Licensing is a long term game

Retailer: What is your view about the licensing and merchandising business in India? What is the potential of this budding industry (entertainment licensing) in India?

SD: I believe that the licensing industry in India has come a long way in the last 3-4 years. But it still has a long way to go in the sense that it is still a nascent industry. However, the potential is undoubtedly huge. Today, there are more than 100 licensed brands/characters in the kids space itself. While there’s a lot that local licensees need to learn about licensing, the multinationals (the licensors) similarly need to ‘unlearn’ a lot here.

 

Retailer: What is your take on licensing as a marketing strategy? How important is the retailers’ role in the whole process of launching licensed products?

SD: Licensing for Viacom18 is fundamentally a part of revenue strategy, while it cannot be denied that it also plays a critical marketing role. While the kids can watch their favourite toons on Nick for about 30 to 60 minutes in a day, licensing ensures that they interact with their toons 24x7.

Retailers play a significant role in the whole licensing business. In fact, one of the reasons for the significant growth of licensing over the last 3-4 years has been the robust growth of organised retail. Secondly, the environment (through which licensed products sell) is as important as the products themselves. And therefore, the importance of retail can never be underestimated. 

 

Retailer: Viacom18 announced its plan to introduce merchandise products of popular shows on  entertainment channels like Colors and Vh1 in India. Does this arrangement involve a licensing arrangement?

Sandeep Dahiya (SD): Colors and Vh1 are great franchises that have tremendous licensing opportunities. Within Colors, there are exciting format shows like Fear Factor - Khatron Ke Khiladi, India’s Got Talent and Big Boss that lend themselves naturally to licensing. Similarly, within Vh1 there are shows such as ‘Pimp my Ride’, ‘Hip Hop Hustle’ and ‘Dance 101’ that can make for an exciting licensing range. Right now, we’re exploring various opportunities and shall reveal the plan in time to come.

 

Retailer: Could you brief us about the detailed deal that implies Viacom 18 introducing MTV merchandise marking its foray into footwear in 2010? What are the other plans in offing?

SD:  Today, we have presence across seven categories in MTV merchandise - credit & debit cards, notebooks, copier/printer paper, bags, bed linen, FMCG, eyewear, mobile phones and helmets. Over the next few months, we plan to enter at least three new categories in the youth space, including footwear, electronics and watches.

 

Retailer: What kind of investment did you make in such initiatives? What is the TG for such licensed merchandise?

SD: In terms of TG, the MTV range of merchandise is targeted at the 15-25 years old, while the Nick range of character merchandise (Dora the Explorer, SpongeBob SquarePants, Ninja Hattori) is targeted at the kids between 4 and 14 years of age. In terms of investment, we continue to invest heavily in our brands to ensure that all these brands/characters continue to remain aspirational for their respective TG.

 

Retailer: How do you promote and market your licensed products? Through what channels do you retail such licensed products? What is the strategy behind selecting retail outlets?

SD: Our key strengths are our channels that reach out to their respective TG, our understanding of our respective TGs (youth, kids and young adults) like no one else and creativity that’s unmatched. Between MTV and Nick, we’ve today got products in over 50 categories, over 35 licensees and more than 500 SKUs in the market. These products are sold in close to 100 cities from more than 4000 outlets as well as key retail chains. The distribution strategy for each category is different and we sit down with each of our licensees to finalise the same.

 

Retailer: What are the criteria you seek to select the licensees/manufacturers? 

SD: We take pride in the fact that all our licensees are players who’re experts in their respective domains, manufacturing quality products that can compete in any market across the world, in terms of quality and creativity. Our licensees today include BILT, Mattel, Citibank, Micromax, Funskool, Colgate-Palmolive, Crocs, Aureole-Inspecs, Wildcraft, Portico, Brand Concepts, Steelbird, Metro and Excel Entertainment amongst many others. The criteria while selecting licensees include domain expertise, manufacturing/sourcing capabilities, an eye for quality, robust distribution set-up and an understanding of the category and the consumers.  

 

Retailer: What is the contribution of licensing intiatives by Viacom18 to the overall revenue generated?

SD: While I am not at liberty to disclose company financials, I can tell you that today the combined MRP value of MTV & Nick merchandise sold are close to Rs 200 crore.

 

Retailer: Which are the categories (verticals) in which Viacom18 has entered through a licensing deal?

SD: Today, between MTV & Nick we’re present in more than 50 categories including apparel, footwear, stationery, back-to-school, eyewear, banking, bed linen, toys, story & activity books, mobile phones, gifts & novelties, innerwear, oral care, plush, home entertainment, tableware and many others. Going forward, we plan to enter at least 20 more categories by this financial year-end.

 

Retailer: How do you determine the pricing of licensed merchandise? What initiative do you take to combat counterfeit products? How big or grave is the issue?

SD: Viacom18 has licensed products that are priced between Rs 5 to Rs 6000. Pricing is governed by many factors - category itself, distribution strategy and competitive scenario amongst other factors. What we’ve learnt is that more than the ‘price’, it is the ‘value perception’ that is more important.

Given that 92 per cent of India’s retail market is still unorganised, counterfeit is bound to be a part of the game. We combat it strongly through awareness about the quality of our products (which counterfeit can never offer - and in kids category, quality is paramount), constantly innovating and coming up with newer designs and creatives and finally, taking a firm action against companies that indulge in counterfeits.

Interviewed by Vrinda Oberai

 

 

 

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