BLE brand director Anna Knight highlights some key themes and trends to watch.
As high street retail sales continue to decline, sales of licensed products have been charting in the opposite direction.
In the UK alone, licensed product sales were valued at $13bn in 2016. This was a 4.4% increase over 2015. It’s worth quadruple the toy industry, which has been hovering around the £3 billion mark for the last decade.
It’s also ten times the size of the UK box office, which sits at £1.3billion and triple the value of the UK games industry, which is worth a very respectable £4.33 billion.
These days, brands are considerably more aware how powerful licensing is for the IP – it’s another marketing platform, another route to the consumer, another route to revenue. Retailers are also wiser to the potential of licensing as a lucrative profit centre and a tool for achieving differentiation and consumer engagement and loyalty, but there is still a way to go in terms of educating them.
Brand Licensing Europe runs a Retail Mentoring Programme each year for junior buyers. It’s a six-month programme that’s free for retailers to take part in – this year we have buyers from Tesco, Sainsbury’s, Morrisons, John Lewis, Argos, M&Co, Mothercare, Dixons Carphone, The Entertainer and Toymaster taking part.
It’s designed to help buyers understand the processes behind a licensing programme (believe me, there are many and they can be complex) as well as get their heads around the key trends that lie ahead, which, awkwardly (and excitingly) are forever changing.
And talking of trends, here are my top four for 2017/2018.
eSports has been around a lot longer than people think, but it’s only in the last three or four years that it’s gone stratospheric. eSports is competitive video gaming among individuals or teams. It has a huge global fan base with gamers filling vast stadia, tickets selling out in seconds and star players earning millions.
It has been predicted that eSports will be included in the official programme of the 2022 Asian Olympic Games and Tobias Sherman, global head of eSports at talent agency WWE-IMG, has been quoted as saying, “If you are a CMO and not in eSports in 2017, you are going to risk getting fired.”
eSports is already gaining attention from huge brands. Red Bull is a sponsor of the world championships, Coke Zero is involved with League of Legends (the biggest eSports game) developer Riot and Paris Saint-Germain (an exhibitor at BLE this year) has signed a whole squad of eSports players secure in the knowledge eSports is where the next generation of fans will come from.
It was enough to get your head around VR and AR, right? And now we have XR. Short for extended reality, XR is simply an umbrella term for any alternative reality, whether virtual, augmented, mixed or merged. A year ago, it was VR that was grabbing the headlights because the hardware – headsets – were on the cusp of launching, but as the focus is now on content and applications, it’s still finding its feet to some degree.
In that time, AR has powered to the fore and is hogging the limelight, the revenue and the acclaim for its content. You may have heard of Pokémon Go? Yep. This can pretty much take ALL the credit for AR bursting in to the mainstream. Within six months of launch, this free to play app had made more than $1 billion in revenue. At its peak, it was turning over $18 million a day.
AR and VR lend themselves perfectly to gaming, but once the industries mature and tech evolves (wireless VR is next on the horizon and will make a huge difference to adoption and content development), the world’s their oyster. Look forward to seeing more of both across all forms of entertainment.
Google ‘superhero films 2017’ and you’ll see that love for them is far from dwindling: Warner Bros’ Wonder Woman (which took nearly £2 million in ticket sales in its first weekend), Power Rangers, Justice League, Guardians of the Galaxy Volume 2 and Kingsman: The Golden Circle.
They have sparked some stunningly creative and successful licensing partnerships. LEGO Batman is a great example of two brands connecting so seamlessly they have created a third brand entity with its own brand extension programme including everything from movies, to video games, apps and, of course, LEGO toys.
Love them or hate them, there is no getting away from them I’m afraid. Following the success of the Kardashians as a brand and the number and variety of licensing partners the family has amassed in recent years, it’s impossible to overestimate the retail potential of celebrity licensing.
Celebrities from the worlds of music, sport, publishing, TV and movies have been wise to the power of licensing for decades from the more obvious fashion and beauty extensions (Kate Moss), to food (Jamie Oliver), publishing (just about everyone), toys (One Direction), gifts (Orla Keilly), homewares (Kylie/Kelly Hoppen) and experiential.
But it’s the rise and rise of social media powering the stratospheric rise of influencers such as Kendall Jenner and Gigi Hadid on Instagram – even nonagenarian fashionista Iris Apfel – and Zoella and PewDiePie on YouTube that has created the new band of celebrities to keep an eye open for.