Celebrity licensing: The dos and don'ts

Why you should choose your celebrities and licensees carefully.
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Celebrity licensing has taken off in a big way in the past decade making it one of the most lucrative sales avenues for licensors of recent times, and it looks set to stay this way.

The world we live in is consumed with celebrity status. It’s become a way for licensors and retailers to target pre teens and teens, a notoriously difficult audience to reach. As a result of this, licensing agreements and celebrity image rights have become big business in terms of generating revenue. Such agreements might involve granting third parties the rights to use a celebrity’s name, image and brand in connection with product endorsement and related commercial ventures.

It’s essential for licensors to choose their celebrities and licensees carefully. On one hand, all celebs have a shelf life and therefore a limited window of opportunity before fans turn to the next big thing. That said, dead celebrity licensing has many advantages over living celebrity licensing and can be a reliable choice for licensors – think Michael Jackson and Elvis Presley.

Through licensing consumers can pay tribute to their idols and keep their memory alive. Michael Jackson was one of the most money making licences of 2010, kicking a host of living celebrities from Hollywood, music and sport into touch.

Living celebrities can’t be controlled like characters can; their antics can result in a drop in popularity and a plummet in sales that a licensor can do nothing about. This is all part of the risk. You are effectively licensing a human being – anything can happen or come out of the closet that will disrupt the entire licensing programme. Just think Tiger Woods and David Beckham.

There is also the risk with stars who frequently change their look rendering products bearing a previous look to look dated and last season. Also, if the intention is to have the celebrity on board for promotional activity, make sure you agree to have a number of days PR written into the licensing agreement.

We must remember, with the risks come vast opportunities. Merchandise opportunities are phenomenal, going way beyond traditional items such as t shirts, key rings and mugs. All manner of licensees will want to get involved in a celebrity licence, making all kinds of items; from electricals to licensed make up. Lead times are short, so auditing is vital to check licensees honour their obligations to retailers.

With increased opportunities to merchandise, licensors must ensure they keep a handle on all activity. With celebs and in particular music stars, giveaways, competitions, promotions and new launches are commonplace. Retain full control of how many products are being given away and where they are going.

It’s easy for licensors and licensees to lose sight of this when a big star is hitting the headlines and demands are high.


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