Europeans enter the children’s licensing business

In recent months, European program distributors have been seeking ways to muscle in on the licensing and merchandising market....
June 1, 1998

In recent months, European program distributors have been seeking ways to muscle in on the licensing and merchandising market.

At Licensing 98 International in New York, HIT Entertainment, ITEL and EVA Entertainment will all unveil their plans for expansion into off-air rights management. And already this year, the U.K.’s largest multimedia rights owners-Carlton International, Granada Media Group and BBC Worldwide-have all restructured their in-house teams to create better communication between the program makers they represent and the people responsible for marketing ancillary rights.

Much of the current activity in licensing is driven by the changing structure of program financing in Europe.

Increasingly, distributors are required to put up production money in advance and are holding onto off-screen rights in return. Having seen the success of Britt Allcroft’s Thomas the Tank Engine & Friends and now the BBC’s Teletubbies, many companies are anxious to recoup from the ancillary market.

HIT’s expansion into licensing is built around a portfolio of television properties that includes successful animated series such as Percy the Park Keeper and Kipper. In New York, it will introduce potential partners to a new head of licensing, Tim Collins, who, until recently, headed up Universal Studios’ activities in the U.K.

According to Collins, ‘What attracts me most is the opportunity to build a global company from scratch. There are not too many opportunities like that around, but HIT’s reputation as a producer, distributor and video company speaks for itself.’

ITEL also plans to promote itself heavily in New York, though it has been laying the foundation for its licensing activities for some time.

Head of licensing Rachel Barke says, ‘We have been looking at this area ever since we started our animation catalogue three years ago. During the last two years, I have been building up relationships with international licensing agents.’

ITEL’s major asset is its sister company, Cosgrove Hall, which is best known for producing model animation television series such as Animal Shelf and the forthcoming Rocky and the Dodos. ITEL also handles the ancillary rights to the European Broadcasting Union co-production Noah’s Island.

Barke says there is a natural link between television and licensing, which opens the door for distributors to be involved in off-screen activities. ‘TV rights are the engine of the whole property, so it makes sense for us to coordinate things,’ she says. ‘No one will buy a toy from a show they haven’t seen.’

Barke is very clear, however, that ITEL has no intention of building up a big in-house team of experts. ‘My role is to work with agents as a rights manager. We believe the market is too crowded to set up on our own when there are agents who have the necessary contacts.’ In the case of Animal Shelf, key partners include licensing agent TLC, video distributor Buena Vista and Ladybird Books.

EVA Entertainment, which has animated television properties such as Billy the Cat, Pond Life and Flatworld in its catalogue, takes a similar view. Fran Barlow, who has just taken up the licensing role full-time, stresses the need to draw on the existing skills base in licensing. ‘We are realistic about licensing. We believe that we have properties with potential, but also recognize that the market is very competitive.’

The approach at the bigger companies is different. At Granada Media Group, all off-screen merchandising activities have been consolidated under head of media products Simon Crowther.

According to Crowther, bringing all licensing and merchandising activities in-house allows him to operate in ‘a very integrated way. Granada Media Products is very close to the production side of Granada’s business because it is important for producers to see that we understand their concerns.’

Currently, the bulk of Crowther’s work is with non-children’s properties. However, with Granada’s recently launched animation studio beginning to bear fruit, he expects to be able to gear up licensing activity in the children’s area significantly over the next two years.

Granada’s ability to justify in-house licensing activity is partly a reflection of its size. In the U.K., only the BBC is a bigger producer and it too handles licensing and merchandising through its distribution arm, BBC Worldwide.

The advantage of this approach for the BBC has been apparent with the Teletubbies, which have taken the U.K. retail market by storm in the last nine months. The internal planning for that campaign began over two years ago.

BBC Worldwide head of children’s marketing Mark Johnstone says, ‘A lot of focus in the organization in the last year has been on coordinating the distribution and licensing of both children’s and non-kids properties.’

Carlton International has also taken the decision to bring its licensing activities closer to its distribution arm. Managing director Rupert Dilnott-Cooper says it is not his ambition to pull all of the technical expertise of licensing in-house, but to ensure that the company is prepared for any eventuality.

On the one hand, ‘We have to be able to handle the day-to-day running of licensing in partnership with the program distribution business,’ he says. On the other, it is important to be prepared if you hit the jackpot. ‘The idea that there is a meaningful number of projects out there [that] will lead to substantial amounts of licensing revenue is wrong. But we have to make sure that when we get our lucky break, we are prepared for it.’

Carlton still works closely with specialists such as Copyright Promotions Licensing Group (CPLG), one of Europe’s largest independent licensing companies. CPLG head of brand development Ian Downes says there is a ‘trend for program makers and distributors to try and see the process right through from start to finish.’ But he stresses that ‘if you have a good agency as a partner, then there shouldn’t be any great difference in the results you can achieve.’

Downes believes that being an independent company affords CPLG a number of advantages because it can focus all of its energies on the job of licensing. First, ‘We can act as a barometer for demand among retailers and manufacturers,’ he says. ‘The market changes so quickly that you have constantly got to be in touch with what is in demand. That is more difficult for an in-house department.’

Not only that, but CPLG can give an objective view about the value of a property, without having its judgment colored by the investment that a program distributor might have already made in a series. ‘We might have 10 or 20 series being offered to us at any one time, so we are in a position to test the market’s interest.’

Link Entertainment managing director Claire Derry issues a pragmatic warning that companies should not overcommit themselves. ‘We are one of the biggest licensing agents in the U.K. and have had phenomenal success with Barbie in recent years,’ she says. ‘But we know just how hard it is to have a hot licensing product.’

Even proven publishing successes like Goosebumps struggle to make headway against a European market crammed with movie, sports and music spin-offs, she says. ‘The retailers have limited shelf space and want a proven success [that] can guarantee a lot of exposure. They are rarely interested in breaking a new property.’

Derry’s own animated television series, The Forgotten Toys (co-produced with Hibbert Ralph), has done well in the U.K. ratings, but even this is not enough to secure an instant licensing hit, she says. ‘A lot of very good programming won’t see the light of day on major retailers’ shelves. In some cases, you can’t even give program merchandise away because retailers don’t want to take up shelf space with it.’

According to Derry, distributors must accept that licensing is a long-haul business. ‘I suspect that Forgotten Toys will have some success by year five [the show is in its second series]. In the meantime, we concentrate on keeping up our contacts.’

French production company Marina Productions also warns that licensing is a tough market to tackle. Head of marketing Valžrie Seban says that, increasingly, a property needs more than just television exposure if it is to succeed.

‘We are developing a children’s project based around the life of Jacques Cousteau. The advantage for us is that he is a well-known name even without television. But in many cases, licensing agents are saying that television exposure by itself is not enough. You must have notoriety and constant awareness. Agents will not even look at a project unless it has 52 episodes.’

About The Author


Brand Menu