Licensing Trends, 2002

The licensing industry continues to be dominated by the Entertainment, Corporate, Fashion and Sports categories according to the most recent study sponsored by the International Licensing Industry Merchandisers' Association (LIMA) in conjunction with the Yale School of Management and the Harvard Business School. Those four sectors accounted for 93.5 percent of the $5.606 billion generated in royalty income in 2001. While total licensing revenues experienced a 4.4% dip from 2000, the fourth annual Harvard/Yale study also revealed that art and cause-related licensing posted healthy gains from 2000. Art licensing increased 4.2% to $147 million dollars while cause-related licensing != which includes non-profit museums and charitable organizations -- experienced a significant 5.5% growth to $38 million in royalties paid."During these economic times, when most related industries have experienced some business decline, a small decrease in licensing revenues was not unexpected. A closer look at the study, however, shows that business held up very well in most categories during last year's difficult economic period, the industry remains strong, and is increasingly regarded by many companies as an important and powerful tool in their marketing mix," said Charles Riotto, LIMA President. "While entertainment experienced a slight dip in 2001, we're already seeing signs of a turnaround this year with the immediate success of the Spider-Man and Star Wars franchises. Early reports are also pointing toward strong growth in the Brands and Sports categories.""It is obvious due to current events throughout the world and the state of the economy that people would gravitate to what they know and what makes them feel good," Riotto continued. "That helps explain why art and cause-related licenses were two categories that showed significant increases from 2000." The LIMA-sponsored survey is the most comprehensive and significant study to date on the business of licensing and relies primarily on responses direct from licensors and licensing agents as to the actual royalty income that they received in 2001, according to LIMA's general counsel, Greg Battersby, who spearheads the program. "By coordinating our efforts through academia to research the data, we are ensuring that the information will be the most accurate research available, providing a valuable proactive tool in the development of effective marketing strategies for the business of licensing," he said. The study, which was conducted by Ravi Dhar, associate professor of marketing at the Yale School of Management and Bharat Anand, assistant professor at the Harvard Business School, has found that entertainment/character licensing continues to be the strongest category in the licensing business, maintaining a 44.3% share of the market. The trademarks/brands category is next in line at 17.2% followed by fashion at 16.2%. The single largest percentage increase within any major category was in the business of non-profit/cause-related properties, which saw a 5% increase from the prior year.

Licensing Trends, 2002

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