LICENSING ADVICE CLINIC: Getting started

The basics you need to know before entering the licensing business.
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Since ‘starting’ Start Licensing we have developed a good relationship with rights holders who are looking to start a business in licensing or to get involved in licensing for the first time. I guess our company name helps in that respect, but I also think it is a reflection of our focus on developing relationships in licensing.

At its heart, licensing is an industry that survives on relationships and operating a network of contacts. The first piece of advice we give rights holders looking to exploit their rights commercially is to carry out an honest assessment of the rights they are seeking to sell. We ask them to consider where they would fit into the market – a simple question is who is the target market. It is important that an ‘audience’ has been defined for a property. Ideally there will also be a demand and awareness of the property.

In areas like art licensing this ready made awareness is not as crucial as a design can be tailored to a set purpose, but in other areas of licensing it is essential to have some level of demand. This can be relative and can be scaled up. For example, a property created online and seen via social networks and websites may have a strong following in its universe which could translate well to a more mass marketing application. It is unlikely that a property which does not have success in its core area will translate into a success in licensing. Licensees and retailers have their pick of properties and, as such, can be very selective.

It is also important that a rights holder can demonstrate a good knowledge of their property. This is maybe easier for a property that has been created for licensing, but there have been cases of brand owners looking to move into licensing who do not have any knowledge of their brand archive, for example. It is important to do preparatory work in private rather than in the glare of the public.

Generally you have one chance to make a first impression in licensing. An allied point here is that you should ensure that you are coming to market with no baggage. Try to check prior use of your rights if appropriate and carry out some research about your brand. A simple exercise is to carry out a search on eBay – are there people using or selling your brand already?

Allied to this is the advice that you should talk to a lawyer who has knowledge of the intellectual property and licensing marketplaces. A simple consultation would be a good first step - having a focus on what you should be doing to protect your rights and general housekeeping regarding your these. This does not have to be a longwinded or complex process – but it is worthwhile: think of it like a survey before buying a house. As a property is commercialised and hopefully grown through licensing, good legal foundations will be essential to maximise the commercial value. Also, as a property becomes more visible, you need to be in a position where you can police and protect it.

There are a range of good legal firms operating in licensing. In my direct experience with our clients, Briffa and Hamlins have provided good advice.

I would also recommend art and design based companies considering joining ACID (Anti Copying in Design). This is an organisation that helps design owners protect and develop their rights. It has a collective approach and provides ongoing support. Our client Bang on the Door is a member and it is a useful ally to their business. The licensing trade organisation LIMA, which has a UK office, can also provide good ongoing support and networking opportunities.

A good licensing agent will be able to provide advice on strategy, tactics and structure, but it is sensible to supplement this with specialist advice when needed in matters such as legal and accounting matters. You should budget to pay for advice.

Another dimension of getting started is to prepare comprehensive and commercial artwork materials. Most licensees will understandably expect you as the rights holder to lead the way on design materials. A good style guide acts as a control mechanism, an information provider and an inspirational guide can literally set the tone for a campaign. Licensees see this as essential and a sign of commitment to a programme. There is a set formula for style guides with key information and content that must be included ranging from design styles through to packaging and labelling. It will also cover off items such as legal lines for products.

Again, there are specialists who can advise further on this. A few examples are Red Central, Doodlebug Design and Dot Dash Design.

This is part of the investment needed to start a licensing programme. It is an investment that will help enormously in controlling and influencing the development of your programme. Some companies, such as our client Bang on the Door, are able to handle this element ‘in house’. So in their case it is time investment rather than a financial one, but having set guides for all Bang on the Door characters has been a great contributor to the development of the brand internationally. You can’t be in every market all of the time but your guide can. It is your design representative.

As licensing grows, it is essential to look beyond the UK market – the UK is a competitive and crowded marketplace. There are opportunities outside the UK and you need to have a strategy that reflects this.

Getting started in licensing must begin with a strong idea that will find a home in the market – think about your competitors, your target market and your retail placement. Be realistic – develop a plan for your Intellectual Property with set targets, clear objectives and a timetable to reach certain goals by. Reflect on success and failure – adjust your plans accordingly.
Be prepared to show belief in your ideas, but listen to advice. Enjoy the journey – it’s a fun industry.

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