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Want royalties? Show them the value

Pink Key Consulting’s Richard Pink on how to get promoters interested in your licence.

Shhhhh – there aren’t any promoters listening are there? Good, now we’re alone, I can tell you what I think you need to do to get a healthy fee from them for using your property.

Years ago it was easy – you rocked up to the cereal, snacks or pop people, told them when your film was coming out, or when the first episode would be aired, and the cheque book came out. Well maybe it wasn’t quite that easy, but you know what I mean.

But it’s all changed these days.

The promoters think (for some reason) they are doing you a favour putting your property on their pack. They think giving you exposure should be enough for you – I know!

Well, to be fair, depending on which licence you are lucky enough to represent, exposure might be exactly what you need. However, what are we all in this for? To derive value out of a promotional licensing deal, money has to be part of the discussion. Therefore, even if it doesn’t finish that way, a royalty fee for the use of the licence should be on the opening agenda.

However, too many brand owners and licensing agents are still stuck in the past and believe that it’s a ‘given’ that a promoter is simply going to hand the cash over. These days the licence holder has to work harder and give a bit of justification if they are going to be asking for a fee.

So, what are the things that need to be ‘talked up’ in this negotiation? I’d divide them into the obvious and the less obvious.

Here are the obvious ones:

  • Added value through point of difference versus competitors
  • TV or cinema exposure and the accompanying marketing campaigns and events
  • Exposure from other non-competitive promoters

But there are other not so obvious things that might seem pretty run of the mill to the licensor or agent, but may actually be of more value to a promoter than you might think. Try these:

  • Your approval process: speed is of the essence to promoters and their deadlines are tight – deliver this and they’ll love you
  • Product as a prize fund: you may find your licensees are willing to stump up some product to add into the deal, helping you get the exposure from the promoter
  • Access to talent: remember your brand is unique – there are some dead easy ‘money can’t buy’ things you can offer such as a visit to the set, tea with a celeb or the creator, or one of the cast
  • Bespoke artwork: if the writers or creators are available and accessible, providing unique art for prizes or the promotion can add enormous value

The list is not exhaustive by any means. I bet if you put your mind to it you could come up with a whole host of things that cost you nothing, but could add enormous value to a potential partner, thereby helping you justify asking for royalty fee.

Richard Pink is md of Pink Key Consulting – an agency specialising in licensing and promotions. He can be contacted on richard@pinkkey.co.uk.

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