Note: This feature is a continuation of TLL’s lead story on royalty ranges, which first examines average royalty rates broken out by property type rate.
Compared to TLL’s breakdown of royalty rates and ranges by property type, the major product categories (in terms of retail sales) have overall lower royalty ranges. The categories with the most royalties, in other words, are not the same as the categories with the most licensed retail sales.
As seen below, very few product categories track the 8.7% industry average. The categories that do, such as infant products, tend to see the most brand diversity.
Amongst the eight major categories TLL tracks, those with the smallest variance in royalty rates are HBA and publishing, with just 10 percentage points difference between the lowest and highest average royalty ranges. While
The apparel/accessories/footwear category saw the largest gap with a 17 percentage point difference, largely thanks to the sheer amount of property types that are represented in this property type. At the lower end of this megacategory, you will typically find goods selling in mass or discount merchants with very low overhead, (quite rarely) promotional goods, or brands that typically command lower royalties on average. On the high end, certain fashion, entertainment/character, and sports brands may command a 20% or higher royalty rate.
But the category with the highest royalty rate measured from 2010–2017 is toys/games with a 21% rate at the high end of its average range. Unsurprisingly, this figure is being driven by ‘A-list’ entertainment and film properties.
Note: Numbers may not add up exactly due to rounding. | ||||
Product Category | Average Royalty Rate | Average Low Royalty | Average High Royalty | Range, Lowest to Highight |
---|---|---|---|---|
Accessories | 9.1% | 3.0% | 18.0% | 15.0% |
Eyewear | 8.2% | 5.0% | 15.0% | 11.0% |
Handbags, Backpacks, Messenger Bags | 8.9% | 5.4% | 16.3% | 13.0% |
Headwear | 9.8% | 7.0% | 13.8% | 7.0% |
Hosiery | 8.6% | 5.1% | 13.5% | 9.0% |
Jewelry and Watches | 7.7% | 3.0% | 17.3% | 15.0% |
Luggage and Travel Accessories | 10.1% | 5.4% | 18.0% | 13.0% |
Scarves and Ties | 7.3% | 5.1% | 12.8% | 9.0% |
Apparel | 9.4% | 5.4% | 18.2% | 15.0% |
Consumer Electronics | 5.2% | 3.1% | 10.5% | 15.0% |
Domestics | 8.9% | 4.0% | 13.3% | 10.0% |
Food/Beverages | 6.1% | 1.9% | 12.0% | 11.0% |
Footwear | 8.1% | 3.0% | 15.0% | 13.0% |
Funiture/Home Furnishings | 7.5% | 3.1% | 13.3% | 11.0% |
Gifts/Novelties | 8.8% | 4.4% | 16.4% | 14.0% |
HBA | 9.0% | 5.1% | 13.4% | 10.0% |
Fragrance | 9.3% | 5.3% | 15.8% | 13.0% |
Cosmetics, Hair Accessories, Other | 8.4% | 6.0% | 12.5% | 8.0% |
Housewares | 6.3% | 3.0% | 13.5% | 11.0% |
Infant Products | 8.7% | 5.1% | 13.8% | 9.0% |
Publishing | 9.7% | 5.0% | 15.0% | 10.0% |
Sporting Goods | 9.8% | 3.3% | 15.1% | 14.0% |
Stationery/Paper | 9.0% | 4.0% | 13.9% | 12.0% |
Toys/Games | 10.5% | 5.0% | 18.4% | 16.0% |
Videogames/Software | 10.5% | 1.1% | 20.0% | 19.0% |
OVERALL AVERAGE | 8.7% | 1.1% | 20.9% | 24.0% |