What a time to be starting a new column! The stuff of nightmares has arrived to bring almost all business to a grinding halt. I have to say, though, three months into the UK ‘lockdown’ – with similar restrictions in most countries –
Licensing Industry showing itself to be resilient & optimistic in Covid19.
The pattern everywhere seems to be similar: manufacturers supplying food and drink to the grocery business, largely supermarkets (but some smaller food stores have stayed open, too) have managed to maintain sales of licensing products to a good level. However, if your business distributes through other retail, sales opportunities have been few and far between. Our own business here in Europe has seen this in practice. General Mills, Yoplait and Finsbury Foods ( a major supplier of licensed cakes in Europe ) have all been trading positively, even going ahead in France with a new product launch. Our craft gin client, The Harrogate Tipple, on the other hand, licensee for Downton Abbey, has lost all his retail and, of course, the pubs, bars and clubs’ business where he also sells gin and whisky has been totally shut down.
I’ve also tried to stay upbeat, as I believe that licensing is only really coming into its own internationally and still presents major opportunities. That’s why my company just this week launch a new campaign on the theme of ‘Connecting you to the world’s biggest brands’. You can see our launch video here: https://bit.ly/AsgardVideo.
While all this has been going on, we have had Virtual Licensing week, a brave attempt by Informa and Licensing International to fill the huge hole in the licensing calendar caused by the inevitable and unavoidable cancellation of Licensing Expo 2020. There were shortcomings from the international licensing community’s point of view. All events and even the matchmaking schedule working only in US Pacific Coast time made for some confusing appointment requests, and potentially late (or very early) joining of some of the live sessions. However, the organisers mitigated this to some extent by the ‘on demand’ facility for many of the sessions, and they deserve congratulations for putting this entirely new platform together in around eight weeks from scratch – no mean feat.
What was evident from many of the panels, especially those featuring licensees, is that the existing financial structure of licensing deals needs urgently addressing. It can’t be tenable, when retailers are so fragile, to continue to insist that royalties are paid on uncollectable accounts. Minimum Guarantees agreed in the world of 2019 now look vastly inflated in the post – Covid future we will return to. Advances that looked fair last year now are onerous to the extent of potentially bankrupting licensees. However, agents, too, are at risk if their businesses depend on some staged payments coming in. That cannot be fair, either. I do detect a willingness on the part of licensors to come to terms with this, and that is very good news.
In future columns I hope to reflect on even greater positivity in licensing. Covid 19 will, I am convinced, reveal the best and worst of business practice. I very much hope that our very own licensing industry falls entirely into the first of these categories.