Monday, June 02, 2008

Asian markets on a roll for licensed goods

Source: HKTDC Website

17 Jul 2007
report from Licensing 2007 International, New York
Asian opportunities from Viz Media.

Asia, with South America, provides the fastest growing opportunities for licensed goods sales, according to buyers and licensors attending the Licensing 2007 International show held over three days at the Javits Center in New York.

Properties and preferences in Asia vary widely, while licensing has become increasingly developed throughout the region. Established, trusted brands still seem to carry the day, although new Asian properties, including those from the Chinese mainland and Hong Kong carry increasing influence.

"There seems to be a marked increase in interest in long-term, perennial properties," said Gail Mitchell, vice president of HPG, Hasbro's licensing arm for the Asia Pacific.

"We have experienced increased interest in companies wanting to represent our brands as agents," Mitchell said. "Perhaps most importantly, we have just employed a business development manager who will be based in Hong Kong and will be responsible for building comprehensive merchandise ranges and securing high-profile promotional properties in Asia."

Hasbro Transformer laptop.

Hasbro's Transformers, already a major brand globally, is seeing still more action coming off the live-action DreamWorks/Paramount movie. More than 230 deals in over 70 countries cross every category, the company reported.

My Little Pony, Littlest Pet Shop, Tonka, and The Game of Life are other long-term Hasbro properties with appeal in Asia.

As for Monopoly - "our crown jewel," Mitchell called it: "we've been working with licensees on apparel promotions, a collectible gift line for adults, in food and beverage promotions, and in digital gaming, to name just a few."

Licensing activity is strong in Japan, which has a mature licensing market that is something of a trendsetter for Asia. Taiwan and South Korea had large pavilions at the show.

Long-term appeal in Asia.
Littlest Pet Shop ArtsNCrafts.

The Chinese mainland, Hong Kong and India have less-developed licensing markets, but are growing them rapidly, buyers said. Disney, MTV, Nickleodeon, and the Cartoon Network are in the Indian market, as they are in China.

New York-based licensing organisation, International Licensing Industry Merchandisers' Association (LIMA), has some 60 members under its China affiliate, starting from zero just a few years ago, said Sherry Rao, managing director. Entertainment, sports, art, corporate brands, food and local Chinese celebrities all have strong potential. It's important to invest in the brand, Rao said.

Tonka 12 Bike.

"Licensing is definitely growing in India," said Rajesh Rodriguez, general manager of Toonz Animation and an attendee from India. "It's not huge, but there is potential."

Toonz represents several Asian properties on the subcontinent, including Indian folklore characters Tenali and the monkey god, Hanuman. The company has nearly completed arrangements to represent consumer products for a large American license.

"We're looking to represent properties in India," Rodriguez said. "You need to start the licensing programme when the programmes are on the air."

Anime, manga, Hong Kong originals and Mainland favourites

"Anime and manga are becoming more mainstream in the US and abroad," said Jane Lui, public relations manager for Viz Media, master licensor for these properties. The category is growing fast in bookstores.

Manga from Viz Media: "in the mainstream".
Naruto anime series.

Viz Media's Naruto anime series, from Japan, tops weekly sales, Lui said. Retail tie-ins for Naruto and other Viz-managed properties include T-shirts and DVDs.

Hong Kong-based Intelli-Media Group has developed a strong market on the Chinese mainland for its original cartoons and animations. "We're here discussing opportunities for the US and other markets," said licensing director, Shelley Leung.

The company has 500 episodes of its "Pleasant Goat and the Big Bad Wolf" ready to go, along with a merchandise line that includes apparel, comics, plush, backpacks, candies, stationary, and kids' furniture. The appeal is to both boys and girls.

"Asia is a very diverse market," said Bianca Lee, Warner Bros Consumer Properties managing director for China, Southeast Asia and India. "The industry is growing, and the number of players in the market is increasing tremendously."

Highlight at the show: Space Chimps.*
Licensing promotion for The Dark Knight.*

"We're starting to see some Chinese [mainland] local properties emerging, but the major interest is in Western and Korean brands, said Lee.

Warner's Tom and Jerry cartoons are a major property in China and India. Looney Tunes and DC Comics are also popular in the traditional categories.

Retail is a key strategy. In products, Lee said: "the biggest category for us is apparel and then fashion accessories and toys. We tie up with as many strong retailers as we can in every market we're in."

In apparel, Warner licensees are building their own retail programmes, often with consignment areas in department stores.

"[On the Chinese mainland], licensing is emerging so fast that it's hard to keep up with developments," said Ciaran Coyle, managing director at New York's The Beanstalk Group.

The 2008 Beijing Olympics will be a significant publicity opportunity for Chinese brands, said Coyle.

Land Rover is an emerging brand on the Mainland. There was a freestanding store selling diecast cars and other merchandise, and products will eventually be in car dealerships.

The major diecast manufacturers are in Hong Kong, Coyle noted.

Footwear and apparel are other categories, with health and beauty a possibility.

Footwear from Transformers.
T-shirts for all occasions.

"China has a huge appetite for brands, especially high-end luxury brands," Coyle said. There is particular interest in British brands.

"Asia-Pacific and Latin America are two key markets we're looking to grow," said Lynne-Mei Lee, head of publicity for FremantleMedia. The Idols format is a major focus for the company, which owns rights for and handles American Idol, along with a wide range of other entertainment properties.

Larger show with bigger international element

More broadly, the US$180 billion global licensing industry is poised for more growth as it expands its international reach, buyers said at the Licensing 2007 International show ending 21st June.

"International" was the right word as 525 exhibitors from 19 countries showed more than 6,000 properties. In addition to the US and Europe, exhibitors came from the Middle East and the Asia Pacific.

In the mood: licensing show expands.*
Entertainment and character licensing dominant.*

The 23,000-plus attendees were from 82 countries.

US licensing royalties were US$6 billion in 2006, up 1.5% over 2005, according to LIMA.

Entertainment/Character licensing is the dominant category, holding 44% of the market. It grew by 2%, with an increase of US$54 million to US$2.6 billion. Trademarks/Brands (18% share) and fashion and sports (14% each) are the next biggest.

Toy and bag option on display.

Apparel (17% revenue share), and toys and games (15%) top the product category. Royalties tend to be in the 8% to 12% range for apparel and 5% to 12% for toys and games. Home decor had an 11% revenue share.

Brands ranged from newer, less familiar, and smaller properties to giant global names including the major toy companies and movie studios.

Classic brands and older names are a key focus as trademark licensing becomes more important. Names ranged from foods and household cleaning products to favourite toys, characters from literature, and old movie classics and stars.

Reflecting current issues, licensing is moving into environmental causes and health concerns. In property types, revenues for non-profits (museums and charitable organisations) grew by 4.8%.

Major deals at the show

Major deals announced at the show reflected geographic and property growth and Asia's role in that growth.

Speed Racer a new licence.
The Dark Knight film spin off.
  • Photo
    Harry Potter movie deal.
    Warner Bros Consumer Products named Mattel as global toy licensee for the anime-inspired Speed Racer, and for the new Batman film, The Dark Knight.
  • Current movie property deals included video game releases for Warner's new Harry Potter movie and for the Disney/Pixar Ratatouille.
  • Paramount's "Reel Rides" is a direct-to-retail program developed for Wal-Mart, with Malibu Toys supplying limited edition die-cast vehicles from films.
  • Brand extensions for the Hollywood Walk of Fame, handled by Global Icons, and for MGM and its lion, handled by Brand Sense Partners.
  • Viz Media named Bandai America as toy licensee for its new anime series Blue Dragon, based on the Xbox game.
  • The Beanstalk Group and the World Wildlife Fund will center their efforts on furthering the conservation group's programs in sustainability and green living.
  • McDonald's teamed with DreamWorks Animation on a Shrek 3 promotion to encourage kids to make healthy eating choices like salads and white meat chicken.
Monopoly in with McDonald's.

Licensing executives, including those from movie studios, commented that familiar names and established brands have more long-term staying power than most current "hot" movie properties.

"Movies have peaks and valleys," said US-based Global Icons CEO Jeff Lotman. Familiar names have "dependability and reliability," he said.

Mobility and digital portals are the future. "The next wave of the Internet will be on your phone," Lotman said. Global Icons' Hollywood Walk of Fame launches through a digital portal. "It's an icon that contains the entire industry," he said.

Global Icons signed Honda just before the show, and will be handling motorcycles, Honda cars, and Acura. Lifestyle products will be a good fit, Lotman said.

Asia's tie-ins

American Idol's portfolio includes over 40 licensees in apparel, role-play, toys and games, food, and other categories. "We're looking for ways for people to interact with the brand," said Lee of FremantleMedia. "We look at each brand on an individual basis, for logical brand extensions."

Vietnam Idol tie-ins include board and electronic games, and musical instruments.

Asia will be a major focus for MGM and its lion, to be managed by Brand Sense in a partnership announced at the show. "It's a high-end lifestyle play on the MGM brand itself," said Brand Sense business development director, Austin Katz.

Product plans include fragrances, furniture inspired by old MGM movies, and apparel. Quality and luxury will be central as Brand Sense talks with potential suppliers.

Cultural mingling: Transformers as sunglasses.

"It's wonderful to see your property translate to another culture," said Anthony Kosiewska, director of international licensing for the educational company Scholastic Media, a relatively new player internationally. Part of that is recognising the different appeal brands can have in different markets.

Scholastic's Clifford the Big Red Dog, mainly a pre-school property in the US, reaches across age groups in other countries. "It's a way of adapting to other cultures," Kosiewska said.

Scholastic has been working with Mindworks and with Japanese licensee Densu to create Clifford products targeting teens and young adults in Japan. There are 12 licenses already in Japan, covering apparel, change purses, bedding and curtains, and novelty plush.

Clifford has been the "spokesdog" for the Tokyo metro, using his reputation for cooperative, sharing behaviour to encourage safety on the trains. Plans call for going into China.

from special correspondent Lisa Harbatkin, New York

(*Images by Cory Doviak)


The Beanstalk Group

Tel: (1) 212-303-1122 (US),
(44) 20-7030-7979 (UK)

Brand Sense Partners, LLC

Tel: (1) 310-867-7322

FremantleMedia Tel: (44) 7691-6782
Global Icons

Tel: (1) 310-820-5300

Hasbro Properties Group Tel: (1) 401-727-5634
Intell-Media Group (Holdings) Limited Tel: (852) 3426-9898
Scholastic Media Tel: (1) 212-343-6849
Toonz Animation Tel: (91) 471-2700954
Viz Media, LLC Tel: (1) 415-546-7073
Warner Bros (FE) Inc Tel: (852) 3128-1898
Warner Bros Consumer Products

Tel: (1) 818-954-7980

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