Glimpsing the L&M Biz

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Martin Brochstein

The Licensing & Merchandising business globally is estimated to be around US$170 Billion. India is very new to L&M with lesser then 0.3 % share of the global count. Licensing & Merchandising however is all set to grow and the Franchise & Retail Show which took off in Mumbai today also had a separate smaller conference and showcase focused on the Brand Licensing & Merchandising Business.

The keynote at the licensing show was delivered by LIMA SVP – Industry relations & Information Martin Brochstein who armed with his 15+ years in this space shared quite some insights with the audience.

Stating that licensing was all about branding & marketing, Brochstein encapsulated the essence of Licensing by sharing one of his favorite definitions of this practice “Licensing is the act of renting the emotion engendered by an Intellectual Property in order to sell more stuff”

Resonating with something that one often hears in the movie business, Brochstein pointed out that not every license works and one can never tell which ones will work. “One can have belief, can have data and success stories but one can never predict how the property will fare in L&M. The biggest successes in L&M have mostly always emerged from under the radar” he shared giving the example of Pokemon.
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Within licensing, the largest two categories are entertainment character licensing and corporate brand licensing. Brochstein shared that within the estimated global size of US$170 Bn L&M market, 2/3rds was dominated by North America, followed by West Europe which had a 20% share, Japan at 8% and the rest of the world contributes to 6%. Looking forward, he stated, “The BRIC economies (Brazil, Russia, India, China) are the most exciting ones to watch out for”

He also mentioned that recession had dealt a blow of an approximate 10-15% reduction in the overall L&M gross in 2008.

An interesting slide he shared was on the need to license, both from the licensor as well as the licensee perspective.

Why License

(For the Licensor)

Protection
Brand Enhancement / Promotion
In the entertainment space, its also about enhancing and massaging egos of stars whose images are licensed.
Money (Of Course)

(For the Licensee)

Expand and build the business, bypassing the time and expense of building a completely new brand
To gain new distribution
Diversification
Money (Of Course)

Brochstein also shared some trends

Retail & Manufacturing are consolidating
The velocity of change is increasing

(If something doesn’t take off quickly, its got ten contenders waiting to replace it on the shelves immediately. This, Brochstein pointed out was not the best of things, as there are several examples of Iconic L&M properties that have built slowly and steadily)

A very important point that the expert shared was that L&M takes a while, though people expect it to flow instantly.

He also shared that the pattern of movie releases had changed and it was all about ‘open wide, open big’ and that trend also reflected upon the L&M of those properties.

Brochstein shared that there was a big difference in the L&M performance of franchise and sequel movies as compared to one off, original story idea movies. Sequels and Franchises allow the time needed to develop an ideal L&M program, he hinted.

Talking about Challenges, Brochstein shared

Maximising Price / Value relationships
Heirarchy of L&M goals
Dealing with the effects of the economic downturn

He concluded his address saying, “The smart ones are making it through this period. They are also developing and innovating some great new programs which will herald the upswing”

connect@animationxpress.com

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