CENTRAL & EASTERN EUROPE SPECIAL: State of the Nation

While the recession is making itself felt in CEE, it's important to remember the licensing industry in the region is still in its infancy, so there's plenty of room to grow, says ELC's Hakan Durdag...
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During 2008, anything to do with Looney Tunes proved very popular and superhero brands have also been strong throughout the year; Marvel Comics and DC Comics have both been consistently strong performers. The Dark Knight film did very well throughout the region last year, which fuelled interest in the brand.

Scooby-Doo has also been hugely successful during 2008, particularly in Poland, and Ben 10 has proved phenomenally popular wherever Cartoon Network has a presence.

With regards to 2009, the recession is affecting CEE badly. In general, there is a crisis throughout the region and many markets are particularly shaky, such as Russia, Hungary and Romania.

However, the important thing to remember about CEE is that the licensing industry is in its infancy, and this means that there is plenty of room to develop new opportunities and for the market to still grow. Expectations and projections may have to be scaled down, but the licensing industry will not grind to a halt, far from it.

As in any recession, things that are designed to entertain and amuse - such as licensed products - will still do well. Something that really caught my attention during the recent Nuremberg Toy Fair was a much larger presence of licensed toy products than in previous years, and many new companies seemed to be there with a view to moving into licensed products. I met with a lot of companies from less established markets that had not been having much luck with generic products and were looking to licensing as a way of increasing market penetration. This certainly bodes well for the future.

There are certainly many positives that can be drawn from the last 12 months, which make me confident that 2009 will still see market growth. For example, the retail sector in CEE is really catching on to the benefits of licensed products and ELC recently put together a huge Scooby-Doo promotion with the Auchan retail chain in Hungary, which owns 11 hypermarkets throughout the country.

The promotion consisted of Scooby-Doo product placements, competitions and decorations in all Auchan stores, as well as a Scooby-Doo insert being placed in the Auchan retail leaflet. This has led to massive success for the brand in Hungary and two licensees have been listed in Auchan as a direct result.

This type of collaboration with retail will be a real growth sector throughout the region during 2009 and beyond - it has previously been difficult to organise promotions with retail, but they are starting to realise the huge benefits in terms of increased footfall and sales.

With regards to specific brands, Looney Tunes is doing better and better at retail across the region. Visibility is also increasing on TV and this, combined with an extensive marketing campaign, will see the brand continue its success and really grow in 2009. I believe that Scooby-Doo and Ben 10 will also do very well across CEE.

Superhero brands are likely to build on their success. Batman in particular is set to have a very good year and Marvel characters will also be very hot in 2009, with Marvel Heroes appearing on a variety of products. As a whole, Marvel's growth is set to continue with a number of new movies set to come out, particularly in 2010.

Also, with a series of new Harry Potter films yet to come, there is likely to be a renewed strong interest in that brand during 2009.

Hakan Durdag is the co-founder and CEO of European Licensing Company.

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