One American asset that is definitely growing in value these days is the American Brand. While consumer product sales in the U.S. are key, this market is fairly saturated with licensed product and growth is almost flat during this consumer slowdown.
That's why so many entertainment and toy giants are looking to lend their names to manufacturers who want to sell their name overseas. According to Disney, their licensing business will grow to $30 billion dollars in 2008.That means Disney gets a percentage of sales (the typical rights deal can be as small as 5 or at times even 15%) for simply allowing other companies to make and market products that feature Disney characters.
I can only imagine how potentially profitable the direct-to-retail Disney-Wal-Mart deal is to exclusively sell certain Hannah Montana products in store. Disney projects that global retail sales of its Hannah Montana products will reach $1.3 billion in 2008. While Disney sees only a percentage of that total revenue, the company is essentially getting paid for marketing. Feeding a trend and appetite for its brands creates buzz and elevates the 'got to have' status of parts of the Disney empire.
An interesting side note: Disney Consumer Products head Andy Mooney said that he expects the cost to manufacturers and to consumers of toys and licensed products to go increase in the low double digits this year. Licensing products instead of manufacturing the products themselves, frees Disney of the costs associated with bringing those items to market. That's one way to dodge inflation.
Marvel Comics, Hasbro and other giants also broker these types of licensing deals. In fact, many smaller brands are gathered this week at New York City's Javits Center to showcase their characters, icons and brands to global manufacturers.
The licensing market isn't just for children's products either. I spoke to Debra Joester the CEO of the Joester Loria Group at the Licensing show on Monday. She is bringing Jeep branded consumer products to market throughout Asia, South Africa and the U.S. She said that Jeep products including baby strollers, outdoor clothing, bicycles, luggage and camping equipment have brought in more than $550 million in global sales in 2007.
While I've talked about the business of apparel licensing with the CEO of Iconix more than a few times this was my first stint looking at the broader market for consumer product licensing. We've posted some interview clips here online. Enjoy.
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