The Crowded World of Kids Licensing

State of the Industry: The Crowded World of Kids Licensing

Creating a new toy without the brand power of the “Rugrats,” the WWF or some other runaway license is becoming increasingly difficult. And toys aren’t the only product category seeing an explosion in licenses. But the growing momentum within the business means cutthroat competition, shorter shelf life and more creative challenges than ever in order to build a successful licensing program. In response, kids marketers are making a twofold effort to get their licensed products noticed: they’re endowing licensed products with more value and extending the the overall brand beyond a TV show, a character or a company to become a part of kids’ lifestyles.

Smart Marketing

Licensors are making more careful decisions about the way products are released to market and how each product contributes to the overall success of the brand. “We have to be smarter about the way we work with retailers and third-party partners to extend the lifecycle. We have to enhance kids’ experience to not only mean products but lifestyle,” says Tracey Beeker, director of licensing and marketing with PBS Learning Media.

For example, companies like Mattel are expanding the reach of popular characters like Barbie to create lifestyle brands that embrace fashion, beauty and other categories relevant to a broader range of kids. The same holds true for licensees, says Woody Browne, president of Building Q, a licensing and marketing consultancy in New Jersey.

Overextending in order to get a hot license and not having the margins to produce a quality product can be a major misstep. “It used to be that buying a license gave you the ability to go to retail and sell product. In today’s environment, it’s only one element in the marketing mix,” Browne says. Investing in strong product rather than relying on the strength of a brand or character is crucial. Licensed apparel no longer means a T-shirt stamped with a character’s face; it now competes with major fashion brands for kids’ business, meaning details like embroidery, beads and better fabrics are coming into play. And in the toy category, Beeker’s team is looking for ways to take PBS’ “Zoboomafoo” animals beyond plush toys to incorporate wildlife habitats and other product extensions that fit the way kids play, rather than just giving them another stuffed toy.

It’s Lonely at the Top

While the big guys may not have to worry as much about getting product on the shelves, managing the brand can be even more difficult than it is in the case of a less stellar license. The best licenses, in fact, are usually the most troublesome for all involved. “It’s very easy to manage an undersuccessful licensing program,” says Nick Underwood, director of marketing for Just Group, a licensing and marketing firm. “One of the biggest challenges is controlling a licensing program.” Underwood refers to past experience with the “Teletubbies,” which “ran away from us” due to overwhelming consumer and retail demand, he says. His best advice for managing a top license: “Stick to your original thinking. Stick to maintaining the values of the property as a whole. If you’ve got a preschool property, the merchandising and product should be reflective of its core values.”

(Broadstreet Licensing: Bill Cross, 973/655-0598; Building Q: Woody Browne, 856/751-2800; Just Group: Nick Underwood, +44 20 7625-3600; PBS: Tracey Beeker, 703/739-8673)

COPYRIGHT 2000 Phillips Publishing International, Inc.

COPYRIGHT 2001 Gale Group