Creating a licensed property from scratch

Last September, I was asked to give a lecture at the U.K. Licensing Show at the Birmingham Autumn Fair. The topic was 'How to Build a Design Concept/Licensing Program from Scratch.'...
June 1, 1998

Last September, I was asked to give a lecture at the U.K. Licensing Show at the Birmingham Autumn Fair. The topic was ‘How to Build a Design Concept/Licensing Program from Scratch.’

I was intrigued to see in the audience one or two seasoned owners of licensing organizations. After the lecture, I asked these hardened professionals why they had attended the talk. To my surprise, the answer was that they had no idea how to build a property from scratch. The reason is obvious when you look at the comparison between the approach of our company, MWC Inc., and that of other licensing organizations.

Licensing companies, in general, take on new television or film properties. Once the dates for the screening have been scheduled, they can then develop a licensing program, basically built on hype predicting how successful the TV series or film will be. In reality, however, no one really knows how successful it will be until the public has responded. These licenses, as we all know, are a gamble and can quite often be extremely short-term.

There are obvious success stories in this market, such as Winnie the Pooh, The Simpsons and Rugrats, but when you consider the number of new properties being launched, there are comparatively very few that stand the test of time.

MWC’s philosophy from the outset in 1990 has been to build long-term concepts that prove themselves over time. By adopting a strategy of launching products featuring a character, such as greeting cards, stationery and giftware, the aim is that these products will sell in their own right.

In the last few years, we’ve nurtured a number of properties, the best of which has been Teddy Tum Tum, developed in-house by one of our contracted artists in collaboration with MWC. Over a five-year period, approximately US$30 million in retail sales resulted. While in TV property terms, this is not a huge revenue, it is still substantial and can lead to establishing a property that gradually moves into animation, thus building a concept into a long-term venture, which we believe is a key contribution to character merchandise manufacturers.

Our present success with Rambling Ted, another property developed in-house with the help of one of our long-term illustrators, is following this principal exactly. Initial licenses were signed for greeting cards, tinware, bedding, fabric, posters and housewares, followed by figurines, stitch kits and balloons. A worldwide book deal with HarperCollins has been reached, with products to launch in April 1999, and a pilot for 26 x 15-minute episodes for television is almost complete.

In 1997, over US$10 million worth of product, based on only four licenses, had been sold. With a major launch by Wedgewood for 26 figurines and 19 giftware products, and plush being manufactured by The Beverly Hills Teddy Bear Company, we are confident that Rambling Ted will be a long-term success.

To create a character or property from scratch is not for the faint-hearted. First, you have to have a very strong idea and a good creator who is easy to work with-someone who will take advice. Many creators have great ideas but no commercial sense, and it is imperative that this relationship is right in the beginning, or the concept will be a disaster.

The concept now needs a plan. The range of product needs to be worked out, including which licensees will get the concept in front of the public in order to gauge the reaction. Children’s books are one way, TV is another, but it can take two to five years to get a series funded, produced and on the air. Rambling Ted started life on greetings cards, as well as on fabric and children’s bedding. Since the response was so good, books and TV then became very important for increasing awareness and exposure.

A coordinated licensing program is essential to gain support for the character and to develop the licensing program with licensees. We have regular licensee meetings to keep everyone informed of each market sector. We arrange cross-merchandise deals in which a licensee’s product is used with product from another licensee as a special promotion, for example, bears can be given away with bedding sets or books can be incorporated with a plush toy.

Retail awareness is an essential part of the education program, and we produce regular mailings to key buyers. Full-page ads in the trade press and a major presence at the Licensing Show in New York are essential.

You can see quite clearly that it is no mean feat to get a new character off the ground. If you do not have a large budget to throw behind a concept, you need to develop the project from licensing revenue and reinvest for the first two to three years at least. Remember, trademarking, brochures, pilots, advertising and exhibitions are expensive. In our estimation, US$100,000 to US$150,000 per year is needed to support any serious attempt to promote a new concept from scratch-that, and very strong nerves.

Michael Woodward is the president of MWC Inc., based in Ridgefield, Connecticut, and the managing director of its U.K.-based founding company, Michael Woodward Creations.

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