FREE Report: Licensing in the Metaverse
Don’t miss out on the hottest trend in licensing today—making real money in the virtual world. Read this report to learn how you can capitalize on this trend today!

Upgrade to Premium Membership NOW for Just $147!
Get 3 Months of Full Premium Membership Access
Includes Our Monthly Newsletter, Licensing News, Deals, and Contacts
Royalty Rates

Average Royalty Rates Inch Up by 0.2% in 2018: Ent/Char Drives Increases in Property Types

Contact the editor at

The average royalty rate across all property types and product categories edged up 0.2% in 2018 to reach 8.81% in the U.S./Canada, according to TLL’s Annual Licensing Business Survey. Since 2006, the average royalty rate across property types and product categories has remained in the quite narrow 8.7–8.8% corridor, with overall rates fluctuating by no more than 2.5% from year-to-year in that same time period.

Three-fourths of respondents to the Survey shared that their royalty rates were flat from the previous year, with the remaining quarter indicated that rates rose. Virtually no licensing executive said that overall royalties decreased, although in some categories we noted that there was flat or depressed growth in rates.

The areas with the largest fluctuations were entertainment/character and food/beverage (both brands and, to a limited extent, products)—and by fluctuations, we mean that rates were up. For the sixth year in a row, entertainment/character led the charge with the highest growth in average royalties, up 1% in 2018 after increasing 1.5% in 2017 and 2016. Survey respondents pointed to Disney and Warner Bros. as the primary culprits behind the shift.

We discuss property types below, click here to review industry-wide royalty rates by property type.

Art-based brands enjoy the lowest royalty rates among the major property types TLL tracks, with an average rate of 6.13% in 2018. The lower rate is thanks to commercial artists who, outside of a handful of superstar A-list properties, tend to command lower rates. Museum-based properties, which historically asked for lower rates, are beginning to catch up to the larger (by retail sales) art and artists category for an average royalty rate of 6.11% in 2018—although the average range is three percentage points higher.

The celebrities category is re-calibrating to rest at a slightly lower (-0.1%) average royalty in 2018, in part because of an influx of new digital celebrities, entertainers, and chefs who demand lower rates than the well-heeled elite celebrities whose popularity has been waning in terms of retail sales over the last couple of years.

Sports- and collegiate-based brands continue to cost more on average, jumping 0.4% and 0.2%, respectively, in 2018. Part of the shift in average rates, however, is thanks in part to license consolidation: that is, some licensors are cutting down on their less profitable agreements and focusing on key licensees.

Entertainment brands drove higher royalties, while the character side of the equation was either flat or down for most agreements. For the first time in years, the average royalty for entertainment/character (10.24%) was higher than celebrity (10.23%) brands.

Estates saw a 0.5% higher royalty in 2018, rebounding after steadily decreasing rates in previous years.

Fashion royalties were flat, steady at 8.44% in 2018. While rates for apparel- and home-based brands were slightly higher (up 0.2% each), footwear-based brands slightly declined for an average -0.1% drop.

Despite maintaining one of the highest upper bounds for average royalty range (4–18%), music brands on average saw decreasing royalties as demand for the property type softened.

Non-profits also saw falling average royalties (-0.3%), but unlike for some other property types, this drop was a sign of positive growth in 2018. Key non-profit brands struck a higher range of deals commanding lower royalties (by product category) in the year, landing at an average 8.21% rate.

Publishing brands didn’t see royalty rates move dramatically, although there are signs that rates might increase for 2019. Books and comic books/strips jumped 0.2% each, while newspapers/magazines commanded an average 0.1% higher rate.

The megalith trademarks/brands category also jumped 0.2% to reach 7.78% in 2018, although with a 1–16% average range, it would be unwise to generalize. Rising royalty rates for food/beverage- as well as restaurant-based brands contributed to a percentage-point bump in the range of royalties for both property types.

Rates for traditional toys/games were up 0.4% on average, but a handful of A-list properties were responsible for a single percentage point increase in average royalty range to reach as high as 13% in 2018.

Despite a slowdown in rates for interactive/online brands, in 2018 there was an overall 0.4% bump in the broader category thanks to video game brands to reach an average 9.05% rate.

Average Industry-wide Royalty, by Property Type,
U.S. & Canada, 2017–2018
Note: Numbers may not add up exactly due to rounding.
Property Type Average Royalty, 2018 Average Royalty, 2017 Change, 2017–2018 Range of Royalties, 2018
Art 6.13% 6.14% -0.1% 4–15%
Art and Artists 6.11% 6.13% -0.3% 4–12%
Museums 6.11% 6.06% 0.8% 4–15%
Celebrities 10.23% 10.24% -0.1% 2–18%
Entertainers/Models 10.35% 10.38% -0.2% 4–18%
Chefs/Home-related 9.65% 9.64% 0.1% 2–16%
Collegiate 10.04% 10.02% 0.2% 5–19%
Entertainment/Character 10.24% 10.14% 1.0% 5–21%
Estates 9.70% 9.65% 0.5% 4–18%
Fashion 8.44% 8.44% 0.0% 2–17%
Apparel 8.40% 8.38% 0.2% 5–17%
Footwear 7.12% 7.13% -0.1% 2–14%
Home 7.51% 7.50% 0.2% 2–14%
Music 8.11% 8.14% -0.3% 4–18%
Non-profit 8.21% 8.24% -0.3% 4–14%
Publishing 8.49% 8.48% 0.1% 2–18%
Books 7.95% 7.94% 0.2% 6–14%
Newspapers/Magazines 8.17% 8.16% 0.1% 2–12%
Comic Books/Strips 9.57% 9.55% 0.2% 5–18%
Sports 10.11% 10.07% 0.4% 5–19%
Trademarks/Brands 7.78% 7.76% 0.2% 1–16%
Automotive/Motor Vehicle 4.07% 4.06% 0.1% 1–16%
Food/Beverage 5.61% 5.58% 0.4% 1–11%
Restaurants 5.93% 5.92% 0.3% 4–9%
Sporting Goods 7.01% 7.00% 0.1% 6–14%
Traditional Toys/Games 8.20% 8.17% 0.4% 5–13%
Video games/Interactive/
9.05% 9.01% 0.4% 6–15%
Overall Average 8.81% 8.79% 0.2% 1–21%


You have 3 articles left to view this month.

Your 3 Free Articles Per Month Goes Very Quickly!
Get a 3 month Premium Membership to
The Licensing Letter for just $147!

Sign up now and get unlimited access to all articles, archives, and tools for The Licensing Letter!









Try Premium Membership