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Licensing royalty revenues take a slide, brand owners seeking new retail opps

It's been a tough year for the licensing industry, as LIMA's just-released annual Licensing Industry Survey revealed that brand owners collected 5.6% less in licensing royalty revenue in 2008, raking in a total of US$5.7 billion for the year.
June 3, 2009

It’s been a tough year for the licensing industry, as LIMA’s just-released annual Licensing Industry Survey revealed that brand owners collected 5.6% less in licensing royalty revenue in 2008, raking in a total of US$5.7 billion for the year.

Consumer spending was especially weak in the second half of last year, as the US Treasury Department reported a 3.8% drop in Q3 and a 3.5% decline in Q4 and that had a direct impact on licensor revenues.

Royalty revenue declined in eight of the nine categories of licenses tracked in the LIMA survey, with the exception of the collegiate market, where royalties collected by schools and affiliated organizations actually saw a 3.5% uptick to $208 million.

The character segment still generates the largest portion of licensing industry royalty revenues, accounting for 46% of the business, with other major segments including corporate trademarks/brands (17%), fashion (14%) and sports (13%).

Interestingly, survey responses also indicated that brand owners are exploring retail opps outside their regular distribution channels. Several reported looking at relationships with smaller, indie retailers, which respond more quickly to hot market trends and are more willing to take on new, untested properties and products. Supermarkets, drug store chains, specialty chains, online retailers, dollar stores and warehouse clubs are also seemed to be growing in importance to brand owners and licensees.

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