Kids' licensing: The next generation of licensing

Kids' licensing market is undoubtedly on a growth trajectory owing to many brands taking up the kids' animation segment seriously.
Kids' licensing: The next generation of licensing

Kids' licensing market is undoubtedly on a growth trajectory owing to many brands taking up the kids’ animation segment seriously. The entry of major brands in Indian market asserts the market potential India has in terms of licensing and merchandising for kids.

Four-year-old Tanu is always thrilled to go to school even after long breaks as she gets to carry her ‘Dora the explorer’ schoolbag. She is such an ardent admirer of Dora that almost all of her stuff ranging from stationery to water bottle and monkey boots to dresses, are Dora branded. While her brother Vivan is such a die-hard fan of Chhota Bheem, that apart from owning Chhota Bheem accessories, he even named his room as Dholakpur.

For these tiny tots, merchandise with imprints of their favourite characters serves as a medium of being connected to these cartoon characters and to revel in the cartoon world long after the TV show. While one may think of such merchandise as just another kiddish thing, the stalwarts of cartoon TV channels and Retail are no way kidding when they swear by the humongous potential that this industry carries.

The brand is the USP for the kid’s channels. In the competitive marketplace, where it is not only expensive and time consuming to get a brand recognised, the companies, therefore, choose to extend brand license to a third party to exploit their brand name to launch new products, and thus, leveraging the power of the existing brand.

The scenario in India

Though the kid’s licensing industry in India is in its embryonic stage, still, the market is valued to be worth more than 20 million USD. While local Indian content is lead by Chhota Bheem – a property of Green Gold Animations, assessed to be the biggest kid’s entertainment property, Disney leads the clan globally by foraying into almost every possible domain.

In the words of Jiggy George, Founder & CEO of Dream Theatre Pvt Ltd, “While entertainment industry remains the mainstay, one of the growing trends in licensing is content or characters emanating from digital applications. In this entertainment segment, all the great brands have been built on platforms of TV, movies and digital.”

Licensing industry acts as a trump card for kid’s channels keen to grow their brand franchises through not just viewership led advertisement revenues, but also through consumer products.

Saugato Bhowmick - Senior Vice President – Consumer Products, Viacom 18, shared, “Licensing and merchandising serves as an excellent strategy to surround the consumer by the brand while being a revenue generating opportunity as well. This is a model that is much accepted and practiced by a lot of television networks across the world.”

Commenting on the current trends in licensing sector, Madhav Prabhala, Vice President - Licensing & Merchandising, Green Gold Animation Pvt Ltd, said, “Kid’s channels are trying to monetise their popular shows and are investing more and more in the available space in India. Doremon has been there in the market for a while; and ‘motu-patlu’ has done really well over the last few years. In terms of monetising, the TV channels, IP owners are looking at developing the IP based on kid’s shows.”

While this type of licensing is giving an opportunity to the consumer to experience the character outside of the television experience, it can build products not just on TV, but also enact as a profitable proposition.

The roadblocks

In the times when this industry is promising exponential growth, the licensors are in a catch-22 situation due to the bottlenecks in the operation in India, which leave them with a constrained set of genuine licensees. The major cause is stated to be the poor IP protection rights in the country.

According to an index released by the US Chamber of Commerce in year 2012, four members of BRIC group - Brazil, Russia, India and China received worst scores for protecting copyrights, patents and other intellectual property. India was last with 6.24 points, reflecting its low scores in each of the categories.

How a click adds to the revenue

Taking a clue from the retail giants, this industry is answering the call by e-tailers as licensing and merchandising is thought of to be very urbane and metro-oriented concept. The modern format of retail stores and MBOs help to cover and create brand experience in metros as well as sub-metros. This reach is multiplied manifold with the aid of eCommerce.

“Via digital retailing, nearly 400 towns of India become immediately accessible as more than 50 per cent of revenue of eCommerce sites comes from small towns,” said Bhowmick.

The gleaming future ahead

From a 2015 perspective, licensing in kid’s segment is going to witness a tremendous upsurge in terms of revenues as the major international brands such as HBO, Disney etc. are entering Indian market.

Taking a step forward, many licensors are entering into partnerships with Amusement Parks, Realtors, beverage brands, restaurants etc. to expand their market share.

Sharing view on the same, Prabhala said, “We are developing new games and apps. A special initiative taken by us is the opportunity in amusement projects in India as well as globally, based on our characters. Further, we are looking at developing theme-based developments, Real Estate, kid’s rooms etc. where Chhota Bheem theme can be adopted.”

In conclusion, while the above genres will continue to grow in 2015, 2014 has set the ball rolling for newer genres of licensing, building blocks of which are being put in place.

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