Copious amounts of ink flowed in the pages of the trade press and the New York Times on the subject of the most recent Licensing Show, which took place June 13–15 at the Javits Center in New York. Unhappily for exhibitors, however, the lucrative patina around the likes of Eloise and Curious George could do little to lighten the gloomy countenances of those on the floor. Most licensing veterans chalked it up to a certain post-apocalyptic malaise, noting that the number of licensees who were burned by stunning failures appears to be growing exponentially — starting with Disney’s Hunchback, moving along to Godzilla, and culminating with Star Wars. And licensees will tell you that one major failure hurts everyone, particularly as the royalties exacted from them (viz. Star Wars, which topped out at 9%) move ever higher.
Such dire times found most licensors clamoring for the security of the classics, abetted by the brand-sustaining powers of cable television. Cable TV means that your favorite program from 25 years ago never dies — and neither does the possibility of licensing myriad products. Leave It to Beaver tote bags, anyone? In any case, nothing could be more tried and true than backlist publishing. Hence the numerous book properties on deck, including Babar, Raggedy Ann and Andy, Rainbow Fish, Miffy (Dick Bruna), C.S. Lewis’ Chronicles of Narnia, Franklin the Turtle, The Lord of the Rings (based on a live action movie this time, and opening against Harry Potter in the 2001 holiday season), Peter Rabbit, Maisy, Curious George, Dr. Seuss, Clifford, pat the bunny, and Harold and the Purple Crayon. And, as Viacom licensing maven Risa Kessler notes, a lot more non-classic oldies are returning — Strawberry Shortcake is 20 years old and in the midst of a mid-life revival, with plenty of licensing attached (Viacom and Cinar). While many of these properties are being licensed by third parties (Warner is licensing the Harry Potter merchandise, demanding — and getting — those outrageous royalties), Scholastic is handling the licensing for Clifford, and Golden is developing its own program for pat the bunny.
But Harry Potter is unquestionably the moment’s 1000-pound gorilla. When a property with this much hype and money behind it flops, it drags the whole industry down with it. Based on the findings of focus groups, some close to the property feel that the range of licenses proposed by Warner Bros. is too great (Hasbro is the master licensee), is inappropriate for this kind of property, and could sink the business. (It is difficult to conceive of an audience for Harry Potter action figures, but they will undoubtedly be marching into toy stores near you.)
Meanwhile, the fair was bristling with licensing-industry versions of rightscenter.com and subrights.com, though they were more ambitious, with a dash of Inside.com thrown in for good measure. There was toynetwork.com, which went live following its launch at Toy Fair, and is a subscription-based B2B with links to all the commerce and communication resources you’ll ever need — for a mere $5000 annually. Initial agreements have been signed with Mattel, Hasbro, Universal Studios, and Dreamworks, among others. Also boasting a presence at the fair was WHN (whatshotnow.com), which lets retailers shop for branded product, and allows potential licensees to purchase rights to make products based on those licensors’ brands. So far Coca Cola and the 2002 Olympics have signed up, at a cost of $1,000 per month, following a six-month trial period. (Both licensor and licensee pay the fee, but retailers log on for free.)
As glitzy as they were, such Internet initiatives failed to satisfy an e-commerce panel sponsored by LIMA (Licensing Industry Merchandisers’ Association), where there was much comment on the likelihood that, if the US does not become more proactive, it will lag behind Europe in adopting PC-less technology. Panel member Nigel Huddleston, manager of the business consulting division of Arthur Andersen, told those assembled that his Mum, who lives in the UK, did her food shopping, made her travel arrangements, and did myriad other things all from home without benefit of a computer — via interactive TV. Others cited the phone as a successful tool for interactive commerce across Europe. Incidentally, the panel, billed as “E-Commerce: The Way We Are Is Not the Way We Were,” was chaired by John Barbour, whose amusingly self-deprecating manner was explained by the fact that he is CEO and President of Toysrus.com — a notable e-commerce failure to which Barbour frequently alluded.
For a final irony, we’ll have to wait for next year’s show to see whether or not licenses for all those imported megahit TV programs, from Survivor (UK) to Big Brother (Holland) to Iron Chefs (Japan) — and let’s not forget Who Wants To Be a Millionaire (UK) — share the spotlight with the longer-lived and undeniably classier imports: Dick Bruna, Jean de Brunhoff, J.R.R. Tolkien, and C.S. Lewis, to name just a few.
Sidebar: By the Numbers
It’s comforting to see that meaningful licensing figures are almost as difficult to arrive at as are book publishing ones, though for different reasons. A June 12 New York Times Business Day article features a chart under the presumably ironic heading “Literary License,” showing publishing royalty revenues at $40 million for 1999. However, LIMA’s own figures, presented at BEA, put that figure at $30 million. In addition, the presentation notes that “some users of this survey would want to also arrive at an estimate of Retail Sales of Licensed Goods. Industry practices suggest that in order to obtain retail sales of licensed goods, a good multiplier is 20,” but their own presentation has Publishing Licensing Revenue in Retail Dollars at $5.25 billion. The Times uses The Licensing Letter’s more conservative $1.3 billion number, which is, according to publisher Ira Mayer, a consensus figure based on sales estimates by publishers, retailers, property owners, and agents. Moreover, says Mayer “their sample is biased toward the entertainment world.” It is complicated, he explains, to break out publishing revenues on properties that may begin as books, but go on to become television and movie megahits with independent licensing programs and with merchandise that is sometimes only peripherally related to the underlying property.
