Each issue of Raugust Communications’ monthly e-newsletter features Datapoint (a recent research finding from Raugust Communications); a Licensing Topic of the Month; and news about the company and its books and reports on licensing. Below are the Datapoint archives.
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Datapoint: November 2023
Licensing Activity in the U.S. Board Game Category
More than a fifth (22.4%) of board games currently on the market are tied to licensed properties, versus 77.6% that are original, unlicensed games, according to new research from Raugust Communications.
Pure licensed products, with brand-new game play tailored to the property, account for 11.6% of the total; co-branded games, where the property is applied to the game play of an existing board game brand, comprise 9.7%; and co-branded and licensed games that are based on a licensed IP owned by the same toymaker that produces the game—e.g., the Hasbro-owned My Little Pony version of the Hasbro-produced game Guess Who?— represent 1.1% of the total. Games in the last category are often perceived by consumers as licensed products.
Looking at just the portion of the market tied to licensed IP, 51.9% of games are identified as pure licensed products, 43.3% are co-branded, and 4.8% are based on licensed IP owned by the same company as makes the game (including both co-branded examples and those introducing original game play).
The co-branded segment, while still accounting for a lower percentage of the overall market than pure licensed titles in terms of the number of games available, has been growing rapidly in recent years. It is a less-risky configuration. Rather than asking consumers to purchase a brand-new game with untested game play, combining two strong brands gives fans a new way to experience a favorite property along with a gaming experience that is familiar and is known to be fun. Co-branding is also a way to bring in new fans to a classic gaming franchise and keep it fresh over time and to heighten the chances for a property entering the category for the first time to achieve success.
Overall, sales of board games and puzzles have grown at a compound annual growth rate of 7% for the past three years, according to Circana, putting them in about in the middle of the pack among the 11 toy categories tracked. In the first nine months of 2023, sales have been flat, a good performance given the 8% decline in toys overall. Board games and puzzles outperformed seven of the 11 other categories during that period.
This new Raugust Communications research, which includes the U.S. only, analyzes board and game SKUs (but not puzzles) that are on the market as of November 2023, including both new releases and classics. The data measures the number and share of products on the market, not retail sales; the co-branded segment likely would account for a larger relative share of the total in an analysis of the latter.
On a side note, our data suggests that less than 5% of total board game franchises have launched outbound licensing programs. Most of these are narrow in scope, although there are some exceptions.
Datapoint: October 2023
The Changing Sneaker Collaboration Landscape
The landscape of properties involved in sneaker collaborations in the U.S. over the past nearly two years, compared to the previous two-year period, has diversified. Designers and fashion labels, from Gucci to Supreme, continue to dominate the market, commanding a share of 32% of collaborations, according to new Raugust Communications research. No other property type accounts for more than 15% of the total.
But fashion’s share of market has declined significantly, from 41.1% in the two years from 2020 through 2021 to 32.0% in the almost two years from 2022 through 2023 year to date. That is because every other property type tracked saw their shares rise as more properties have gotten involved in this sector.
The property types with the largest percentage-point increases include corporate brands, whose share is up 1.7 points from 9% to 10.7%; celebrities and influencers (outside of musicians and athletes, which are included in other segments), whose share is up 1.5 points, from 3.3% to 4.8%; entertainment/character properties, whose share is up 1.3 points from 13.6% to 14.9%; and art and museums, whose share is up 1.1 points from 4.6% to 5.7%.
The largest sectors in the most recent nearly two-year period, after fashion, are entertainment/character (with a share of 14.9%), corporate brands (10.7%), musicians (9.3%), and sports/athletes (8.6%).
The data measures shares of the number of collaborative deals done during the period, not retail sales. Only agreements for which the products are distributed in the U.S. are included; some initiatives may have distribution in other territories as well. The 2023 figures include the nine-and-a-half-month period through October 15; all other years are full-year figures.
Datapoint: September 2023
Deals in the Children’s Audio Category, by Medium
Children’s audio has been an active category for licensing deals of late—especially based on children’s entertainment properties, not surprisingly—as parents and caregivers continue to value off-screen time for their children; as the children themselves enjoy audio as a medium for storytelling, as well as music; and as licensors look for every opportunity to reach their audience and generate revenue.
Audio devices designed for children, which give young kids agency over what they listen to (e.g., Tonies, StoryPod, and several others) account for 46.6% of deals in this category, according to new Raugust Communications research. These marketers need a lot of content to offer their consumers, and some rely heavily on licensing, which contributes to the strong market share in this research.
The second most active medium for licensing deals is podcasts, accounting for 22.4% of agreements during the period measured. This sector has attracted some high-profile players of late, with productions tied to Disney’s Frozen, Dr. Seuss, and Peppa Pig, to name a few.
Two other formats round out the market. Streaming audio accounts for 15.5% of deals, with the likes of the Lumistella Company (Elf on the Shelf), Hasbro, and Moonbug recently signing deals to distribute music content on streaming channels. And music albums, with Teletubbies, Peppa Pig, Clangers, Bluey, and PJ Masks among the properties represented, account for a 12.1% share, including both digital and physical (often vinyl) formats.
It should be noted that the data set for this research is relatively small compared to most of the research published in this newsletter. The data measures properties backed by licensing programs that entered the children’s audio market from January 2022 through August 2023. It includes music and storytelling productions alike, both repurposed and original, but does not include content about children’s entertainment (e.g., productions featuring discussions about a movie or TV series). The numbers are global.
Datapoint: August 2023
The Wide World of Licensed Collectibles
Even as the collectibles market has declined, both in terms of primary-sales revenue and secondary-resale value, since the peak of the pandemic lockdowns, collectibility remains a very important component of licensing programs across property types, probably as much as any time in recent memory.
A lot of it has to do with collectibility being part of the fan experience. The acts of unboxing, studying and learning about a property or product, taking acquisitions out repeatedly to admire or show friends, being surprised and delighted by new offerings, assuming pride of ownership, etc.—as well as value in some cases—all contribute to the joy fans get from a favorite property or brand.
New Raugust Communications data examines the key sectors of the collectibles market, taking a broad view. The research finds that, in terms of the number of deals done globally during calendar year 2022, digital-first collectibles were the most common focus of licensing agreements during the period, accounting for 29.4% of deals done. This sector includes digital-first initiatives only (sometimes including the occasional connected physical product) and excludes physical products with digital collectibles as a value-added offering. The frequency of deals is primarily due to the low barriers of entry and continued experimentation in this relatively new space.
The second most common collectibles category is “products as collectibles,” accounting for 25.2% of deals done. This refers to products that are functional—they can be and are worn, read, or played, for example—but also are collected by some fans. Classic examples include comic books, action figures, sports cards, t-shirts, and watches; popular examples of late include sneakers and handbags. As it is difficult to determine which purchases may be driven by collectors versus daily users, deals in this sector were included in the research only when described by the licensor or licensee as collectible.
The third largest category is children’s collectibles, including things like mini-figures, trading card games, and vinyl figurines, which account for 23.7% of deals done. These are low-cost items for which the joy comes more from assembling a big collection and knowing a lot about each item than from preserving the value, although knowing the rarity is part of the fun. Of course some adults collect these products as well, and often do care about value on the secondary market.
High-end collectibles, which account for 15.6% of deals done, are defined as very detailed pieces using the highest-quality materials, very limited or even one-of-a-kind, and produced specifically as collectibles. These are collectibles in the classic sense. They range from replica movie props to sculptures or other pieces integrating gemstones or precious metals. The appeal to collectors is often the lure of owning something rare and closely tied to a favorite property and/or being part of a small community of super-fans. This segment appeals to relatively few customers, albeit avid and loyal ones, and there are fewer licensees active in this market than in the other sectors, thus its relatively low share of collectibles deals overall.
It should be noted that there are grey areas in terms of whether a given item should be defined as collectible, as well as, in some cases, which of these buckets a given collectible should fall into. But the research does help illustrate the depth and breadth of the currently hot collectibles landscape.
Datapoint: July 2023
Footwear Deals by Property Type, U.S.
The footwear category, always a stalwart of the licensing business, has been a particularly busy place for collaboration of late, in part driven by the insatiable demand of sneaker collectors for new releases.
According to new research by Raugust Communications, character/entertainment properties were the most active in forging new deals in the U.S. market over the past two years, accounting for 32.6% of all the licensing and collaboration agreements announced in this category during the time period. This is a somewhat surprising result; however, entertainment and character properties bring the variety and element of fun that consumers are looking for in their shoes these days. In addition to long-term deals, mostly in the kids’ space, properties from Sesame Street and Halo to Marvel and SpongeBob were involved in short-term footwear collections for both kids and adults.
Fashion was the second most active property type, accounting for 22.5% of deals. While designer and fashion labels are often involved in in-and-out collaborations, traditional long-term brand-extension agreements, along with ongoing series of collaborative drops, are driving the action in this segment.
The third most active IP type was corporate brands, with an 18.8% share of total footwear agreements over the two years. Unlike fashion, this segment was driven by novelty, with brands like Hennessy, Haribo, and Hidden Valley creating drops for brand aficionados, collectors, and consumers who view a range of fun shoes as essential fashion accessories.
Celebrities accounted for 13.8% of the deals done in the last two years, with musicians leading the way, mostly involved in short-term drops. They were followed by athletes, with a combination of long-term agreements and in-and-out collaborations.
A sizable share, 12.3%, of category deals were attributable to other properties—artists, nonprofit groups, sports entities, and the like—which demonstrates the diversity of licensing activity in this category.
The data measures licensing and collaboration agreements announced from July 2021 through June 2023 and is focused on the U.S. market, including both U.S.-only and regional or global deals of which the U.S. is a part. Partnerships analyzed range from collaborations to traditional licensing deals and encompass new alliances as well as renewals. Some deals in the analysis focus on footwear specifically, while others include shoes among a broader range of products. The data examines the number of deals done, not retail sales.
Datapoint: June 2023
Food, Beverage, and Restaurant Brands Available for Licensing, by IP Type
Outbound licensing of food, beverage, and restaurant brands has been among the most active sectors in the corporate licensing business, and the licensing business in general, for the last several years. And the deals just keep coming.
New research from Raugust Communications shows that, in the U.S. market, owners of candy and gum brands are the most active players, as measured by the number of properties available for licensing in 2022. In fact, candy brands account for almost 25% of the food brands available that year. The next most active IP types include alcoholic beverages (with a 14.5% share), cereal brands (11.8%), and restaurants (including everything from QSRs to sit-down dining, with 10.9%).
Observers who have been watching this area of the business will not be surprised by these results. Not only are these segments the most prevalent in terms of properties available, but they are also among the most active in forging deals.
All other segments, respectively, account for well under 10% of the properties available. They include fresh foods (7.7%), non-alcoholic beverages (6.3%), shelf-stable foods not broken out into other categories (5.4%), sauces (5.0%), bread and baked goods (4.5%), frozen food brands (4.1%), and salty snacks (3.6%).
The numbers measure individual brands that were available for outbound licensing and partnerships in the U.S. in 2022. The properties are targeting both food and non-food categories and are doing deals across all business models (traditional long-term licensing deals, collaborations, and limited editions, as well as novelty goods typically implemented by the marketing rather than the licensing team).
Datapoint: May 2023
Museum Licensing Deals, by Category, Worldwide
Lifestyle products in the fashion and home goods categories were the two most active areas for museum-based licensing programs in 2022, according to new research from Raugust Communications. More than a fifth (22.1%) of active licensing deals in place that year focused on lifestyle fashion collections, inspired by but not replicating the museum’s holdings, while another 19.1% consisted of lifestyle collections for the home.
Licensing and collaboration deals for gifts, stationery, novelties, and collectibles together accounted for 16.2% of active licensing deals in 2022, followed by books, educational products, and content, which collectively held a 10.3% share. These have traditionally been strong categories for museum licensing. Other notable sectors included toys, games, and activities (collectively the focus of 8.8% of active deals); food and beverages (8.1%); and beauty collections, a hot category of late (5.9%).
Reproductions, which faithfully recreate items in the collection for consumer use, were the focus of 6.6% of active licensing deals in 2022. These cut across product categories, although most are centered on the home goods space. Reproductions were historically an important sector for museum licensing, but they have largely been replaced by products that are influenced by, but do not duplicate, items in the collection.
It should be noted that this category breakdown varies by type of museum. Science museums tend to have a stronger business in toys, games, and activities than many other institutions, for example, while food and beverage and reproductions of furniture or tableware tend to be a greater focus for historical estates than other museum types.
This analysis includes licensing and collaboration deals that were active in 2022 and incorporates new and existing agreements and deals with both long-term and short-term durations. It excludes products that are produced or contracted in-house by the museum itself rather than through partnerships (e.g., many of the items sold exclusively in the museum shop). The scope is international, with many countries around the world, including the U.K., China, and France, having museum licensing landscapes that are as or more robust than the U.S.
Datapoint: April 2023
DTC and E-commerce Sales of Licensed Goods, U.S., 2022
Direct-to-consumer sales of licensed products through physical stores and e-commerce platforms, managed either by the licensor or licensee, accounted for 14.7% of U.S. licensed product sales in 2022, according to recent estimates from Raugust Communications. Close to nine-tenths (88.9%) of that, or 12.4% of the whole, was attributable to physical stores, while 11.1%, or 2.3% of the whole, was attributable to e-commerce. This indicates that although e-commerce accounts for a greater number of DTC initiatives than the more challenging physical DTC model, it does not yet drive a huge portion of total DTC sales of licensed merchandise.
E-commerce accounted for an estimated 18.5% of total retail sales of licensed merchandise in 2022. About 12.4% percent of that—2.3% of the whole—is attributable to direct-to-consumer channels, while the remaining 87.6%, or 16.2% of total retail sales of licensed goods, is attributable to traditional wholesale sales to third-party e-commerce sites. The bulk (81.5%) of retail sales of licensed goods are still sold through physical stores.
Raugust Communications estimates that e-commerce accounts for a slightly higher proportion of licensed product sales than it does for U.S. consumer products in general, with e-commerce driving 18.5% of the former, compared to 16% of total consumer products, as measured by the U.S. Census Bureau. This may be due to the fact that many of the categories most important to the licensing business tend to skew higher than average toward e-commerce, as well as the fact that the licensing business consists of a high proportion of smaller companies and individuals for which the lower barriers to entry in the e-commerce world are particularly valuable.
Conversely, the proportion of direct-to-consumer e-commerce sales for licensed products is lower than those for e-commerce sales of consumer products as a whole, with DTC accounting for 12.4% of e-commerce sales of licensed goods, versus 14.2% for all U.S. consumer product e-commerce sales, with eMarketer providing the latter estimate. This is likely because the partnerships that characterize licensing add complications to the process of selling through DTC channels, given competitive and other issues. In fact, some licensors do not allow their licensees to sell through DTC channels at all.
The research measures U.S. sales only. It was compiled using estimates from individual companies, gleaned through conversations and public information; third-party research on individual categories and consumer product sales overall; and reviews of trade publications focusing on category sectors.
Datapoint: March 2023
Share of Licensed vs. Non-Licensed Toy Sales, 2018-2022
The share of retail sales of toys attributable to licensed products in the U.S. grew a total of 1.5 percentage points over the last four years, from 26.8% in 2018 to 28.3% in 2022, according to new estimates from Raugust Communications. In addition, the percentage of toys supported by a licensing program but not licensed themselves—in other words, the toy maker is also the owner of the intellectual property—increased by 0.6 percentage points during the same period, to 18.1%.
Together, the two sectors accounted for 46.4% of all toy sales in 2022. The remainder of the market (53.6%) consists of non-licensed, pure toys, which are neither attached to an external license nor have their own IP extended into other categories.
The share of 46.4% is within the range of what would be expected for licensing-connected toys each year, with some annual variation. The big movement over the past decade has been the growing proportion of that share attributable to toy company-owned brands, as more and more toy companies have created entertainment and outbound licensing programs for their proprietary IP.
That trend continues. Just in the past few months, MGA Entertainment launched an entertainment studio, acquired Pixel Zoo Animation, and committed to a $500 million investment in further expanding entertainment productions based on its own IP; Just Play launched a new division to oversee extensions of its proprietary brands and properties and create new IP; Playmobil retained WildBrain CPLG to extend its brand and IP into further consumer products categories globally; and Moose Toys launched a new division focused on mergers and acquisitions, with one of its goals to bring new extendable IP into its portfolio.
Datapoint: February 2023
Product Launch Strategies, by Distribution Channel, 2022 versus 2018
The traditional distribution strategy for the sale of licensed products globally is an omnichannel/wholesale approach in which licensed merchandise is sold to any retail channel that will have it (with some guardrails). This remains the top single strategy for new licensed product launches, by a significant margin, accounting for 37.3% of launch strategies in 2022, according to new research from Raugust Communications. But that share is down 5.1 percentage points from 2018, when this strategy accounted for 42.4% of launches.
Conversely, e-commerce-only strategies—selling licensed products through multiple outlets, but exclusively online—has grown significantly, from a 15.2% share in 2018 to 20.4% in 2022. This growth may be less a matter of strategic intent than due to the fact that there are fewer barriers to securing space for brand-new products in e-commerce channels than in the bricks-and-mortar world. The number and types of e-commerce channels, from social shopping to print-on-demand, have also proliferated.
Strategies where initial distribution is limited to “select” retailers (online and/or offline) have also seen their share grow slightly, from 10.9% to 12.8%. And retail exclusives—a strong and steady strategy, albeit often difficult for smaller or newer players—have maintained a consistent share, accounting for 17.8% of product launches in 2022 versus 17.6% in 2018.
Strategies that have seen their shares decline over the period studied include exclusive distribution through licensors’ and/or licensees’ own branded stores (accounting for 5.9% of launches in 2022 versus 7.9% in 2018) and home shopping (3.7% versus 4.2%).
The data measures the relative shares for launches of licensed or collaborative products worldwide; the landscape would look different for more established programs, with omnichannel strategies likely assuming a larger share. Note also that the figures gauge the number of launches tied to each strategy, not shares of retail sales.
Datapoint: January 2023
Changes in Celebrity Branding Strategies, 2018 to 2022
A strong majority (59.5%) of celebrities globally used their own names and signatures for all of their licensing and collaboration activities in 2022. But that share has declined since Raugust Communications last conducted this research for calendar year 2018. At that time, 70.9% of all celebrity licensing programs focused exclusively on signature products under the personalities’ own names.
Celebrities using “hybrid” brands that are different from their own name but recognizable as being attached to that celebrity (e.g., EleVen by Venus Williams or Bob Dylan’s Heaven’s Door brand, named after one of his well-known songs), accounted for 15.9% of licensing programs in 2022, much higher than the 8.5% of programs that relied on this model in 2018.
A significant 15.2% of celebrity licensing programs are conducted under a brand name that has no obvious connection to the celebrity. Think Draper James or William Rast, the brands of actress Reese Witherspoon and singer/actor Justin Timberlake, respectively. This philosophy is often associated with celebrities who see their merchandise business as a long-term mission, separate from their fame, and often (but not always) involves ownership or investment in the brand rather than licensing or other forms of partnership. Of course, the celebrities’ fans know of the connection, but the brand is meant to exist without relying on that link. This is a well-established model, but its share of all licensing programs has remained relatively stable, increasing just .1 percentage point from 15.1% in 2018 to 15.2% in 2022.
Another approach that has gained traction in the past four years consists of celebrities who use multiple branding strategies for licensing and collaboration, varying the model depending on the category or partner. Almost a tenth (9.4%) of celebrity programs follow this approach, up from 7.8% in 2018.
The data measures celebrity licensing programs that were active, with at least one licensee or collaboration partner in place, during the respective years studied.
Datapoint: December 2022
Evolving Strategies for Lifestyle Collaborations
In the past five years, the lifestyle collaboration segment of the licensing business has become more strategic. The number of single, one-off collaborations has declined from close to half (48.6%) of all collaborations in 2017 to just 38.5% in 2022. In the current landscape, these tend to consist of collaborations that are on the novelty end of the spectrum, as well as those that did not work as well as expected. Neither lend themselves to repetition.
On the other hand, several strategic approaches toward collaborations saw significant growth in the period. One-off collaborations that turn into a series of collaborations that build on past successes saw their share grow from 9.9% to 14.5%; collaborations as a component of broader endorsement, ambassadorship, or other promotional or marketing deals increased their share from 7.4% to 10.5%; and collaborations that are part of a series involving multiple collaborators (i.e., the fast-fashion or collectability model) experienced an increase in share from 12.8% to 14.7%.
Two other strategies saw their shares grow just slightly. Collaborations that are precursors to, or part of, a long-term licensing deal, saw their share rise a bit from 7.8% to 7.9% during the period; successful collaborations remain more apt to transition into a series of similar collabs, instead of a long-term traditional licensing deal. And collaborations that are intended upfront as a series of collaborations, while not a rare strategy, rose only slightly in share from 13.5% to 13.9%. Collaborators tend to take a wait-and-see approach, monitoring the success of a first standalone initiative before making a commitment.
It should be noted that raw numbers for every category have increased, as the number of collaborations overall has gone up significantly in the past five years.
The data measures the number of individual collaborations in each category. Lifestyle collaborations are defined as product partnerships that are limited in some way (period of time available, number produced, and/or number of SKUs) and fall into what are typically defined as “lifestyle” categories, primarily including apparel, accessories, and footwear; beauty; and home goods.
Datapoint: November 2022
Experiential Efforts, by Type, Worldwide
In our first post-lockdown review of location-based experiences by type of initiative, some interesting changes have taken place. Exhibitions and immersive experiences, theme parks and theme park attractions, activities (arcades, play areas, escape rooms, go-kart tracks, and the like), retail locations, and restaurants all have seen their shares of market rise, some significantly, since we last took this measurement in December 2019. Conversely, live theater and performances, pop-up experiences including shops and cafés, and especially travel saw their shares decline significantly.
One key differentiator (of several) between those that saw their shares grow and those that did not was the lead time required for development. Types of initiatives that have seen their shares rise, with some exceptions, require longer lead times for planning and implementation. In other words, they were typically in the works prior to the beginning of the lockdown and, while their openings were often delayed, they used the time to ensure they were ready when their fans felt comfortable in public again. This caused their share to rise now that the experiential industry is coming back, especially as other types of initiatives saw their shares decline.
It should be noted that experiential initiatives of all kinds are on the rise as of the second half of 2022, and it is likely that the shares will revert to something like their past breakdown the next time we do this analysis. There are some types of initiatives whose frequency is growing organically—regardless of any external factors caused by the pandemic—and these will see their shares continue to increase. Current examples, to name just two, include symphony concerts (categorized under live theater and performance) and exhibits of art and artifacts, which have been of great interest of late to licensors, especially owners of classic properties celebrating anniversaries. However, these trends, which are led by popularity or business objectives, tend to cause more subtle shifts in share than the big pandemic-driven swings we have seen since 2019.
The numbers in this analysis are global and are measured by the number of initiatives, not by revenue generated. They include any initiative that was live at the time the research was conducted in November 2022 (or with a set launch date in the remainder of the year), whether new or ongoing.
Datapoint: October 2022
Celebrity Cannabis Projects by Purpose and Business Model
Celebrity-driven cannabis projects (both marijuana/THC and CBD/hemp) have proliferated in the U.S. since CBD was legalized federally in 2018 and more states began legalizing marijuana for recreational as well as medical use.
According to a new analysis by Raugust Communications, close to half (47.7%) of the top celebrity-driven brands are positioned as being for general recreational or relaxation purposes. These include both celebrity-connected marijuana buds, cigarettes, edibles, and the like (which dominate the sector) as well as CBD-containing products.
Another 21.2% of celebrity cannabis brands are positioned as having general health benefits for mind, body, and/or spirit; 10.6% (mostly CBD projects) are specifically aimed at addressing skincare issues; and 9.3% address specific health conditions (e.g., reducing anxiety, managing joint pain, or alleviating the symptoms of cancer or its treatment). Another 11.2% of celebrity brands either have another purpose or do not name a specific purpose.
The analysis also looks at the business models celebrities are using to enter this category. The most common deals take some form of partnership, whether licensing deals, joint ventures, or strategic alliances. These together account for 44.8% of deals in this space. Nearly as common are celebrities who launch their own cannabis company or brand, or make a significant investment in a new or existing company that markets their signature products. A total of 42.8% of deals take one of these forms. Finally, endorsements or brand ambassadorships that lead to signature products (short- or long-term) hold a 9.7% share.
This research was conducted through a review of two dozen “best of” lists of celebrity-connected cannabis projects, some measuring the most popular brands and others rating quality. While this analysis does not include every celebrity deal, of which there are many, it yields a sample size of close to 150 brands and offers some insights into strategies used for celebrity cannabis projects. While brands tend to come and go in this industry, all of the examples included in this analysis are available for sale as of October 15, 2022.
Additional results from this analysis are published in the October 17, 2022, edition of Raugust Reports. The post includes information about the types of celebrities that are active in this space; the share of projects focused on marijuana, CBD, or both; the branding strategies used; and the top celebrity brands in the sector, based on number of mentions of the lists analyzed.
Datapoint: September 2022
Musicians with Active Licensing Programs, by Genre
Of the musicians who had active licensing programs in the 18 months from March 2020 through August 2022, rappers and hop-hop artists were the most numerous, according to new research from Raugust Communications that looks at musicians involved in licensing by genre. Rap/hip-hop accounted for 22.1% of musicians globally who had at least one licensing or collaboration deal in place for some or all of the time period.
The second largest sector consists of musicians generally regarded as falling into the pop genre, who accounted for 18.6% of musicians active in licensing in the past year and a half. Rock in all its forms (both current and classic) was next with a 12.1% share, followed by country with 10%. R&B/soul, metal, and EDM round out the top seven genres.
A significant 17.9% of the market is comprised of musicians who either cannot be categorized into a single genre or who specialize in a genre that has relatively little presence in licensing. Some of these less-often-licensed musical styles include jazz, Latin, punk/new wave, Christian, and reggae.
In some cases, these genres inherently have a smaller presence in licensing because their fan base is comparatively narrow and/or there are relatively few musicians specializing in the style (e.g., jazz). But in other cases, they may simply be underutilized in the licensing business and therefore represent an opportunity, both for the musicians in these genres and for licensees whose products are a good fit.
Datapoint: August 2022
Fashion Capsules Are Larger, on Average, Than in the Past
The average scope of fashion/lifestyle capsule collections involving licensed properties has expanded slightly since 2018, according to new research by Raugust Communications, with the number of collections encompassing 19 or fewer pieces shrinking, and the number with 20 or more growing. The data measures the number of individual designs included in the collection, with each typically available in multiple sizes and often multiple colorways.
Collections with nine or fewer pieces saw the greatest drop in share, falling from 39.6% of the total in calendar year 2018 to 35.7% in 2021. Those with 50 or more pieces, conversely, saw their share grow from 6.7% of the total in 2018 to 9.4% in 2021.
This gradual movement toward larger capsules is likely a function of several factors. One is that as licensors and their collaboration partners have accrued more experience with capsules, they are better able to predict the best number of pieces, reducing the need to create very small collections to avoid risk. In addition, even the largest, most successful brands routinely produce capsule collections these days, not out of risk-averseness but to give consumers new merchandise on a regular basis. They are better able to support larger collections than less-established brands and labels.
Despite the trend toward expanded capsules, the bulk of collections—63.5% in 2021—remain narrow in scope, consisting of less than 20 pieces. In addition, the average number of pieces across all capsules during 2021 was 18.6, just slightly above the average of 18.3 in 2018. (Note that some capsules in the 50-piece-plus group encompass well over 100 items, skewing the average upward.
The data includes any capsule collection in the apparel, accessories, and/or footwear category in which at least one of the partners is an owner of a licensed property of any type. One-off capsules are included, as are capsules that are part of broader licensing agreements, DTRs, promotional partnerships, or a series of collaborations.
Datapoint: July 2022
Outbound Candy Brand Licensing: Lifestyle vs. Brand Extension vs. Fan-Based
Candy brands seem to grow hotter and hotter when it comes to the number of properties launching outbound licensing programs and the frequency of licensing deals. The IP owners’ strategies cut across all the major licensing approaches, from lifestyle to brand extension to fan-based products.
The largest percentage of deals (31.6%) finalized over the past two years fall into the lifestyle category, encompassing apparel and accessories, cosmetics, home furnishings, and the like, according to new research from Raugust Communications. This fits with consumers’ desire, especially during the pandemic era that this analysis measures, for upbeat, positive products to counteract the challenges of daily life. Being surrounded by colorful, often nostalgic, candy-branded products makes many customers happy.
Just behind that are brand-extension deals, mostly into other food categories, from ice cream and other frozen treats, to baked goods, to beverages. These types of deals now represent 30.4% of the total. Not long ago, deals in this sector would have been relatively few and far between, but candy-brand licensors have been actively entering or expanding their activities in this sector in recent years. Licensing of indulgent treats tied to sugary brands (e.g., cereal, ice cream, soda) has been on the rise in general, due to consumers’ quest for comfort foods, and candy brands are certainly part of that trend.
Fan-based products, such as collectibles, novelties, social expressions, and toys, represent just less than a quarter of the total, at 24.1%. As is the case with many other property types, this segment has seen its relative importance decline, to a degree, as lifestyle and especially brand extension deals have been on the rise.
Experiential and promotional deals bring up the rear, accounting for 11.4% of the total. (Promotions are included in this analysis only if there is a merchandise component as part of the deal.)
The data measures the number of licensing and collaboration agreements involving candy and confection brands completed in the two-year period from July 2020 to June 2022, on a global basis.
Datapoint: June 2022
Celebrity-Based Product Initiatives, by Business Model
Celebrities represent the property type least likely to sign a traditional long-term licensing deal and the most likely to opt for an alternative business model, whether a short-term lifestyle collaboration, a venture in which they have some sort of ownership, or a line of products developed through a brand ambassadorship or some other type of promotional arrangement.
In fact, traditional licensing deals accounted for just 18.1% of new celebrity product initiatives in 2021, according to new research by Raugust Communications. The most common business model was short-term lifestyle collaborations that were limited in number of units, number of SKUs, and/or time period. These accounted for more than a third (34.8%) of celebrity-based initiatives during the year.
Celebrities extending their brands through a form of ownership—joint ventures, investments, and/or total or partial ownership of the company making the products—represented 24.9% of initiatives, a much higher percentage than is true for the rest of the business, where this type of arrangement is growing but still small.
Signature products created as part of a broader promotional deal were the least frequent approach, accounting for 16.2% of celebrity ventures during the period. Note that this figure is just two percentage points less than the share held by traditional long-term licensing deals. (The number includes only promotional agreements where signature products were involved.)
The data in this analysis includes contracts finalized in calendar year 2021. In cases where a celebrity owns or partially owns the marketer of the products, where there is not necessarily a deal done with the celebrity-owner, the numbers measure individual initiatives such as the launch of a new product line (e.g., something that would require a contract if an outside celebrity was involved).
Datapoint: May 2022
The Retail-to-Retail Licensing Landscape
For more than a decade, retailers around the world have been extending their brands beyond their own walls through licensing and other forms of partnership. The practice is getting more and more common as retailers in a challenging environment look to generate new revenue streams and bring new customers to their brands, whether in their own stores or in another setting.
New Raugust Communications research estimates that the top strategy for such brand-extension efforts is direct-to-retail deals with non-competitive partners, accounting for 35.1% of deals in place from April 1, 2020 through March 31, 2022. This would include initiatives such as Gap’s home goods line at Walmart, Abercrombie & Fitch’s footwear with Zappos, or Forever 21’s apparel at JC Penney.
The second most common deal type centers on in-store boutiques or distribution deals that bring the products of one retailer into another retail setting. This accounts for 29.5% of all deals during the period. An example would be Petco’s arrangement to bring its pet products into Lowe’s stores.
The third most common practice is to license a retail brand widely for distribution in other channels beyond its own stores; this is limited mostly to defunct retail brands but can work for ongoing retail operations as well. British chain Oasis forged a deal with Clarke & Clarke for textile-based home products while Aeropostale did the same with IHL Group for lingerie. This strategy accounts for 17.7% of all deals.
The other major category of partnership, accounting for 13.2% of deals, is when a brand extends its name into new categories of product for the purpose of adding those categories to its assortment in its own stores. For example an apparel retailer might take on a partner to extend its brand into footwear. These may take the form of licensing deals or collaborations, but often are accomplished through some other form of partnership.
Some agreements do not fit snugly into any of these segments and are featured in “other.” This would include situations such as Kroger and Bed Bath Beyond launching a joint e-commerce site where complementary products from both (e.g. food from Kroger and tableware from BBB) are featured.
The data measures deals based on retail brands (current and former) that were signed or ongoing during the time period studied, worldwide. It should be noted that while outbound licensing on the part of retailers is getting more common, the sample size is still smaller than many of the other research projects covered in this space each month.
Datapoint: April 2022
Outbound Deals Based on Food, Beverage, Restaurant IP, Worldwide, by Type of Initiative
Brand extension into adjacent food and beverage categories accounted for 39.4% of food, beverage, and restaurant-based properties’ outbound partnerships, on a global basis, from January 1, 2021, through March 31, 2022, according to Raugust Communications research. Food-to-food brand extension has long been an important strategy in this sector but is becoming even more so as food, beverage, and restaurant IP owners that previously had not allowed this sort of extension are increasingly open to it.
Lifestyle collaborations, defined as limited partnerships involving categories such as fashion apparel, sneakers, and cosmetics, remain relevant to consumers and a good way for brands to maintain awareness and a coolness factor, as well as generate revenue. These accounted for 24.1% of partnerships in this space during the 15-month period measured.
The third most common type of initiative was novelty goods. These are offbeat limited-edition products tied to brands or specific food items, such as Flamin’ Hot Cheetos lip scrub, Taco Bell Hot Sauce Packet onesies, or Popeyes Hottie Sauce swimsuits, often available through a corporate e-commerce shop or as part of a broader promotion, but sometimes through retail as well. While not quite as ubiquitous as they were a couple of years ago, these initiatives accounted for 10.6% of deals in our research.
Limited-time food offerings (e.g., Kraft Macaroni & Cheese ice cream from Van Leeuwen) accounted for 8.2% of initiatives; digital extensions (NFTs, virtual goods in a metaverse, etc.) for 6.5%; non-food brand extension (cookbooks, toys, grilling accessories, etc.) for 5.9%; and experiential activations (e.g., Johnnie Walker’s Blue Table dining experience at Taian Table in Shanghai) for 3.5%. The last percentage was likely lower than would normally be expected due to the circumstances of the past 15 months.
This analysis is global and includes initiatives that were implemented through some sort of partnership, most often a licensing or collaboration deal but sometimes a joint venture or other construct. The data tracks the relative shares of the number of initiatives and does not measure revenue. Most brands in this segment are involved in inbound licensing and partnership activity with a variety of licensed properties as well as outbound extensions, but only outbound activities are included here.
Datapoint: March 2022
NFT Projects Involving Licensed Properties, by Feature
Pure collectability is the objective behind the vast majority of global NFT projects involving licensed properties in these early days, according to new research by Raugust Communications. Three-quarters of all NFT projects (75.2%) released in the past year involve an element of collectability, often as the sole feature.
This is the simplest form of NFT, where a piece of digital content such as an image or animation is minted and sold; the owners can then collect, digitally display, trade, or resell the NFT, similar to the usage pattern of a collectible in the physical world. The owner of the IP captured in the NFT generates revenue on the initial sale, as well as on future sales throughout the NFT’s lifetime. This has turned into a boon for some licensors, such as certain artists.
It makes sense that this relatively simple and straightforward application dominates the landscape at this point. But many marketers believe an equally effective use of NFTs for licensing will be for fan engagement. Some features that would fit into the fan-engagement category are starting to gain traction. Almost three in 10 NFT projects (29.1%) unlock access to content such as a TV show, comic book, concert, or interactive game. Another 19.4% unlock items that can be used within a game or other environment, such as an avatar or a digital article of clothing, furniture, or décor. It should be noted that while these sorts of objects are pervasive in 3D worlds such as Roblox, most do not yet take the form of unique, authenticated NFTs residing on a blockchain, but rather remain traditional types of digital items.
Other uses are also starting to emerge. Direct connections between NFTs and physical items (e.g., a physical purchase is required to secure the NFT or an NFT is utilized to track the authenticity and/or value of a real-life luxury good) are associated with 12.7% of NFT projects involving licensed properties, while promotional elements (such as entrance to a contest or sweepstakes) are included in 9.7%. Another 10.3% of projects include other features, such as community elements or charitable links.
This research covers the one-year period from March 11, 2021, when artist Beeple’s “Everydays: The First 5,000 Days” sold at auction for $69 million and put NFTs on the mainstream map, through last Friday. The numbers analyze percentages of NFT projects, which can include multiple individual NFTs (sometimes thousands) per project. The data also includes only projects affiliated with IPs that maintain consumer products licensing programs, across a variety of property types and geographic origins. Note that a growing percentage of NFT projects include more than one of the elements tracked in the research.
Datapoint: February 2022
Licensing Deals by Strategic Approach (Brand Extension vs. Lifestyle vs. Fan-Based), 2021
Most licensing and collaboration deals fall under the banner of one of three major strategic approaches to licensing: brand extension, lifestyle, or fan-based. According to new Raugust Communications research, 42.9% of licensing deals announced worldwide in 2021 fell into the fan-based category, followed by lifestyle with a 32.2% share. Brand extension ranked last, accounting for 14.1% of deals during the period.
The reasons for these relative shares have to do in part with the changing nature of licensing, which has put a premium on lifestyle and fan-based licensing deals, and less on brand extension (with corporations in certain sectors being one notable exception). The difficult retail landscape and the need to limit risk, both pre-pandemic and more recently, also results in more short-term deals and limited programs. These are associated with lifestyle and fan-based licensing but not so much with brand-extension, resulting in a higher quantity of deals for the former two segments. The brand-extension sector would certainly have a much larger share in an analysis of retail sales than in this analysis of the number of individual deals.
For this study, we used the following basic definitions: Brand-extension deals bring a property’s distinctive attributes into adjacent categories. Lifestyle collaborations take a property’s look-and-feel, or the way of life it captures, mostly but not exclusively into the fashion, home goods, and beauty categories. And fan-based licensing agreements are primarily meant to offer a property’s enthusiasts opportunities for additional engagement, experience, and enjoyment by way of collectibles, social expressions, t-shirts, board games, coloring books, and a wide variety of other products. All three approaches can cross into all property types and product categories, and individual licensors often sign deals over their properties’ lifetime that reflect more than one approach.
This data analyzes individual deals announced in calendar year 2021 and includes consumer products only; agreements for services, live experiences, content, and the like are excluded. Some partnerships cannot be categorized neatly into any of these three sectors or, more often, fit into more than one; such situations are grouped into a fourth category for the purposes of this research, and together they account for a fairly significant 10.8% of the market.
Datapoint: January 2022
Experiential Objectives: Revenue Versus Awareness
Experiential initiatives of all kinds can be both awareness- and revenue-generating to various degrees (as well as achieving other business goals). Typically, however, each individual venture has either revenue-generation or awareness- and loyalty-building as its primary objective, with the other representing a secondary benefit.
Over the past two years, almost two-thirds (65.6%) of experiential initiatives involving licensed properties were primarily revenue-generating, according to new research from Raugust Communications, while 34.4% of efforts were primarily promotional in nature. The numbers include experiential ventures that launched, were ongoing, entered into development, or had licensing or other partnership agreements signed in 2020 or 2021.
The time period studied essentially represents the pandemic era, which may have contributed to the comparatively low share for promotional initiatives. With the exception of a short hiatus just after COVID hit, many licensors and their partners have continued to forge deals for revenue-generating ventures such as theme park exhibits, immersive experiences, escape rooms, bars and restaurants, and the like, with some even opening to the public during the past two years. On the other hand, purely promotional efforts such as pop-up experiences or free mall tours for fans have more often remained on hold.
Revenue-generating experiences include those that bring in significant funds from ticket, food, and/or merchandise sales or other revenue streams. Ventures categorized as promotional are financed all or in part by the property owner. While there may be some sources of income (e.g. merchandise sales), they are relatively small and secondary in importance to the promotional benefits of the effort.
All the initiatives included in the research sample are centered around a licensed property, but they have come to fruition through different business models. Some involve licensing deals, while others are joint ventures or strategic partnerships, are developed in-house, involve a paid vendor or vendors, or take other forms.
Datapoint: December 2021
Sneaker Collaborations by Property Type, 2020-2021
Fashion-related properties, including luxury labels such as Gucci, independent clothing boutiques, and especially streetwear designers, have been by far the most active players in the sneaker collaboration game in the COVID era of 2020 and 2021. In fact, fashion IP accounted for 41.1% of all properties involved in one or more sneaker collabs in the U.S. over the period, according to new research from Raugust Communications.
Entertainment/character properties (including characters originating in comics, books, toys, and of course films and traditional and streaming TV) were the second most prolific during the two years, with 13.6% of properties active in the sector coming from this group. Anime and other animated properties had a particularly notable profile, but the segment was diverse.
Just behind entertainment came corporate brands, a diverse lot but dominated by food/beverage and QSR properties, representing 9% of IP involved; musicians and other music-based properties (8.7%); and sports properties, including athletes (7.7%). Property types with slightly less presence included art (artists, museums, architects, photographers), accounting for 4.6% of active IPs; celebrities and influencers (3.3%, excluding athletes and musicians, who are included in classifications discussed above); and video games and other digital properties (2.6%, excluding characters such as Super Mario that hail from video games but are now multimedia in scope and included in entertainment/character).
A significant slice of the pie (6.9%) consists of collaborations involving properties from multiple sectors, as when a fashion designer and a corporate brand or an artist and a character/entertainment property join forces with a shoe marketer for an exclusive drop.
The data examined here includes only limited collaborations and not long-term licensing agreements. It examines deals that incorporate footwear exclusively and excludes multicategory deals that encompass other products, such as apparel as well as shoes. All the collaborations analyzed were available in the U.S., although some extended to other territories as well. The data focuses on the number of properties involved in one or more collaborations, not the number of collaborations within each property type; several of the properties and their footwear partners that are included in these numbers—especially in the fashion segment—released multiple sneakers over the two years studied.
Datapoint: November 2021
Licensing and Branding in the Global Eyewear Market
Licensing plays a critical role in the market for sunglasses and spectacles worldwide. Of the brands available for purchase as of November 1, 2021, according to a new analysis by Raugust Communications, more than half (55.2%) are licensed, with the remaining 44.8% being brands that originated in the eyewear industry.
The most important property type, by far, is fashion/lifestyle/luxury, with designer, luxury, and other fashion-related marks accounting for 37.4% of total brands in the category (and 67% of the licensed portion of the market). This is not surprising, since nearly every established fashion and luxury label has an eyewear deal.
The second-largest licensed segment is corporate brands outside the realm of fashion, which include everything from magazine IP to automotive properties. They account for 8.4% of total brands (and 15.2% of licensed brands). Other property types with a notable presence include celebrity IP, representing 4.0% of all brands (and 7.2% of licensed brands); entertainment/toy properties, with 2.3% of the total (4.2% of licensed), mostly lending their names to children’s products; and sports IP with 1.5% (2.7% of licensed).
Note that this analysis, which focuses on the relative shares of brands on the market, is just one way to look at the importance of licensing in the category. It does not necessarily correlate exactly with relative sales levels (where the designer/luxury portion is likely even stronger) nor with retail placements, as the number of SKUs tied to each brand varies.
The data includes products from both the global eyewear giants, such as Essilor Luxottica, and newer direct-to-consumer brands like Zenni and Warby Parker. Licensed brands examined are overwhelmingly the result of long-term licensing deals, but some short-term collaborations are also included, if they were available for purchase on November 1 of this year.
Datapoint: October 2021
The Evolution of Licensing-Related DE&I Initiatives
We last examined the licensing community’s activities tied specifically to diversity, equity, and inclusion one year ago. That was in October 2020, just four and a half months after the killing of George Floyd. At the time, the top focus of DE&I-specific initiatives was anti-racist messaging—in advertising and social posts and on merchandise—with 31.6% of initiatives featuring that as an element.
As time has gone on and marketers have had more time to plan and implement such initiatives, anti-racist messaging is still common, being part of 23.5% of DE&I activities that have been announced in the past six months, making it the third most common tactic in this space, according to a new analysis by Raugust Communications. The top two components now are tie-ins with diverse celebrities, designers, or other IP, featured in 29.4% of initiatives, and creating products with inclusive color ranges, featured in 25.3% of DE&I-specific projects.
Hiring, purchasing, and incubator initiatives are by far the most impactful of all the options included in the research, and the percentage of announcements featuring such programs is almost two-and-a-half-fold more in the past six months compared to a year ago. These types of projects include the likes of designer Aurora James’ 15% Pledge asking retailers to commit to sourcing 15% of their products from Black-owned businesses and the Serena Williams x Nike Design Crew incubator project that seeks to elevate emerging diverse designers. These require significant planning and investment compared to most of the other tactics researched here and still are featured in a relatively small share of the total at 8.9%. Expect to see growth in this segment as time goes on, however.
Note that, while most elements analyzed have increased significantly over the past year-plus, some of the activities measured a year ago, soon after the Floyd incident prompted a reinvigoration of the conversation around DE&I, have seen their shares decline as components of DE&I initiatives over the past 16 months. These include changes in names and logos to remove offensive language and graphics, severing or cancelling ties with celebrities and other properties due to past and present racist behavior, and, as mentioned, anti-racist messaging. These can be seen as somewhat low-hanging fruit that spiked initially but have since been surpassed by other DE&I undertakings.
This research measures the number of new initiatives that have been announced (but not necessarily fully implemented yet) in each of three periods. It includes only initiatives in which the announcements specifically mention their role in meeting the marketers’ DE&I objectives. Note that many initiatives include more than one of these components.
Datapoint: September 2021
Alcoholic Beverage Deals by Category, North America
A couple of years ago, beer collaborations ruled when it came to deals involving alcoholic beverages and licensed IP. During the pandemic, however, when the number of agreements in the alcohol segment has flourished, licensing and other partnership agreements involving wine, Prosecco, and Champagne have taken the lead. Wines accounted for 25.3% of North American collaborative alcoholic beverage contracts announced since the start of the first lockdown in mid-March through August of this year, according to new research by Raugust Communications. Several properties, especially celebrities but also corporate brands, entertainment/character IP, fashion designers, and more, have done deals in the wine space during that period.
Beer deals, driven by limited-edition collaborations involving craft brewers, who need to offer a continuous stream of new and different offerings to their loyal consumers, came in a close second, with 24.6% of deals during the time span measured. Musicians have been particularly prolific partners in this segment since the coronavirus hit.
The market has diversified over the past year and a half, with many different alcohol segments boasting a growing group of branded beverages tied to licensed IP. Leading the way are whiskeys, with a 10.8% share of agreements, and hard seltzers, with 7.7%. Vodka, gin, tequila, rum, and liqueur each have between a 4.8% and 6.1% share of deals across the alcohol segment, respectively. Another 4.6% of deals have focused on “other” liquor categories collectively, from canned cocktails to hard kombucha.
The numbers include all forms of partnership and brand extension (long-term licensing deals, short-term collaborations, proprietary brands) connected to licensed IP announced in the past 18 months. They exclude partnerships for label designs and purely promotional ventures without a signature product component.
Datapoint: August 2021
Global Beauty Deals by Type of Product
The beauty category has been one of the hottest in the licensing business in the last year, as measured by the sheer number of collaboration and licensing deals announced globally during the period. The bulk of these involved color cosmetics, with lip color included in 68.9% of beauty deals announced from August 2020 to August 2021, eye color in 63.5%, and blush, highlighter, and other products for the face playing a part in 41.9%. These figures are according to recent Raugust Communications research on the category.
Perhaps surprisingly, two product types that were involved in relatively few deals during the timeframe included nail products (which were a factor in just 14.8% of beauty agreements) and fragrance (12.2%). This low incidence is likely due to the longtime popularity of these products as the focal point of beauty partnerships, leading to saturation when it comes to the number of collaborations and licensing deals the sector can sustain.
Other product types that accounted for a relatively low percentage of deals do not have much of a history of participation in licensing. In this case, there may be white space to be filled by the right properties. Examples include cleansing (18.9% of deals), skin care (17.6%), lashes and brows (9.4%), haircare (5.4%), and tanning and suncare (4.1%). Indeed, some of these have been growing as focuses for collaborations of late.
It should be noted, however, that these products are not always relevant for a given property, especially since so many of the IPs active in the beauty category lately—entertainment, classic characters, corporate brands—lend themselves to novelty treatments. In fact, the primary raison d’être for many of these partnerships, aside from the promotional value, is that the properties offer a color palette that inspires a unique cosmetics offering. Many of the categories with white space available, on the other hand, make more sense for a property that brings some sort expertise to the category, rather than simply a specific range of colors, although there are always exceptions.
Well over half (55.4%) of beauty deals in the period of the analysis involved multiple product types, while the remaining 44.6% focused on only one product. Color cosmetics propelled the multi-product majority, since they are more likely than not to include eye, face, and lip color in a single deal, whereas products such as nail items and fragrance are more likely to stand alone.
Datapoint: July 2021
Licensors Involved in the Sale of NFTs, January-June 2021
NFTs are digital tokens that represent a specific digital or physical item. They are secured through the use of blockchain, providing a tamper-proof record of current and historical ownership. At the moment, their use in licensing is mostly related to collectibility, but they have applications in monitoring authenticity, enhancing fan engagement, and more. NFTs are one of the hottest areas in licensing at the moment.
Sports properties have been at the forefront of this new category. Dedicated marketplaces host the creation and sale of sports NFTs, with many sports and esports leagues, organizing committees, clubs, and athletes involved. As pioneers in the space, sports IPs have accounted for almost a third (30.3%) of the licensors involved in NFTs in the first six months of this year, according to new research from Raugust Communications.
Other property types are catching up quickly, however. Celebrities (led by musicians) account for 21.1% of licensors creating or selling NFTs, artists 16.9%, and fashion, lifestyle, and luxury labels 7.7%. Other property owners, which range from toy companies and nonprofit groups to publishers and a fast-growing group of corporate licensors, collectively account for a 13.4% share.
Perhaps surprisingly, video game creators, publishers, distributors, and other licensors of interactive properties account for just 10.6% of licensors involved. Like sports licensors, these IP owners were early entrants in the space, and they are sophisticated in the use of both collectibles and technology. Their relatively small share may be due to the fact that their use of NFTs is limited to occasions where the technology makes real sense within their property ecosystems. Many licensors in other segments, on the other hand, are getting into NFTs in a big way mostly for the novelty of it. The latter group’s participation is likely to wane a bit as time goes on.
These numbers measure property owners who are involved in licensing and have attached their names to specific NFTs for sale. It does not include licensing-connected companies who have gotten involved with NFTs by investing in or launching NFT marketplaces, of which there are several.
Datapoint: June 2021
U.S. Licensed Pet Product Lines, by Purpose, June 2021
Licensing in the pet industry has historically been mostly about novelty, enticing consumers to buy a leash or pet sweater to express their fandom of a sports team, TV show, comic character, or classic car through their pet. While the role of licensing in the industry has become much more sophisticated, the emphasis on novelty continues, with more than half (53.1%) of deals currently in place falling into this realm.
The data is based on new Raugust Communications research analyzing licensed product lines that are under contract as of June 1, 2021, ranging from arrays that have been ongoing for years to new assortments about to launch.
The data is based on new Raugust Communications research analyzing licensed product lines that are under contract as of June 1, 2021, ranging from arrays that have been ongoing for years to new assortments about to launch.
More than half (52.9%) of current novelty-based product lines (and 28.1% of total licensed pet product lines) are related to animal-themed properties (e.g., Garfield), while the remainder are tied to licenses that have nothing to do with pets or animals (e.g., Marvel or John Deere).
Beyond these core novelty products, a collective 44.8% of current licensed product lines in the pet industry are tied to fashion/lifestyle, functional characteristics, or specific pet or animal expertise, respectively. The number of deals in each of these segments is growing, even though together they remain in a narrow minority.
Fashion/lifestyle properties (e.g., fashion designers or celebrity-based lifestyle labels), which allow dogs and cats to reflect the style of their pet parents, account for 16.7% of current licensed assortments. Properties that are rooted in pet or animal expertise (e.g., pet care professionals or animal welfare organizations), which have the know-how to contribute to the development of a potentially unique or superior product, account for 14.6% of the total. And brands that lend some sort of functional benefit or differentiation (e.g. Arm & Hammer or Nerf) account for 13.5% of deals currently in place.
The types of products included in industry licensing deals has also diversified over time, with licensing now playing a role in formerly relatively untapped segments such as pet food, cat litter, and cleaning products, as well as the traditional toys, costumes, collars, and the like.
Datapoint: May 2021
Short-Term Beauty Collaborations, by Property Type
Short-term beauty collaborations involving licensed properties have been ubiquitous for the last couple of years and even more so during the pandemic, when it seems a new venture or two is announced daily.
Not surprisingly, celebrities have driven the largest percentage of limited beauty initiatives during the pandemic to date, being involved in 38.7% of the total, according to new Raugust Communications research. These include beauty influencers; makeup, nail, and hair artists; lifestyle gurus; and the like, but they also extend to musicians, actors, athletes, and a wide variety of other celebrities.
The second most common type of collaborator, by far, consists of owners of character/entertainment properties, both classic and new. These have accounted for more than a quarter (26.6%) of total initiatives during the period.
The third most active property type is corporate brands (dominated by food, beverage, and restaurant trademarks), which contributed their assets to 16.1% of beauty collaborations, followed by fashion labels, which were at the center of 8.9% of such ventures. The relatively low results for the latter, considering the close relationship between fashion and beauty, are due in part to the fact that the labels’ activity in this space remains skewed more toward traditional long-term licensing agreements rather than short-term collaborations.
The remainder of property types, from art to sports, are less present in this space, collectively accounting for 9.7% of initiatives.
These numbers include only partnerships that are limited in duration, number of SKUs, and/or quantities. All took place in the U.S. market during the peak pandemic months to date, March 15, 2020 through May 15, 2021.
Datapoint: April 2021
The Licensed Face Mask Market in the U.S., 2020
The licensed portion of the face mask market in the U.S. in 2020 totaled $340 million, according to new Raugust Communications estimates. Sports dominated the landscape, accounting for 46.9% of retail sales, or $160 million. Entertainment/character properties (defined widely as including video games, children’s publishing, and other character-based IP) accounted for another third of the market (33.4%, or $114 million). Fashion was the third major player, with 11% of the market, or $37.5 million. Other properties, from corporate brands to artists to musicians, accounted for the remainder.
These numbers are more conservative than some observers have suggested. While some licensees, such as FOCO, Trevco, and others had very strong mask businesses, and almost every licensor was involved in this market to some degree, the revenues were ancillary for most players. In addition, many licensors created masks internally rather than through licensing—that was especially the case in the fashion/lifestyle segment, but in other instances as well—and these are not included in these estimates of licensed product sales. During the pandemic’s early days, many licensed masks were distributed through giveaways or donations, also not included here.
Furthermore, licensed masks, for the most part, account for a percentage of just one segment of the mask market, namely reusable cloth masks, not of other popular choices such as disposable surgical masks and N95 masks. And, finally, retail sales of masks, while still ongoing, were booming for a relatively short time, largely during the second and early third quarters.
Retail prices for licensed face masks ranged from $5 or less to $50 or more, with a sweet spot of $10 to $30 during the peak. (Prices have decreased along with demand.) Assuming an average price of $15 per licensed mask for 2020 as a whole, the $340.5 million retail sales figure translates to 22.7 million units.
The licensed face mask market in 2021 is likely to contract significantly compared to 2020. That said, it stands to reason that face masks will remain a viable category for licensing—especially for IP owners that can bring relevant functional attributes or other added value—in the year ahead and beyond. Even as vaccination rates start to rise significantly, a slice of the population is expected to remain unvaccinated, whether for political or health reasons or because of their age. Many consumers plan to continue wearing masks in certain situations even after they are vaccinated, giving them a comfort level if they are worried about their own or their family’s infection or reinfection, especially from new variants.
Longer-term, consumers and marketers are now aware of the possibility of future pandemics and will want masks available in case they need them. Perhaps more significantly, research during the pandemic has shown that mask-wearing has reduced the incidence of colds, flu, and allergies, as well as COVID-19. This, along with growing concern about the environment and the impact of air quality on health, is expected to drive continued mask sales, at least to a degree, even when pandemic concerns are a memory.
These numbers were compiled using several datapoints, including retailer, licensor, and licensee estimates of their own sales of face masks, disseminated through their corporate financial releases or press interviews; an examination of a variety of third-party estimates of sales, pricing, usage, and number companies involved in the face mask market; an analysis of licensing deals done throughout the period; digital “shelf studies” of mask availability via e-commerce channels; and conversations with licensing executives throughout the year.
Datapoint: March 2021
Top-Line Sales Performance for Public Companies, 2020
Just over a quarter (25.3%) of public companies with significant involvement in licensed products and properties globally—as licensors, licensees, or retailers—reported positive top-line financial results in 2020, according to new research from Raugust Communications. This compares to nearly three-quarters that were in negative territory. Almost half the companies studied in this research experienced top-line sales declines of between 0.1% and 20%, with 23.9% in the 0.1% to 10% decline range and 25.4% in the 10.1 to 20% decline range. A significant number (14.1%) saw sales declines of more than 30% for the year. The results reflect the companies’ entire businesses, not just the licensing portion.
The data naturally includes mostly big companies, which are more apt to be public, and is also weighted somewhat toward apparel, where there are a large number of public companies. This may have skewed the numbers down somewhat (as did many of the entertainment and sports companies included), but there were also ample examples included of companies in the analysis that operate in e-commerce, mass retail, toys, and the like, which experienced generally positive results in 2020. It should be noted that the data set is relatively small compared to most of our other research, given that relatively few companies in licensing are public. Only companies whose fiscal year matches the calendar year are included.
A number of the companies analyzed cited some bright spots in their businesses, even when their top-line numbers were bleak. Some fared better in profitability than revenue, almost all showed positive results in their ecommerce operations, and many were upbeat about particular geographic regions (especially China). Some noted good performance for specific licenses as well.
While this analysis does not measure licensing results specifically, nor does it cover the entire scope of the business, it offers another way of looking at how companies involved in licensing fared overall in 2020. It can be used alongside other measures of performance as a guide for benchmarking purposes.
Datapoint: February 2021
The Use of Blockchain in Licensing
Sports properties have been the most active participants within the licensing business when it comes to experimenting with the emerging technology of blockchain. Sports entities accounted for 35.1% of all blockchain-related deals done in the U.S. and Canada, from January 2018 through December 2020, that involved licensed IP, according to new Raugust Communications research. Leagues, events, individual clubs, and athletes across sports have all paired with technology companies to experiment with blockchain ventures.
Other active property types include interactive gaming and esports (representing 24.3% of deals); luxury, fashion, lifestyle, and beauty (21.6%); corporate brands outside of the lifestyle space (9.5%); and entertainment, including celebrities from the worlds of entertainment and music (4.1%).
The top use for blockchain has been digital collectibles and virtual goods, with 43.1% of deals centered on this purpose; sports and gaming properties, as well as entertainment, lead the way in this segment. The second primary use is as currency (27.8% of deals), followed closely by fan engagement (26.4%). The latter, which includes promotions, games, and giveaways, often overlaps with currency and collectibles as a co-purpose for a deal, but it can also stand alone as a reason for an agreement. (The fact that some deals have multiple objectives is reflected in these numbers.)
Another 18.1% of deals involved the use of blockchain to track the authenticity of physical goods as an anti-counterfeiting measure; this is a primary purpose for agreements involving fashion, luxury, lifestyle, and beauty licensors. Rounding out the list is information management (e.g., content, rights, data, or royalties), accounting for 9.7% of deals, and “other” (8.3%). Objectives for the use of blockchain can run the gamut from monitoring the supply chain, worker rights, and food safety, to tracking ethical sourcing, sustainability, and deliveries.
As the numbers show, companies involved in licensing, at least in these still-early days, tend to focus on limited, consumer-facing uses such as collectibles, fan engagement, and currency. But it is the other, back-end, harder-to-implement, and less-frequent-to-date purposes, from anti-counterfeiting to data management, that are likely to represent the real value of blockchain for the licensing business going forward.
These estimates measure agreements forged by companies involved with licensed IP and outside technology companies. They exclude blockchain ventures managed internally as well as investments in blockchain technologies.
Datapoint: January 2021
Share of Cannabis Licensing Deals, CBD vs. THC
Brand licensing in the emerging U.S. and Canadian cannabis industry is weighted almost two-to-one toward oils, tinctures, edibles, creams, beverages, and the like that contain CBD and/or similar cannabinoids, with 60.3% of licensing deals in the cannabis sector in 2020 falling into this group, according to Raugust Communications research. That compares to 32.5% of deals that focus on marijuana and products containing THC. The remaining 7.1% of deals encompass both types of products.
The dominance of CBD makes sense, as CBD (along with CBG and other similar cannabinoids) is non-high-producing—unlike THC—which expands the pool of potential partners. CBD is also legal federally (within certain parameters) in both the U.S. and Canada, allowing for nationwide consumer products programs, while THC for recreational use is legal federally in Canada but only on a state-by-state basis in the U.S. CBD is also currently seeing strong consumer growth as a pain reliever and stress reducer, while, as a drug, THC’s consumer base is more limited.
A wide variety of properties are active in the CBD space, with athletes/sports properties and fashion/lifestyle labels leading the way; cannabis-related brands and musicians are the primary partners in the THC segment. (See our previous data on property types active in cannabis licensing below; scroll down to September 2020.)
This month’s research measures licensing and other partnership agreements (e.g., joint ventures, ownership stakes) that were closed in calendar year 2020. Deals focusing on the distribution of marijuana in other states or territories, a necessity in the U.S. given the legal landscape, are excluded (although these sorts of agreements often include a brand-licensing component as part of a broader package of rights).
Datapoint: December 2020
Changes in Licensing Deal Types, 2015-2020
New research from Raugust Communications confirms that the licensing landscape has become more reliant over time on short-term collaborations and limited editions, as well as experiential and related initiatives, and less dependent on traditional, long-term licensing deals. The data shows that the percentage of traditional licensing deals (defined here as two years or longer and including a physical product) done from April 2017 to December 2020 fell to less than half (48.7%) of total deals involving licensed IP. This compares to 66.6% in the period from January 2015 to March 2017 (the last time we published such research in this newsletter).
Note that these figures measure the number of deals done in each period, not retail sales. Traditional licensing deals continue to drive the bulk of the latter. The incidence of licensing versus collaborations also varies significantly by property type, product category, and geographic region.
The share attributable to collaborations and limited editions, meanwhile, rose significantly, from 13.1% in the earlier period to 29.9% in the more recent timeframe. Experiential, content, and promotional deals based on licensed IP saw their share rise from 20.3% in the earlier period to 21.4% more recently.
The numbers in this analysis are skewed somewhat, of course, by the coronavirus disruption, which has led to an inflated dependence on collaborations and limited editions over the past nine months. During that time, these sorts of less-risky deals accounted for 43.5% of total partnerships. The share of experiential, promotional, and content deals, meanwhile, plummeted to just 9.4%, due to the inability to hold live events; that steep drop impacted the percentages for the full period from April 2017 to December 2020. (Both traditional licensing and experiential deals have started to come back to a degree this fall.)
A more logical look at long-term change in the licensing business can be gleaned by examining the period from January 2015 to March 2017 versus April 2017 to February 2020, which excludes the pandemic from the analysis. In the latter timeframe, collaborations and limited editions accounted for 26.3% of all partnerships, still a hefty increase from the earlier interval, while experiential, promotional, and content-related deals rose from 20.3% to 24.5%. Traditional, long-term licensing agreements fell to just below 50% of all deals, at 49.2%, in the more recent stretch.
For the purposes of this research, the experiential/promotional/content sector includes content that would typically be within the realm of a licensing program, such as apps, but excludes pure entertainment such as TV and films; promotions include only initiatives that incorporate some sort of merchandise component.
Datapoint: November 2020
Artist Licensing Representation, by Agency Type
Specialist art licensing agencies are by far the standard when it comes to managing artists’ licensing businesses. They handle 72.3% of all artists globally that are represented by an agency for licensing, according to new Raugust Communications research, working with anywhere from a half dozen to hundreds of individuals each.
These companies typically offer portfolios from which licensees can select images for specific needs (e.g., for a Christmas plate) as well as creating cohesive licensing strategies for individual artists. Some agencies have diversified, such as offering art licensing education, but remain active in representation at the same time. Due to the extreme competition in this sector, some specialist agencies have gone out of business in recent years, but this type of agency continues to dominate the art-licensing representation landscape overall.
The second most frequent configuration is when publishers (e.g. of prints, fine art, or wall art) represent the works of the artists they publish for brand extension into other categories. Agencies in this sector, which includes companies such as Wild Wings and Wild Apple Graphics, represent an estimated 17.1% of artist licensing programs. This segment of the business has declined somewhat since the collapse of the collector market for fine art prints several years back. Some publisher-agents have ceased operations since then, while others have repositioned their businesses, including placing more emphasis on licensing in some cases.
One small but growing slice of the business is comprised of generalist licensing agencies such as The Brand Liaison, which handle licensing activities for artists alongside other property types. Relatively few generalist agents represent artists to date, and those who do tend to focus on just one or a few of the bigger brand names in the art licensing world. Thus they together represent just 2.3% of artists’ licensing efforts worldwide. But the practice is trending upward.
Other types of companies together represent 8.3% of artists. This segment primarily consists of entities in the art business (e.g. galleries, illustration reps, surface design houses, and the like). These firms mainly specialize in other areas of artist management but maintain a licensing operation or handle incoming licensing requests for their roster of artists on an ad hoc basis.
This analysis does not include artists that manage their own licensing activities in-house, of which there are many, ranging from those that are licensing novices to well-established names. It also does not reflect the relative shares of retail sales of licensed goods, simply the share of artists represented.
Datapoint: October 2020
Licensing-Related Diversity Strategies
Since the death of George Floyd on May 25, companies with connections to licensing—retailers, IP owners, manufacturers, and promotional partners—have been taking steps to create more diverse products, content, and marketing efforts and dissociate themselves from racist behavior or imagery. The most common strategy is the simplest, with 31.6% of initiatives to date involving anti-racism or pro-diversity messaging in social media campaigns or on products, according to new Raugust Communications research. The least common step is the one that would be most meaningful, namely the establishment of new hiring or purchasing practices or thresholds (3.7% of initiatives to date).
Of course, this could change as time goes on. Less than five months have passed since the Floyd incident and the sample size is still relatively small (about 150 initiatives in this analysis). The research includes only companies with ties to licensing, although not all of the specific ventures included in the numbers involve licensed products per se.
Other diversity-related strategies implemented so far have included tie-ins with diverse celebrities or designers, or other IP known for their association with diversity (15.4% of initiatives); launching or expanding diversity-focused content or properties, such as TV shows with black characters in lead roles (13.2%); creating or expanding product lines with inclusive color ranges (e.g. crayons, makeup, or ballet shoes, 12.5%); and working with or launching initiatives or organizations focused on social justice (11.7%). Other efforts include redesigning offensive names, logos, or artwork (8.3% of initiatives studied) and severing ties with or cancelling properties with racist themes or behavior (6.6%). Some initiatives fall into more than one category.
Datapoint: September 2020
Properties Involved in Cannabis-Related Licensing Deals, by Type
Just in the last week, Martha Stewart and Canopy Growth released their long-awaited CBD product line, while sports commentator Jay Glazer partnered with hemp and CBD supplement start-up Champions + Legends. This is a reminder that the cannabis industry continues to attract interest from many IP owners, particularly celebrities.
According to new research from Raugust Communications, nearly 60% of properties involved in partnerships in the cannabis industry are celebrities, with musicians accounting for 20.6% of active properties and athletes (as well as other sports entities) not far behind with a 19.6% share of the sector as a whole. Others range from chefs and actors/actresses to pet influencers and fitness/wellness mavens (the latter two included in “other celebrities”).
Cannabis-centric trademarks account for 16.8% of the market, including brands of marijuana (11.2%) and cannabis-related brands (e.g. accessories and publications, accounting for 5.6%). Another 14.0% of properties involved in this segment are fashion and lifestyle labels.
The research involves more than 100 properties that have had at least one deal in place for cannabis-centric products in 2019 and 2020, a relatively small sample but one that gives a good overview of what is happening in this sector. The data includes both cannabis-related trademarks involved in brand-extension (excluding deals focusing on distribution of core products) as well as non-cannabis brands that have entered the business by lending their names to marijuana or accessories, CBD-infused ingestible or topical products, or cannabis-related lifestyle products in the U.S. and Canada. All forms of deals are included, from traditional licensing to other partnerships such as joint ventures. The research also encompasses products containing both mind-altering THC and non-mind-altering CBD and CBG, as well as related products containing neither.
Datapoint: August 2020
QSR Chains’ Licensing and Collaboration Activities
Of the top 50 quick-service restaurant chains as ranked by sales in 2019, recently published by QSR magazine, 64% have had at least one tie-in with a licensed property (inbound or outbound) in 2019 and/or 2020, according to a Raugust Communications analysis.
The most common activity (representing 36% of the total) is participating in inbound licensing or promotions involving licensed IP, including both non-food premiums and food tie-ins (e.g. flavors or mix-ins). This is not surprising, as in-bound tie-ins have been a frequent strategy for QSR chains for decades, although in recent years the emphasis has moved away from toy premiums and toward limited-edition food and beverage offerings.
Short-term lifestyle collaborations have become frequent enough to assume second place in this analysis, with 28% of chains having at least one such initiative in the past year and a half. Long-term brand-extension licensing deals for foods and beverages sold in supermarkets and other retail outlets are right behind, ranking as the third most frequent activity, with 26% of chains playing in this sector in the past 18 months. Collaborations tend to be more common toward the top of the rankings than the bottom among the top-50 chains, whereas brand-extension deals are more evenly distributed throughout the list.
QSR chains have been in the news of late for launching branded consumer-facing shops selling everything from chicken-scented fire logs (KFC) to pajama pants featuring a pattern of hot sauce packets (Taco Bell). The numbers reflect this, with 22% of chains involved in such ventures in 2019 and 2020.
Ten to 15 years ago, non-foods licensing into categories such as collectibles, gifts, and toys would have been prevalent in this space. But that is not the case today, with only 12% involved in this sector.
These numbers include only the top 50 QSR companies and reflect the percentage of chains with deals in place in the respective sectors during 2019 and 2020 (as of mid-August). While the sample is small, the results offer some insights into what is happening with licensed properties in the QSR space.
Datapoint: July 2020
Streamed vs. Traditional Kids’ TV Properties
More than 51.2% of first-run children’s episodic TV properties with active licensing programs globally in 2019 were distributed through streaming channels alone. That means streaming-only properties’ share has grown from virtually 0% of children’s TV-centric licensed properties to more than half in the less than seven years when streaming became viable as a platform for licensing. The data measure the number properties that have at least one licensee at the end of each calendar year and exclude library titles.
In fact, 2019 marked the first time the share of streaming-only properties available for licensing exceeded the share of properties backed by traditional TV.
The proportion of streaming properties increased from 35.6% in 2017 and 40.4% in 2018 to 51.2% in 2019. The remaining 48.8% of licensed kids’ TV properties in 2019 were primarily distributed on traditional TV channels, including mass and niche outlets, most often with secondary streaming exposure. (It should be pointed out that the streaming landscape changes quickly, with properties jumping from streaming to TV and back again.)
A number of well-documented factors have led to the growth in streaming, including the continuing proliferation of content-hungry streaming channels and the sheer amount of streamed content that exists; growing viewership of streaming platforms, along with reduced viewership of traditional broadcast and cable networks; a rising focus on streamed properties on the part of licensors, including studios and platforms such as Netflix; more interest from licensees as they look for niche as well as mainstream licensing opportunities and recognize where their customers are consuming entertainment; and a mounting track record of success.
More recently, the coronavirus lockdown has boosted viewership of streamed entertainment, both new and archival. That will certainly ensure that this trend will intensify by the end of 2020.
Most top-ranking TV-based licensed properties for children, in terms of retail sales of licensed merchandise, are still associated with traditional television (especially for younger kids). Many streaming-only properties are still likely to have just one or a handful of licensees and be considered relatively niche opportunities. But that is apt to change in the not-too-distant future as streaming continues to gain dominance as the go-to platform for kids’ entertainment.
Datapoint: June 2020
Influencer-Led Licensing Programs, by Type
Influencers around the world whose names, likenesses, and/or other IP are available for licensing and collaboration tend to skew toward beauty (20.6% of programs), fashion (15.3%), “lifestyle” (12.2%), and cooking/baking (11.5%), according to new research from Raugust Communication. The remainder of the segment is distributed among six other major sectors, with another 9.2%—a substantial portion—attributed to “other” properties that do not fit comfortably into any of the 10 separate segments shown in the chart.
Influencer-led properties are more concentrated in the beauty, fashion, and lifestyle segments than celebrity licensing programs in general. The latter are more rooted in traditional areas including sports, acting, and music, and also are more widely distributed among multiple categories. (To see the data on celebrity licensing as a whole, visit the Datapoint archive and scroll down to August 2018.)
For the purposes of this analysis, influencers are defined as celebrities whose fame originated on one or more social media platforms, and for whom social media continues to drive their activities (although they often have a presence in traditional media, too). It does not include celebrities whose original fame can be traced to traditional platforms like TV, pro sports, or the fashion runway, even if today they have a strong social media presence and are considered influencers.
In licensing, the term “lifestyle” often refers generally to properties in the fashion, beauty, art, or home sectors. This analysis defines “lifestyle” programs as those that have a defined positioning in their content and cut across product categories. Such properties typically have an overarching theme such as travel, wellness, luxury, or “living your best life,” but are not associated solely with any of the individual sectors outlined here, such as beauty or fashion.
The numbers are global and encompass influencer-led properties that are available for licensing and collaboration as of June 2020.
Datapoint: May 2020
Licensing-Related Marketing Campaigns During COVID-19
The number of marketing, promotional, advertising, and social media campaigns to support licensed properties and products decreased precipitously in the U.S. as soon as the coronavirus hit the region in earnest in mid-March. The incidence of awareness-generating efforts, both to consumers and the trade, is creeping back up. But many licensors, licensees, and other partners are still figuring out when it is appropriate to get back to marketing, as well as how to develop appropriate messaging for the times.
COVID-related efforts tend to fit into three categories: spotlighting charitable efforts (35.1% of campaigns); highlighting existing COVID-friendly product lines, such as puzzles, educational workbooks, meal kits, and the like (29.4%); and touting new products or services created due to the virus, such as face masks, content about hand-washing, t-shirts with COVID-related phrases, and thank you messages to first responders (12.4%).
Non-COVID-related messaging continues to exist, but these represent just 16.9% of campaigns. They fall into two classifications: 7.3% that are tying their messaging to a recurring special event, such as Easter, Cinco de Mayo, graduation, Earth Day, or the NFL Draft, and 9.6% that are promoting general product launches.
The landscape has evolved quickly as the crisis has gone on. In the first month, COVID-related messaging of the three types mentioned above collectively drove 84.4% of campaigns, while 11.4% were non-COVID-related. From April 15 to the present, messaging still skewed toward the COVID-specific, accounting for a 73.0% share of campaigns collectively. Non-COVID messages are starting to reappear, however, comprising an 18.7% share in the past month.
Total frequency of campaigns has also increased over the two-month period, with about three times as many efforts overall occurring from April 15 to May 14 as took place from March 15 to April 14.
Datapoint: April 2020
U.S. Licensed-Product Recalls
Over the last five years, 4.2% of all consumer product recalls announced by the Consumer Products Safety Commission involved licensed merchandise, according to a Raugust Communications analysis. The period studied ranged from April 2015 to April 2020. By far the most incidents were linked to corporate brands, which accounted for 52.5% of all licensed product recalls, followed by entertainment/character properties with 28.9%.
More than three in 10 (30.4%) of licensed product recalls involved toys or infant products; the second and third most cited categories were electronics, appliances, and tools, with 25% of all licensed-product incidents, and apparel, accessories, and footwear with 16.1%.
The most common hazards at the center of the licensed product recalls over the period were fires and burns (25%), choking and ingestion (20%), and laceration and amputation (15%).
Datapoint: March 2020
Art Licensing Business Models Versus Licensing at Large
The licensing business overall is increasingly considering alternative deal types as means of brand extension, alongside traditional licensing agreements. These newer options include lifestyle collaborations and product lines as part of broader experiential, promotional, or content deals. The art licensing sector is no exception. Fine artists such as Damien Hirst and Takashi Murakami have paired with fashion designers for limited collections; Craig & Karl, Donald Robertson, and others have collaborated with beauty brands; and handbag and t-shirt capsules have featured imagery from a range of emerging or local artists.
Artists are much less likely to be involved in alternative deal types than the licensing business as a whole, however. In fact, 80.7% of the deals forged by artists during the 36-month period between January 2017 and June of last year were traditional, long-term licensing deals, according to Raugust Communications research, mostly in familiar art-licensing categories such as home goods, gifts, and paper products. That compares to just 48.1% of deals across licensing as a whole.
Conversely, 11.9% of artists’ licensing deals cemented during the same period were lifestyle collaborations, versus 28.4% for licensing overall. And 6.5% of art deals led to the creation of a product line as part of a broader experiential, promotional, or content initiative, compared to 21.7% for the full licensing business.
While artists are far more likely than the rest of the licensing community to focus on traditional licensing agreements than to experiment with new models, the frequency of the latter is certainly growing. In the last few weeks, examples have ranged from Swedish artists Carl and Karin Larsson collaborating with Design House Stockholm on a limited furniture collection to the Andy Warhol Foundation pairing with apparel label Maharishi for a capsule of trousers and twill jackets.
Datapoint: February 2020
Eco-Friendly Licensing Deals, by Type, 2019
A quarter (25.0%) of licensing and collaboration deals self-identified by the partners as sustainable or eco-friendly in 2019 involved the use of organic or natural materials or ingredients, according to a just-completed Raugust Communications analysis. Slightly less frequent are products made from recycled materials, primarily plastic bottles, accounting for 24.4% of initiatives.
Other sustainable strategies include reducing the amount of packaging or materials used in conjunction with a product (cited as a component of 21.2% of eco-friendly initiatives during the year); integrating some form of reuse into the initiative, whether upcycling, resale, or rentals, with a stated goal of sustainability (20.1%); using sustainably sourced ingredients (13.6%); incorporating alternative materials such as milk, eucalyptus, or mushrooms (9.4%); or incorporating a mechanism for recycling end-use products (by the manufacturer, IP owner, or consumer) and/or waste from the manufacturing process (7.7%).
Other steps, such as relying on solar power, removing chemicals, or making a product biodegradable, collectively represented 9.2% of initiatives. Some product lines rely on more than one of these techniques to achieve their sustainability goals.
The numbers cross property types, geographic regions, and product categories (although a lot of the activity is in apparel, accessories, and footwear). The data excludes systemic steps such as a licensee or licensor reducing water use or energy use company-wide.
Datapoint: January 2020
Properties for Hispanic Audiences, by Property Type, 2019
Licensing efforts geared toward U.S. Hispanic consumers have experienced cyclical ups and downs over the years. But the frequency of such initiatives has been on the upswing in 2018 and 2019, as measured by the number of properties available for licensing. Celebrities, ranging from actors and actresses to musicians to celebrity chefs, represent the most common type of property among active Hispanic-focused licensing programs in 2019; collectively they account for 22.3% of all such properties available.
These figures include IP that appeal almost exclusively to Hispanic consumers, such as Spanish-language TV shows that are favorites among Hispanic Americans but are little known to the broader U.S. population. It also includes properties that have mainstream appeal but index strongly with Hispanic shoppers, and those whose licensors have stated that reaching Hispanic consumers is a priority.
The second most active property type within this sector is sports, including Mexican soccer clubs, Mexican wresting and wrestlers, and Hispanic-focused sub-brands of the U.S. major leagues, which together account for 21.2% of Hispanic-skewing properties available. Character and entertainment licenses (including TV and films, publishing properties, and toy brands) account for 14.6% of properties; corporate brands (especially from the food industry), maintain a 13.5% share; art and artists hold a 12.8% share of properties; and fashion and design labels have an 11.7% share.
Datapoint: December 2019
Evolution of Experiential Licensing, 2019 vs. 2017
A Raugust Communications analysis of experiential initiatives involving licensed properties, on a global basis, in 2019 versus 2017, shows that travel-related experiences, pop-ups of various types, art and historical exhibitions, and immersive/interactive experiences (shown in bold in the table below) all saw a bump in their relative share of total experiential initiatives launched during the year.
Segments that saw their relative shares decline included restaurants and cafés, location-based entertainment (e.g. video arcades or go-kart tracks), permanent retail stores, and live theater. Theme parks and theme park exhibits’ share stayed the same over the period.
It should be noted that none of these sectors have declined in numbers; all types of experiential initiatives continue to grow in real terms. While it is difficult to pinpoint a specific reason for the relative growth or decline in shares, the sectors that saw decreases tended to be those with more investment required and those that are better established. The segments that saw their shares grow, conversely, tended to be those that were less risky (e.g. shorter in duration or less expensive to produce).
Datapoint: November 2019
Reasons for Selecting Collaboration Partners, 2019
An analysis of the primary reasons cited by the participants in limited-scope collaborations for their coming together shows that the number-one impetus remains a desire to simply create something fresh and new. Partners in 63.4% of such initiatives, all involving licensed IP, stated that as the primary, or one of the primary, reasons for working together, according to new Raugust Communications research.
Many of the initiatives that fall into this group are part of ongoing campaigns, such as fast-fashion designer collaboration series or collectible sneaker deals, where having a steady stream of new properties is essential to the strategy.
As the market for limited lifestyle collaborations featuring licensed properties continues to become ever more crowded, there has been an increase in partners citing more strategic reasons, beyond just novelty, as motivations for entering into collaborations. Nearly half (49.3%) are looking for complementary or reimagined looks, tastes, or aesthetics; 33.8% cite complementary or new distribution channels, price points, or demographic customer bases; 18.9% cite a desire to test complementary or new categories, businesses, or industries; 16.9% cite shared or complementary history, geography, or brand image; and another 16.9% cite complementary materials, technologies, or expertise as a primary reason for the joining of the partners. Reasons such as these are likely to continue to become more prominent as collaboration partners look for deeper meaning, beyond just novelty, as a way to stand out from the crowd.
The data in this analysis includes collaborations in the apparel, accessories, footwear, cosmetics, home goods, and other lifestyle categories and is based on the partners’ stated reasons for aligning. It should be noted that some collaboration partners are a good fit for multiple reasons, which are reflected in these numbers. The data focuses only on the primary cited reason(s) for coming together; for example, almost all collaborations are trying to be fresh and new in some manner, but only those that mention this as one of the primary drivers of the partnership are included in this data.
Datapoint: October 2019
Global Licensing Agency Commissions, 2018
Agency compensation structures have changed significantly over time as the business of licensing has evolved and agencies have adapted by taking on new tasks and trying new business models. That said, commissions remain at the core of agency payment for most practitioners, except for firms that have converted completely to business practices outside of traditional licensing representation.
The average commission has declined over time. Up until about 2000 or so, 35%-40% was considered the typical commission rate (with variations due to differences in property or category specialties and other factors). As of 2018, 70.3% of agencies report that their commissions, on average, fall into the 25% to 34% range, according to Raugust Communications’ The Licensing Agency Benchmarking Report.
The most common range is 30% to 34%, with 43.2% of agencies reporting average commissions in this range, followed by the 25% to 29% range, reported by 27.1% of agencies, and the 35% to 39% range, with a still-significant 17.3% reporting commissions at this level. The average is 31.5%.
A number of factors affect the commission rate, of course, including the sector of licensing in which the agent specializes; any other elements of compensation, such as retainers or fees for services, that are part of the total package; whether there are layers of agents (master and sub-agents) involved; the tasks with which the agency is charged; and the relative negotiating power of the agent and client; among others.
Datapoint: September 2019
Predictions of Toy Success at Retail, Holiday 2019
An analysis of key U.S. and U.K. retailers’ annual lists of top toy predictions for the upcoming holiday season suggests that toys tied to licensed properties will have a good showing as usual. Fully 44.5% of all the toys mentioned across the lists have some connection to licensing. Almost a quarter (23.0%) are traditional licensed toys, based on a property not owned by the toy company. Another 21.5% are proprietary (non-licensed) toys that feature a property supported by a toy company-managed licensing effort (e.g. Transformers). These are not licensed per se, but are perceived by customers as such. The remaining 55.5% of the predicted top toys of the season have nothing to do with licensing.
Previous Raugust Communications research for the year 2018 showed non-licensed toys having a 55.2% share of industry retail sales overall and toys associated with a license (toy company-owned or from outside the industry) accounting for 44.8%. This is consistent with the results for this year’s predicted top toys.
A key difference, however, is the relative share of toy company-owned properties backed by licensing, as compared to outside licenses, on the holidays lists. Proprietary toy brands backed by licensing accounted for a 14.7% share of the toy industry overall in 2018, much less than the 21.5% they account for in this year’s top toy predictions. Toys tied to non-toy-industry licenses accounted for 30.1% of total industry sales overall last year, versus only 23.0% of this year’s top toys. These numbers suggest that toy company-owned IP currently have an outsized impact on driving the most popular toys.
When looking at individual brand and property types, MGA Entertainment’s unboxing-inspired brands (e.g., L.O.L. Surprise, Poopsie Slime Surprise, and Poopsie Rainbow Surprise) are dominant, accounting for approximately 8.5% of total slots (licensed and non). Lego also has a significant presence, both with its proprietary brands and its licensed co-brands.
The Disney/Pixar/Marvel/Lucasfilm family, not surprisingly, has a strong showing, accounting for 8% of total slots. Toys tied to preschool-specific properties such as Paw Patrol, PJ Masks, Peppa Pig, Sesame Street, Thomas & Friends, and Baby Shark (excluding preschool toys tied to all-ages properties), collectively account for 8.5% of the total. And non-character-based licenses, such as Mensa for Kids, NASCAR, RealTree, Animal Planet, and the like, collectively account for a small but significant 3.5% of the total. Other properties and brands of note on the lists include Barbie, Fortnite, and Harry Potter.
This research measures the lists that have been published to date, including those from Target, Walmart, Amazon, John Lewis, Argos, and Smyths. Some retailers that traditionally produce similar lists have not yet done so at the time of this writing. Each list has a different methodology to come up with their top toy picks, and the total number on each list varies from 10 to 100. The total sample size is relatively small. For all of these reasons, this data should be viewed as a rough guide to what retailers think will happen in the toy industry this holiday season. It should be noted that, in past seasons, the top toy lists have tended to be accurate predictors of which products will rise to the top.
Datapoint: August 2019
Plus- and Extended-Size Apparel Deals by Property Type
Licensing deals and especially collaborations involving plus-size and extended-size apparel ranges for women are heavily driven by celebrities, according to new research from Raugust Communications. According to this data, 60.4% of total licensing and collaboration agreements involving this sector over the past three years have centered on some sort of celebrity tie-in.
That percentage was split fairly evenly between personalities positioned as experts in plus-size or “curve” fashion, including curve models and bloggers promoting a body-positive lifestyle (28.3% of the total), and other types of celebrities such as actresses and musicians (32.1%). Many of the latter moonlight as designers.
Fashion designers and labels, meanwhile, are also becoming increasingly active in this segment, accounting for 34.0% of the total. Other property types, including entertainment properties, sports entities, and corporate brands, are also present, but their activity, representing only 5.7% of total deals, is dwarfed by that of celebrities and designers.
Our research also shows that partners for licensed and collaborative apparel deals focused on the plus-size and extended-size market are typically retailers or e-tailers, with 71.2% falling into this category; the remaining 28.8% involve manufacturers as licensees. Retailers and e-tailers specializing in the plus-size market (e.g., Lane Bryant or Torrid on the primarily bricks-and-mortar side and Eloquii or Dia & Co. on the primarily e-commerce side), dominate. They represent 44.3% of total deals and 62.2% of deals involving retailers and e-tailers. Mainstream retailers and e-tailers, meanwhile, account for 26.9% of total deals and 37.8% of deals involving retailers and e-tailers.
As time has gone on, the trend is for licensing deals and collaborations to encompass an “extended-size” apparel range—meaning that the products include both plus sizes and very small sizes that are traditionally also difficult for shoppers to find, as part of a whole range of sizing—versus plus-size only. From 2017-2019, slightly more deals have been identified as extended-size, with 52.3% falling into this group, than plus-size (47.7%). Deals in the past year or so have heavily leaned toward the former, while older deals in the period traditionally skewed toward the latter.
Datapoint: July 2019
Licensing-Related Lawsuits, by Type of Suit
Lawsuits are a fact of life in the licensing business, with recent examples ranging from Adidas and the Spanish Football Association battling over the legality of Spain’s early termination of their uniform contract, to Jay-Z suing Iconix for fraud in not delivering the services promised when it took over the Roc Nation brand and being dishonest about its financial status.
A Raugust Communications analysis of licensing-related lawsuits occurring over the past 10 years shows that by far the most common reason licensing practitioners end up in court is trademark infringement, which accounts for nearly half (48.2%) of all lawsuits involving licensors, licensees, and/or agents. While most of these matters involve a licensor (or occasionally a licensee) and a third party, it can also occur within the bounds of an existing licensing agreement.
The second most common type of dispute, accounting for 12.5% of all lawsuits, consists of grant-of-rights violations, typically taking the form of a licensor accusing a licensee of going out of agreed-upon bounds on pricing, distribution channel, or products allowed under the scope of the deal.
Other common disputes include arguments over who owns a trademark at the center of a licensing deal (10.7%), disputes about the payment of royalties or other fees (8.9%); lack of quality control on the part of either the licensor through negligence on approvals or the licensee through shoddy manufacturing (5.4%); and lack of marketing or other support, typically from the licensor (4.5%).
Almost a tenth of lawsuits (9.8%) are brought due to other types of disputes outside of these six major categories, such as antitrust issues, fraud, class-action matters involving consumer complaints, and more.
Datapoint: June 2019
Retail Sales Driven by Licensing Agencies, by Sales Level
More than three-quarters (78.5%) of licensing agencies worldwide are responsible for retail sales of licensed goods totaling less than $50 million each, across all of their clients, according to new data from Raugust Communications’ just-published study, The Licensing Agency Benchmarking Report. That compares to just 2.3% of agencies worldwide that drive $1 billion or more in retail sales of licensed goods tied to their clients’ IP.
That said, this is a top-heavy business, with the 2.3% of agencies driving $1 billion-plus each in retail sales collectively accounting for a huge proportion—59.8%, or $61.5 billion—of the $102.9 billion in total retail sales of licensed goods worldwide facilitated by agencies.
Agencies driving less than $50 million in total retail sales, meanwhile, account for only 3.9% of the total retail sales of licensed goods flowing through agencies. (Note that there is a wide variation in retail sales levels attributable to individual agencies within each retail sales tier.)
Read more about The Licensing Agency Benchmarking Report here. The description includes a link to the full executive summary, including research methodology, and a link to purchase a PDF edition of the report.
Datapoint: May 2019
Licensing-Related Crowdfunding Campaigns, by Property Type
More than half (51.2%) of licensing-related crowdfunding initiatives in 2018 were tied to properties in the “geek culture” realm, according to newly updated Raugust Communications research. This sector is comprised of properties from the world of sci-fi and fantasy entertainment, comic books and comic-based film and TV, manga/anime, and videogames and videogame-based entertainment.
Other types of entertainment and publishing properties represent the second biggest segment, accounting for 17.5% of campaigns; the remainder of initiatives are tied to a diverse roster of non-entertainment-related property types.
Three factors account for the dominance of geek-culture properties. First, marketers of products based on these licenses (e.g., card, board, and tabletop games) tend to use crowdfunding as an ongoing strategy for marketing and product development, meaning they oversee a significant number of campaigns.
Second, these companies tend to hold licensing rights before launching a campaign. Crowdfunders that would be categorized in other segments, conversely, may be offering a product with inbound licensing potential but do not have those rights at the time of the campaign. Or they may be funding an entertainment vehicle that is likely to be licensed if it becomes a hit, but has no such activity planned to date. Their efforts are therefore not categorized as licensing-related for the purpose of this research.
Finally, and most importantly, properties arising from geek-culture entertainment and publishing remain a good fit with the demographics of crowdfunding, as users of both—while slowly diversifying—still tend to skew toward young adult men.
Datapoint: April 2019
Impact of Controversy and Scandal on Licensing
The college cheating scandal currently in the news, which has brought an end to the licensing and endorsement career of influencer Olivia Jade, at least for now, is a reminder of the risks associated with celebrity licensing. Still, according to new research by Raugust Communications, more than a third (36.7%) of controversies or scandals involving celebrities with licensing programs have had no impact on the celebrity’s commercial activities. The research measures incidents occurring over the past 10 years.
That said, in 29.9% of cases, a scandal is off-putting enough to consumers that it leads to the end of a celebrity’s licensing efforts. In another 21.8% of cases, the scandal causes significant harm to the program, although some consumers remain loyal enough to keep it going at a reduced level. Finally, in nearly 10% of cases, the licensing effort is significantly harmed in the short term, but recovers to a degree once time has erased the memory of the infraction or the celebrity shows remorse and/or changes his or her behavior.
A number of factors play into all of this. The type and frequency of the infraction makes a difference, as does the age and loyalty level of the fan base and the “edginess” factor associated with the celebrity. If the controversy is tied to the celebrity’s core accomplishments (e.g. an athlete’s steroid use), the impact can be greater than something that involves the personal life. And factors outside the scandal itself can play a role, with the controversy sometimes serving as a catalyst but not the only reason for the decline of a licensing program.
It should be noted that this research involves a relatively small (although fast growing) sample size, compared to the greater world of celebrity licensing. In addition, the research represents a snapshot of a moment in time, since the status of scandal-impacted licensing programs can change as the months and years go by. Finally, while the research focuses on celebrity licensing programs, where controversy is common, the results may have relevance for corporate trademarks and other property types that find themselves dealing with scandalous behavior as well.
Datapoint: March 2019
Distribution Strategies for Licensed Product Launches
Just 42.4% of licensed and collaborative product lines launch through traditional wholesale/omnichannel distribution strategies (e.g., with licensees selling through retailers and etailers of all types) globally, according to Raugust Communications estimates. The figures measure current or planned distribution for physical products under licensing and collaboration deals signed in 2018.
The remaining 57.6% of deals have distribution upon launch that is limited in some way. The highest proportion of this group (17.6% of the total) launch or plan to launch though one retailer exclusively, while 15.2% debut through e-commerce only (including exclusives and deals encompassing multiple online retailers), 10.9% through a select group of retailers, 7.9% through the licensor’s and/or licensee’s own stores only, and 4.2% through home shopping.
Of course, distribution strategies evolve over time. These figures measure the stated approach upon launch only, and once a licensed product line is established, a traditional wholesale strategy becomes more likely. The numbers also vary by property type and category. Corporate brand extension programs are more likely to have a traditional distribution strategy at launch, for example, while lifestyle programs tied to celebrities would be more likely to skew toward exclusives. The percentages also vary from country to county, depending on the nature of retailing in each.
Datapoint: February 2019
Market Share, Licensed vs. Non-Licensed Toys
The share of retail sales of toys attributable to licensed products fell 11%, from 30.1% in 2016 to 26.8% in 2018, according to new research from Raugust Communications.
Meanwhile, the percentage of toys supported by a licensing program but not licensed, because the toy maker is also the owner of the intellectual property (as is the case for Mattel’s Transformers, Hasbro’s Barbie, and a large and expanding universe of others), grew 19% over the same period, from a 14.7% share of industry sales in 2016 to 17.5% in 2018. Toy companies from Funko! to Funrise are creating more and more IP, and some of these properties (L.O.L. Surprise, Shopkins, Paw Patrol) have dominated the sales charts. For the two largest players, Mattel and Hasbro, the growth (or loss) trajectory of owned brands was more positive than that of their licensed products by a significant margin in 2018.
The share of non-licensed toys—for the purposes of this analysis, products that are neither based on a license nor supported by a licensing program managed by the toy company—was relatively flat over the period, rising less than 1%.
Traditionally, licensed products’ share of toy industry sales have been estimated at approximately 45%. The 26.8% share found in this analysis is a big drop from that benchmark. However, when the percentage of licensed toys is combined with the percentage of toys based on toy company IP but supported by a licensing program—a sector that was relatively small a decade or so ago—the two together account for almost 45% of the market.
Thus the importance of media and entertainment-driven toys has stayed relatively stable over the years. The real change is that ownership of the media and entertainment IP has moved from outside licensors to the toy companies themselves.
Datapoint: January 2019
Licensed Eyewear Sales, by Property Type
Close to three-quarters (74.6%) of the licensed portion of the eyewear industry (e.g., licensed eyeglass frames and sunglasses) is attributable to brands associated with clothing designers, according to new research from Raugust Communications.
The second largest sector, accounting for 10.3% of retail sales of licensed eyewear, consists of luxury/lifestyle labels, with many having roots in the worlds of accessories, jewelry, and cosmetics. Active, outdoors, and sports-related properties (e.g. Nike, O’Neill, or Champion) account for 5.5% of licensed sales, and corporate brands (Harley Davidson or Caterpillar) for 4.0%. Celebrities (in a somewhat surprising result) and character/entertainment properties drive only 2.7% and 2.2%, respectively, of licensed eyewear sales.
Total retail sales of eyewear globally are estimated at about $130 billion to $140 billion, depending on who is measuring. Of that, between $13 billion and $18 billion, again depending on the researcher, is thought to be attributable to luxury frames and sunglasses. This is the industry sector where most of the licensing occurs, and it is experiencing sales growth that is outpacing increases for the industry as a whole.
Some of the licensing deals or launches of licensed eyewear lines that occurred in 2018 included Montblanc with Kering, Reese Witherspoon’s Draper James brand with Altair, DKNY with Marchon, Rebecca Minkoff and Missoni with Safilo, Robert Graham with Nouveau Eyewear, and Victoria’s Secret and Pink with Marcolin. Recent renewals have included Tiffany with Luxottica, Bebe with Altair, Guess? with Marcolin, and Havaianas with Safilo.
Licensing deals in the eyewear space tend to be long, often in the seven- to 10-year range.
Datapoint: December 2018
Celebrity Licensing Programs, by Branding Strategy
As celebrities look to their licensing, collaboration, and other product-focused initiatives as a way to generate long-term revenue, more are marketing their products under a brand name as opposed to their own name, opting for brand longevity over in-the-moment fame.
That said, 70.9% of celebrities’ signature product programs remain associated with their own names, signatures, and/or likenesses, according to new Raugust Communications research. That compares to 15.1% of celebrity initiatives that are marketed under a brand name that does not include their personal name (e.g. Reese Witherspoon’s Draper James or Ree Drummond’s Pioneer Woman). Brands such as these are positioned to stand alone and capture customers who do not know the celebrities for whatever made them famous in the first place, as well as attracting core fans who are aware of the celebrity backing.
Another up-and-coming technique is to create a name for a product line that is a hybrid of a brand name and the celebrity’s own name. This strategy, illustrated by initiatives such as CALIA by Carrie Underwood or Melissa McCarthy Seven7, accounts for 8.5% of celebrities’ licensing efforts. It allows the celebrity to capitalize on current fame while creating a brand that may be able to live on its own in the future.
A growing number of celebrities (5.5% in 2018) use multiple branding strategies for their product extensions. One notable example: Gwen Stefani, who has marketed fashion and lifestyle products under brand names including Harajuku Lovers, L.A.M.B., and DWP; under hybrid labels including gx by Gwen Stefani; and, a few times, under her own name alone.
These numbers include celebrity-based signature product programs of all types, whether achieved through licensing, collaboration, an element of an endorsement deal, or a proprietary business.
Datapoint: November 2018
Preschool Properties by Age
The sweet spot for preschool properties in 2018 is four-year-olds. Almost three-quarters (74.5%) of properties focused on preschoolers include four-year-olds among their core age range, according to newly updated research from Raugust Communications.
That said, the share of preschool properties that include four-year-olds among their target customers in 2018 has decreased slightly since this research was last conducted in 2016. At that time, four-year-olds were included in 76.7% of properties. The shares of all other age cohorts, meanwhile, increased over the same period, with three-year-olds rising the most. The latter were included in 64.1% of all preschool properties in 2018, versus 61.2% in 2016.
The growth in the relative shares of preschool properties targeting children older and younger than four is due to two trends. At the upper end of the age range, more properties continue to include four- and even three-year-olds along with school-age children as part of their core markets, which stretches more “preschool” properties up into the age 5 and age 5+ cohorts. Conversely, at the lower end of the age range, more properties are focusing on sweet spots that encompass very narrow age groups of younger preschoolers, as opposed to trying to appeal to the whole preschool spectrum. That trend has helped reduce four-year-olds’ share as well as increasing the shares for younger age cohorts.
The numbers reflect the age positioning stated by the licensors of the properties measured; some likely end up attracting fans above and below the stated core age range.
Datapoint: October 2018
Capsule Collections by Scope
Fashion/lifestyle capsule collections involving licensed properties are most likely to be very limited in scope, featuring less than 20 core pieces—each in multiple sizes and often multiple colorways—with 69.5% of capsules falling into this category. Close to four in 10 (39.6%) of capsules encompass less than 10 pieces, while 29.9% feature anywhere from 10 to 19, according to new research from Raugust Communications.
That said, the scope of capsule collections varies widely, ranging from one to more than 100 pieces. And, although the greatest proportion of capsules fall into the zero- to nine-piece range, the average number across all capsules is 18.3 pieces, thanks to some larger assortments that skew the mean upward.
The numbers include any capsule collection in the apparel, accessories, and/or footwear category in which at least one of the partners is an owner of a licensed property of any type. One-offs are included, as are capsules that are part of broader licensing agreements, DTRs, promotional partnerships, or a series of collaborations.
Datapoint: September 2018
Meal Kits by Property Type
More than 40% of retail sales of meal kits connected to licensed properties in the U.S. are associated with chefs, according to new research from Raugust Communications, which pegs total retail sales of meal kits tied to licensed properties at $51.2 million in 2017. The figures include kits that are tied to any licensed property, no matter the structure of the deal.
Celebrities other than chefs account for the second largest category, with 22.7% of retail sales, followed by food/diet brands (18.2%), media brands (11.4%), sports/fitness properties (4.5%), and other types of properties, including entertainment/character (2.3%).
While still representing a tiny segment (just 1% of meal kits overall), retail sales of meal kits connected to licensed properties jumped 200% in 2017 from just $25.5 million in 2016, Raugust Communications estimates, thanks to rising sales of meal kits in general and the entry of more properties into the category.
The licensing-related segment of the business promises to increase again in 2018, despite the many challenges and changing business models facing the meal kit industry overall this year. As the segment struggles, more players are turning to licensed properties to help them attract customers, and more licensed properties are testing the category as a means of generating awareness, assessing their brand strength in the food category, engaging their fans, and potentially generating revenue.
Datapoint: August 2018
Celebrity Licensing, by Type of Celebrity
Musicians are the most active type of celebrity/estate when it comes to maintaining licensing programs, with 19.2% of current celebrity licensing efforts tied to this sector, according to new Raugust Communications research. Second comes actors and actresses with 16.0% of all celebrity licensing programs, followed by athletes with 11.2%, chefs with 9.2%, and models with 5.5%.
Rounding out the list of top segments are pure reality stars, who have achieved fame primarily through reality TV (4.8%); lifestyle, style, and beauty experts, driven largely by influencers such as beauty and style bloggers (4.7%); TV presenters, hosts, and newscasters (3.9%); comedians and “slice of life” influencers who are famous simply for creating videos and making observations about their lives (3.6%); makeup artists and stylists (3.2%); celebrity interior designers and DIY experts (3.0%); and fitness/wellness experts (2.5%). Many of these segments are heavily weighted with influencers.
“Other” types of celebrities collectively account for a significant 13.3% of properties. This is a diverse group consisting of everything from cosplayers, coaches, and costume designers, to gamers (e.g., e-sports celebrities and “let’s play” video creators), to business people and authors, to burlesque artists and dancers, among many more.
It should be noted that this analysis includes properties often considered part of other property types, as long as their celebrity extends beyond the traditional licensing norms of that segment. For example, the chart includes musicians, typically considered part of the “music” segment, if their licensing and collaboration activities extend beyond traditional music merchandising (e.g., into lifestyle apparel programs or home goods) and/or if their celebrity extends beyond their core expertise (e.g., they appear on a reality or competition show or have written books on cooking). The same is true of athletes (typically included as part of sports licensing), fashion designers (fashion), and so on.
Many celebrities these days are involved in a diverse range of activities, such as actresses who are also models, musicians, reality stars, designers, and/or entrepreneurs. In this analysis, they are included in the segment where they originally gained enough fame to launch a licensing program and/or the segment that primarily drives their licensing activity.
Datapoint: July 2018
An analysis of food-to-food licensing deals currently in effect shows that candy brands are the most active sector when it comes to outbound licensing into other food segments, accounting for 22.6% of all deals in this space, according to Raugust Communications research. Following candy are fruit, vegetable, and juice brands, collectively driving 19.3% of all deals currently in place, alcoholic beverages, driving 16.3%, and sauces, spices, condiments, and dressings, driving 14.2%. Note that each of these sectors is dominated by brands associated with distinctive flavor profiles. All told, 14 different product categories found in the grocery store aisles boast a significant number of brands involved in outbound food-to-food licensing.
On the inbound licensing side, the category of ice cream and frozen novelties is the most likely to acquire rights to other food brands, accounting for 14.7% of current food-to-food licensing deals. Since licensing in this category is about giving consumers more choices, new items tend to cycle in and out quickly and/or represent just one component of a broad spectrum of licensed flavors—thus, more deals are required. Beyond iced treats, meanwhile, the landscape is very diverse, with 10 different categories accounting for between 4% and 8% of current deals and “other,” representing an additional nine categories, collectively driving 37% of deals.
A closer look at the most common pairings of property and product within food-to-food licensing shows that candy brands paired with ice cream and frozen novelties, not surprisingly given the results above, represent one of the two most active matches, accounting for 6.6% of total deals. Equally common are condiments, hot sauces, and spices paired with savory snacks (e.g., popcorn, nuts, or jerky), also with 6.6%. Another notable finding is that 12.3% of deals overall involve licensors and licensees that operate in the same category; in other words, the licensed product is closely adjacent to the core brand. Examples include fruit and vegetable brands licensed into other fruit and vegetable categories (the top example), as well as dairy-to-dairy and beverage-to-beverage deals (alcoholic and non-alcholic), among others.
It should be noted that this analysis includes only food-to-food licensing deals and excludes restaurants, chefs, and other property types that are licensed into the food category.
Datapoint: June 2018
Current Pet Product Deals, by Property Type
The entertainment/character sector is the most active property type when it comes to deal-making in the pet products industry. Of licensed pet product deals for which merchandise is currently available at retail or online, 29.3% are tied to entertainment/character properties. Examples range from the Disney/Marvel/Star Wars family to pet and animal characters such as Grumpy Cat and Garfield.
The second largest segment, as measured by the number of deals, is corporate trademarks and brands, not far behind with 26.0% of active deals. These tend to be broader in product scope and/or more clearly differentiated than character deals, which are likely to be more on the novelty end of the spectrum. Examples from the varied corporate landscape range from pet food brands (Purina Pet Gear) to brands offering some sort of characteristic that stands out in the marketplace (e.g., Energizer LED pet collars, Goodyear car accessories, or Burt’s Bees natural pet care).
The celebrity sector, with properties ranging from Bret Michaels and Miranda Lambert to Ellen DeGeneres, ranks third with 11.4% of active deals. The rest of the market, with a collective share of 33.3%, is fragmented, with five property types accounting for a market share of between 3.3% and 7.3% respectively.
The total pet products market in 2017 reached $69.51 billion, according to the American Pet Products Association, with $15.11 billion of that attributable to supplies and over-the-counter medicine. (The majority of licensing deals fall into the supplies category.) Estimated spend in 2018 is forecast at $72.13 billion total, with $15.51 billion in supplies and OTC meds.
Datapoint: May 2018
Fragrance Sales by Property Type
More than two-thirds (68.4%) of retail sales of personal fragrances in the U.S. are licensed, according to new research from Raugust Communications. Fashion labels dominate the market, accounting for 59.0% of the total and 86.3% of the licensed portion. This is due not only to the sheer quantity of fashion labels that have fragrance licenses, but also to the fact that they drive many of the bestselling scents.
Brands with origins in the beauty market, such as non-licensed Estée Lauder or Lancôme products, account for 31.6% of total industry retail sales.
Celebrities comprise the second-largest licensed property type, far behind fashion labels with 5.3% of the total and 7.7% of the licensed portion. This segment—which continues to include strong-performing scents tied to the likes of Sarah Jessica Parker, Jennifer Lopez, Jessica Simpson, Paris Hilton, Rihanna, Beyoncé, Elizabeth Taylor, and others—has become significantly less important in recent years.
This drop is due to a number of factors, including the decline of the “masstige” fragrance channel (where most celebrity fragrances live), overcrowding in the celebrity sector, the fact that many celebrity scents are more novelty than classic, consumers’ fickle tastes when it comes to celebrities, and fashion labels stealing share from celebrities in both the prestige and mass channels.
“Other,” which accounts for 4.1% of the total and 5.9% of the licensed segment, includes everything from novelty scents tied to sports or entertainment properties to branded fragrances connected to the likes of Ford Mustang or Stetson. The top-selling slice of this sector is luxury labels, particularly from the world of jewelry, with examples including Tiffany, Bulgari, and Van Cleef & Arpels.
Euromonitor International pegs the total U.S. fragrance market at close to $8 billion. It should be noted that researchers vary widely in their estimates of fragrance sales, both in the U.S. and globally.
Datapoint: April 2018
Licensing Agency Specialization
On a global basis, nearly four in 10 (39.4%) of licensing agencies specialize in just one property type, according to new research by Raugust Communications.
This unexpectedly high percentage is due primarily to two factors: 1) The large number of agencies representing art and artists, especially in North America and Europe, and 2) the large number of agencies specializing in entertainment/character licensing only, which tend to be located in markets outside of North America, particularly in less developed territories.
Almost as high a percentage, 38.5%, of agencies have a relatively narrow focus, concentrating on two to three property types. The remaining 22% of agencies globally—by far the smallest percentage—handle a wider range of four or more property types. These are likely to be larger and/or longer-established companies that have diversified over time.
Datapoint: March 2018
Magazine Brand Licensing Deals by Content Type and Category
Among magazines with outbound brand licensing programs, the beauty/fashion segment has been the most active in forging deals over the two-year period from March 2016 to March 2018, according to new research from Raugust Communications. That sector accounted for 18.8% of the magazine brand licensing agreements completed, worldwide, during the period.
Other active sectors include cooking/food (17.9% of deals), home/garden (13.7%), health/fitness/outdoors (13.5%) and men’s (12.5%). These sectors include a large number of titles doing deals and/or titles that are very active in deal-making. The fact that 23.6% of deals fall into the “other” category (incorporating eight additional segments, from sports to parenting) shows the diversity of the landscape.
An analysis of magazine brand licensing deals by product category, meanwhile, shows how important experiential and content licensing is for this property type, with 24.1% of deals falling into this segment. (These include only licensing deals and not in-house produced content or experiences.) The diversity of the business is again clear as well, with 29% of deals falling into “other,” reflecting 10 additional categories beyond the five key categories shown.
The numbers also reflect the targeted nature of magazine licensing. When content and experiential licensing are removed from the category mix, the home-related and food/beverage product categories collectively account for approximately 38% of deals done, not too far from the nearly 32% of deals attributable to magazines whose content falls into the cooking/food and home/garden sectors. A similar correlation exists for the beauty/fashion content segment and the apparel/accessories footwear category, which account for 18.8% and 22.2% (excluding experiential/content), respectively.
The figures in these charts show the number of deals and do not necessarily mirror the percentages of retail sales attributable to each segment. Global retail sales of licensed products tied to magazine brands totaled $5.1 billion in 2017, according to Raugust Communications estimates.
Datapoint: February 2018
Licensed Toy Sales by Gender
In 2017, 39.2% of retail sales of licensed toys were tied to boy-skewing properties, while 37.2% were tied to girl-skewing properties, according to Raugust Communications research. The remaining 23.3% are estimated to be gender-neutral.
Total retail sales of licensed preschool toys totaled $6.18 billion in the U.S. in 2017, Raugust Communications estimates.
Both the gender-neutral and the girl-skewing portions of the total have been on the rise in recent years. The increase in the former is largely due to the efforts of licensors, licensees, and entertainment creators to not succumb to gender stereotypes. The growth in the latter is due primarily to the strength of girl-skewing preschool licenses in recent years.
Datapoint: January 2018
Licensed Lifestyle Collaborations by Strategy
When lifestyle collaborations first came on the scene as a licensing tactic, they tended to be one-and-done efforts. The number of collaborations has grown exponentially since then, leading licensors and their partners to be more strategic. In fact, while one-offs remain the most common single approach when it comes to licensed lifestyle collaborations, they account for less than half (48.6%) of collaborations overall, according to Raugust Communications research.
In the other 51.4% of cases, the collaboration is part of a broader strategy. The most common (13.5% of the total) is when a specific initiative is part of what was intended upfront as a series of collaborations. The second most frequent (12.8%) comprises collaborations that are part of a program involving multiple collaborators over time, such as a fast-fashion or artist collaboration series. Another 9.9% are those intended as one-offs but which transitioned into a series due to early success. Rounding out the collaborative strategies are initiatives that become or are part of a long-term licensing agreement (7.8%) and those that occur as part of a broader marketing or endorsement relationship (7.4%).
The numbers focus on lifestyle collaborations that involve apparel, accessories, and footwear; home goods; and/or cosmetics and that feature at least one licensed property (cutting across property types). Other collaborators may include retailers, manufacturers, and/or other licensors.
Datapoint: December 2017
Experiential Initiatives by Type
Pop-up shops and cafés were the most-utilized type of licensing-related experiential initiative in 2017 on a global basis, according to new research from Raugust Communications. They accounted for 20.5% of the experiential deals announced during the year to support licensed properties. Ranking second were live theater and performances (encompassing everything from Broadway, regional, and touring theatrical shows to promotional mall-performance tours), with a share of 18.6%.
On the other end of the spectrum, the experiential initiatives that were the least utilized during the year were, for the most part, those that are longer term and require a greater investment. They include permanent retail outlets (5.6%), restaurants and cafés (6.8%), theme parks and theme park attractions (9.3%), and location-based entertainment and activities (e.g. branded go-kart tracks or arcades, with 9.9%). Travel-related examples were also on the lower end of usage, accounting for 8.1% of announced deals.
The figures—which include experiential ventures of any financial configuration, whether a promotional effort backed by the licensor, a straight licensing deal with a producer, or another type of partnership—also show the diversity of the landscape, with eight different sectors measured and none dominant.
Datapoint: November 2017
Celebrity Licensing Deals by Distribution Strategy
An estimated 28% of licensing deals tied to celebrities’ names and brands in 2017, to date, have involved exclusive distribution through a traditional retailer (either via direct-to-retail agreements or exclusive distribution partnerships with a single retail chain and its e-commerce operations), according to new research by Raugust Communications.
Another 10% of the deals called for product lines to be exclusive to an e-commerce-only platform and 4.4% exclusive to a home shopping network (with distribution via both television and e-commerce).
Collectively, that means a significant portion (42.4%) of licensing deals involving celebrities in 2017 included some sort an exclusive distribution strategy. That said, more than half (56.6%) of all celebrity licensing deals over the same period remained non-exclusive in their distribution plans, with merchandise set to be sold across multiple retailers.
This last segment includes product lines launched exclusively at one retailer for a short period before going wide, as well as those distributed widely from the start, while the retailer-, etailer-, and home shopping-exclusive segments incorporate merchandise lines that remain exclusive to the respective channel over the life of the current deal. Naturally, distribution strategies often change if the products remain on the market beyond the current agreement.
Datapoint: October 2017
Retail Sales of Licensed Educational Products for Kids
Retail sales of licensed educational products for children totaled $669.7 million in 2016, according to newly updated research conducted by Raugust Communications. By far the bulk of that, 84.7%, is attributable to traditional toys, with print publishing accounting for 8.1% and interactive products (apps and interactive gaming) for 6.4% of retail sales. The remaining 1.2% comes from products outside these three major categories.
While both licensed merchandise and educational products, separately, represent significant portions of the children’s product market, the intersection between licensing and education commands just a small slice of the total landscape. For example, licensed educational products represented just 2.7% of the $20.36 billion toy industry and 1.2% of the $4.47 billion children’s book industry in 2016. (The totals come from the NPD Group/Toy Industry Association and the Association of American Publishers, respectively.)
The Raugust Communications figures measure educational products using a relatively narrow definition. For example, a role-play toy could in many cases be considered educational, since it teaches life skills through play. But these figures include only toys that have a connection to specific PreK-12 subjects, such as National Geographic Science Kits from Thames & Kosmos or the Disney Princess Magical Learning Laptop from VTech.
Similarly, any book could be considered educational by encouraging reading, but these figures reflect only educational books that teach specific curriculum topics, such as Workman’s Star Wars leveled workbooks; Scholastic’s Assassin’s Creed: A Walk Through History, which teaches about the historical periods portrayed in the game; or Sesame Street: Elmo’s Word Book, a vocabulary book in English and Spanish from Readerlink’s Studio Fun imprint.
Despite the small retail sales levels for licensed educational kids products to date, interest and activity is growing (albeit slowly) as both educational product marketers and licensors see the benefits of marrying learning concepts and popular properties. That said, these products face some strong challenges, especially when it comes to parental and retailer perceptions about whether a licensed product can really serve as a tool to help children learn.
Datapoint: September 2017
Kids’ TV: Streaming-only Versus Traditional Distribution
More than 35% of current children’s episodic TV properties with active licensing programs in the U.S. are distributed through streaming channels alone, according to Raugust Communications research. That means streaming-only properties’ share has grown from 0% to more than a third in less than five years. The remaining 64.4% of licensed kids’ TV properties are primarily distributed on traditional TV channels, from the likes of PBS Kids, Nickelodeon, and Disney Jr. to more niche channels on cable, satellite, or terrestrial television. The traditional TV properties may have secondary streaming exposure as well.
Of course, a chart of retail sales figures would show a very different story. Most top-selling TV-based licensed properties—from classics such as Sesame Street to newer phenomena such as Paw Patrol—are still supported by traditional television. Most of the properties on the streaming-only side still have just one or a handful of licensees, often centered on the publishing category and/or a limited range of toys.
It should be noted that this chart offers a snapshot of a moment in a quickly changing landscape. Properties that do not achieve adequate ratings on traditional television often transition to streaming-only properties, while properties that become hits on Hulu, Netflix, Amazon, YouTube, or other streaming channels are often able to make a jump to a traditional TV network.
These figures reflect properties for children that are currently in production in episodic TV form, including both franchise-based and originals, with distribution and at least one licensee signed in the U.S. They do not measure secondary distribution of older programs. The numbers encompass both U.S.-made properties and international properties, as long as they are able to be viewed in the U.S. and have at least one U.S. licensee.
Datapoint: August 2017
Subscription Box Activity by Property Type
Character/entertainment properties (primarily of the “geek-and-gamer” sort), celebrities, and publishing brands (mainly magazine titles) are the three most active licensed property types when it comes to associating their names with subscription boxes, according to Raugust Communications research. They account for 29.2%, 21.2%, and 20.4%, respectively—or fully 70.8% collectively—of all boxes tied to an individual license.
These figures measure only boxes that are identified with a single licensed property as a brand name (e.g., Culturefly’s Pusheen Box or Loot Crate’s Firefly Cargo Crate), as opposed to having licensed products included in a box marketed under the supplier’s brand (e.g., a Jessica Simpson item contained, along with other merchandise, in a monthly KidBox).
The data reflects the industry in 2016. This year has seen continued growth in the subscription box business overall, and an increase in licensing activity in the sector, with more diversification in the property types that are associated with boxes. Meanwhile, there has been some consolidation in the more crowded segments of the industry, including the geek-and-gamer area, where character licensing is centered, and the lifestyle segment, where magazine brand and celebrity involvement are strong. As one example, traditional and social media outlets are reporting this summer that one of the leading geek-and-gamer players, Fan Blocks, seems to have suspended operations (at least temporarily).
These developments suggest that licensing sectors outside the big 3—including sports and corporate brands, among others—will see a boost in their relative shares in 2017.
Datapoint: July 2017
Toys: Licensed Versus Generic
Licensed products accounted for 30.1% of total retail sales of licensed toys in the U.S. in 2016, according to Raugust Communications estimates. That translates to $6.1 billion of the nearly $20.4 billion in total sales that year, as measured by the Toy Industry Association.
Another 14.7% of toy sales were tied to properties owned by the toy company making the product. This would include items such as Spin Master’s Paw Patrol or Hasbro’s Transformers toys. These appear to consumers to be licensed, since they are connected to a TV show or film, but they are actually not, because they are produced by the licensor and not an outside partner.
Historically, a general rule of thumb has been that about 45% of toys in the U.S. were licensed, with that number rising and falling annually depending on what properties were hot and who was doing the measuring. At first glance, it seems from the estimates discussed here that the licensed portion of the market has fallen precipitously.
However, if you take the licensed share and combine it with the share connected to toy company-owned IP that is supported by outbound licensing, the two together account for 44.8% of industry sales, very close to the historical average of 45% for licensed toys. The shift reflects the increasing propensity for toy companies to back their proprietary brands with entertainment vehicles and a full licensing effort and to place as much importance on these brands as on their licensed products.
While licensing is obviously very important in the toy industry, it should be noted that over half of industry-wide sales (55.2%) are attributable to purely non-licensed toys; in other words, those that are neither based on an outside licensed property nor backed by a toy company-managed licensing program.
Datapoint: June 2017
Licensing by Type of Deal
Traditional, long-term licensing agreements continue to dominate the business, as measured by the number of deals forged across property types and product categories. In fact, close to 66.6% of all licensing contracts signed from January 2015 to March 2017 can be categorized as traditional (two years or longer and involving a physical product), according to Raugust Communications estimates.
About a third of deals over that period, on the other hand, either fall into the category of non-product deals (experiential, content, promotional) or short-term lifestyle collaborations. These two segments accounted for 20.3% and 13.1% of all agreements, respectively, during this approximately two-year timeframe.
A few observations about the numbers: First, the percentage of traditional licensing deals would have been much more significant 10 years ago, when neither collaborations nor experiential licensing were as commonplace as they are today. Second, the chart analyzes the number of deals and not retail sales; a depiction of the latter would most likely show a greater percentage attributable to traditional licensing agreements. And third, it should be noted that the boundaries between each segment can be fuzzy in some cases, depending on the nature of the deal.