Licensing remains as one the most exciting activities of the marketing mix. Many celebrities and brand owners are waking up to the idea that their brands have a value that can be exploited in areas outside their current existence.

 

According to LIMA’s 2nd Annual Global Licensing Industry Survey, which quantifies worldwide royalty revenue and accompanying retail sales; retail sales of products bearing the trademarked names and likenesses of cartoon characters, corporate logos and brands, major sports teams and more totaled an estimated $251.7 billion in retail sales in 2015 – a healthy 4.2% increase over 2014 – with the majority of the growth driven by Entertainment, Sports, Publishing and Celebrity properties. Royalty revenue grew by 7.8% to $13.9 billion due to a combination of retail sales increase, product mix changes and an increase in the average industry royalty rate to 8.5% from 8.2%.

By category, the licensing industry continues to be dominated by Character & Entertainment, Corporate Trademarks, Sports, and Fashion. Together, they represented 87.7% of all licensing revenues in 2015. Character & Entertainment, by far the most dominant category, accounted for 45% of retail sales and was more than double the next highest category, Corporate Trademark, at 21%.

  • The UK the brand licensing industry is worth around £8billion at retail and £420m in royalties. (Source: Licensingpages, with reference to LIMA and The Licensing Letter figures).
  • Asia sales are around $19.4 billion in sales
  • Australia and New Zealand are around $2.3 billion in sales
  • Japan is the world’s third largest market for licensed products after the USA and the United Kingdom, generating $700 million* in royalty revenues and nearly $12 billion* in retail sales each year. (*source: LIMA Global Licensing Industry Survey Report 2016)
LIMA Licensed Merchandise By Property Type 2014

Overall the size of the licensing industry has remained fairly static over the last 8 years, with marginal growth in the last 3 years. Within this, character and entertainment licensing makes up the bulk of activity with around 45% of the market; corporate brands and trademarks make up roughly 21%; sport 13%, fashion 14%, collegiate 3%, art 3%. There have been shifts within the industry.

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The key indicator is what is in retail. It would appear that retailers are concentrating on the brands that are tried and tested and will provide solid sales. These are being ‘topped up by promotional licenses, for instance around blockbuster movies. Retailers are more frequently launching their own brands.

There have been a considerable number of mergers and acquisitions in the industry recently. Disney have acquired the Marvel and Lucasfilm archives which places them in a dominant market position with considerable leverage at retail. Similarly Mattel have acquired HIT.

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Property Sectors

  • Television and movie licensing: Television programmes or series; movies etc
  • Sports licensing: Individual clubs; championships etc
  • Event licensing: Sporting events; Film or music events; calendar dates e.g. Millennium etc
  • Art & Design licensing: Photographs; paintings; designs etc
  • Food and Drink licensing: Food retail outlet promotions; on pack promotions; individual products or ranges etc
  • Personality licensing: Individuals, dead or alive, in all fields from Sport, Music, Film to Science.
  • Institutional licensing: Museums; galleries; tourist attractions; charitable organisations; Cities or regions etc
  • Corporate brand licensing: Individual corporations or organisations
  • Music licensing: Individual artists or bands; club nights etc
  • Fashion brand licensing: Fashion or designer labels etc
  • Magazine brand licensing: Lifestyle and specialist magazines etc