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Consumer Products

Opinion: The entertainment licensing game has changed. Are you ready to play?

Coming out of Licensing Show last month, industry vet Scott Shahmenesh offers up some tips on entering the world of entertainment licensing in an era where kids are moving between iPhones, iPads, TVs and Xboxes (sometimes all within the course of an hour) to get their content fix.
July 11, 2013

My friend Dave has an eight-year-old whirling dervish of a son named Adam who works his way through a room of toys, electronics and media like a contestant navigating an obstacle course on Wipeout. On a recent visit to his house, Adam played Fruit Ninja on his dad’s iPhone, watched a Black Eyes Peas video on YouTube via a laptop, surfed the web, used the Drawing Pad app on an iPad, queued up his Xbox to play Call of Duty, built a Lego robot, sprawled out on his belly to catch an episode of SpongeBob on Nickelodeon, then grabbed his Kindle and went up to his bedroom to zip through a few chapters of Diary of a Wimpy Kid. I was exhausted just watching this happen – all within a one-hour time frame.

This is a perfect example of how next to no singular form of entertainment has the impact on kids that it had less than a decade ago. New entertainment properties come and go so quickly, it can be impossible to capitalize on them by getting products on the shelves, before the craze is over. If you start while a property is hot, it’s usually dropped from the radar before products have a chance to follow. Just five years ago, a singer/dancer like Psy with the music video Gangnam Style (which had more than a billion views on YouTube) would have generated enough momentum to justify a huge merchandising program. Yet we saw only a handful of products on the shelves before Psy’s moment came and went. Kids quickly moved onto the Harlem Shake. And somewhere in between the two,we were all singing “Call Me Maybe.”

Still, there will always be breakout properties that garner attention and capitalize on merchandising opportunities, with many even becoming solid performers. While the challenges around achieving success continue to rise, there are some things you can do to survive and thrive in the new content jungle.

1. Stay Alert. Look at your competitors and the up-and-comers. See what’s working and what isn’t. While it’s clearly a whole new world, many entertainment providers appear to be operating like it’s business as usual – which blows my mind! They seem to be cranking out content without any thought as to how they’re going to capture an audience or subsequently build a merchandising program around it. Even if you believe your property is markedly different than anything anyone has ever seen before, you should still be aware of everything that’s happening around you. Be a “student” of the business – don’t operate in a vacuum. This applies most specifically to those involved in creating the concepts. For example, there’s nothing that can replace regular visits to retail stores like Target, Walmart or Toys ‘R’ Us to see what they’re carrying (or not) and how and where relevant licensed products are being merchandised. This may sound like an obvious place to start, but you would be surpised how few people do it.

2. Think differently. Understand that everything has changed and will continue to change, so it’s imperative that you constantly evolve and really be in-tune with where the business is going. What can you do that no one else is doing, has done or would ever do to get noticed and cut through the clutter? If the ultimate goal is to drive additional revenue through consumer products that do double duty as walking billboards for your brand, you have to think about this before you start developing a property. At an ad agency, creative teams write commercials based on a creative strategy. This is what needs to happen with most content and programming.You must identify your target, why you’re targeting it and how you plan to reach it before you put pen to paper and start creating. Then focus on filling the bucket with creative content that answers those questions and meets an actual market need. On the flipside, if you already have a concept, figure out how it might be tweaked to cater to a particular target.

3. Build an Audience First. It’s hard enough to get viewers for a new series. Getting retail shelf space can be even more challenging. Don’t try to create a licensing program for a property until it actually has a substantial audience. You have to let it build and simmer. Most companies try and solicit licensees to develop products before they even know if their property will be successful. That’s OK for Disney, Nickelodeon or DreamWorks, which are virtually guaranteed retail support at Walmart or Target, but not a great approach for properties or companies that don’t wield that level of consumer engagement. Everyone else needs a success story before developing product and approaching retailers.You must go a retailer or a potential licensee fully armed.

Neil Friedman, the former President of Mattel and Toys ‘R’ Us once said, “If I reject 100% of the licenses shown to me, I’ll be right 90% of the time.” The irony is that this is more true right now than it was when he said it number of years ago (during an era when there were far more retail opportunities for far fewer entertainment properties). Currently, licensing professionals would likely put Friedman’s number closer to 99.9%.  I know I would.

Retailers have yet to really embrace licenses that aren’t driven by television or movie properties. It will happen more often as time goes on – as in the case of Angry Birds or Skylanders.  But before developing a new property, you simply have to ask yourself what you think you need to do to be a part of that .01% that achieves some level of merchandising success. To be successful in the kids media landscape, you need to market, promote and merchandise differently. You need to know everything that’s going on around you and not turn a blind eye to the fact that you can’t develop content like it’s still 2003 – or even 2012 for that matter. Then look at that wall of “been there, done that” and find the cracks and chasms that others don’t see if you want to find the white space. That’s what increases your chances of creating a licensing success story.

Scott Shahmanesh is a youth & family marketing expert and the president and COO of Brandemonium, a New York-based brand licensing and business development agency. Scott can be reached at Scott@BrandemoniumNYC.com, www.BrandemoniumNYC.com.

 

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