Star Wars top driver of merchandise sales in 2016

Global retail sales of licensed merchandise were worth $262.9 billion in 2016, up 4.4% over the previous year. Movies such as Star Wars, Batman v. Superman: Dawn of Justice and Finding Dory were among key drivers of sales.

Nickelodeon’s Paw Patrol was another hit, according to the Licensing Industry Merchandiser’s Association (LIMA). Several of these franchises, of course, have also spawned existing or upcoming theme park attractions.

Among top categories of merchandise, apparel led the way with 14.9% of total global licensed retail sales. Toys and fashion accessories followed. According to LIMA’s Licensing Industry Market Sizing Study, released ahead of this week’s Licensing Expo in Las Vegas, entertainment and characters remained the top licensed property type. This category accounted for $118.3 bn of sales last year, up from $113.2 bn in 2015. According to research firm NPD Group, Disney-owned Star Wars was the largest property for the toy business in 2016.

The Frozen effect

“Each year there are also surprises that drive the market, like Frozen did when it launched,” notes LIMA’s Marty Brochstein. “Last year’s surprise hit was DreamWorks and Universal’s Trolls.”

Computer games, increasingly in app form, are also driving sales. “The launch of Pokemon Go was a global phenomenon,” adds Brochstein. “While there wasn’t much licensing directly with the game, the excitement helped Pokemon products across the board and made it one of the stories of the year.”

Female-friendly IPs

More intellectual properties (IPs) targeting women is also a licensing business trend, believes Brochstein. He cites Star Wars as leading the way with the female character Rey. “However, we are seeing this way beyond Star Wars with Wonder Woman, DC Super Hero Girls, innovative preschool television programs and much more.”

After entertainment and characters, corporate trademarks remained the second most lucrative category for merchandise sales in 2016, up from $52.8 to $54.6 billion. Fashion with $31.1 bn and sports with $25.3 bn followed. Higher retail sales helped offset a decrease in the weighted average industry royalty rate, down from 8.5 to 8.2%. The USA and Canada remains the largest market for licensed merchandise and services.

Image courtesy Disney Parks and Resorts

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