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Licensing Execs Pessimistic About After-Effects of Covid-19; 75% Say Business Will Drop by 25%

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In this year’s edition of TLL’s Annual Licensing Business Survey, we introduced new questions specifically targeting the impact of Covid-19 on respondents’ licensing business.

Note that the Survey was administered throughout March, and earlier responses predated many of the major impacts of Covid-19, such as the effective shut-down of several major metropolitan cities. As a consequence, we expect these responses to shift as time goes on.

We’re hosting a follow-up survey through the month of April in connection with TLL’s 2020 Salary Survey, to help track the individualized effects of Covid-19 on the licensing industry as well as the licensing executives that keep it going. As always, all responses are confidential and any potentially identifiable information is redacted. Update: The Salary Survey has since closed. Thanks to all who responded.

When asked how immediately direct the impact of Covid-19 on their business was, just 20% of Survey respondents stated that there was minimal or no impact. Over 80% said that there was at least some indirect impact, with 43% of respondents stating that they were directly impacted.

Over three-fourths (76%) of respondents said that their department or company had taken some action in response to Covid-19. The remainder indicated that either that there was no action (14%) or that they did not know (10%).

Of those who mentioned specific changes, roughly two-thirds (67%) said that they were working from home. Other changes included freezing new licensing contracts and hirings, donating royalties to organizations dedicated to fighting the spread of Covid-19, and reviewing sourcing or retailer agreements to make changes.

When asked about their personal level of stress, only 10% indicated that they were minimally or not at all stressed about Covid-19. Ninety percent said that they were at least somewhat stressed, and 35% indicated that they were very stressed. Stated reasons for stress naturally included the uncertainty of measuring the impact of the related economic downturn as well as concern for the health of family members.

When asked about the biggest challenge they will face in 2020, a question we ask from year-to-year, virtually every respondent referred to Covid-19 and the unknown short-term and long-term impact of factors such as store closures, increased rates of and extended unemployment, lowered consumer confidence, and lowered spending power.

A quarter (25%) of respondents expect their business to grow in 2020, while over half (56%) predict a decline and 19% expect minimal or no growth.

Among those that expect a decline in business over 2020, the average expected dip is roughly -25% compared to 2019 licensed retail sales. For those who predict growth, sales are expected to rise 15% over last year.

For context on where these licensing executives are coming from, roughly 71% of respondents’ departments or companies were based in the U.S./Canada, 14% in Western Europe, and the remainder 15% in the rest of the world. Approximately 38% of respondents do business worldwide, with all major territories adequately represented for the purposes of determining licensing trends.


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