Each of our examples emphasised the importance of financial backing, in particular for legal protection and marketing. Each explained the continuing process of evolving your strategy as you gather more feedback and commitment. Each talked of how it's impossible to do it alone and that having an industry 'insider' helping you is crucial. And each has had to think imaginatively about how to create 'stand out' in a cluttered field. Their methods and lessons are invaluable to others attempting the same thing. Their experiences coming into the industry provide useful food for thought for industry stalwarts.
Groovy DistributionGroovy Distribution's first incarnation was as a small chain of independent retailers called Groovy. It then became a manufacturing and distribution business helping retailers like the Gadget Shop with ideas like Gadget Girls. When the founders decided that their concept Rock Hard Fairies had a future as a consumer brand, they decided to take it to the market themselves.
Groovy's Martin Baker thinks it's important to think big, right from the start: 'You don't get your windfall back in the shape of a multi-million dollar brand unless you invest heavily.' He says that Groovy started with talent, connections and experience in related industries like retail and manufacturing and then looked for financial backing. Martin recommends looking for investors that will be on your side throughout.
Martin sought advice on I.P. protection from books and the internet before hiring a lawyer to protect the Groovy brand. 'We nearly had a heart attack when we got the bill, but it's investment for the future,' he says.
Groovy has stayed small (it is still just five people) and hired in the help it needs, including a licensing consultant to help it avoid some of the obvious pitfalls. The company is seven years old and the idea for the Rock Hard Fairies has been in development for two years. It was first shown at Spring Fair 2003 and was launched to the trade at Autumn Fair and Brand Licensing 2003. At all times Groovy wanted to present a well-developed idea and a professional style. So it manufactured sample products (on sale in a French chain called Soho at the moment) and created top quality graphics. It invites feedback to help evolve the look, such as asking children to make up stories about the Rock Hard Fairies, and hopes that having a concept rooted in a subject with its own folklore and fans will help the property grow.
Being a small company meant funding a pilot animation was too expensive, so Groovy's strategy has been to protect and expose the brand, make products and then attract animation partners. Since the Brand Licensing show Groovy has been busy exploring leads and hopes to sign key licences by the end of 2003. The company intends to plough all guarantees back into the brand and expects royalties to come on stream by summer 2004. As products launch Groovy will activate its marketing budget to promote the brand and to refine the I.P. protection. It will also launch a 20 page comic book to explain the history and backstory for the Fairies and then start honing the story lines for development into games and animation.
Martin says that in hindsight more funding would have enabled things to develop more quickly than they have. 'You do get scared, spending all the money on one brand. But you have to remember that in your mind things are already there, it's a question of bringing them into reality.'
PacemakerLuke Smith and Paul Cherry founded Pacemaker to bring entertainment concepts to market. Both are ex-EMAP marketers and wanted to use their blue chip marketing experience to enter the animation scene. They saw a gap in the market for a post-watershed show in the vein of South Park and created a concept called The Turds in which characters with toilet-humour names occupy a fictional world with story lines that pay homage to famous movies, stereotype characters and the dark humour of the post-club world.
The company's five-year strategy was to drive both animation projects and merchandising simultaneously. This 'double hit' would help to raise awareness quickly with both both consumers and production companies. The first big break came when the managing director of the Gadget Shop requested to see the proposal for a line of collectible figurines based on the characters. His interest led to confidence from other manufacturers and the deals began, first with manufacturer Character Distribution for figurines.
Well aware that Pacemaker was new to the licensing industry, it set out to offer more than the usual services a licensor gives to its licensees. Luke expands, 'For example, we created a different licensing contract, offering the manufacturer the master licence and first refusal on distribution of other products or territories if they have the capability. We also requested realistic advances and we do all the product design and prototyping in house.' Pacemaker also provides trade marketing and consumer PR and has even been training licensee staff in telemarketing techniques. 'We are offering more because we have to, as an unknown brand,' says Luke.
'The internet and PR are the two most powerful and cost-effective tools for a start up company,' says Luke, who has so far used both to great advantage. When the company launched the Turds website there wasn't enough funding to create the site in its entirety. So a holding trailer went up in May 2002 asking visitors if they wanted to be informed when the site finally went live. It did this in early November and 20,000 logged on immediately. FHM featured it as website of the month in November.
With a second range of figurines in production, animation is now top of the agenda and Luke hopes that the products and the finished site will help illustrate the popularity of the brand. One major studio has already taken the concept to final stages before declining it and discussions are well underway with another.
As with all start-ups, Pacemaker worked cleverly with the resources available, enrolling the right people, working out of an attic and using all savings as investment. The company is now profitable and expects to make £2-3m retail sales in 2004.
Luke's advice to new companies launching new brands into the market is to 'Keep your focus' and he admits that presenting a left of field project to the market has sometimes been a very painful process. It was tough getting retailers and trade press to look at The Turds. But after great tenacity the company is now getting calls from mainstream retailers wanting to list the figurines and from family broadcasters interested in the animation.
Meanwhile Pacemaker has two more concepts coming to fruition: England's Glory, which will be launched in September 2004, and Leo, described as Jungle Book meets Huckleberry Finn. Leo has been signed by Metro Toys, that will launch plush and toys in February 2004.
SkaramooshSkaramoosh is well known in the television business for producing animation but until now has always worked on commissions from clients. It recently produced the animated series Spooky Sisters for Disney, for example. It now aims to create and manage its own content in addition to working on commissions. The person charged with investigating new concepts is Alison Warner and, because Skaramoosh isn't known as a co-production partner, she has had to proactively look for ideas. She says: 'Broadly speaking there are three ways ideas come to you. Firstly they already exist, perhaps as books. Secondly you create an idea in house. I feel strongly that one person must have creative ownership of the property, which isn't always compatible with an inhouse creation. Thirdly you wait to see what crosses your desk through networking and talking.'
It was by the latter method that Alison has discovered two properties, one of which Skaramoosh liked so much that it made a promotional reel and presented to the Cartoon Forum in 2002. It then took a year to raise the finance to make the show. And this is where most of the lessons are learned. Alison says it takes time to evolve a business plan and realistic expectations for your property. Finance is achieved through the sale of equity and key TV distribution. And the opportunities for licensing and merchandising are important parts of the pitch. For this reason it's good to talk at an early stage to people in the licensing business and essential to have some-one dedicated to representing your property. Skaramoosh already has a licensing specialist lined up to represent its new property in the UK and aims to be in production with the property in early 2004.
Alison likens the funding process to putting up a flat pack box. You have to hold all four sides up in the air at the same time and then fasten the lid securely. If one side falls, usually others do too.
A strong message from these entrants to the market is that licensing professionals are prone to asking the same questions to new companies, such as 'When is it on TV?' Agents often seem to be looking for quick results. And the perception is that if you can start a bandwagon, every-one will jump on. There are clear defences for these attitudes in a such a highly competitive market but the Brand Licensing show demonstrated just how many good ideas are out there. Looking at the new talent and being flexible about bringing on new properties in the market should be the lifeblood of the industry.