Brands gain exposure to uncharted channels
Licensing a brand name to the right kind of products can make a business a fortune, and it’s not just children’s TV and film characters that are popular. Grown-up brands are getting in on the act, finds Lucy Handley.
The licensing of brands in the children’s market has long been successful, with cartoon Peppa Pig, for example, taking its show to 33 UK towns this year and 10-year-old boy Ben 10 selling everything from toy characters to T-shirts in an exclusive deal with Tesco last year.
But grown up brands are capitalising on their names to launch products too. The BBC’s Planet Earth licensed live show toured the US last year and its Walking With Dinosaurs live event made similar money to the biggest rock band tours, according to a BBC Worldwide spokesman. The BBC is now looking at taking the Planet Earth tour to Japan and Australia, and is working on a Walking With Dinosaurs 3D film to be released in 2013.
Meanwhile, BMW is producing a range of sunglasses with licensee Polaroid Eyewear for the Chinese market, which will retail at $300 (£189) a pair (see The Licensee, right). According to Kelvyn Gardner, managing director of trade body the Licensing Industry Merchandisers’ Association UK, licensed products had a worldwide retail value of $182bn (£115bn) last year, with the US being the biggest market, followed by the UK with about 20% of the market.
You need to know your brand inside out and backwards and look at that first touchpoint with licensing and make sure it is logical and won’t damage your business in any way
Alan Fenwick, Turner Enterprises
But many brand owners may be wary of giving away control of their brand to a third party. “Brands may be keeping themselves to themselves because of some kind of internal concern. One of these can quite often be a fear that licensing can dilute their brand or that it would be damaged,” says Gardner.
But brands that allow a licensee to make products can expect to get a healthy 10-15% in royalties from the sale of goods.
Agencies may get involved with finding partners for a brand and brokering deals. For example, Omnicom-owned Beanstalk works with brands such as rapper P Diddy to produce his clothing line Sean John and Paris Hilton Entertainment to produce false eyelashes and stick-on nails under her name. Beanstalk says its clients’ combined retail sales were $2.2bn (£1.39bn) in 2009.
Industry show Brand Licensing Europe last year had a 16% increase in visitors compared with the previous year, with more than 7,000 visitors and exhibitors. Noticeable at the show were heritage brands aimed more at adults than children, such as the Museum of London and the Royal Opera House.
Gardner at LIMA says this is part of a growing trend. “We have seen a real influx of new members from the heritage sector. [What they do best] is going into their archives and combining what they find with something new,” he says.
Careful brand extensions are also set to help media brands expand this year. TV shows and entertainment brands have long licensed their characters to soft toys and games, but these have tended to be in the children’s market.
This year will see a raft of more grown-up launches from brands such as CNN (see The Licensor, above), Discovery and BBC Earth, the umbrella brand for series such as Planet Earth and Walking With Dinosaurs. Discovery Expedition will license its name to outdoor gear aimed at men who like shows such as Man vs Wild with Bear Grylls and Deadliest Catch (see main picture). It will also roll out holidays under its Adventures brand, explains Nicolas Bonard, senior vice-president of Discovery Enterprises.
“Discovery is synonymous with exploration, knowledge and adventure. In keeping with this, we are launching a new brand strategy to create compelling products and experiences,” he says.
BBC Worldwide’s director of marketing, global brands Julia Kenyon explains that although the Natural History Unit has been producing programmes for 50 years, there is now a move towards capitalising on the broadcaster’s brands beyond the television series. “It’s about creating a brand that brings together what we have been doing on TV and with DVDs. We are looking at a broad family audience and adults are a key part of that for us,” she says.
BBC Worldwide is looking to further the reach of its nature programmes in the US. “Our content is huge outside the UK. The BBC is huge in the US and it is strong for factual content, but we had not really communicated to people about our natural history offering even though that is a crown jewel for the BBC here. Planet Earth showed how popular strong branded content can be. [Planet Earth Live] was a natural extension beyond seeing it on TV,” Kenyon says.
Another of these extensions is a new touring exhibition called BBC Earth Explorers, which will show interactive behind-the-scenes footage of how its natural history programmes are made in remote locations and extreme weather. This will tour the US over five years and will be run by event company Global Experiences Specialists following a deal signed last month.
Making sure the content reflects brand BBC as well as the essence of the programme are key to getting licensed products and shows right, Kenyon says. “We have quite a strong view on the way our brand should be managed and have very clear checkpoints – such as approving content to be used for licensing – so we have nothing on the market we are not happy with.”
Although letting a third party use your brand on products could be seen as literally a license to print money, this should not be a brand owner’s view, according to Kenyon. She says: “We get a large number of approaches, which means we have to be quite rigorous. Even though something might look commercially tempting, if it is not right for the brand, we won’t do it.”
The licensee – Polaroid Eyewear
Polaroid Eyewear makes sunglasses for a variety of children’s brands including Disney and Hello Kitty. But this month it launched eyewear for BMW, the first time the car-maker has licensed a third party to sell via retailers other than solely through its dealerships.
Selling at more than $300 (£189) a pair, Chris Knight, sales and marketing director for Polaroid Eyewear’s EMEA and Asia regions, is convinced the launch will be successful. “China at the upper end is a sort of bullet-proof market, where people accept very high pricing and look for top quality. If someone wants a product, brand or item they appear to be ready to pay enormous amounts for it. If we tried to take that into the UK optical channel, we would get a big knock back,” he says.
As a licensee brand, Polaroid Eyewear’s UK sales manager Rebecca Harwood Lincoln says that it is important to pick the right partner brands. “As a licensee we have to make sure the business will be incremental from what we do at the moment. We make sure the licensor is looking for us to distribute in markets or channels where we are already very strong.”
Knight adds that he often comes up against marketers who feel their brand has more influence than it actually does. “A brand may be powerful in its own arena but if you stick it on another product and the consumer or trade don’t see it as relevant then you are just another one of the many.”
The licensor – CNN
CNN made its first foray into the world of licensing when it launched a range of branded diaries and travel journals last month after it agreed a deal with Letts Publishing.
The Turner-owned channel launched a licensing division last March to publicise the brand outside its traditional channels. The brand is following the success of parent company Time Warner in this area. The owner of Turner has licensed properties such as the Harry Potter films, while The Cartoon Network, which is part of Turner, has seen money pouring in from its Ben 10 licensing agreements.
Extensive research was carried out before the deal with Letts was signed to ensure the products would match the brand’s values and would appeal to CNN viewers.
Alan Fenwick, vice-president EMEA for consumer goods division Turner Enterprises, says the most important point about licensing the brand is to find the right partner. “You have to enter into this sort of partnership with care because you are entrusting your brand to be executed by somebody else.”
And finding the right partner has clear benefits. “We are both in this to generate exposure for our brands and to make money,” says Fenwick. He adds that marketers must also be realistic about what their brand can stretch to.
“You need to know your brand inside out and backwards and look at that first touchpoint with licensing and make sure it is logical and won’t damage your business in any way.”