Building Successful Licensed Brands Without Retailers

It’s a fact: most retailers aren’t picking up many licensed brands. Shelf space is at a premium and, with so many licensed brands in the marketplace, tough business decisions have to be made as to which properties will be given footage. And the winners are: high-profile properties that are managed and leveraged expertly, ensuring a much higher degree of success for licensors, their licensees and their retail partners.

Hot new virtual properties are growing in number and many are eager to ink licensing deals to reap the rewards of increased consumer recognition and strong sales. For them, the goal is to simply get started and then ink as many licensing deals as they can, often leaving it up to their licensees to develop consumer products and packaging. That kind of thinking will actually inhibit the potential of the brand. As brands mature and grow, the property’s most equitable assets must be leveraged in a consistent visual and verbal manner – this is crucial to the success of licensed brands; of all brands.

But some of the smart owners of the hottest new properties that exist solely online seem to know that innately. And even though many of these brands, hot as they are, are only in their infancy, I see exciting futures for them as they mature and become more sophisticated. The key to their ultimate success will be to see if these brand owners know when to collaborate with licensing program experts to take their properties to the next level, even if they only sell their consumer products online.

YouTube star and fitness instructor turned licensed brand owner

When licensed brands only appear online, it’s important that they build and foster a special community of followers, just as consumer product brands and major entertainment properties do. Cassey Ho presents us with a great example. Ho, an entrepreneur and creator of POP Pilates, built her own brand from the ground up – online. Beginning in college, she created the largest female fitness channel on YouTube with over 2.8 million followers. A social media diva, Ho blogs on her own web site (Blogilates) and she has a million followers on Instagram. Her “POP Pilates” program is offered in 24 Hour Fitness gyms across the country. Ho also won the Streamy Award for Best Health and Wellness Channel in 2014 and 2015.

When still in college, Ho was committed to exercise and yoga practice. According to her web site bio: “I couldn’t find a yoga bag that was stylish enough or big enough to fit my mat and gym things in.” So she designed her own, of course, launching her own licensing program in the process. “Super girly, it attracted the attention of my students. Orders started to roll in and the next set of designs were drawn.”

Getting the attention of Brand Licensing Europe

Cassey Ho is a unique brand and gaining increasing attention world-wide. In 2015, she was tapped to deliver the keynote address at Brand Licensing Europe (BLE) in London with Benjamin Grubbs, global head of top creators at YouTube. Ho’s presentation? “Creating an effective licensing program to follow”.

“This is the first time we have focused on a YouTube celebrity at BLE, and the session will provide a fascinating insight into how brands can leverage the digital landscape,” said Darren Brechin, BLE Event Director. Clearly, BLE recognizes how timely and important it is to recognize successful licensed properties that only appear in virtual environments.

In the BLE abstract about her keynote address, Ho hits the nail on the head: “A lot of people may think of me as a YouTube star and fitness instructor, but I’m also the CEO and head designer of my merchandise lines. I know my audience very well, so it makes it simpler to come up with new products. That’s the perk of selling to a community, not just customers

Exactly. Understanding that she has a community of POP Pilates brand fans, not mere customers, wishing to purchase fitness-related merchandise, Ho offers her own line of apparel, accessories, DVDs and fitness books. She recognized the power of branding to create an avid fan base early on and she has worked hard to create meaningful relationships with her followers, whom she dubs her POPsters.

Letting verbal communication drive the licensing program

At first glance, Ho’s licensed products are not centered around specific visual aesthetics for the most part, but rather rely on short quotes (verbal brand communication) that are no doubt recognizable to her fans from her presentations and blog posts. For example, signature phrases on her water bottles include: “Train like a beast. Look like a beauty”; “Sore today. Strong tomorrow”; “Never, ever give up”; “Dream. Believe. Achieve.”

As she expands her reach and presumably develops new consumer products in more categories, some of which may be packaged, Ho will have to take her branding to the next level. By collaborating with licensing program design experts who develop style guides, a visual aesthetic can be created to tie her product lines together and tether them to her brand in a sophisticated, convincing manner. But as an astute branding expert, I’m certain that she already knows that.

Multi-Channel Networks: the new licensing frontier

Multi-Channel Networks are the hottest thing in new media and the giants of entertainment have taken notice. MCNs are comprised of groups of YouTube channels that usually offer some of their own fare as well as user-generated content typically formatted as short-form videos. They drive users to their various stations which are supported by advertising focused on user demographics.

MCNs are a very recent development, only appearing on the radar screen over the past five years. Because they are still in their infancy, most of them haven’t created the infrastructure necessary to develop licensing programs that offer consumer products across multiple categories as the entertainment giants in Hollywood and television do. Yet. But given the growing power of MCNs, the potential exists to leverage their own high-profile brands.

Entertainment content is being churned out via MCNs with staggering creativity. Many adults are likely unaware of them because most of their content is aimed directly at tweens, teens and the youngest of the Millennials. New celebrities are emerging and it’s possible that some of them may eventually have as much clout as TV and movie stars in the near future because they already enjoy huge, cult-like fan bases. And because that has led to traditional media outlets and movie studios wanting a piece of this new media pie in which they’re willing to invest.

DreamWorks Animation, for example, saw the potential of MCNs when it acquired teen-focused AwesomenessTV, in 2013, shelling out $33 million in cash for it. The deal gives DreamWorks access to 86,000 channels, 48 million subscribers and close to 5 billion video views. AwesomenessTV is an amalgam of the network’s own content as well as user-generated content.

With the hire of James D. Fielding as head of consumer products (a former president of Disney Stores Worldwide and CEO of Claire’s stores) DreamWorks signaled its commitment to leverage the power of its properties with licensed consumer products in a concerted manner. In an interview, Mr. Fielding commented: “We’re seriously working away on our strategic plan, and we see multiple unique revenue opportunities with our talent through brand partnerships, and we also see opportunities to go direct-to-consumer.” Touching on the fact that the stars of their own user-generated content aren’t the property of the network, or represented by agents, Mr. Fielding said: “The great news about this world we’re in is that there is no set of rules we must act within. We can act as a licensing agent for some of our talent–… we will represent some talent for their consumer product initiatives, which is exciting for us because talent is what makes AwesomenessTV what it is. They are our brands and franchises.”

What Disney knows about MCNs

In March, 2014, The Walt Disney Company announced the acquisition of MCN Maker Studios for $500 million, offering to pay another $450 million if Maker achieved specified performance goals. The deal gave Disney access to Maker’s 55,000 channels, 380 million subscribers and 5.5 billion monthly views. Disney’s chairman and CEO, Bob Iger, stated: “Short-form online video is growing at an astonishing pace, and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities.”

And you can bet that with its usual acumen in finding and developing star talent, as well as its tremendous capabilities in licensing its brands, Disney will be at the forefront in the maturation of this new frontier in entertainment and licensing. Maker stars include rapper Snoop Lion’s (Snoop Dogg) channel, WestFestTV, Robert DeNiro’s Tribeca Enterprises, actor/filmmaker Kevin Smith, and numerous content-rich channels including The Platform (beauty channel) and Cartoonium (kids’ channel) to name a few.

According to Business Insider

The magazine assesses and publishes a list of the YouTube stars with the highest earnings (1 million and up in ad revenues.) Because of their high profiles, these stars are candidates for strong consumer product licensing programs. Some of them have their own YouTube sites and established a following, but many of the names on the list received their exposure on MCNs, like PewDiePie, aka Felix Arvid Ulf Kjelberg, a Swedish video game commentator with a penchant for colorful language.

Smosh, a veteran YouTube duo of comedians Ian Hecox and Anthony Padilla, have millions of fans and more than 3 billion video views. The duo has its own online store selling consumer products, aka “store merch,” emblazoned with their own tongue-in-cheek, inimitable style. This is a preview of things to come, not only for Smosh but for many other YouTube stars.

As this kind of new media develops and matures online consumers will have access to unlimited, entertaining fare and the licensed consumer products that will surely follow. I expect more traditional entertainment companies to either buy out MCNs or create their own as the lucrative potential of online entertainment, celebrity and licensing possibilities explodes.

It’s an exciting time to be involved in the licensing business. And here’s the thing: I predict that some of the hottest properties that emerge online will become so famous and so lucrative that retailers will come to them to ink deals in the near future. So stay tuned; this is going to be a bumpy ride! And an exhilarating one.

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