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Retail Sales

It’s Getting Crowded: A Census of Licensors

Over 2,500 unique companies own and license out intellectual property for branded consumer goods in the U.S./Canada. TLL breaks down the numbers behind the Licensing Sourcebook to discover where the money is—and for which property types the field is getting crowded.

Please note that this breakdown won’t tell you the relative size of the licensing business—after all, it doesn’t factor in retail sales activity generated by the efforts of  licensing agents (approximately 1,300) and other service providers. I’ve noted TLL’s figures for property type share by retail sales where appropriate. The number of licensing companies is based on aggregated listings in the Licensing Sourcebook as of January 2018. In the rare case that a company represents brands under more than one property type, that company is counted twice. Some categories have been merged to best represent the data.

Companies just dipping their toes in the licensing business (as a rule of thumb they won’t have over $500,000 in licensed retail sales) are not typically listed in the Sourcebook. Instead of taking on staff to strike new deals, these companies’ brands will be represented by agents. Or they might not enter into traditional licensing arrangements at all, but, instead, order print-on-demand merchandise. Even if their volume is small, these branded goods are nevertheless one extra source of competition for licensed brands.

Only 12% of licensor companies in the Sourcebook are represented by at least one agent. Entertainment/character and video games/interactive/online licensors are the most likely to retain agents. Typically, these agents serve as point of contact for international territories in which the licensor does not have an office. In recent years, however, the trend has been for licensors to take on increasing ownership of their brand licensing business and establish their own presence in countries like China or India.

Keep in mind that among licensors, licensed retail sales range from under $50,000 to over $100 billion. The number of properties owned range from just one to thousands. Similarly, the number of employees dedicated to licensing at least part-time ranges from one to over one hundred. Despite these wide disparities, there are some trends that emerge when sorting these companies by the types of brands they own.

Entertainment/character & Trademark Licensors Overwhelm the Rest

By sheer numbers, the companies which license out entertainment/character- and corporate/trademark-based brands dominate the industry. Combined, the number of companies under these two banners consitutes almost half (45%) of the total Sourcebook listings. Naturally, these categories also see the largest variances when comparing any two companies.

Ranked in order by sheer number of companies, here are the top property types—not that much different from an accounting of the companies that regularly appear at trade shows:

  1. Entertainment/character
  2. Trademarks/brands
  3. Fashion
  4. Art
  5. Video games/interactive/online
  6. Publishing
  7. Traditional toys/games
  8. Sports & collegiate
  9. Non-profit
  10. Celebrities & estates
  11. Music

Source of Licenseable Properties in the U.S./Canada

On average, companies involved in licensing count 5.7 properties under their belt. Unsurprisingly, on the low end of the scale, art and non-profit licensors count the least amount of IP, on average.

Despite the fact that there are relatively fewer music brand-based companies, those that exist are powerhouses representing, on average, 11 properties for consumer products licensing. This figure doesn’t accurately represent the number of artists per company however—a large-scale music publisher will have thousands of artists on its roster. Listings in the Sourcebook are limited to a licensor’s most popular musical acts or, more broadly, the record labels under which they perform.

In the same way, entertainment/character brand-based licensors own approximately 10.3 properties per company. Given that 20% of entertainment/character licensors own just one brand (and 40% of companies five or less) in the U.S./Canada, the high average is a function of a handful of companies with monster rosters.

In an imperfect accounting of the total number of licenseable properties, we’ve counted and segmented the total number of individual properties owned by licensors—or over 14,000 brands.

Entertainment/character properties outnumber the rest by a wide margin with over 6,700 brands owned, followed by trademark/brand (1,800) and fashion (1,200). Note that the total number of brands represented in the Sourcebook is larger because it includes properties owned by companies outside of the U.S./Canada as well as those whose only representation is through a licensing agent or master licensee. Because of this, the breakdown of brands is not entirely accurate—European fashion, sports, and video game brands, for example, have a non-negligible impact on licensed sale in the U.S./Canada.

Number of Co.’s Versus Share of Retail Sales

The licensing business for property types where the share of companies is greater than the share by retail sales tends to be more competitive, with a greater number of smaller companies duking it out for consumer attention. Although there are more players, these property types are actually easier to compete in because retailers are accustomed to juggling a variety of properties on shelves.

On the other hand, in categories where the share of companies is less than the share by retail sales, the field tends to be dominated by a number of A-list players. Unique, strong brands can certainly disrupt the space—but at a greater cost.

And, obviously, these generalizations are best taken with a grain of salt. The influence of property type depends on the product category and territory in which one is licensing any given brand—as well as the strength of that brand.

Sports, Celebs & Music Co.’s See Most Sales

On average, companies which own sports and/or collegiate brands generate the most retail sales, as compared to those which license out other property types. This makes sense given that there are fewer companies that own sports league IP than, say, children’s TV shows. Note that because we’re only counting U.S./Canadian companies here; many football clubs which also generate North American sales are not being counted.

Celebrities & estates ranks second (each company generating an average of $165 million) and music third ($105 million). Not all of the money is coming in as profits, however—companies for the top three property types tend to make deals with multiple partners that command lower royalty rates. They also have some of the lowest rates of licensing agents and therefore take on greater expenses for staff and labor.

While the average retail sales figures themselves should be taken with a teaspoon’s worth of salt, the ranking closely tracks relative sales across different types of companies.




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