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Licensed Entertainment/Character Sales Hit $31.1 Billion Worldwide; Soft Goods Lead Growth

By Karina Masolova,

Entertainment/character-based licensed goods continue to grow at a faster rate than any of the other five major property types TLL tracks globally—as well as the 13 major properties we track within the U.S./Canada territory.

In the U.S./Canada, entertainment/character-based licensing grew by $435 million in 2017 to reach $13.2 billion in retail sales, or just over 12% of the territory total.

Internationally, the category was up 3.1% to reach $17.9 billion in licensed retail sales. In 2017, the U.S./Canada was a major driver of growth in retail sales worldwide; the territory constitutes just under 43% of all global sales for the property type.

But growth rates were far from uniform in 2017—the brand landscape was extremely volatile, with a handful of brands single-handedly lifting the category from what would have otherwise been double-digit declines. Such brand volatility and consumer fatigue emerged even before Toys ‘R’ Us announced bankruptcy in late 2017—and, to put it mildly, that development wasn’t too helpful for the health of the toys/games industry. Thanks in part to TRU’s demise, the share of licensed entertainment/character sales made through specialty retailers declined in 2017.

For example, superheroes retain a supersized influence in the licensing business, with respondents to TLL’s Licensing Business Survey reporting double-digit sales growth for A-list properties like Marvel and DC Comics in 2017.

On the other hand, many were disappointed by underperforming “sure hits” like Cars 3 and Despicable Me 3—even Star Wars stumbled, although it continued to perform relatively well (think low-double-digit growth versus the triple-digit gains seen with the first Star Wars reboot).

Notably, the “character” part of the “entertainment/character” continued to record stiff declines. Retail sales of licensed merchandise for characters like Sanrio’s Hello Kitty and Disney’s Mickey & Minnie continue to trend downwards worldwide.

Product Category Sales Come Home

Apparel and accessories now make up 20% of all entertainment/character brand-based sales in the U.S./Canada at 10% share each, or roughly $1.3 billion. Sales of licensed apparel grew 10.9% in 2017 (or $130 million) compared to accessories’ slightly higher 11% growth ($131 million).

The most rapidly growing categories were in home-based goods such as furniture/home furnishings (24%) and domestics (23%). In sheer dollar amounts, however, such growth was not enough to overcome the roughly $333 million loss sustained by the dip in the toys/games category.

Although sales fell by 8% in 2017, toys/games remains the largest product category in entertainment/character at 29% share. Notably, it was the only category to decline in entertainment/character. Overall retail sales of licensed toys/games contracted 4.4% in 2017, with losses driven primarily by entertainment/character—corporate trademark/brand-, fashion-, and sports-based brands recorded flat to slight growth in 2017.

The general U.S. toy market is expected to remain flat at 0-1% growth in 2017, according to the NPD. In 2018, TLL anticipates growth to come from toyco-owned brands, in particular collectibles lines like Shopkins, which are expected to launch their own licensed extensions this year.

Another bright spot for entertainment/character brands is the health & beauty space, where sales grew 19.5%—or $116 million—to reach almost $708 million in 2017. Most new growth comes from girl-oriented brands like My Little Pony extending into makeup for tweens and adults. Surprisingly, some younger (unisex) brands are also seeing growth in the vitamin and supplement space as part of a broader health trend driving food/beverage growth.

With 6.1% growth in 2017, food/beverage sales are expected to flatten somewhat both as the health foods market matures and some brands step back from an incredibly competitive space. Healthy kid’s products like juice boxes, cereal, gummy snacks, and snack bars are the most common medium on which entertainment/character brands appear, but everything from fresh fruit to frozen dinners to cake mixes is being actively licensed.

Retail Sales of Licensed Entertainment & Character Merchandise, by Product Category, U.S. & Canada, 2016–2017
Note: Numbers may not add up exactly due to rounding.
(Figures in Millions)
Product Category Retail Sales, 2017 Retail Sales, 2016 Change, 2016–2017 Share, 2017
Accessories $1,319 $1,188 11.0% 10.0%
Apparel $1,320 $1,190 10.9% 10.0%
Consumer Electronics $547 $521 5.0% 4.1%
Domestics $400 $326 23.0% 3.0%
Food/Beverages $500 $472 6.1% 3.8%
Footwear $302 $300 0.5% 2.3%
Furniture/Home Furnishings $365 $294 24.0% 2.8%
Gifts/Novelties $286 $318 -10.0% 2.2%
HBA $708 $593 19.5% 5.4%
Housewares $246 $227 8.0% 1.9%
Infant Products $393 $378 4.0% 3.0%
Publishing $868 $815 6.5% 6.6%
Sporting Goods $207 $202 2.4% 1.6%
Stationery/Paper $500 $483 3.5% 3.8%
Toys/Games $3,832 $4,165 -8.0% 29.0%
Video Games/Software $919 $892 3.0% 7.0%
Other $503 $421 19.5% 3.8%
Total $13,215 $12,785 3.4% 100.0%


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