The third and final instalment of the research piece Toy World and Informa, the organiser of BLE, have collaborated on.
Rounding off our three-part breakdown of the August issue’s bumper licensing survey, here are questions 7 and 8, giving a sense of how the toy community views the state of play in the licensing arena right now.
Look out for the follow-up piece in September’s issue, which will look at the biggest challenges that licensees and retailers will face in the coming years, and what licensors could do to improve their partnerships with licensees and retailers.
Slicensing is clearly affecting the vast majority of licensees, either to a modest (54%) or significant (40%) degree. Obviously the practice is more prevalent in some categories than others, while there is also a massive variance between the levels of slicensing on a ‘hot’ brand compared to steady, long-term properties.
- It is a nuisance and often it is the licensors lust for extra revenue at the expense of partnerships and their inability to say ‘no’ to certain big retailers.
- The majority of licensors offer genuine exclusivity – with one main exception. With them, it’s a nuisance and does nothing for the category.
- We have seen RRPs driven down in several categories because of slicensing and it is not sustainable – to the extent where businesses have gone into receivership because of it. Thankfully, we tend to be the licensee that remains, but our business is impacted. Also, the lack of communication between licensor and licensees on this is deeply frustrating – we need to know who the players are or we look pretty stupid in front of our retailers.
Responses were fairly evenly spread here – clearly grey imports are an issue in certain quarters, and they can have an impact at various stages of a product lifecycle, especially if a property or range has been launched at different times in different markets.
- It’s a massive issue which licensors do not want to tackle. UK- based agents are getting away with it illegally day in day out, without any risk or financial stake in the property. It brings gross margin and licensed down massively (for both parties). It affects investment in product development, marketing and dumbs down/devalues licensed products.
- It’s getting to be more of a concern: certain retailers will source from European manufacturers who do not officially have the licence to sell within the UK. That said, licensors are not happy either, but say they are powerless.
- We are massively affected by ‘inspired by’ and counterfeit product – this is a growing problem that licensors should invest more in tackling.
To read the full article, published in the August issue of Toy World, click here.