Licensing Industry

With globally iconic brands such as Mickey Mouse and Winnie the Pooh, Disney must experience a significant number of counterfeit products. What overt and covert brand protection initiatives does Disney employ to hinder the counterfeiters?
Andrew Levy, Managing Director, Licensingpages

We look to provide our content through as many legitimate outlets as possible so that consumers have easy access to legitimate content at a fair price. We also make our content available to distributors around the world who create the right environment and protect our content from piracy, however we also protect our intellectual property on a number of different levels, including working with law enforcement agencies, local anti-piracy organisations and the Motion Picture Association. We also prosecute our own civil actions and support criminal prosecution, where appropriate.

How do you view the increase of movie franchises and brands seeking to create licensed merchandise programmes? Is this increased competition or could this be an opportunity for evergreen brands like Disney to promote their credentials as long-term fan favourites, without the inherent risks of a new property?
Ben Jennings, Licensing Coordinator, Pokemon UK

The UK licensing business is incredibly competitive, however Disney has not suffered from this increase in competition and we continue to deliver product across a breadth of different franchises. Our focus is on delivering product that is right for the customer, right for the retailer, and ultimately right for Disney. As part of this, a key focus for us is also offer innovative, compelling products that really leverage the story of the property.

Our evergreen franchises continue to be incredibly strong, for example Disney Princess global revenues have grown from $3bn in 2006 to $4bn in 2007 and we continue to offer new content to drive future potential growth. The Disney Princess franchise will be benefiting from new content over the next few years, including a home entertainment push for the Disney Classic Sleeping Beauty on DVD in 2008. We are very excited about this, as it takes an evergreen and builds on it with new content.

Evergreen properties are key for us to deliver the needed growth for the everyday business, however, we are also very focused on new properties that have the potential to turn into evergreens. Cars, High School Musical and Disney Fairies are just a few properties that have shown the ability to warrant year-round real estate in store, so we apply focus on those as well.

What do you see as the way forward for licensed products which tie up with major movies?
Mary Vacher, Licensing Director, Random House Children’s Publishing

One of the many great benefits we have here at Disney is that most of our products originate from a story. Studios get inspiration from many different means these days; old TV shows, video games and even attractions from parks - like the Pirates of the Caribbean attraction - have served as an inspiration for movies over the past few years and there has been great success from these mediums. Pirates of the Caribbean is one example, which has generated more than $600 million in merchandise sales globally. I believe Studios will continue to produce movies behind great products or franchises as we move forward, but the need for a great story will always remain the determining factor of whether a movie is successful. Products that tie up with major movies also need to be compelling and really link back to the intrinsic attributes of the movie if they are to cut through the competition.

Disney is notoriously protective of how its characters are portrayed; does this create particular challenges when working with licensees?
Dave Roberts, Managing Editor, Licensing.biz

It is important for us to protect our characters and we strive to put quality in front of quantity, as we are unwilling to compromise the integrity of our characters to sell more merchandise. We spend a lot of time researching our audience to truly understand them and what they want, such as for the tween market before we released High School Musical, and with this knowledge we can work closely with our licensee partners to create truly compelling product. I believe that we have established a sound licensee base that reflect the same standards and who work just as hard to uphold these same standards within their organisation. When Andy Mooney became Chairman of DCP in 2003, he focused on our licensing partners and the product that was being offered at retail. The result of this focus was a sound base of licensees with focus on compelling product – in turn driving enormous sales growth and brand equity. It is a model that we still utilise today, and our licensee partners are truly that, partners.

Disney has taken a strong view on the use of their characters on perceived 'unhealthy' foods. In the light of growing public opinion and the new regulations governing food and children's advertising do you believe that licensed characters have been unfairly singled out as scapegoats, and do you think that over time there will be a relaxation of the new restrictions?
Richard Pink, MD, Pink Key Consulting

At Disney we understand the challenges faced by parents as they strive to provide their children with healthier food options, and we believe our brand and characters are in a unique position to contribute to a solution. Disney is a brand that parents trust and at the same time one that excites kids. Going forward we will only use the Disney name and characters on child-targeted licensed foods when they meet specific guidelines such as limits on calories, fat, saturated fat and sugar. One example of this that we have teamed up with Tesco to introduce a co-branded kids food range featuring Disney favourites such as Mickey and Nemo, and this range will continue to grow throughout 2008. I do not believe there will be a relaxation of these restrictions and speaking specifically for Disney, we have a long-term commitment to helping parents achieve a healthier lifestyle for their children.

Paper Engineering (3D packaging) and Pop-Up books are enjoying a renaissance, how do you evaluate their commercial potential when incorporating your properties?
Peter Wroe, MD, Imagine Paper

We do have some Pop-Up and carousel book formats available now and we are in constant search for new product opportunities that make sense for the Disney Brand. Sometimes these are driven via our category teams and sometimes by our retail teams, but regardless of who finds these opportunities, our category specialists will do a full analysis of these business opportunities. This will involve anything from a market analysis to contacting potential licensees for the new product idea.

What ‘real’ long-term impact on consumer choice does a DCP office presence at Asda and Tesco behold for UK licensed brands?
Stephen Gould, Joint Managing Director, 4Kids

From a Disney perspective, we have established teams for several retailers in the UK, covering sales, marketing, category, and analytics. We have done this in order to become a more innovative licensor, in turn delivering the most compelling product to retail. Our account offices and account teams strive to ensure that we have the right product in the marketplace, which doesn’t always mean more. These teams allow us to better align ourselves with the demands of the retailers, ensuring we are complying as well as reacting effectively. The proximity encourages fluid communication throughout the retail cycle - at these offices our staff can walk to the buyer’s office in under 60 seconds. It is all about building the brand effectively and it takes people to accomplish this. We understand that the retailers know their customers better then anyone and as we learn from them, it allows us to build a strong strategic solution for them.

Would you ever develop non-entertainment driven products under the Disney brand? A purely art based property or a fashion brand for example?
Nicolas Loufrani, MD, SmileyWorld

The Disney Brand represents many things in the marketplace such as trust, fun, family values, quality and even fashion. The strength of this brand and the tremendous quality associated with it means that we can develop products that are not character branded.

There are three examples of iconic programmes that we have launched over the last year that display how Disney resonates as a brand, not just character product.

Our Global Home team last year launched the Walt Disney Signature Furniture Collection, an upper end line of furniture that was “inspired by the man who inspired millions”. This line has been so well received that it has become a market priority throughout Europe, where the inspiration of Walt Disney will be merged with country specific trends in order to deliver a local range that works for the consumer. Watch this space.

Our Global Apparel team has recently partnered with couture bridal designer Kirstie Kelly to launch a line of innovative wedding dresses that were inspired by each of the Disney Princesses, such as Sleeping Beauty and Cinderella. These dresses are not simply replicas of the original dress worn by the princesses, instead they take the characteristics of each Disney Princess and twist them into an elegant modern day dress.

Last but not least, our Apparel team has launched Disney Jeans throughout Europe, where the only character integration is in the cuffs or lining of these products. In the UK our Creative and Apparel teams worked with Asda to create this fashion forward range of children’s clothes that can be trusted by mum and enjoyed by kids.

Can you tell us the major brands which DCP will be focusing on in 2008?
Samantha Loveday, Editor, Licensing.biz

Our Playhouse Disney pre-school properties continue to be a core focus and include My Friends Tigger & Pooh, Mickey Mouse Clubhouse, Little Einsteins and Handy Manny. These will be airing on the Disney Channel and free-to-air, which will help to establish these as key pre-school properties in the UK, and our pre-school licensees are developing exciting new ranges behind these.

For boys, Cars is positioning itself as an evergreen franchise experiencing strong growth since launch. In fact, sales in 2007 were actually larger than in 2006 the year in the film launched and we will continue to refresh this range with new content and themes on the horizon.

Girls is an exciting area of focus as we prepare to launch the Tinker Bell movie in second half of 2008 which will strengthen the power of the Disney Fairies brand. The Disney Princess franchise will be an evergreen that will receive major content divers, starting with a home entertainment push for the Disney Classic Sleeping Beauty on DVD.

For tweens, High School Musical and Hannah Montana are set to be even stronger in 2008 and will continue to be a key focus over the course of the next year. Both properties have created incremental growth in terms of age and product, without cannibalising our Disney Fairies and Disney Princess business.

From a film perspective, we are very proud of our new computer animated cosmic comedy, Wall-E, which will receive our focus as will our Narnia franchise with the release of The Chronicles of Narnia: Prince Caspian in theatres over the summer.

Which of Disney’s characters would you choose to accompany you to an important retail meeting and why?
Michele Fabian-Jones, Pineapple Squared Productions

What a fun question, and such an easy answer… Mickey Mouse. That’s what it all started with, a mouse that was created on a train ride from New York to LA back in 1928. Mickey represents everything we aspire to be, and he has the ability to put a smile on anyone who meets him. We’ve had Grand Openings and Retail Product Roadshows where senior executives from leading retailers smile just as much as any child would when seeing Mickey at these events. Mickey is the magic from which everything has been created. He is and always will be the iconic image of this great company. Sometimes I wish he were present at every meeting.

Is direct-to-retail the future for licensing?
Vickie O’Malley, MD, CPLG

Direct-to-Retail will always be part of the future of licensing, but traditional licensing still drives the majority of our business, so we clearly remain committed to this. In terms of our key account relationships, I believe DCP would not have achieved the growth in traditional licensing we’ve experienced, had we not been able to offer DTR licensing as an option to these retailers, as these programmes allow DCP to drive incremental sales in incremental categories.