Transcript First Time Licensee –Basic Training

Building New Streams of
Income – An Introduction
to the Basics of Licensing
The Licensees point of
view – Licensing into your
company
First Time Licensee Outline
 Licensing defined
 Some license examples
 Licensing language
 Licensee/Licensor relationship
 What types of licenses are right for your
company
 How to prepare your company for entry
 Tips on how to secure your first license
What is licensing?
 Licensing is “renting” the use of a
trademark or copyright, that is commonly
called “the Property” which can be a name,
likeness, logo, graphic artwork, saying,
signature or any combination of these
elements in conjunction with your
publishing product.
 These rights cover a specific time and
geography for agreed to cash payments
Types of Licensing
 Art
 Brand Name/
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Trademarks
Celebrity
Character/
Entertainment
Collegiate
Estates
 Fashion/Designers
 Music
 Non Profit
 Publishing
 Sports
 Toys/games
 More
License Examples-Character
License Examples - Celebrity
License Examples
Licensor/Licensee defined
 Licensor is the property owner of the
trademark or copyright you want to license
from for your publishing product.
 Licensees are publishers that secure the
rights from the licensor
 Formalized by a Licensing Agreement
 Contractual agreement that defines the
terms and mutual responsibilities of the
licensor and licensee.
Licensee Responsibilities
 Guarantee: The minimum royalty
dollar amount you agree to generate
for the licensor over the term of the
agreement.
 Advance: Down payment(s) against
the guarantee
 Royalty Rate: The percentage (some
times piece) rate the licensee must
pay the licensor based on the
licensee’s sales volume
Publishing Royalty Rates
 Royalty rates are based on many variables and negotiable.
These rates are built into the wholesale price of your
product, but be sure the market can handle the price you
plan to charge inclusive of the royalty rate
 Publishers (as property owners) charge, on average, 8.7%
 Publishers as licensees pay, on average , 9.8%
 Rates can range from 2 to 15% and vary by type
- Books: 6 to 12%
- Newspapers/Magazines 3 to 12%
- Comic Books/Strips 5 to 15%
Source: The Licensing Letter
Licensee Responsibilities
 Exclusive vs. Non-Exclusive
 Territories
 Distribution
 Product(s)
 Ship & marketing dates
Licensee Responsibilities
 Product development, the licensee
must develop product incorporating
the licensed property in an
appropriate way acceptable to the
licensor
Licensee Responsibilities
 Approvals
 Marketing plans
 Product Liability
 Termination/Sell-off
Licensor Responsibilities
 Style Guide
 Approvals
 Trademark Protection
 Advertising & Promotion
 Retail Development
What type of licensing is
right for your company?
 What are your corporate objectives
 Examine your product line
 What is your distribution
 Who is your customer
Securing licenses - Preparation
 Staffing
 Know what a licensor seeks in a perspective
licensee
 Resources:
- LIMA, Licensing Industry Merchandisers Association – www.licensing.org
- Advanstar Communications, [email protected], www.licensingshow.com
- The Licesning Letter, www.epmcom.com
- Kidscreen Magazine, www.kidscreen.com
- License! Magazine, www.licensemag.com
- Royalties, [email protected]
- The Licensing Book, www.adventurepub.com
- Licensing Royalty Rates, Battersby & Grimes, www.aspenpublishers.com
Recent Trends
 Some licensors are “bundling” their properties into
one agreement – this gives you an assortment of
properties and saves you the burden of multiple
guarantees ie music, character, art.
 Guarantees on average have come down in size
with exceptions.
 Contract lengths are also becoming shorter.
 Sales of licensed merchandise grew 25% in
ecommerce, TV +50%, Dollar Stores +14%
Building Income –
Questions??