Licensees enjoy many benefits from a strong brand. One of the most important is pricing power.
Marketers of no-name products and weak labels are in no position to raise prices. They are replaced easily.
Whereas strong brands generate a premium and higher margins. And the higher margins – the brand premium – justify the royalties.
That is especially true during times of rising costs like now.
One example of successful brand building and management is Banksy. The most recent auction of his “Love in the Bin” fetched US$25.4 million. Just three years ago, the work was auctioned for US$1.4 million.
What makes Banksy successful?
Brand myth, the person is a mystery.
Pushing boundaries, the legality of graffiti is questionable. Similar to Red Bull, which was considered not legal in Germany initially.
Brand checks, at PestControl he authenticates his work, and thus, protects and defends his work and his brand.
Exclusivity, Banksy is selective when licensing.
Banksy operates largely outside the classic channels of the art market such as galleries, art fairs, museums.
Pure licensing company Sequential Brands Group (SBG) filed for Chapter 11 in August. During the proceedings it is auctioning off its remaining labels and brands including Jessica Simpson, Avia, AND1 and William Rast.
Earlier this year, SBG sold Caribbean Joe for US$3M and Ellen Tracy for US$17M. Both are licensed successfully. In 2013 SBG paid more than US$80M.
Linnens ‘N’ Things went to Retail Ecommerce Ventures. It converts companies from classic retail, or ‘brick and mortar’, to e-commerce.
Martha Stewart had left SBG earlier and moved to Marquee Brands.
The competitive market of online sports betting has some big names, mostly of British origin like Betfair, Betdaq, William Hill, DraftKings, Fanduel.
With high costs to acquire additional gamblers, the market is looking to license established brands. TV companies like Sky were early in the UK, Fox in the USA followed in 2019.
Now Disney’s ESPN is in talks to license its brand. The royalties it is aiming for are ~ US$ 3 Billion.
Disney of course is a veteran and champion in brand licensing.
Way back we approached the owner of a best-ager mobility brand.
We wanted to license the brand to a bicycle manufacturer, and into other product categories.
We saw an opportunity, easy to ride bicycles for aging consumers, and the matching brand. Plus, at the time the bicycle market was struggling.
Sadly, we failed to convince the brand owner. One obstacle were our fees. Shortly thereafter bicycle manufacturers went bust.
Today, the papers are full with Arnold Schwarzenegger or Simon Cowell on their e-bikes. Well-off people in their 60s and 70s are spending thousands on bicycles.
The market is red hot, bike shops cannot get product as fast as it is flying out the door.
A while ago I met the brand owner. He was sad to have missed the opportunity.
The fragrance industry was early in brand licenses.
Coco Chanel and her perfume are a textbook case. Christian Dior Parfums and cosmetics were at the starting point of Bernard Arnault’s LVMH.
Even today the new Coty CEO mentions licensed brands Gucci, Burberry, Hugo Boss and Adidas first. Her newest stars are Kylie (Jenner) Cosmetics and Kim Kardashian’s KKW.
Reportedly, Blackberry, also known as Research in Motion or RIM, found a new licensee, Onward Mobility.
The previous one, TCL, did not renew the license, which expired in 02/2020.
British accessories brand Mulberry has an eyewear license.
The licensee is the UK subsidiary of De Rigo.
The collection of optical glasses and sunglasses is scheduled for 2019.
As reported here by LicenseGlobal, BMW has signed a brand license for watches and smart watches.
The licensee is Fossil Group, which holds a broad portfolio of brand licenses already. A license had been with the Ball Watch company before.
The territory is worldwide.
First products are expected in 2019, the agreement runs through 2023.
Distribution will be via BMW retail channels and the retail network of Fossil.
Philips has extended its license with TPV, licensee for TV and monitors.. The additional category is audio and video, as reported here.
The license started on June 1, 2018 and runs until December 31, 2023, with renewal options.
Previously, the license has been with Gibson Innovation. The parent, Gibson Brands, filed for Chapter 11. Thus, Philips explored other options.