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Issue Date: Vol. 52, No. 8, August 2012, Posted On: 7/22/2012


Licensing Industry Sales Jump 5%, Marking First Gain In 5 Years


Source: International Licensing Industry Merchandisers' Association's (LIMA) | Released June 14, 2012
TAGS: vending, vending machine products, retail products, licensed products, bulk vending products, sales of licensed products, consumer packaged goods, International Licensing Industry Merchandisers' Association, LIMA, Charles Riotto, 2012 Licensing Industry Survey, licensing royalties, branded products, trademark products, Coca-Cola, coin machine

PRESS RELEASE

June 2012, NEW YORK -- Sales of licensed products (items bearing the names and likenesses of cartoon characters, company logos, major sports teams and more) are on the rise for the first time in five years, jumping 5% in 2011 to an estimated $109.3 billion, according to the International Licensing Industry Merchandisers' Association's (LIMA) 2012 Licensing Industry Survey. That figure is derived from the survey's conclusion that trademark owners (such as entertainment studios, sports leagues, fashion houses, corporate brand owners and others) generated $5.316 billion in royalties in 2011, up 5% from royalties generated in 2010.

The report from LIMA, the primary trade organization for the worldwide licensing industry, points to retail sales and trends data that underscore a recovering national economy. Leading the way were sales of character-related goods, the study's largest category, followed by trademarks/brands, fashion and sports. (The report was released to LIMA members in advance of Licensing Expo 2012, the industry's largest annual event that opened on June 12 in Las Vegas.)

"The bottom line is we're seeing a huge growth in licensing across the board," said LIMA president Charles Riotto. "Confidence has not been this strong since 2006 and there are a number of key influencers today that make licensing an effective strategy for brand owners to expand their reach into additional product categories and for manufacturers and service providers to tap into new revenue streams and capture sales based on the equity that IP owners have built for their brands. Major players as well as smaller ones are using licensing as a strategic tool in their retail campaigns and overall marketing plan -- and it's working."

The outlook for licensed product sales in 2012 is optimistic, according to survey respondents, with the positive performance trajectory of 2011 expected to continue. Following are just a few highlights from the new report:

» Character-related merchandise (encompassing celebrities, entertainment, TV and movies) grew 4.4% to nearly $2.5 billion in royalty revenues and an estimated $48 billion in retail sales. This category includes goods and services based on the TV and film productions of major studios and entertainment properties, and celebrity brands such as Jennifer Lopez, Kathy Ireland and Paris Hilton.

» Trademark and brand licensing, the second-largest category in the survey, and the one associated with major corporate brands from leading packaged goods companies such as P&G and General Mills, as well as classic brands such as Coca-Cola, Harley-Davidson and Ford, surged 7.7% to $910 million in royalties and $21.2 billion in retail sales.

» Licensed fashion sales, including branded goods such as Perry Ellis, Polo Ralph Lauren and Liz Claiborne, rose 5.8% last year to $730 million in royalties and $16.0 billion at retail. The changes in the industry are being driven by greater use of exclusive licensing in the mid-tier and mass merchandising segment.

» The NBA, MLB and other sports leagues and individuals drove a 3.9% sales gain to $670 million in royalties and $12.3 billion at retail. Sports licensors report longer strategic partnerships, continued reorganization at retail and a greater opportunity to participate in the growth of a retailer's own-label products.

» Art licensors are a relatively small category in the licensing world, and a fragmented one relative to its size, and sales rose 3.1% to $132 million in royalties and retail sales of $3.9 billion. Large retailers prefer to work with larger players in this field, overlooking the smaller companies in preference for "safe" options. New platforms like tablets and smart phones with a social context continue to provide opportunities for growth by creating new accessories categories.

In addition to these categories, the annual survey presented sales results for music, publishing, collegiate and nonprofit, all of which recorded increases in royalty revenues from LIMA's 2010 report.


See: $5.065 Billion In Licensing Royalty Revenues Generated In 2010


Comments from companies who responded to LIMA's survey indicate the growing prominence of online retailers and e-commerce sites, as well as the rise of properties born in the digital world forging merchandise deals that drove -- and continue to drive -- traffic and increased sales. This activity was further fueled by property owners with their own e-commerce sites that allow them to present their entire product catalog online, an additional avenue that gives brand owners direct access to their customers and provides consumers with more options beyond traditional retailers for purchasing licensed goods.

LIMA's 2012 Licensing Industry Report is available free to LIMA members and $295 for nonmembers. It can be ordered at licensing.org.


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