There's good news . . . and then there's good news. According to License! research found in our Industry Annual Report 2003, the worldwide licensing business experienced gain in 2002. Of course, that's good news. But that's not what I'd like to speak to in this month's column; you'll find our full report by category beginning on p. 20.
Instead, I'd like to focus on the "good" news: The business of licensing and brand building hasn't even scratched the surface or reached its full potential. Here's why:
- There exists a multitude of brands that haven't acknowledged licensing as strengthening their overall consumer picture, and adding to their bottom lines. Of the categories where this potential exists: Corporate Brands and Trademarks.
- There exists a variety of licensors that have only just begun to build their images through licensing, or have realized some of their proprietary brands are ripe for licensing. Because of that, more brand extensions are on the way. Expect the Art, Interactive, and Sports categories to flourish.
- There exist waters still uncharted. While the licensing business has matured at a greater rate in the U.S., many international territories have yet to be developed by licensors and licensing agents. Great strides have been made in the UK, Germany, and Japan, among others, but the bulk of those strides have been entertainment driven. Some regions outside the U.S. are difficult to navigate. Why? Local tastes and preferences play a major role in product placement. In territories such as Latin America, the adage, "Think Global. Act Local." rings true. Once barriers have been broken via local licensing agents or licensors themselves in territories as such, a variety of opportunities will exist. All categories in licensing will have major potential.
- There exists more opportunity in co-branding, promotion, and sponsorship. Here, licensors and retailers alike can capture consumer demographics never captured before. Plus, licensors can tap into retail channels they've never sold before. Crossover into categories is a win-win for all involved. Entertainment and Fashion. Food and Character. Interactive and Entertainment. Fashion and Sports. Art and Interactive. Publishing and Fashion. Art and Entertainment. The possibilities are endless.
Of course, as with any industry, oversaturation becomes the major challenge. Consumer information is key. In addition, keep a close eye on larger retail real estate (there's always a push/pull when an area is not performing). Be on the lookout for specialty/independents as they are a true bread-and-butter business and tend to excel in hard economic times. Although Internet business reached its high and low, the Internet offers a host of opportunity once a major hit has been made.
Next month, we'll focus on a subject that may change (and in some cases is already changing) the face of the food business: obesity. A consumer trend like that can have an effect on many categories, not just food.
If you're out and about for the Brand Licensing London show in the UK, October 28 to 29, don't miss our panel discussion, "How to Build a Property Overseas."
In the meantime, I hope I've left you with some food for thought . . .