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Licensed Properties Target the Digital Frontier at Las Vegas Expo

Although many movie licence holders are clearly keen to take their properties into the digital realm, it is not all one-way traffic, with several companies now set to migrate from their internet-based origins to the more traditional world of print.

Photo: Licensed plates: Monster Jam’s Megalodon heads the brand’s Las Vegas sales drive.
Licensed plates: Monster Jam's Megalodon heads the brand's Las Vegas sales drive.
Photo: Licensed plates: Monster Jam’s Megalodon heads the brand’s Las Vegas sales drive.
Licensed plates: Monster Jam's Megalodon heads the brand's Las Vegas sales drive.

"Life Finds a Way" was the strangely apt tagline on the Jurassic Park movie banner that framed the entrance to this year's Las Vegas Licensing Expo. The franchise's giant dinosaurs, however, were just some of the many striking characters making an appearance at the show, an annual event that translates the intangible world of movies and experiences into marketable merchandise. Increasingly, it also attracts a number of non-entertainment brands, all keen to expand their reach as well as to create new opportunities for properties to bridge the digital and physical worlds.

Globally, licensed merchandise is enjoying a healthy growth streak. Related retail sales rose 4.4% to US$262.9 billion in 2016 – up from $251.7 billion the previous year – according to the third annual Licensing Industry Merchandiser's Association's (LIMA) Licensing Industry Market Sizing Study.

Entertainment/character licensing overall remained the leading property category, accounting for $118.3 billion of the total. This was up 4.5% over the 2015 figure and represented 45% of the total global retail sales of licensed products. This was the same share as in 2015, when the total was some $113.2 billion.

Explaining the rising value of the sector, Marty Brochstein, LIMA's Senior Vice-president for Industry Relations and Information, said: "One of the drivers of this growth is movie tie-ins. In 2015, Star Wars was really a fourth-quarter phenomenon. Last year, though, it enjoyed a full 12 months, stretching from the Force Awakens to Rogue One.

"Despite such bankable properties, each year also throws up a number of surprises that help drive the market, as Frozen did when it launched back in 2013. Last year's surprise hit was Trolls (Dreamworks/Universal), a quality movie supported by really strong marketing, making it one of the bigger launches of the year."

Coming second to entertainment/character licensing, once again, was corporate trademarks, with the sector worth $54.6 billion in 2016, up from $52.8 billion in the previous year. This accounted for 20.8% of the total value of the licensed sector. In third place was fashion with $31.1 billion, (11.8%), then sports with $25.3 billion (9.6%, down from 9.9% the previous year).

Overall, the US/Canada remains the largest market for licensed merchandise and services, accounting for 57.9% of the global total, up slightly from the 57.7% recorded in 2015. Globally, the fastest expanding area was the Southeast Asia/Pacific region, with its 6.8% growth seeing it account for 3.4% of total global licensing revenue in 2016.

On the showfloor in Las Vegas, though, it was the likely hits of the near future that were making a predictable splash, with dinosaur posters and displays of action-hero costumes widely on show. It was the newcomers to the event – and to the licensing world – that were truly mixing things up, however. While a number of them have only recently become brands in the traditional sense of the word, their impact is pretty much impossible to ignore.

A clear case in point here would be the Property Brothers – Jonathan and Drew Scott. The two have become household names in the US thanks to their hit reality TV show on HGTV, which seems them renovate properties and, magically, "turn flab into fab".

As they set out to try to rapidly build a global brand, it's their actual identity that's presenting an interesting challenge, with everyone knowing them by the name of their show – The Property Brothers – not their actual names. That's not deterring the Scott brothers, however, who are keen to license their likeness to everything from textile and furniture lines to home d?cor, suitcases and even pocket squares.

Assessing their progress to date, Jessica Johnson, an Account Manager with SB Merchandising, the Las Vegas-based company that represents the two brothers, said: "When you already have an established name, it's tough to try to change that, but they're rocking it. People love how nothing is scripted on their show, with how you see them on TV being how they are in real life, and people want to buy into that through their merchandise."

Photo: The Licensed Property Brothers.
The Licensed Property Brothers.
Photo: The Licensed Property Brothers.
The Licensed Property Brothers.
Photo: BuzzFeed: Reverse-engineering its brands.
BuzzFeed: Reverse-engineering its brands.
Photo: BuzzFeed: Reverse-engineering its brands.
BuzzFeed: Reverse-engineering its brands.

One of the items the brothers have the highest hopes for is their new book, due out September. Perhaps surprisingly, a new book is also among the first physical consumer products planned for BuzzFeed, the US-based digital media and entertainment company best-known for its provocative online video content.

Explaining this unlikely move, Tobias Keunecke, the company's Communications Co-ordinator, said: "We've literally only been involved with the licensing sector for two months now. People don't expect us to be here, even though we have several brands that are huge on social and distributed media.

"Tasty, for instance, our short cooking videos channel, is viewed by half a billion people a month and it's our biggest network on Facebook. We've now extended it into a cookbook, which has already sold more than 150,000 copies in two months.

"Customers can actually build their own cookbook from Tasty's collection of recipes and then print them on demand. As an indication of its success, to appear on the New York Times bestseller list, you only have to sell 25,000 books."

BuzzFeed is already looking at selling a variety of other products, including "homesick" candles for those who recently moved to another state and crave the smell of the peaches they left behind in Georgia, for instance, or the oranges they miss from Florida. It is also looking for a variety of extensions for Nifty (its do-it-yourself brand), Goodful (conscious living) and Top Knot (an emerging beauty brand).

Describing the process as akin to reverse engineering the original product, Keunecke said: "We have an audience that's super-engaged on social and we're looking to find products that would appeal to them. It could be anything – food products, appliances, crafting kits, classes…"

Singapore-based Techstorm Dynamics is also banking on love for old-fashion hardcopy to shift its O2O notebooks or, as they prefer to call them, "the book to the future". Essentially, these are physical notebooks that digitise notes through an app, allowing them to be shared and easily searched, with each page scanned with a smartphone and turned into a cloud-stored pdf.

Justifying the concept, Rose Karman, the company's International Account Manager, said: "People love to write in a notebook, but they also want to have their data available anytime and anywhere. We can now make that a reality via an app that works on your smartphone or tablet."

At present, the company primarily works with retail merchants and corporate partners that brand the product for promotional use. While it would seem like a natural extension to sell the concept to universities/colleges, allowing them to brand it and sell it through their own bookstores, Karman said this was an idea they had yet to explore.

Extending their reach into the digital space is certainly an alluring prospect for many brands, especially those with particularly deep pockets – a category that Caterpillar, the Illinois-based heavy-machinery manufacturer, certainly falls into. A first-time exhibitor at the Licensing expo, the company was there in search of potential brand extensions for its consumer products, sales of which amounted to some $2.8 billion globally last year.

Explaining the thinking, Lesley Godby, one of the company's Programme Managers, said: "We already produce a lot of toys, so now we're looking at online games and Virtual Reality [VR]. We want something that's going to appeal to kids today, who are really all about the digital formats."

Sony Pictures is also looking at VR as a way of extending the reach of many of its already hugely-popular franchises. This year the company was in Las Vegas to demo the new Ghostbusters VR game for the Playstation, with a second chapter promised soon. In a similar vein, they are also working with a number of partner companies to develop a VR tie-in to the Emoji Movie, which is scheduled for release in August of this year.

Spelling out the company's current thinking, Jamie Stevens, Executive Vice-president for Worldwide Consumer products and Licensing, said: "VR is an area where we see aggressive revenue growth in the years to come. We're already beginning to develop products that will integrate our properties into VR experiences."

Photo: Star Trek Discovery: Boldly going where no licensed property has gone before.
Star Trek Discovery: Boldly going where no licensed property has gone before.
Photo: Star Trek Discovery: Boldly going where no licensed property has gone before.
Star Trek Discovery: Boldly going where no licensed property has gone before.

The Licensing Expo 2017 took place at the Mandalay Bay Convention Center in Las Vegas from 23-25 May. The event brought together more than 16,200 licensees, manufacturers and retailers.

Anna Huddleston, Special Correspondent, Las Vegas

Content provided by Picture: HKTDC Research
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