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The Power of Licensing for Theme Parks, Museums, Zoos and Other Attractions

simon foulkes rainbow productions mascot licensed cartoon charactersAt the recent Dubai Entertainment and Leisure Show (DEAL) in the UAE, Rainbow Productions’ Director Simon Foulkes (left) spoke at the seminar about licensing, looking at its impact on the theme park and attractions sector and giving a fascinating overview of the workings, benefits and history of the business. Here is a summary of his presentation.

So what is licensing?

Licensing started to make its mark in the 1930s in America and one of the first licensing deals was made by the Ideal Toy Company who secured the rights to license a Shirley Temple Doll (below).

“At its most basic licensing enables companies to use well known imagery from films, cartoon characters, books, comics, brands and sports events on product to increase its consumer appeal, provide a distinct point of differentiation and a unique selling point”-  Andrew Carley, Head of Licensing at eOne.

This definition neatly sets out the potential benefits of licensing: increasing consumer appeal; providing a distinct point of differentiation and offering a USP.shirley temple doll licensing simon foulkes rainbow productions theme parks

Terms used in licensing

Licensing involves the owner of the intellectual property (IP as it is usually referred to) either directly or, indirectly via a Licensing agency, coordinating and developing a licensing programme which assigns rights to licensees. For example, if  you wished to theme an area of your theme park or attraction here in Dubai with Shaun the Sheep you would have to discuss and negotiate this with mbc as they are Aardman Animation’s licensing agency for this region.

Property is simply the term used to describe the imagery be that Spider-Man, David Beckham or a Rubik’s cube.

RelatedThe Future of Theme Park IP? Disney App Makes Splash in China / Angry Birds Land at Särkänniemi Adventure Park: Interview with CEO Miikka Seppälä IP & Theme Parks: here to stay?

The term licensed product describes all the products that carry the licensor’s imagery.

Product categories tend to be defined by gender, age and product type (i.e. Girls socks aged 3-5 featuring Winnie the Pooh). A license may cover as many or as few products as required but generally broad product areas will naturally lead to higher financial expectations and higher financial commitments from the licensee. So if I just wanted a SpongeBob license for a particular ride in my theme park I would expect my financial commitment to be less than if I wanted all the Nickelodeon brands including Dora the Explorer, The Rugrats and the Backyardigans.

The payment made for the use of the licensed property is called a royalty. Many millions of dollars have been spent by Marvel in creating the Spider-Man brand awareness and the royalty received is the justification for this expense.

The advance is a non refundable financial commitment in the form of royalties paid in advance on signature of the license. Royalties subsequently generated over the term of the license are offset against any advance that has been paid.

A guarantee is a commitment by the licensee to generate a minimum level of royalty income over the term of the license

At agreed intervals during the term of the license the licensee must declare and pay any royalties ddisney socks winni the pooh tigger theme park licensing simon foulkes rainbow productionsue.

The distribution is the network of retailers and other outlets that the licensee wishes to sell to.

NON EXCLUSIVITY – Licenses are generally issued on a “non-exclusive” basis which means that the owner of the license can appoint someone else to use the property.  

And the use of the word TERM is simply the period of time that the license runs.

The key to success?

Some of the revenue figures that are banded around the licensing industry are startling and some of the success stories are very impressive, but equally I have invested in licenses over the years that have flopped horribly so I am afraid there is no sure-fire guarantee that any property will succeed.

In 2010 the toy manufacturers Hasbro reported licensed merchandise sales at retail of $3.5 billion – a remarkable figure made even more impressive by the fact that this only ranked them at number 12 in the TOP 125*.

It is no wonder when toys are generating this type of revenue that HASBRO are now looking to extend their products into different categories, concentrating initially it appears on apparel and accessories across all age groups and demographics.

Licensed products are not defined by single distribution channels or specific age groups but by far more innovative and imaginative concepts.

Licenses tend to be grouped in defined categories. These include Accessories, Publishing, Food and Drink, Sporting Goods, Giftware, Live events, Toys and Hobbies, Apparel and Toiletries.   

It is therefore imperative that should you wish to invest in a license and to maximise the revenue potential of that license by selling merchandise, you need to negotiate these from the outset.

A popular misconception is that Licensing is a way to print your own money and that Licensed Products sell themselves.  They certainly carry a premium price and an assurance of quality but, contrary to what you will hear from a Licensing agency, my experience dispels this myth. However, if certain factors are borne in mind, the potential of character related sales can be very rewarding.

SpongeBob SquarePants and the Pleasure Beachmr potato head hasbro games licensing simon foulkes rainbow productions theme parks

Blackpool Pleasure Beach’s deputy Managing Director Nick Thompson: “If you look at the retail in any park, it’s not that huge until you start bringing in brands. They can provide a great boost to a park’s merchandise sales.”

A park operator can proactively drive footfall and increase the effectiveness of a licensed product promotion using the property as a “hook”. A lot of financial investment has gone into creating the property in the first place and this brand awareness needs to be tapped into in order to gain a tactical advantage over competition and realise the brand’s potential.

In the UK, Blackpool Pleasure Beach’s television commercials did not feature any of Nickelodeon Lands' rides or attractions.  Instead they featured SpongeBob and other animated Nickelodeon characters – clearly demonstrating that licensed brands are stronger marketing tools than any individual rides.  Further evidence of this was the TV commercials for the SAW ride at Merlin Entertainment’s Thorpe Park which featured footage of the films rather than images of the ride itself.

 

How  do you Evaluate and Choose the right brand?blackpool pleasure beach nickelodeon land rainbow productions licensing theme parks

1.Timing

The old adage “timing is everything” is particularly relevant to the success of licensed associations. The Ice Age movies have had huge family appeal over recent years and their popularity has soared. What better time for Alton Towers in the UK, Gardaland in Italy, San Diego Zoo in the States and MovieWorld in Germany to tap into this and introduce new themed zones and rides this year? 

The first Ice Age film was released nine years ago so why didn’t we see these kind of investments back then? The reason is that the window of opportunity that a film presents can be limited and whilst a film may have a high impact during its release, the brand can date very quickly.

2.Target Market

Operators have to consider how the property or brand will resonate with their targeted customers.  For instance, could Bob the Builder appearances genuinely work at a Science Museum? 

Each and every licensed property has defined target age groups: for example, Mothercare would never feature a Family Guy campaign or an Elvis Presley range. Some properties work on numerous levels like Shrek and SpongeBob SquarePants and cross generations, but these are few and far between and there could be a danger that an ambiguous message is being sent out.thunderbirds are go licensing simon foulkes theme parks rainbow productions

3.Defined Objectives

So what are you looking to achieve from licensed association? Is it to swell numbers at a specific time of year or compete with a rival attraction’s promotions? 

In the UK this year there are a number of new pressures to the Leisure Industry with Euro 2012, the trial of amended school term times in some areas and the Olympics in London.  The benefits of a licensed character tie-in could compete with these extraordinary new competitive influences.

4.Choice of Character

The association of your product, park or attraction with a famous brand or character has to be carefully thought out.  The market place is heavily diluted with brands and characters and each licensor will have you believe that their property is the hottest. Getting in early has tremendous financial rewards; royalties are more negotiable, advances are lower and expectations are more realistic.

A local property, like Friij or Modesh here in Dubai, may also give you a competitive edge and have more appeal to your target market.

5.Product associations 

New properties coming into the market are usually launched with broadcast, master plush and publishing partners and in most categories the success of the properties is dependent on the success of these key partners. As the lifespan of the property develops these are of less importance but it is still worth investigating what major advertising activity is behind the brands and what promotions are planned by other licensing partners.

6.Longevity

Determining at what stage of the product’s lifecycle you are considering coming on board is key. Some properties have faded from our TV screens like the Thunderbirds and Barney the Purple Dinosaur but they still command huge awareness.  If you felt that these would fit in with your brand then obviously their current popularity would be reflected in the cost.

Some years ago we brokered a licensing partnership between Butlins, a holiday resort in the UK, and the then Enid Blyton Company for Noddy as Butlins were looking for a quintessentially British character with family appeal and heritage. This led not only to a successful and lucrative programme for Butlins, who backed the character appearances with a full scale merchandising programme, but it was also a hook to reinvigorate a character that had not enjoyed that level of exposure for a number of years previously.

Should you wish to invest in partnership with current favourites like ferrari licensing simon foulkes rainbow productions theme parksBen 10 or Dr Who then you must be aware that they are justifiably commanding premium guarantees.

What impact will a licensed character have?

In parks and attractions in the UK we know that footfall increases as a direct result of targeted licensed character association. We regularly organise character appearances in parks as part of their special event programmes and these can make a huge impact on visitor numbers.

“We had excellent numbers for our Easter Event with over 8, 000 visitors a day (and that is not counting our under 5’s). We ended up 94% on the previous Easter weekend.” Blenheim Palce.

Many attractions vie for the same market share and an association with a well-known cartoon celebrity can give a competitive edge, adding value and differentiation to the visitor experience.

One of the many impacts that it is impossible to gauge financially is the attention the local media pay to famous cartoon celebrities.  Using licensed characters turns the knowledge of an event into an image-driven occasion which frequently commands favourable attention from the local or national press.

jcb mobile phone licensing theme park simon foulkes rainbow productionsNo formula exists for marketing a licensed association, but marketing is marketing and the principals of making your customers aware of the licensed association are the same as the principals of marketing your own product. The main advantage is that you are able to tap into a pre-existing profile.

A bold financial move that reaped huge rewards

In terms of the theme park and leisure industry the most notable association that has made a huge impact has to be Disney followed in time by all the other major US licensing studios like MGM and Universal.  Nowadays more and more other brands like Ferrari, Hershey, JCB and Lego – which are not necessarily character driven brands – are moving into the Leisure Industry.

All the attractions above are intrinsically linked to their parent brand.  However, there are opportunities for any attraction to tap into a brand extension programme that has a specific fit with its own brand.  Here in the UAE the water brand Oasis is perfectly positioned to offer a point of differentiation and value to any waterpark, and it now features characters on its packaging to heighten its own market distinction.
In the UK the success of Thomas Land at Drayton Manor made every park owner or operator sit up and take notice.  It was a very bold financial move and one that reaped huge rewards from year one.

For a number of years Alton Towers has themed areas of its park with the Tweenies, Bob the Builder and Barney amongst other high profile children’s characters, and backed that theming with shows and merchandise to encourage high levels of secondary spend.

The Postman Pat area at Longleat (a stately home in the UK which is well known for having a safari park) is an interactive experience that allows visitors to wander through the village of Greendale looking in on all the characters who live there whilst presenting photo opportunities.  The attraction itself is less sophisticated than the multi dimensional Harry Potter  ride but perfectly targeted towards Longleats’ demographic and socio-economic group, and has bob builder licensing science museum theme parks ipbeen successful both in terms of Postman Pat merchandise sales and driving visitor numbers for many years.

Bob the Builder at The Science Museum

“We want to expand the audience for the brand by looking at a younger target age group”, said Lucy McCredie from The Science Museum in London.

HIT Entertainment teamed up with The Science Museum to run a live exhibit as part of a commitment to cater for a younger audience.  Starting at the end of May and running through to the 7th September, “Build it with Bob Live at the Science Museum” was a science based show where younger children could experience the key elements of the science curriculum.

The show, which featured Bob the Builder, Wendy and Spud and was set in Sunflower Valley, interacted directly with children who learned about structures, water flow, patterns, numbers and the all important 3 R’s: reducing, reusing and recycling – which are a key focus of the Key Stage 1 science curriculum.

Jon Tucker, head of the Science Museum, was reported in the press as saying that it was dream come true for children to come face to face with Bob the Builder and the show itself underpinned the Science Museum’s ethos of learning by observation, testing out, evaluating and putting this knowledge into context.

Lucy’s stated aims that she wanted to expand the audience for the Science Museum’s brand by looking at a younger target age group were fulfilled and she was satisfied that the exhibit complemented the Science Museum’s brand values and stretched their brand focus into the pre-school market.

So with creativity, targeted direct marketing and defined objectives, despite there not appearing to be an instant match between an entertainment brand like Bob the Builder and a heritage brand like The Science Museum, all the boxes were ticked and the event was a highly praised success.

Summary

In summary, licensing offers huge potential benefits for theme parks and attractions, for example Thomas Land at Drayton Manor in the UK saw attendances increase by 40%.

Unfortunately there is no magic formula that can guarantee the success of a licensed character or a brand association in any park or attraction.
However, with so much synergy between the respective target markets, Licensing/Leisure Industry relationships are surely set continue for many years to come.

*(Global Licensors list as published by License! Global – the journal of the licensing industry.)
 

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