License to Thrill

Ahead of Brand Licensing Europe (BLE), rights owners share with TV Kids their strategies for standing out in the children’s licensing and merchandising business.

By all accounts, the global licensing business is buoyant right now. Global retail sales of licensed goods hit $251.7 billion in 2015, marking a 4.2-percent increase over the previous year. According to data from LIMA’s Annual Global Licensing Industry Survey, character- and entertainment-based brands continue to be the most dominant categories, delivering 45 percent of all licensed retail sales.

That’s good news for content rights owners as they continue to navigate the crowded waters of the kids’ licensing and merchandising (L&M) business. The prospects are particularly bright for those that can offer retailers products inspired by proven brands with dedicated fan bases. When kids see items featuring characters from their favorite TV shows on store shelves, their wish lists grow, and so do revenues.

BRAND RECOGNITION 
Established properties like Saban Brands’ Power Rangers franchise continue to draw in new and returning fans, a harbinger for ongoing success in the kids’ L&M arena. “Power Rangers has become an iconic, evergreen brand that taps into the strong nostalgia trend influencing today’s consumer products industry,” says Janet Hsu, the CEO of Saban Brands, of the 23-year-old property. “Retailers look for brands with proven success at retail and consumer awareness, which is why longstanding franchises, like Power Rangers, see such strong traction.”

For the new Netflix original kids’ series Cirque du Soleil Junior: Luna Petunia, Saban is betting on the built-in recognition associated with the Cirque brand. Funrise is already on board as the global master toy licensee for the animated preschool property, which premieres in late 2016, with the toy range set to hit the U.S. market in fall 2017. Initial categories will include dolls, accessories, playsets, plush, role-play and dress-up, among others.

Risa Greenbaum, the assistant VP of international licensing at Sesame Workshop, knows a thing or two about proven brands. At BLE, “Sesame Street is the core franchise that we’ll be representing,” she says. “Retailers like properties that are established and have proven themselves because those tend to be lower risk.”

Sesame Workshop is also promoting newer shows such as The Furchester Hotel, which is in production on two additional seasons for CBeebies in the U.K., and an all-new Elmo’s World. Both properties feature characters from the mainstay brand, giving them an advantage when it comes to L&M.

Another veteran property that has been gaining traction in the kids’ L&M world is the anime brand Yu-Gi-Oh!, which began as a manga comic in Japan 20 years ago and is celebrating its 15th anniversary in territories outside of Asia this year. The Yu-Gi-Oh! brand has developed into a trading-card game and a TV series with five iterations. According to Jennifer Coleman, the VP of licensing and marketing at 4K Media, Yu-Gi-Oh! possesses the “three key components that you want to have with any successful children’s brand that can allow it to remain evergreen and stay in the consciousness.” These are its roots in publishing, gameplay and collectability associated with the trading-card game, and a TV series that reinforces the core values of the brand.

Mondo TV is looking to expand the licensing program for the animated series Sissi, the Young Empress, which has had time to build a following on the small screen. The first season launched in Italy last year and since then Mondo has “developed an extensive licensing program based on the property” throughout Europe, says Valentina La Macchia, Mondo TV’s director of consumer products. The company plans to “continue to work on this franchise and to create long-term partnerships with the existing licensees and reach new ones,” she notes. With an eye toward keeping the property fresh, Mondo TV will present a new style guide for the 26-episode second season of the series at BLE.

Mondo is also highlighting new properties with roots in well-known brands: YooHoo & Friends, based on the plush line from toy company Aurora World, and Heidi, Bienvenida a Casa, a live-action co-production between Mondo TV Iberoamerica and Alianzas Producciones.

While having a property with a track record of fan engagement or roots in a well-known brand is helpful when trying to get merchandise on shelves, proven brands cannot simply rest on their laurels and expect to attract consumers or retailers.

GOING 360
“At Saban Brands, we break through by taking a 360-degree approach for our diverse portfolio of brands with elevated content and multiplatform distribution, innovative licensing and retail programs, as well as disruptive marketing strategies and initiatives,” Hsu says.

At BLE, Saban has a dual focus for the Power Rangers brand, concentrating on both the upcoming feature film and the new season of the TV series, Power Rangers Ninja Steel, both set for 2017. Global master toy licensee Bandai will launch a new Power Rangers toy line inspired by the 23rd television season. There will also be product lines from new partners Mattel, Funko, Jada Toys and Bioworld, among others.

Toys, apparel and publishing have been the biggest drivers for Sesame Workshop’s brands, Greenbaum notes, “but we’re always looking to expand into areas we feel could benefit children, such as the food category,” with healthy alternatives taking center stage.

STAYING FRESH
“We want consumers to know that even for a brand with such longevity in some markets, we continue to be fresh and vibrant,” Greenbaum continues. “We have a new saying we like to share: ‘It’s a brand-new day on Sesame Street.’ We’re committed to strengthening the core Sesame Streetcharacters such as Elmo, Cookie Monster, Big Bird and Abby Cadabby. We’re developing some great new content. We’re building new partnerships such as [one] with Apple and one with IBM.”

4K Media’s Coleman says the Yu-Gi-Oh! brand is continuing to evolve. “We’ve got some great new artwork that was never available to us before because we’re now a Konami-owned company. We’re also working on taking [the brand] in new directions and opening different doors we hadn’t previously been allowed to open for Yu-Gi-Oh!. The new style guide that we’ve been developing is called Super-deformed, and we’ll be announcing new partners for that soon. Thanks to that new artwork, we’ve got some great interest from partners who we might not have been able to work with before.”

Publishing is a core category for Yu-Gi-Oh!, Coleman adds. Partners include Scholastic and UDON Entertainment, and both have new Yu-Gi-Oh! books coming out in Q4. “We hope that it’s just the start of [what] we’ll be able to do in the publishing category. I will pursue publishing in all shapes and formats where it makes sense for our brand and our partners in Japan,” she says. Apparel is another strong category, with FREEZE and Bioworld on board.

Ink Global is heading to BLE with hopes to extend the L&M campaign further for Masha and the Bear, which “has already established hugely successful consumer-products (CP) programs in many markets,” says Annalisa Woods, the commercial director for Ink Group. Masha is “at varying levels of brand maturity throughout Europe, and so the CP strategy needs to reflect this,” Woods adds. “We are renewing, extending and expanding our key existing partnerships, while also signing up new partners locally at regional levels to supply the increasing consumer demand as the brand’s popularity continues to soar.”

Many of the core categories are covered across Europe, so Ink Global’s plan is to “extend our work with partners in the FMCG and promotional categories, as well as continue to partner with [strong] brands locally across all markets.”

Mondo TV’s La Macchia stresses that a successful L&M strategy is about “not just strengthening existing categories, but always looking to expand our business…. In this way, we are able to increase our revenue because we can develop more SKUs, more products for different retailers and have more products on shelves.”

Food, promotions and personal care goods are prime growth opportunities for La Macchia. The main categories Mondo TV is pursuing for all of its brands include fashion and back to school. The toy category is also paramount, especially for preschool brands like YooHoo & Friends, La Macchia says. Mondo TV is co-producing season three of the series with Aurora World, which is in charge of plush for that brand. She reports that Mondo TV is currently in several conversations regarding the master toy license and is also pursuing secondary toys like puzzles, board games and arts and crafts, as well as publishing.

While L&M categories may be expanding, entertainment and retail consolidation are creating some woes for independent content rights owners.

SHRINKING SHELVES
Ink’s Woods believes that “consolidation of IP portfolios under fewer brand-owning entities is creating an interesting, and very tough, dynamic in the industry at the moment. Amalgamation of ‘top’ brands under limited ownerships shrinks the market as it creates a more difficult environment in which independent brands can compete and thrive.”

4K Media’s Coleman agrees that entertainment consolidation has brought about challenges for independents. “Couple retail consolidation with entertainment consolidation and there is less shelf space and fewer companies out there trying to keep the buyers on their toes,” she says.

“There are a lot of big movie properties [that] are literally buying shelf space at retail,” Sesame’s Greenbaum adds. “It makes it a little tough from a competitive perspective. Retailers are choosing to support fewer and fewer properties.”

That means it’s more important to offer new ways for consumers to enjoy longstanding brands. As such, Greenbaum believes these challenges come with a silver lining.

CREATIVE SOLUTIONS
“We like to think of it more as an opportunity for Sesame Street, and it challenges us to think about things differently and create better products and new ways to license our brand,” Greenbaum says. “You have to think differently about the brand these days, everybody does. The traditional categories are great, and they serve as a great baseline for developing licensing programs, but you need to think out of the box and try new things.”

Freshness is key for the products themselves. Saban’s Hsu adds, “It is crucial for brands to focus on innovation as retailers look for stand-out products that have clear points of differentiation from what is currently on the market.”

REACHING RETAIL
Mondo TV’s La Macchia also believes that to stand out, a licensing program must offer a point of difference. “Retailers want to see things that make your brand, your product and your message different from everybody else’s. They want something unique,” she says. “So to capture buyers’ interest, there has to be some level of exclusivity for the offer, and there are different ways to achieve that [such as] a unique brand or exclusive products that are only available at [specific] retailers.”

For 4K Media’s Coleman, it is critical to maintain relationships with both licensees and retailers to ensure that the products being pitched are relevant. “We’re trying to create and grow direct relationships with the retailers so that we have a dialogue with them. We can tell them directly what’s happening with the brand, why it’s worth looking at and who all of our partners are so that they’re not just getting single-product category pitches from our licensees,” she explains. “We can show them the breadth and scope of what’s available on the licensing side.”

Coleman adds, “We are cultivating retailer relationships so that when there is an opportunity to create special product for them, we can pounce on it.”

DIGITAL DRIVE
Another key area of focus for brand owners is the digital sphere, which is creating an entirely new pathway to consumers.

“To build something in the consumer-products [space] you need a table with four legs, and the fourth leg is digital distribution,” says Bruno Zarka, Ink Group’s media director. “You can’t build something only on digital, you can’t build something only on TV.”

“We realize that it’s a different world, and kids can do things on iPads and devices that they never could do before,” Sesame’s Greenbaum says. “So we’re making sure that we create new digital content that meets the needs of today’s kids. That’s where kids are today, so it’s important for us to be there as well.”

Greenbaum acknowledges the power of apps to help youngsters further engage with a brand. “We have almost 30 Sesame Street apps, some of which have won awards. They bring our characters to life through engaging and interactive content: there’s music, there are games, there are lots of fun ways for kids to interact with our apps these days. We also have an extensive line of e-books that are available globally on many platforms. So digital is an area that we focus on, and we see a lot of opportunity with it.”

Mondo’s La Macchia shares Greenbaum’s perspective. “Digital is very important. We just launched a game app [for] Sissi. We will continue to create more innovative products to target these brands.”

4K Media’s Coleman reports that gaming is an essential element of Yu-Gi-Oh!’s digital strategy, which is handled by Konami Digital Entertainment. “In the past, Nintendo DS has been a key driver, and PlayStation, Xbox, all of the typical gaming devices have been strong and important platforms for the brand, and they will continue to be.”

“Mobile gaming is a key area of focus for us in the digital L&M space,” echoes Saban’s Hsu. “We’ve partnered with game developer nWay and global content leader Lionsgate to reimagine Power Rangers as a real-time multiplayer mobile action game. Slated to launch next year, the mobile game will connect millions of Power Rangers fans around the world with a gaming experience unlike anything else.”