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TLL Survey: Nascent Digital Celebs Sector Rivals Entertainment/Character for Growth

Relative to the rest of licensing, retail sales of goods licensed by digital celebrities grew with the speed of a viral video in 2015, spiking 8% to approach $1 billion in 2015 according to The Licensing Letter’s Annual Licensing Business Survey. The fledgling subcategory of the celebrity property type grew more during the year than any full-fledged property type except for the long-established and much larger (at $11.9 billion) entertainment category, which also grew 8%. Entertainment—which holds an 11.5% market share in licensed product sales, compared to digital celebrities’ 0.9% share—however, was driven by a franchise property light years bigger than any digital celebrity: Star Wars.

Growing from a small base, licensing of digital celebrities picked up speed during the year, with 2015’s 8% growth rate almost tripling 2014’s 3% gain. Sales of licensed goods spawned by digital celebrities topped out at $971 million in the U.S. and Canada in 2015, according to the TLL Survey, as digital celebs moved to build their profiles beyond social media platforms and into streaming services, retail and other outlets. In the process, many of them have built fan engagement that often tops that of more traditional stars.

Digital is the smallest subcategory of the Celebrities property type but drove growth in the category overall, which gained 2.5% in retail sales (still representing slower growth than the 3.4% of the licensing industry overall). The celebrity subcategories of entertainers/models and chefs/home-related grew just 1.8% and 1.1%, respectively, in 2015.

Retail Sales of Licensed Merchandise, Based on Celebrity Properties, U.S./Canada, 2014–2015
Note: Numbers may not add up exactly due to rounding.
(Figures in Billions)
Property Type Retail Sales, 2015 Retail Sales, 2014 Change, 2014–2015 Share of Market, 2015

Entertainers/models $2,585 $2,540 1.8% 45.5%

Chefs/Home-related $2,126 $2,103 1.1% 37.4%

Digital/Other $971 $899 8.0% 17.1%

Total Celebrities $5,682 $5,541 2.5% 100.0%

As evidence of digital’s growing influence in licensing in 2015, one needed look no further than Licensing Expo 2015, where the pre-conference Licensing University included a Digital Media Licensing Summit panel discussion and Bethany Mota, the beauty and fashion vlogger who’s become the face of digital celebrity success in licensing, delivered a keynote speech.

Mota broke into licensing in 2013 by teaming with teen retailer Aéropostale on a personally branded line of apparel, which has since expanded to fragrance and home décor. This year, she added a line of branded school supplies for Target.

In addition to staged events, digital loomed large on the Expo floor in 2015. Record numbers of digital attendees roamed and set up booths, including first-time exhibitors YouTube and its content partner AwesomenessTV.

Despite the growth in the digital celebrity property type and the Expo activity, however, many licensees and retailers remain slow to embrace properties established in digital services but lacking exposure on traditional, linear TV outlets. This was made visually apparent in 2016’s Expo, which saw less digital celebrity presence and a deserted YouTube pavilion.

Licensing successes like Mota’s are the exception, rather than the rule, though there are others: beauty vlogger Michelle Phan launched makeup line em Michelle Phan with L’Oreal and British fashion and beauty vlogger Zoe Sugg (Zoella) has a Zoella Beauty line of bath and beauty products introduced initially in the U.K. and brought to the U.S. this year, where it is sold in American Eagle and Tillys stores.

Mass merchant Target has also embraced digital celebs. It sells women’s apparel line Who What Wear, designed by bloggers Hillary Kerr and Katherine Power, and Oh Joy!-branded baby and home products from blogger and Pinterest influencer Joy Cho.

Many more digital celebrities, however, have a smaller licensing footprint than their millions of followers might suggest, with licensing activity often limited to book deals and merchandising programs with custom manufacturing websites like Spreadshirt or Redbubble. The most popular YouTuber in the world, Swedish comedian and videogamer PewDiePie (real name Felix Kjellberg) in 2015 published a book, This Book Loves You, through Penguin Books, and a videogame, PewDiePie: Legend of the Brofist, with Outerminds. Other merchandise (think t-shirts) is sold on Zazzle, Redbubble and other sites. The same is true for other top YouTubers, like Tyler Oakley and Ryan Higa (Niga Higa).

This new wave of digital celebrities will almost certainly license more widely than the online T-shirt business, however, as they move beyond the short form realm of YouTube, Vine, Snapchat, Instagram, Twitter, Facebook, and and into more traditional, linear TV series and movies. Tyler Oakley, for instance, has a TV development deal with Ellen DeGeneres, Variety reports, and Defy Media, whose brands include the popular Smosh comedy team, raised $70 million to expand programming, including to traditional TV.

In the next few weeks, the Miranda Sings series, Haters Back Off, will bow on Netflix worldwide with eight half-hour episodes, while Amazon Prime will begin streaming Dirty 30, a movie about an out of control 30th birthday party, starring YouTubers Grace Helbig, Mamrie Hart and Hannah Hart. Netflix also will have an unscripted series following the life of Vine star Cameron Dallas as he plots his career path to the next level.

These stars follow others including PewDiePie and Freddie Wong into series on streaming platforms. PewDiePie anchors Scare PewDiePie, a reality-adventure series on YouTube Red, while YouTuber Wong has launched two series on Hulu, RocketJump: The Show and the upcoming Dimension 404.

Even Disney – owner of the Star Wars franchise and a full 50% market share (or more) of entertainment licensed product sales—its doing its part to grow the business for digital celebrities. When the Mouse House launched its merchandising campaign for Star Wars: The Force Awakens on September 4, 2015 (“Force Friday”), it kicked it off with an 18 hour “unboxing” marathon on YouTube. In a bit of priceless exposure, Star Wars toys were opened by digital celebrities from Disney’s own Maker Studios in cities around the world.


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