Report – Margins and Merchandise: What has Licensing Ever Done for Us?

Posted on: Friday 17 March 2017 1:18am


Tim Collins
(The Brand Director)

Susan Bolsover (Penguin Random House) Anna Hewitt (Spin Master Toys)
Katie Price (Hachette Children’s Group)
Ingrid Selberg (Consultant)

  • Why children’s publishers need to understand the wider opportunities available within the world of licensing.
  • Expert panellists discussing both the acquisition and exploitation of IP (Intellectual Property) and tips on how best to navigate the wider licensing world.
  • 360º branding – defining and understand what is meant by the term.

The first key point was that in terms of trade association statistics, publishing is still very much in growth, with most categories still healthy. Fiction enjoyed the biggest percentage increase largely thanks to authors such as JK Rowling, David Walliams, Jeff Kinney and Roald Dahl who are all still posting rises in growth. Licensing opportunities were very important.

What should a publishing company wishing to acquire a licence for a TV show also consider?

Katie responded by stating that publishers should think about a range of licensing opportunities such as a big TV channel, a big toy partner, live events, stage shows, costume characters and more. She went on to say that ‘if all the boxes are ticked it can lead to success but it doesn’t always guarantee it.’ She added, ‘We’re always interested to talk at different stages – if there’s already a TV programme it’s already in a better place.’

Anna of Spin Master stated that ‘Editors are looking for story and character. You may have the best TV platform in the world but you may not be able to make toys out of it. How do we make it so that children are interested in the story and toys? Licensing isn’t always about TV merchandise, it can work in other ways.’

Susan agreed that the story and characters are crucial. ‘The story is the ultimate key. If you create for merchandise it can create cynical characters. ‘Thomas the Tank Engine’ is a perfect example of story first.’

Anna made the point that many people think that licensing is easy – a quick way to get rich and make a lot of cash but successful examples of it such as ‘Paw Patrol’, ‘Dora the Explorer’ and ‘Peppa Pig’ are only 3 of roughly 7 or 8 enormously successful brands in over 20 years so the reality is successful licensing is not that easy at all. ‘The scale of expectation is unreal.’

Tim asked the panel if it was harder to break through now.

Ingrid used the example of the ‘Moomin’ books which she read as a child but sees experiencing a resurgence many years later as it develops into a significant enterprise. ‘If you’d have been impatient you would’ve given up years ago. The people responsible for the brand have stayed true and curated it.’ Susan agreed with this – ‘patience is key.’ She pointed out that ‘Moshi Monsters was huge., It was a great moment while it lasted but it was important to understand it wasn’t going to be a classic brand.’

Anna pointed out that ‘If you want something to last you need to think about the brand. A variety of portfolios with different lifecycles is really important.’

Gaming and YouTube as a new form of story-telling

Katie responded by referencing Pokémon having been around for 25 years and is still incredibly successful with ‘many more years of Pokémon to come.’ She stated it’s a brand that appeals to both adults and children. ‘I’d like to hear from more gaming companies as it’s a way into books for children who don’t read so much. She referenced YouTubers as another route into reading.

Susan answered this question by talking further about YouTube sensation, Zoella. She explained they identified Zoella as ‘someone who reached an audience in a completely different way.’ Zoella vlogs make-up and beauty tutorials reaching 15m subscribers. Before Penguin Random House were involved she had already made a beauty collaboration with Superdrug. YouTuber orientated books and gaming books have become a new and growing market.

Ingrid agreed that there is growing interest in YouTubers for potential books. Zoella is the most successful and it’s very significant to see the influence of these people on the 18-30 sector.

How important are franchises?

Susan answered that ‘One of the most rewarding and challenging things is working on classic brands. We have to think carefully about how to evolve it. It is always about being mindful of the origin.’ Publishing the book, making a TV series, a film with Sony pictures for example, also goes towards paying for the original art archive of Peter Rabbit and the ‘publisher has a role and duty to maintain this.’

It is difficult to say exactly what point something becomes a classic. Brands such as this are ‘evergreen brands.’ There is also a difference between classic brands and retro brands such as ‘My Little Pony’ and ‘Care Bears’ and the reinvented brands such as ‘Bob the Builder’. Classic brands can be about how long you wait. The panel suggested that ‘Thomas the Tank Engine’ is stable and a classic but ‘Bob the Builder’ or ‘Teletubbies’ were perhaps not classic brands. ‘If there is a publishing heritage there is a kudos.’ Anna spoke about how her company makes the new Noddy toys and Hachette publish the books. ‘In my personal opinion, I like the new animation, I prefer it to the one that came before. It has to evolve with the audience. Noddy has a tablet. Children can relate’.

‘Subsequent relaunches can devalue a brand but playing safe is not where you get big success’ thought Ingrid.

 Can brand development be a benevolent benefactor?

Susan said that the structure used to be a lot more linear: the TV show gets made, then publishers, then toys, but now it’s symbiotic. She used the example of it costing £21m to make 2 series of Peter Rabbit so it’s still a massive risk for an established brand. It has be a co-funding model. A package of rights you can look to recoup on.’ Katie added, ‘TV is a form of advertising, not a revenue stream. That’s why YouTube is so important.’ Anna continued, ‘To get a TV show made, the amount of money needed and the commercial revenues required – you can’t afford to be that protective. If you can protect a brand with a 5-10 year vision then lucky you.’

Is there anything different about a magazine as a printed product?

Within the UK 42m copies of magazines are sold per year totalling £150m at retail –brands and profiles such as ‘Paw Patrol’ and ‘Frozen’ are some of the market leaders. Katie made the point that a magazine is still throwaway. ‘It’s an impulse buy. They can be more expensive than books for bumper issues but it’s still throwaway. It’s a shame because the content is really excellent. For the child the attraction is often the  cover-mount on the front.’ Anna added that, ‘Magazines can take your brand into other areas your brand wouldn’t necessarily reach.’ Ingrid said that there can be a lot of waste in the production of magazines since retailers can throw half the stock away at the end of the week. An activity book can stay longer. ‘It’s very hard to make money in magazines and the range is getting ever smaller. If you’re not one of the big brands it’s an easy way to lose money.’

In terms of the 360º model – what do the panel think in terms of what’s appropriate for kids’ IP?

Susan began by stating that primarily it’s ‘making an emotional connection. The live space is really important for us – making a connection. Schools, theatre, experiential things for example, the Festival of Light at Longleat, Grottos for The Snowman brand. Cross generational is really important.’

The panel was aware that the 360º model sets such huge expectations and is largely a marketing term, however i’s about reaching the consumer in every possible way from toys to cakes to hotels to stage shows and more. It is important to have these opportunities but it is impossible to do everything at once as the finances are not available. In terms of IP, looking at who the partner is and their track record, as well as the money, is crucial. Someone could have a great TV show and a great platform but more is required such as YouTube or a knowledge on how to reach parents. There may be a great show but if it can’t reach consumers there’s a problem.

Ingrid gave Disney as the ultimate 360º brand. ‘It’s in the DNA of the company. The emotional commitment and touch point – it’s extraordinary – it’s an incredible force. I admire how they bring that about…It’s hard to do and rare.’

A member of the audience raised a question regarding gendering of merchandise and could the panel see the beginning of brands breaking this down.

Susan was quick to point out that it will never change unless the retailers want to change it. The buying structures in retail dictate whether something is categorised as boys’ or girls’. ‘If you go and meet with a retailer you meet with a boys’ buyer or a girls’ buyer but I don’t see how that’s going to change.’ Anna added that The Entertainer toy shop doesn’t label gender aisles in its stores but has found that ‘girls will go to boys’ aisles but not the other way round due to school and peer influences. ‘At the younger end it does stay gender neutral.’

Ingrid referenced the Moshi Monster brand again saying it was interesting – ‘they were cute so it was for girls and there was the gaming so it was for boys. It was considered gender neutral.’

Susan continued this by stating that some brands start off in one space and end in another. Shopkins started as a girls brand but now they’re appealing to both. Some brands like ‘Despicable Me’ and ‘Star Wars’ are met positively by both boys and girls so are gender neutral.

Kelly Beckett
Writer & Media Researcher
Scribble PR

CMC Rights Exchange @LBF 2017 Blog