huge growth of new technology such as print on demand give opportunities for on-shoring elements of the supply of licensed products which have traditionally been the preserve of factories on the other side of the world. But currently, scale and price leaves the industry still reliant on far-shore factories and it will take a paradigm shift for this to change. Such large-scale re-alignments are not normally industry-specific, but generally driven by commodities or governments. There is every possibility that changes to some supplier bases could come about through a robust governmental response to subjects such as the plight of the Uyghurs, something the UK government is championing, but it is unlikely that unilateral moves from the UK will make significant changes without more support from international communities and it’s unclear where the changes would re-align to… simply moving one off-shore base to a similarly distant one does not seem to be any kind of permanent solution to shoring up the global supply chain, though having options in two distinct geographic locations, whilst embracing new technologies with large-scale government infrastructure projects domestically would help to a degree.

Ciaran Coyle: Whether a product is sold via e-commerce or traditional retail, it still needs to be manufactured, shipped, and distributed. Many of the delays that we saw during the pandemic affected both online and offline retail. The main difference lay in the consumer’s ability to select and purchase products and services which, of course, favoured ecommerce when brick-and-mortar stores were closed, or the offline shopping experience was deemed uncomfortable or risky.

Bethan Garton: Whilst retail closures have meant a boom for ecommerce business, they are all being impacted by factory closures, logistical disturbances, travel bans, trade show cancellations etc. Licensees have huge container issues at the moment and that alongside everything else is just one HUGE headache for everyone - ecom and brick and mortar.

Jeff Lotman: It will affect both

Robert Marick: Definitely all aspects of the business. Depending on e-commerce or traditional retail, some experienced more in one way than others. However, factory, supply chain and distribution impacted both channels equally.

Alan Schauder: While traditional retail will remain an important part of the landscape, licensors and agents will have to embrace the reality of ecommerce and interpret what this means for our businesses going forward. In our case, we are investing in new technologies and marketing capabilities to enable the continued growth of ecommerce for our clients. Last year we added a digital marketing business to our Group (inc Digital Media) and we are developing high end email marketing technology to enable more impactful communication between brands and their fans (MashrLab).

Jamie Stevens: Ecommerce gives us an opportunity to get products to market quickly and test certain product categories or designs. It is also more flexible in a situation if release dates shift. Brick and Mortar offers the ability to tell a story. It’s obviously more difficult to get product through a big supply chain but our retail partners and licensees are much more nimble then in the past.

And what about the long-term effects on globalisation?

Ciaran Coyle: If anything, the pandemic accelerated not only e-commerce but the consolidation of industries as companies struggled and were acquired by their nimbler competitors. This was especially true in the U.S. where traditional mid-market and upmarket retailers were either closed by their owners or acquired by venture capital backed entities (e.g., Forever 21, Henri Bendel, Brooks Brothers, Barney’s).

Mark Kingston: Globalisation was already happening. Interestingly, I think the pandemic, along with other factors such as trade policies, sustainability and overall costs of shipping will see more diversity in supplier base and countries manufacturing products. Over time, I think that will reduce the huge reliance the industry has on the Far East as a manufacturing hub.

Ted Larkins: Globalization has been in the works for hundreds of years. Yes, the invention of international cargo (sea, air, and otherwise), along with the rise of the internet, have sped things up over the last century but, it’s been part of human evolution for a long time. There will be trends to source locally, but low price and good quality will naturally win out. I don’t look at any of this as a negative, which “long-term effects” hints at, but more the natural and changing environment of human migration.

Jeff Lotman: It has all gotten even smaller as we can see that we can reach out and do a lot more business by NOT being there than we would of imagine. The online trend will continue upwards as we see developing countries such as Morocco, Chile, and the Phillipines playing a more active role not only as consumers, but as producers.

Robert Marick: For the licensing industry, globalization can have a positive impact. With new and evolving ways to view content, consumers around the world have the same “front row seat” with what’s happening in pop culture. This impacts the trends in what we wear, play or interact with brands. Global retailers can then deliver licensed merchandise to feed those trends and product needs. Whether those retailers are brick & mortar or ecommerce, this allows consumers broader selection based on their own taste. Bottom line, globalization can help grow the licensing industry.

Alan Schauder: Interestingly, globalization seems to have taken a backward step in the past year and a half. Where once you could do business anywhere in the world within a few days, now the uncertainty of Covid combined with geopolitical challenges such as the challenging relations between Australia and China is forcing our market to re-evaluate our global priorities. This week Australia signed a free-trade agreement with the UK, which is something of a reversion to the past. We even appear to be investing in our own manufacturing capabilities again after years of outsourcing to Asia. Personally, I feel this could be a positive development for our national identity and self-sufficiency. We are huge, resource rich country with endless potential to develop our own tech-forward industries with more local investment.

Jamie Stevens: Our business for the most part is global. It is important that our strategies take into account consumer taste and behavior in specific markets and make changes when necessary.

Are there any positive trends that you noticed during the last fifteen months?

Ciaran Coyle: From a pure economic perspective, consolidation in a category or an industry is a normal part of the cycle but the rate at which it has happened over the past 18 months is stunning. In the licensing industry, some venture capital backed agencies have over-extended their brand acquisition programs and, as a result of the retail slowdown during the pandemic, are now struggling to survive. And others, with perhaps a more diverse holding, are thriving. In the end, it’s about being close to consumer preferences in terms of both what they shop for and, crucially, how they shop.

Bethan Garton: As a business who has always offered flexible working for all team members, we have seen everyone have to move to home working which has meant that more businesses have seen the positives of allowing staff to work from home. You get so much more from your staff if you give them flexibility - it shows you trust them and that is key. We have team members who were desperate to get back into the office and see people face to face again and that is great but you have to have a good balance. I live 5 hours drive from our office and I have always worked from home. It’s not for everyone but I love it. I get so much done in my day. I still love going into the office but I can do that when I need to and when I choose. There is also the impact on the environment to consider, having a video call if face to face is not needed is better. I love nothing better than visiting licensees and seeing their showrooms however I think everyone is now more mindful of what that meeting will achieve and making the most of the time. Everything has a pro and a con and whilst working from home works for me, it doesn’t for everyone and there are business who have suffered terribly e.g. coffee shops in city centres who are not getting the commuters. Everything is one big eco system.

Mark Kingston: Fortunately, yes, I believe there have been some positive trends that have come out of the last fifteen months. The focus on true costs and speed to market has been amplified as is how to use technology to improve day to day business. Spending more time (albeit virtually) with colleagues around the world and allowing them to have a voice and seat at the virtual table has been extremely valuable. We have incredibly innovative and creative teams and partners and their feedback was invaluable. That type of collaboration across borders is much more difficult in the physical world.

Ted Larkins: Yes, people have realized that WFH is viable, and in moderation, better for their health. As a result, they spend the saved-commute times with family or are more productive at work.

Jeff Lotman: The pandemic has taught people adaptation and flexibility. It forced many companies to reconfigure their operations for the better, which in turn increases productivity.

Robert Marick, MGM

Alan Schauder, Merchantwise Group

Jamie Stevens, Sony Pictures Entertainment

Robert Marick: Absolutely! Efficiency, customer interaction and new selling tools were positive outcomes. We learned to effectively and efficiently work via video conferencing. We learned to run our business with zero travel. Globally speaking, time zones were less of an issue and we were able to effectively function with clients around the world. We also learned to conduct major presentations via virtual summits, presenting to more people, at a fraction of the cost.

Alan Schauder: As mentioned earlier, there have been a surprising number of positives in the last 15 months: Growth in local retail sales, including increased demand for many categories of licensed products; Surging interest in gaming and digital brands, an area of focus for our business; Strong performance from Australian retailers led by Big W, Target, Kmart, Woolworths and Coles – with a much greater degree of sophistication in online sales and digital marketing; Increased focus on local properties and local manufacturing capabilities

Jamie Stevens: We had many categories such as interactive gaming, board games and puzzles that were outstanding performers. While people were stuck at home they used the time to reconnect with family which I think was the biggest shining light in all of this.

And what are your plans post-COVID?

Ciaran Coyle: At LMCA, we recently announced a joint-venture enterprise with the private equity company, Warburg Pincus. This JV, Full Sail IP Partners, will acquire brands with the intention of licensing the IP. LMCA will be the exclusive global agency for all brands acquired in this way. Outside the JV, we will expand both our client portfolio and our geographical presence. LMCA has had an office in China for the past 15 years which is being prepared for growth, but we are also making plans for an enhanced presence in South East Asia, the Middle East, Europe and South America.

Bethan Garton: Here at The Point.1888 we are planning for our first Trade Show in November (BLE) and we cannot wait to be back with our industry friends and colleagues once more. It’s our 7th Anniversary this year so we are planning a team celebration - a day to relax, have some fun and celebrate the fact we have survived the pandemic. It’s not over but we can see a huge light at the end of the tunnel. Our team has grown immensely over the last 18 months to 28 people and so bedding everyone in and supporting them in this new world is a key focus. We will continue with our retail first approach as this has been crucial during the pandemic - we listen to what retailers are telling us and in turn they listen to us. Interestingly we now have more time with retail buyers as they have more time by working digitally and they are keen to maintain this which is great news.

Mark Kingston: At ViacomCBS, we have some of the biggest franchises in the world. We are focused on the first PAW Patrol theatrical release in August, expanding the Star Trek universe to the kids space with Star Trek: Prodigy, the rollout of Blue’s Clues & You! and Baby Shark’s Big Show to key markets around the world, and the exciting premieres of the highly-anticipated SpongeBob SquarePants spin-offs Kamp Koral and The Patrick Star Show. We have fantastic consumer products programs hitting across multiple categories and are so excited to bring new items to the market that we know kids and families will love.

Jeff Lotman: Full steam ahead! I am very happy with the sales increase we are seeing and the new clients and responses that we are seeing from licensees to our clients.

Robert Marick: I want to focus on the positive. We are going to start with doubling-down on what worked; Learn from our mistakes; Challenge the status-quo and continue to think outside-the-box. It’s also important to model a better work / life balance and appreciate what we take for granted. I am confident that with these simple practices, our licensing business will continue to evolve and grow. be with us all for some time to come, but we will need to learn to adjust to the new normal. Of course we are always looking for blue chip and high potential brands and properties with strong licensing development potential in Australia and NZ. Personally, I look forward to being able to travel internationally again with our team. From a broader group perspective, we are investing in the continued expansion of our creative, marketing and digital services to support our clients.

Jamie Stevens: I am going to run to the movies and see family and friends I have not been able to see.

What plans, if any, do you want to put in place in case of another global crisis in the near future?

Ciaran Coyle: I feel it’s important to be sufficiently diversified to weather any future global crisis. That means representing brands across different industries, categories, channels and across different geographies and consumer demographics. It also means, importantly, having a diversified agency team in terms of background, ethnicity, gender, skillset etc.

Bethan Garton: Our ‘s’rate is key for us - I would suggest everyone works out what their ‘s’ rate is and have contingencies for when needed. Trust your team, you hired them therefore let them do what they do best and support each other. This pandemic has impacted every single person - lots of people have underlying anxieties or have reevaluated what is important to them and need support in this new world. Be there for each other even if it is virtually, as they will be there for you and the business when you need them most.

Mark Kingston: There have been so many lessons from this crisis. Certainly one of the key learnings is the importance of being connected, another is how essential it is to be flexible and thirdly we can be successful working from home when we have access to the proper tools.

Ted Larkins: Of course, we will stay vigilant in staying as prepared as possible. The ideal is to be as efficient as possible during normal times and challenging times. I believe that COVID helped us be

more conscious of the need to be aware of things that may arise.

Jeff Lotman: Sorry I am an optimist, and I don’t plan for pandemics, and I hope I never see one again– besides no one could have planned for this or counted on how this would affect us all in anyway.

Robert Marick: There are so many variables to that question. But I would start with focusing on what worked in the past global crisis; Learn from our past mistakes; Think outside-the-box and finally, don’t be afraid to fail, because it will happen. It’s how we respond and react failure that will make a difference.

Alan Schauder: That’s a difficult question to answer because it’s impossible to predict the nature of the next global crisis and what impact it may have. COVID has reminded us never to take life – and business – for granted. We will continue to focus on the diversification of our business and capabilities to not be too reliant on any one type of client or revenue stream. We will also try to remain nimble and adaptable to changing business conditions.

Jamie Stevens: This time has taught me that we need to be as nimble as possible and be open to change.

Finally, on a general note, how do you think that the pandemic has affected the licensing industry?

Ciaran Coyle: In connection to my last point, those licensing businesses that were not sufficiently diversified suffered the most during the pandemic. As live events, movies and shows were cancelled, so the entertainment business and the associated licensed products and services also suffered. I think licensees will look to diversify more across the brands and products they serve and agencies that were pure-play entertainment or talent will look to add other areas to their portfolio, including corporate. The key is to get the balance right to avoid dilution of resources (financial and human) which may then result in a lack of business focus. Bethan Garton: The licensing industry is such a sociable industry and I know a lot of the industry has struggled not being able to mingle and go to events. We hope that this will change soon. Licensing has become more agile and decisions are made a lot faster. Layers of decision makers were temporarily removed due to the furlough scheme which has made companies realise fewer people can make decisions much faster. It’s not that there isn’t a place for those people back from furlough; it’s just a new way of working and we are a very adaptable industry. We are a very tactile industry - all about product - not being able to go shopping, go to show rooms, or trade shows has been a big hole in a lot of people’s work life and it’s an area we all want to get back to normality.

Mark Kingston: The industry has learned how to identify opportunities and service consumer needs more than ever before. We are so proud of our reusable face mask partnership with Save The Children. We have entered into multiple licensing agreements to create facemasks with iconic Nickelodeon characters including SpongeBob SquarePants and PAW Patrol with all of the ViacomCBS royalties to be donated to Save the Children. All of the ViacomCBS royalties along with generous donations from many of our licensees, generated over $3 million for Save the Children’s COVID-19 global response.

Ted Larkins: Although many companies and people were negatively affected by the pandemic, I believe that the licensing industry fared well overall. People purchased more licensed products online than ever, new products (can anyone say branded masks?) evolved, digital shows found a new audience and new product lines were created from those. I also believe that the pent-up appetite for our favorite brands will be released, and traditional retail and online sales of licensed products will explode into the holiday season!

Jeff Lotman: The pandemic has obviously affected the licensing industry in one way or another, with its effect on retail, supply chain, conservative budgets, shifts in consumer behaviors…but I am positive that the licensing industry will recover in 2021 and 2022.

Robert Marick: That’s a tough question and I think it’s too soon to answer. I would imagine that every aspect of the consumer brand experience will be impacted. First, consumers content viewing habits have changed. We have so many more content platform options than ever before. Connecting the content to merchandise will be crucial. Second, creating great products and getting it into the hands of the end consumer to buy it will follow. Finding a cohesive shopping experience that brings brick & mortar retail with ecommerce will be the key. And finally, finding opportunities for consumers to live the brand will be important. I am big believer in anything experiential. Whether its shopping, location-based or live entertainment all help connect consumers to the brands they love, which all fuel licensed merchandise opportunities.

Alan Schauder: Clearly large parts of the world have been decimated by COVID, with prolonged retail closures having a devastating impact on brand owners, agents and licensees. Industry segments such as location-based entertainment (theme parks, stage shows and live attractions) have been the hardest hit. That being said, many licensing and retail businesses have also done well through the pandemic, and Australia and NZ have generally been fortunate. Government subsidies and changing patterns of consumer behaviour have driven a spending surge in many parts of the industry, from puzzles and leisurewear to video games and consumer electronics. Ultimately, licensing is an adaptable industry and I expect it to continue to reinvent itself, whether through new types of properties, new categories or new methods of sales, marketing and distribution.

Jamie Stevens: Like all businesses we all had to quickly pivot and find new ways to reach consumers. While some product categories may have been down others were way up. I think it showed us that we need to be more agile and less traditional in our approach.