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Building New Streams of Income – An Introduction to the Basics of LicensingThe 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
Art Brand Name/ Trademarks Celebrity Character/ Entertainment Collegiate Estates
Fashion/Designers Music Non Profit Publishing Sports Toys/games More
Types of Licensing
License Examples-Character
License Examples - Celebrity
License Examples
Kids helping Kids!
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??
