June 16, 2006
Licensing 2006: Looking for 2007’s hottest brands
By Nicole Maestri
NEW YORK (Reuters) - Dora the Explorer shower curtain
hooks. Girl Scouts Thin Mint cookie ice cream. Britney Spears
Licensing 2006 International Show, which is set to run next
week at New York's Jacob K. Javits Convention Center.
The show will bring owners of brand names and characters
together with manufacturers and retailers that might want to
buy the right to use those names to develop new products or
improve on existing ones.
"Movies and entertainment properties for television are all
revealed, and deals are being made right at the show," said
Reyne Rice, toy trend specialist for the Toy Industry
Licensors can make millions of dollars on a single brand.
In 2004, retail licensing revenue reached $105.2 billion in the
United States, and an estimated $175 billion worldwide,
according to the International Licensing Industry
Merchandisers' Association, or LIMA.
Licensing products has moved well beyond the early years of
simply slapping a brand name on a T-shirt, lunch box or some
Brand holders now typically insist on maintaining tight
control over the wares that will display their name -- even
keeping the right to approve the final product -- to make sure
they do not cheapen or misrepresent the brand.
Owners of brands or "properties" -- especially in the
entertainment area -- now also look to develop entire lines of
products to support their brands.
That strategy was recently seen with Microsoft Corp.'s and
4Kids Entertainment Inc.'s development of "Viva Pinata," which
will hit the ground this year with a cartoon TV show, a video
game and Web site.
PLAYING THE ODDS
Licensing can be a lucrative venture for those who happen
to strike a deal with a hot new brand -- like Pokemon when it
first entered the U.S. market or Teenage Mutant Ninja Turtles.
But it can also be a risky business, with bets on even the
best-known and much-hyped brands flopping.
For instance, retailers were left holding unsold
merchandise in 1998 after the overhyped "Godzilla" movie became
an underachiever at the box office.
Even a cultural icon like "Star Wars" is no guarantee of a
hit. While Hasbro Inc. recorded almost $500 million in sales of
its "Star Wars" products last year, it faced languishing
inventory in 1999 after "Episode I: Phantom Menace"
"There's no science to this," said Charles Riotto,
president of LIMA, of picking a successful license.
But show attendees will do their best to scout out the
coolest new brand, character or movie for 2007 and beyond.
At this year's show, Walt Disney Co. will reveal the
celebrity voice behind its upcoming 2007 film "Tinker Bell."
Also attending the show will be toy companies like Mattel
Inc. and Lego; consumer products company Procter & Gamble Co.;
food and beverage brands like Kellogg's and General Mills Inc.;
and mobile and digital properties like Crazy Frog and World
The show will also have a "Sports Licensing Summit," where
representatives from professional leagues and franchises,
including NASCAR, National Basketball Association and Major
League Baseball, will talk about licensing for sports.