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.

 

Global Retail Sales:

According to the 2017 LIMA 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 grew 4.4% over 2015  to an estimated $262.9 billion ($251.7 billion in 2015) in retail sales in 2016

 

Categories:

Entertainment character – $ 118.3 billion (45%)

Corporate/Brand Trademarks $54.6 billion (20.8%)

Fashion $31.1 billion (11.8%)

Sports $25.3 billion (9.6%)

 

Global Royalty Sales:

Royalty revenue from sales of licensed merchandise and services rose 1.3% to US$14.1 billion. (2015- 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%.) This modest increase is the byproduct of a 3.5% decrease in the weighted average industry royalty rate, from 8.5% to 8.2%

 

By Product Category:

Among product categories, Apparel led the way with 14.9% of total global licensed retail sales, followed by Toys at 13.3% of the total, and Fashion Accessories at 11.3%. The fastest growing categories were Infant & Pet Products, as more licensors seek to capitalize on strong industry growth present in both sectors worldwide. Fueled by increases in home ownership and new housing starts in developing countries as well as a stronger housing market in the U.S., sales of licensed Home Décor products grew by 8.2% during the current survey period. The Video Games/Software/Apps segment was again a solid performer, growing 8.1%. It is now the fifth largest segment, accounting for 6.9% of revenue.

 

By Territory:

The U.S./Canada remains the largest market for licensed merchandise and services, with revenue accounting for 57.9% of the global total, up slightly from 57.7% last year. The Southeast Asia/PAC region was the fastest growing of all areas worldwide, with 6.8% year-on-year growth; it now accounts for 3.4% of global licensing revenue.

  • The UK the brand licensing industry is worth around £20 billion at retail and £1.05 billion in royalties. (Source: Licensingpages, with reference to LIMA and The Licensing Letter figures).
  • Asia sales are around $20.4 billion in sales
  • Southeast Asia / PAC region is 3.4% of global revenue at $8.9 billion and has the fastest growth at 6.8% year on year.
  • Australia and New Zealand are around $5 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)

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Overall the key indicator as to what is performing well 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. There is a considerable focus on celebrity, social media celebrities and animals, music and athlete endorsements. Retailers are more frequently launching their own brands or taking licenses directly (DTR=Direct to Retail). There is a shift to greater online sales.

There have been a considerable number of mergers and acquisitions in the industry and there is considerable consolidation. TLC has been absorbed in the CAA-CBG conglomerate. Dreamworks has been acquired by Universal. Disney own the Marvel, Jetix and Lucasfilm archives. Mattel own the HIT archives. DHX own CPLG.

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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