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Royalties

Average Royalty Edges Up 0.5% to Reach 8.79%

The average royalty rate across all property types and product categories edged up 0.5% in 2017 to reach 8.79% in the U.S./Canada. This marks the seventh straight year of gradual growth; the average royalty was 8.75% in 2016 and 8.73% in 2015. Since 2005, the average royalty rate across property types and product categories has remained in the 8.6–8.8% range.

Over half of respondents (61%) to The Licensing Letter’s Annual Licensing Business Survey said that royalty rates were flat in 2017; 35% said they were up and just 4% had their average royalty rate drop. Of those reporting fluctuations, the change in royalty was, on average, just one-half of a percentage point for most categories. Some of the most volatile categories, however, like entertainment properties and licensed apparel, saw swings of up to five percentage points.

For the fifth year in a row, entertainment/character commanded the highest rise in average royalties, after increasing 1.5% in 2016 and 1.4% in 2015. In particular, A-list franchises like Disney’s Marvel and Star Wars were cited as the as the primary instigators behind the greater demand.

Thanks to that sustained rise, entertainment/character brands overtook sports and collegiate properties for the first time with an average royalty rate of 10.14% in 2017. Despite slipping by -0.2%, the sub-category of entertainers/models enjoyed the largest average royalty rate at 10.38%, followed by its parent property type, celebrities.

On the product category side, licensed apparel had the greatest swing in royalties and grew by 1.5% to reach an average 9.66% rate. That placed apparel as the sixth-biggest royalty rate—toys/games merchandise continues to demand the biggest share at 10.54%, followed closely by video games/software at 10.53%.

Average Industry-wide Royalty, by Property Type, U.S./Canada, 2016–2017
Note: Numbers may not add up exactly due to rounding.
Property Type Average Royalty, 2017 Average Royalty, 2016 Change, 2016–2017 Range of Royalties, 2017
Art 6.14% 6.17% -0.5% 4–12%
Art and Artists 6.13% 6.19% -1.0% 4–12%
Museums 6.06% 6.09% -0.5% 4–15%
Celebrities 10.24% 10.26% -0.2% 3–18%
Entertainers/Models 10.38% 10.43% -0.5% 4–16%
Chefs/Home-related 9.64% 9.69% -0.5% 2–17%
Collegiate 10.02% 10.01% 0.1% 5–19%
Entertainment/Character 10.14% 9.99% 1.5% 5–21%
Estates 9.65% 9.62% 0.3% 4–18%
Fashion 8.44% 8.45% -0.1% 2–17%
Apparel 8.38% 8.38% 0.0% 5–17%
Footwear 7.13% 7.13% 0.0% 2–14%
Home 7.50% 7.49% 0.2% 2–14%
Music 8.14% 8.18% -0.5% 4–19%
Non-profit 8.24% 8.26% -0.2% 4–14%
Publishing 8.48% 8.48% 0.0% 2–18%
Books 7.94% 7.93% 0.1% 6–14%
Newspapers/Magazines 8.16% 8.16% 0.1% 2–12%
Comic Books/Strips 9.55% 9.56% -0.1% 5–18%
Sports 10.07% 10.04% 0.3% 5–18%
Trademarks/Brands 7.76% 7.74% 0.3% 1–16%
Automotive/Motor Vehicle 4.06% 4.06% 0.0% 1–16%
Food/Beverage 5.58% 5.57% 0.3% 1–10%
Restaurants 5.92% 5.91% 0.1% 4–8%
Sporting Goods 7.00% 7.00% 0.0% 6–14%
Traditional Toys/Games 8.17% 8.16% 0.1% 5–12%
Videogames/Interactive/Online 9.01% 8.96% 0.5% 6–15%
Overall Average 8.79% 8.75% 0.5% 1–21%

Average Industry-wide Royalty, by Product Category, U.S./Canada, 2016–2017
Note: Numbers may not add up exactly due to rounding.
Product CategoryAverage Royalty, 2017Average Royalty, 2016Change 2016–2017Range of Royalties, 2017
Accessories9.05%9.05%0.0%3–18%
Eyewear8.23%8.26%-0.3%5–16%
Handbags, Backpacks, Messenger Bags8.88%8.88%0.1%5–18%
Headwear9.86%9.85%0.1%7–14%
Hosiery8.57%8.58%-0.1%5–14%
Jewelry and Watches7.72%7.72%0.1%3–18%
Luggage and Travel Accessories10.05%10.07%-0.2%5–18%
Scarves and Ties7.32%7.33%-0.1%5–14%
Apparel9.66%9.52%1.5%5–19%
Consumer Electronics5.26%5.25%0.1%3–10%
Domestics8.92%8.88%0.5%4–14%
Food/Beverages5.99%5.98%0.1%1–12%
Footwear8.09%8.10%-0.1%3–16%
Funiture/Home Furnishings7.55%7.53%0.3%3–14%
Gifts/Novelties8.66%8.65%0.2%4–16%
HBA8.99%8.99%0.0%5–15%
Fragrance9.25%9.27%-0.2%5–18%
Cosmetics, Hair Accessories, Other8.44%8.44%0.0%6–14%
Housewares6.32%6.29%0.4%3–14%
Infant Products8.58%8.61%-0.3%5–14%
Publishing9.63%9.64%-0.1%5–15%
Sporting Goods9.76%9.79%-0.3%4–15%
Stationery/Paper8.81%8.86%-0.5%4–12%
Toys/Games10.54%10.49%0.5%5–21%
Videogames/Software10.53%10.51%0.2%1–20%
Overall Average8.79%8.75%0.5%1–21%

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