NEW YORK, NY: December 19, 2016—I’ve been formally asking marketers about the challenges and opportunities for the year ahead at least since 1988 (before that if you want to limit it to music, home video, and video games). And I’ve been fashioning the responses into an annual (more or less) Fearless Forecast ever since.
Truth is the answers haven’t varied much over the years. For the licensing community in particular, the overriding challenge: Securing the right retailers for new and old licensing programs. The opportunity: Hitching onto the Next Big Thing (challenge: before it’s too late).
The word clouds here sum up this year’s survey responses as well as the longer-term themes, and even give voice to some of the more existential concerns (e.g. “Is licensing still the right nomenclature to describe the business?”)
Not wanting to prejudice responses, I deliberately did not ask about the implications of the U.S. election and growing nationalist sentiment in many parts of the world. Interestingly, no one brought those factors up unaided.
In conversations, however, when asked, it is clear there is concern about potentially stricter trade laws and how they might affect deal-making. Will IP owners and manufacturers hold off on some decisions — especially as they relate to B and C properties — until the dust settles and we have some direction? (Not a new phenomenon, even when there aren’t trade questions on the table.) Will there be greater focus on “made here,” in terms of origination of IP as well as manufacturing, wherever “here” may be?
- Closing licensing deals takes six months at the very short end of the spectrum, with 12-15 months an unscientific median.
- The move to “fast retail” that is spreading beyond apparel, challenging traditional licensing models.
- See #1 and #2 above, and note the inherent conflict.
- Managing expectations. There are very few seven-figure (let alone eight-figure) advances on licensing programs, and with the exception of a handful of high-profile entertainment and sports properties, precious few that will generate retail revenue of $10 million+ annually, certainly not in Year 1 or 2 shy of some major fad that would likely be short-lived. Yet IP owners new to licensing — and sometimes folks experienced in the field — invariably set those goals, only to be disappointed or to fail.
- Figuring out who to push off the shelf in order to get on the shelf. It’s the most elementary question for any new licensing program. Even in the age of “unlimited shelf space” online, the fact is consumers go for the handful of best-sellers. As in traditional brand marketing, it’s the #1 and #2 in a category that account for by far the greatest percent of sales.
Consider: In a pre-Christmas Target tour, looking at licensed properties, close to 10% of the toy section was given over to Star Wars, and just shy of 5% for Marvel. Paw Patrol, Teenage Mutant Ninja Turtles, even Shopkins, one of this year’s hottest girls’ offerings, were about 1% each.
- Speed is of the essence. See #1, #2 and #3 above! The winner is he/she who can “turn it around” while the property is still hot — goes for the IP owner AND the manufacturer — and that can keep refreshing the assortment on a 3-6 week cycle rather than quarterly or semi-annually.
- Be realistic. See #4 above. Always best to exceed expectations.
- Giving retail the differentiators it needs. Not just a single “exclusive” SKU, but a program.
Here’s to 2017’s numbers being better than 2016’s. And to your own participation in marketing and licensing being more fun, more productive, and more rewarding in the New Year!
NEW YORK, NY—MARCH 7, 2016: Is Nickelodeon carving out a new hybrid major league sports-entertainment genre for itself? Others have made efforts in this arena, but none on a platform as wide as Nick’s.
Nick went through a long dry spell as far as developing new, licensable IP. Not for lack of trying, but it isn’t an easy (or scientific, no matter how much testing) process.
Now Nickelodeon is expanding its two-hour Nicktoons sports programming block with the introduction of two high-profile new series produced by Rob Drydek, and one unique licensing program combining a sports figure and a hit animated property:
- Crashletes is a video clip series hosted by New England Patriots’ player Rob Gronkowski;
- Jagger Eaton’s Mega Life is a reality series starring teen skateboarder Jagger Eaton;
- NBA star Carmelo Anthony, aka Melo, is behind an exclusive-to-Macy’s TMNT x Melo fashion line built around the Teenage Mutant Ninja Turtles.
Asked whether Nick will be able to create licensed merchandise incorporating Gronkowski and Eaton, the network’s Pam Kaufman told me at the Nick Upfront that they certainly hope to. “We’re figuring that out.”
Joint licensing of sports and entertainment isn’t a new idea, but TMNT x Melo carries the concept several steps beyond the usual Warner Bros. or classic Disney characters on jerseys, teddy bears, and bobbleheads.
Success will breed plenty of imitators; that’s inevitable. But Nick can use a concept that has built-in renewability; its mix of sports and entertainment can expand with new athletes and be applied to new hit properties as they emerge.
It’s 17 years since SpongeBob SquarePants debuted on Nickelodeon. Sixteen years since the first Dora the Explorer episode. It wasn’t until 2012 that Nick revived TMNT, and 2013 that Paw Patrol began its run and that the revitalized Power Rangers re-emerged in their 20th season as Power Rangers Megaforce.
From a licensing perspective, that left Nick with a more than decade-long lull where, because there was no new breakthrough animated IP, the network’s consumer products division had to do its best reinventing SpongeBob and Dora to carry it. Warner Bros. has faced similar issues over the years, with DC Comics (Batman, especially, but Superman as well — even in non-movie years), Looney Tunes, Tom & Jerry (at least outside the U.S.) and other classics tiding them over.
“Cross-licensing, primarily involving character/entertainment properties along with leagues, teams, and/or players, has long had a presence in the sports sector,” wrote Karen Raugust last month in her excellent trend-rooted RaugustReports blog. “Going back at least to the mid-1990s, the four major U.S. leagues were partnering with classic characters such as Peanuts, Mickey and Minnie Mouse, and Looney Tunes.
“The trend,” Raugust noted, “tends to ebb and flow cyclically, but has been on the upswing lately, with characters from Hello Kitty and Tokidoki to Domo and Betty Boop all being featured with team or athlete imagery on a range of merchandise, in association with the leagues and/or their players associations. The technique also has expanded internationally; examples range from Sesame Street and the Australian Football League to Smeshariki and the Zenit St. Petersburg soccer club in Russia, to name just two.”
With few exceptions (Disney had an NHL/Phineas & Ferb deal in 2011, and there have been several crossovers in Europe), these deals are character rather than program-driven, and are often promotional rather than based on long-term consumer products campaigns.
As for Nick’s current stable of properties, Paw Patrol — produced by Spin Master with Nick and Canada’s TVOKids — is the big recent new hit property and the reconstituted Turtles and Power Rangers have proven resilient as shows and on retail shelves with licensed merchandise.
Whether Nick can parlay Gronkowski’s and Eaton’s live action shows into merchandise, or whether they and other athletes can be teamed, so to speak, with others from Nick’s animated stable to build on this niche, remains to be seen. Nick is well-positioned, though, to make it happen.
Ira Mayer, former publisher and executive editor of The Licensing Letter, conducts competitive research and consults for marketers; takes clients on retail tours; and offers courses on licensing to corporations and at colleges and universities. You can reach him by clicking on the “Contact” button above left.
Call it what you will — retro, vintage, nostalgia, classic, evergreen — the “everything old is new again” refrain has been perennially popular in licensing. But just using old images, or original packaging, is NOT the name of the game:
- Look at how Nick updated the Teenage Mutant Ninja Turtles and Saban the Power Rangers — and the huge success they’ve enjoyed on air and in consumer products. (I estimate that the Turtles exceeded $1 billion at retail worldwide in 2014, while the Power Rangers continued their upward swing to in excess of $350 million worldwide.)
- Nintendo’s Mario Bros., Bandai/Namco’s Pac-Man, and other video game companies are stressing pixilated images in their style guides. These are true to their origins but have the added benefit of playing off the popularity of styles popularized via LEGO and Minecraft, as my colleague Karen Raugust points out.
- “Throwback jerseys” are made of contemporary fabrics. “The Mick’s” throwback comes “equipped with Majestic’s amazing Cool Base technology to keep you cool and dry whenever it heats up!”
- Archival art, whether Fuller Brush, the Smithsonian Library’s Seed Catalog Collection, or the Saturday Evening Post seek to wed “nostalgia with innovation,” as Fuller Brush says in its promotional literature. As do we all.
More from Licensing Expo in coming days.