Licensing Creative Properties – Merchandise and Characters

Posted on | December 4, 2013 | No Comments

One strategy for digital media growth is the licensing of creative intellectual property, a $150.8 billion industry that is increasingly global.

Intellectual property law provides protection for creative content and licensing is required when a desired property such as an animated character is controlled with a copyright, trademark or even a patent. Licensing is giving permission to another company to use a specific form of its intellectual property. Or, a company might want to license a creative property from another company. In either case, a Licensing Agreement defines clear conditions for the relationship and a royalty is paid for using the protected signage or characterization on a product such as a sleeping bag, lunch box, doll, jacket, etc. In this post I examine licensing merchandise and character properties that are protected with a copyright or trademark.

It may be useful to understand the scope of the business and some of its biggest license holders and licensors. One would have to start with the Walt Disney Company, especially in light of their acquisitions of Lucasfilms, Marvel, and Pixar. While 2012 figures still rate the Disney Princesses at $1.5 billion as the highest source of revenues from licensing, Star Wars merchandise at $1.48 billion is a close second. Add other properties licensed such as Mickey Mouse, Winnie the Pooh, Cars and High School Musical and you can understand why Disney controls just over half of this market. The figures are even more extraordinary when you realize that they do not include merchandise manufactured and sold by the property owner.

According to the Licensing Letter, some 34 entertainment/character properties in Canada and the U.S. had retail sales of licensed merchandise of over $100 million. The recent growth has been significant with sales of licensed merchandise in the U.S./Canada alone increasing 136% between 2011 and 2012. Along with Disney, Hello Kitty is a significant property with royalties of just over US 1$billion and Rovio’s Angry Birds totaling over $500 million.

Peter Vesterbacka, the Chief Marketing Officer of the Finnish company Rovio publicly stated that they wanted to turn Angry Birds into a “permanent part of pop culture”. From a $.99 game to a universe of signage, it’s difficult to walk through the store without seeing Angry Birds toys, candies, stickers, shirts, physical games, etc. I took my daughter to NASA’s Johnson Space Center near Houston and she enjoyed playing in a huge “Kids Space Place” with Angry Birds 3-D sculptures, imaginative games and all, of course, adorned with their trademarks (See above image).

Licensing covers a wide range of other property types besides Entertainment/Characters such as Fashion, Sports, Collegiate, Art, Music, and other types of Toys and Games. For those categories as well as Media and Entertainment, a good source of information is the Licensing Letter.

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Anthony J. Pennings, PhD recently joined the Digital Media Management program at St. Edwards University in Austin TX, after ten years on the faculty of New York University.

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