Many of the factors influencing the current licensing market will have a detrimental impact on the landscape as we know it, according to co-managing director of 4Kids Entertainment, Stephen Gould.
Gould told Licensing.biz that, in short, the market is “both saturated and fragmented” and that the perceived value of a brand in the traditional licensing sense is being cannibalised, at least for the short-term.
“Within children’s entertainment licensing the squeeze is perhaps the greatest,” he said.
“We have Ofcom leading the planned extinction of promotions and advertising with little thought levied at the consequent effects on the creative pot, whilst increasingly unrealistic demands by retailers and broadcasters are suffocating the goose that lays the golden egg.
“Whilst the discerning consumer has moved from commodity to authenticity, the retailer has moved from brand integrity to unit price – price drives business instead of brands driving value.”
Gould says that the challenge moving forward will be to re-establish the credibility and desirability of IP as a balance sheet intangible.
“Historically, licensing was a straightforward part of the marketing mix which produced a revenue stream without the incumbent upfront costs,” he continued. “However, this too has changed as the weight distribution in the canoe of commercial balance also shifts.
“There are still great prizes for those who are prepared to run the gauntlet and stick their head above the parapet. However, licensing as a model will need to offer greater solutions to the retail distribution base across a much broader and, in some cases, lower impact portfolio remit. Sometimes the ‘also rans’ add up in enhanced number and fiscally shame the increasingly infrequent hit, both in terms of brand and also shelf space.”