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Expo Wrap-up: Fighting FOMO With Innovation

We are back from another year of Licensing Expo at Las Vegas! Thanks to our regular TLL subscribers as well as our new members for stopping by our booth. We are currently processing all new newsletter subscriptions, so please keep an eye on your inbox for updates! Please note that the 10% Show Discount is still available through the end of June—contact Jen at jen@plainlanguagemedia.com for your custom quote and access to the latest TLL data.

As a preface to this year’s Expo wrap-up, it is important to note that entertainment/character-based brands continue to have an outsized presence on the show floor—as a category, based on licensed retail sales worldwide as well as in the U.S./Canada, entertainment/character does not rank first but third after corporate trademark/brands and fashion. These two categories were somewhat better represented compared to last year, but many new attendees expressed frustration that Expo was not as diverse as the business itself.

The floor itself was larger than in previous years; according to our own highly unscientific estimates, at least a several hundred square feet were added. And the number of attendees increased as well, with the bulk of new faces coming from retailers, manufacturers, and smaller licensors. International exhibitors also saw an uptick in numbers as well as booth size, but the general mood among attendees was more dismissive than welcoming.

More generally, the mood on the floor was unrelenting optimism and enthusiasm, coupled with frustration at the industry’s risk-adverse culture that encourages replication and discourages innovation and risk-taking. One agent aptly summed it up, stating that “the licensing business is full of lemmings.” A more modern diagnosis would be FOMO—licensing executives have a “fear of missing out,” so they hop onto the “next big thing” instead of developing new trends themselves.

There is hope that the business is shaking off its complacency, given the massive upheavals in content and consumer products distribution—virtually everyone we spoke to complained of stagnancy, lack of innovation, and long lead times. But some remain unaffected by industry norms: In response to a question about product development timelines, Millennial digital media powerhouse Buzzfeed (exhibiting its Goodful and Tasty brands but home to dozens more) commented that it looks at 100 day turnaround periods. Other larger players described periods as short as 11 weeks from idea inception to placement in stores.

Increasingly stale buzzwords heard on the floor this year include evergreen and lifestyle: the former used incorrectly three-quarters of the time, and the latter an increasingly commonplace and unoriginal descriptor.

TV, Film, and Otherwise New Media

If at first you don’t succeed, reboot. That’s the plan for properties such as Yo-Kai Watch and YooHoo & Friends, whose licensors are not backing down from the U.S./Canadian market thanks in part to rousing success in other territories. Other entertainment properties that are looking to nurture the U.S. market after success elsewhere include Miraculous: Tales of Ladybug & Cat Noir and Masha and the Bear.

It might be faster to list who isn’t getting a new TV series, film, documentary, Netflix/Hulu/Amazon streaming deal, or some combination of the above, than who is. Here is just a sampling of some interesting properties to announce content deals:

  • Scholastic’s Clifford the Big Red Dog is coming back with a new TV series airing fall 2019 (with partners 9 Story and 100 Chickens) and a live-action film in the works with Paramount. The company is looking to launch a robust consumer products program globally in territories including the U.S., Canada, the U.K., Australia, China, and India.
  • Care Bears is aging up into the 5–8 year-old range with a new retro 2D animation.
  • Aptly named Zoonicorn, which has a presence on YouTube and in plush with Jay@Play, is breaking out with a TV pilot.
  • Plush-based classic Monchhichi is getting a CG-animated TV series thanks to Technicolor, TF1, and Sekiguchi. Technicolor is also working on a drones-based series, Team DroniX, and underwater-based series, The Deep.
  • 9 Story Brands’ Colorforms is getting a Netflix series in 2019. The prodco is additionally developing a Chinese/Welsh co-production, Luo Bao Bei.
  • The Fred Rogers Co. is juggling multiple new film and TV projects, including a new Mister Rogers film starring Tom Hanks and unrelated to this summer’s documentary project.
  • Leading Endemol Shine’s adult-oriented roster are the stylish sci-fi series Black Mirror (looking at consumer tech and apparel extensions) and period series Peaky Blinders (gaming and gambling). Other TV series include a reboot of Deal or No Deal (Howie’s back) and Page Six TV (New York Post).
  • Only the second kids show to be made in partnership with the Paris Opera Ballet in its 200-year history, time-travelling tween drama Find Me in Paris is getting a second season. The show is produced by Cottonwood Media, ZDF, and ZDF Enterprises.
  • Following its success with Masha and the Bear, Ink Group continues to explore underrepresented cultures and original stories with Zafari, a CG-animated show celebrating diversity and conservationism, as well as Anansi, a show based on the titular character from African folklore.
  • LEVEL-5 abby’s collectability-driven The Snack World is launching in North America in later 2019 to join other cross-media projects (video games, digital/linear content, and toys) like an Inazuma Eleven reboot (2019), Yo-Kai Watch sequel, and Professor Layton sequel.

Kidult & Other Trends Heard ‘Round the Floor

After a steep drop in retail sales of licensed traditional toy/game-based brands for the U.S./Canada in 2017, collectibles brands are promising to boost the category in a big way through their own licensed extensions.

For example, the hottest breakout brand from holiday 2017 that ate into licensed sales, Fingerlings, has signed on over 40 licensees so far.

In part because Millennials are much less concerned with labels—it’s good to be a nerd and a geek and to express your identity through brands and pop culture—‘90s brands are seeing a resurgence as nostalgic properties with consumer goods lines for children’s properties aimed at older teens and adults.

On the other hand, many entertainment properties are also “aging down” after years of establishing their presence in the adult collector’s space—such as Jurassic World, Godzilla, and Men in Black. These properties are largely banking on the success of new films and other content with more family-friendly themes.

Perhaps because the 50th anniversary of the moon walk is next year, many properties are taking a look at space themes or lunar exploration within their franchises. As a trend, this is expected to take off in the toys and games space specifically.

Fashion Forward

This year, everyone is taking fashion seriously. There was an increased focus among major entertainment-, character-, and toy-based brands on the floor that were promoting fashion initiatives including high end, adult-oriented apparel, accessories, and footwear.

And fashion goods programs are, rightfully, acting more as marketing initiatives than as revenue generating streams. Most licensors admitted that royalty income from these types of deals was relatively insignificant compared to core licensed category sales (usually, toys/games and publishing).

But branded collaborations have a butterfly effect on an entire brand, elevating its status among consumers and retailers alike as an aspirational lifestyle brand. And these same licensors are looking ahead, expecting to meaningfully diversify revenue streams within the next five or so years.

Examples of licensors with extensive fashion-oriented programs featured at Expo include Hasbro, Cartoon Network, Peanuts Worldwide, Twentieth Century Fox, the Smiley Co., Sesame Workshop, and Sanrio.

Experiential Hubs

In contrast, interest is chilled for experiential extensions such as live events, stage shows, camps, theme parks, etc.—in the U.S./Canada, at least. It should be noted that major domestic parks like Disney, Universal, and Six Flags are not necessarily part of this shift, with the number of licensed or branded attractions expected to grow over the next five years. One additional exception is eOne’s Peppa Pig, for which three parks/attractions are expected to be developed in the U.S. in 2019.

For those who are actively engaged in the space outside of theme parks, there is a definite shift towards transient, pop-up events. In addition to saving money on extended leases, portable extensions allow brands to hit an area exactly when it is the most profitable and move out in off-seasons. Roving locations also create a thrill of exclusivity and urgency among fans to visit.

Those who have pulled back from experiential events and activations cited high costs, e.g., mall operators demanding six-figure fees for renting out space. In that sense, it is easier for retail brands like Build-A-Bear to launch pop-up concept stores because they can negotiate for better deals as well as temper expectations.

Costs are lower and consumer shopping trends are different in most other territories. Territories seeing massive increases in location-based entertainment include Asia (Southeast Asian countries in particular such as Singapore, Malaysia, and Thailand), Latin America (countries such as Mexico and Brazil are still building malls), certain Central Eastern European territories, and even countries in the Middle East and Africa.

In addition to character meet-and-greets, live shows and performances, and theme park attractions, activations can include themed hotels and cruise lines, cafés and restaurants, and even branded nurseries and educational courses.

Internationally, mall operators are looking at the U.S. as an example of what not to do and are embracing pop culture brand activations in their spaces. And it’s worth it; one mall show can draw approximately 5,000 children and their families in the span of a couple of hours.

These most common themes surrounding these areas are that they are highly under-served, with a growing middle class living in densely-populated and increasingly interconnected economic zones thanks to new roads, bridges, rail, and seaports. They are much more likely to be mobile-first, with their first experience on the internet more likely to be through a smartphone than a desktop computer.

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