By Gary Symons
TLL Editor in Chief
As 2022 draws to a close, we at TLL have been struck by the amazing talent for innovation and rapid change we’ve seen in the licensing industry.
Certainly 2022 has been a tough year by any standard. Between the ongoing hangover of the COVID-19 pandemic, the War in Ukraine, ongoing logistical logjams, runaway inflation, and historically low consumer confidence levels, one could be excused for just curling up in a ball and waiting for 2023!
Instead, the licensing sector has been as dynamic and open to innovation as ever, launching new types of programs and products that are not only changing our industry, but changing the entire world as well.
For that reason, we’ve come up with our Top 5 Licensing Trends of 2022 to mark some of the brilliant ideas and programs we’ve seen over the past year. And like any good storyteller, we’re leaving the best for last.
Number 5: The Everything, Everywhere, All at Once Company
Once upon a time, toy companies were toy companies, film companies were film companies, and retailers were retailers.
For many years now, companies have broadened their reach and their ability to generate revenue by adopting multichannel marketing and licensing strategies. For example, in days gone by a toy company mainly made toys and sold them wholesale to a toy or department store.
Today, companies like LEGO, Hasbro, Mattel, and SpinMaster, among others, are entertainment conglomerates in their own right. As well, these companies have their own apps and video games, their own ecommerce channels, and in the case of LEGO, they are also a major retailer with brick-and-mortar stores around the world.
In 2022, we’ve seen that concept broadened still farther, with companies that now combine the entire product lifecycle into their internal operations.
The most dramatic example of this actually started in late 2021, when online retail giant Amazon inked a deal with LEGO for its Monkie Kid franchise. In that case, Amazon picked up the Monkie Kid show for its Amazon Prime streaming service,
The Monkie Kid was the first agreement to see Amazon winning both the streaming rights and the product distribution rights in a single deal.
“This is profound, this is really an historic moment,” said Richard Gottlieb, the founder and CEO of Global Toy Experts, and Publisher of Global Toy News. “I mean, Walmart, Amazon and Target can all sell lots and lots of product, but what Amazon has that Walmart and Target do not have is the ability to stream video to a very broad audience.
“This will deepen and broaden brand equity, brand visibility, and should really boost sales. It’s huge.”
But Amazon was just getting started. It later signed another deal with the Jazwares to be the Master Toymaker for its own series Do, Re, Mi, with the products being available only on Amazon. In other words, other than the production of the toys, Amazon essentially licensed its own show to itself for the production of an Amazon-exclusive line that’s only available on Amazon.
And they’re not alone in following the Everything Company strategy. Netflix in 2022 hit back at Amazon as it developed its own capacity for omnichannel licensing. The king of streamers created its own licensing department for its shows, then signed a distribution deal for its own dedicated ecommerce site through Walmart, and finally created its own internal ecommerce site.
Another example is Disney, which started out primarily as a film producer, then became a theme park operator, but now has its own massive retail operation directly tied to its huge and rapidly growing streaming service.
4: The Rise and Fall of NFTs
NFTs rose to prominence in August 2021 as artists found ways to earn money from digital representations of their work, but really exploded in January of 2022 as licensing companies realized the potential for digital collectibles. On Open Sea alone, more than $4 billion was spent on NFTs in January alone!
On the licensing side, everyone from the NBA to King Features jumped into the virtual collectible marketplace, finding new and innovative ways to add value to the concept.
But the boom faded fast. While the market for digital collectibles actually remains very strong, the concept of NFTs as an investment was ravaged when investors fled both the cryptocurrency and NFT markets in June this year.
Partly driven by astronomical investment losses, NFTs have become a dirty word in some quarters, especially among video gamers. In one case, the studio that produces the popular game Worms introduced NFT collectibles, and then were forced to apologize and ban NFTs from the game forever amid a vicious backlash from their game users.
Is there a future for blockchain-based collectibles? Very likely … but just don’t call them NFTs!
3: Brand-based Virtual Influencers
TLL first wrote about the Virtual Influencer movement in 2020, as studios like Brud cleverly developed virtual people who only exist on the web or on Instagram, and yet have a huge fan base.
At the time, Brud’s Lil Miquela was the most followed virtual human, followed by the Japanese influencer Imma, who made headlines with an innovative display at Ikea where shoppers could watch her go through her daily life via a realistic hologram setup.
But in 2022 the game changed for virtual influencers, as the power of brands and licensing took its inevitable effect. Today, the most popular influencers are those created by and connected to a popular brand. According to the industry site VirtualHumans.org, the world’s most followed virtual influencer is Lu do Magalu, representing Brazilian retail brand Magazine Luiza.
Lil Miquela appears to be hanging on to the number two spot, but number three with a bullet is the Mattel-owned cultural juggernaut Barbie, who now has 2.2 million followers on Instagram, and 11.1 million subscribers on YouTube.
As TLL predicted back in 2020, licensed characters like Barbie appear to be the future of Virtual Influencers, and will almost certainly increase their market share on social media vs. real life influencers.
2. Name Image and Likeness Deals in the NCAA
The NCAA first allowed student athletes to earn money from NIL deals in July of 2021, and in 2022, the impact of the NIL changes is so profound that it’s as if a new, massively popular sport emerged in just a single year.
Consider that, in the first year alone, an estimated $917 million poured into NIL deals for NCAA athletes and schools in football and men’s basketball alone.
As expected, male athletes in football and basketball have dominated the list of big money deals, but it’s the female athletes who dominate the social media landscape. As TLL recently reported, eight of the 10 top money earning NCAA athletes on social media are women, and many of the athletes on that list are from sports like Track and Field or gymnastics.
And the women are definitely showing the guys how it’s done. The top-earning athlete on social media in 2022 was the women’s basketball star Sedona Prince, who earned an average of $80,000 for a single post on TikTok!
1. Licensing in the Metaverse
Sure, the metaverse has been in development for many years, but it was in 2022 that it really took off, particularly for the licensing industry.
In 2021 we primarily saw artists and art houses dipping their toes into virtual worlds like The Sandbox or Decentraland, but in 2022 literally hundreds of brands have launched metaverse licensing programs.. Many of the leaders in the space are in the fashion industry, with major houses like Gucci, Tommy Hilfiger, and Balenciaga all taking a major stake in this new licensing bonanza.
However, the metaverse is also being used extensively by other types of licensors, from automakers to toy manufacturers.
The idea of the metaverse really entered the public zeitgeist in 2021 when Facebook changed its name to Meta, and announced that its primary goal as a company was development of the metaverse. That opened the floodgates, and in 2022 the entire licensing industry poured through, establishing beachheads in metaverse worlds like Roblox, Minecraft, and Fortnite.
In May this year Licensing International issued the first ever Licensing Award of Excellence to a metaverse project, naming fashion retailer Forever21, Roblox, and the metaverse experience creator Virtual Brands Group as the winner.
While many people think of Roblox as a video game for kids, in reality it’s more of a software platform or metaverse on which creators can build their games, products, or even entire stores.
What Virtual Brand Group did was to take that opportunity to a new level, creating a new experience that allows Roblox users, fashion influencers, and creative world builders to own and manage their own personal Forever21 store.
Users will be able to buy and sell Forever 21 merchandise, including accessories and clothing, hire non-player characters (NPCs) as employees and express themselves by customizing every aspect of their own store as they try to become the ‘top shop’ in the experience.
There. have been other licensed activations in various metaverse worlds, including Roblox, but one of the key things that made the Forever 21 Shop City project stand out is that it brought real life products into the metaverse, and metaverse products into the real world, blurring the lines between our digital and real worlds.