iconkids & youth international research GmbH collects market data on licenses. The managing director reveals some insights in the Luna Journal.

Mr. Dammler, what is the market for licenses like?

Axel Dammler, managing director iconkids: We are observing that licenses are becoming more and more important. Even in Germany, which has so far been rather cautious in this market.

Where does this reluctance in the German market come from?

Germany has always been very keen on sustainability and longevity. Customers tend to buy long-term system products that can be easily combined with each other over the years, such as Barbie or Playmobil. We also have a system approach to furniture. And the trade is also structured according to this scheme. The licensing business, on the other hand, is rather fast-moving. Some themes are only available for a summer. This is why licences have always worked better in more dynamic markets such as Southern Europe, Great Britain or the USA.

Licenses are a billion-euro market with over 280 billion euros in sales worldwide. Is that the reason why Germany is now increasingly focusing on merchandising?

The popularity is of course a reason. If children already know the products, it is much easier for retailers to participate. After all, customers don’t have to be convinced first. Another reason to rely on licenses is the toy market itself. It is much fuller today. The awareness of topics can help to establish oneself and set oneself apart. Another reason – especially for manufacturers – is the cost of product development. It is incredibly expensive and resource-intensive to develop a new toy and bring it to market. With licenses you are on the safe side. As a manufacturer, you buy the rights to a well-known brand and transfer these positive characteristics to your product. For the licensor, merchandising is another pillar through which he can distribute his costs to other participants.

Are there certain strategies that the major manufacturers follow?

You can see across the board that all major manufacturers are trying to establish game worlds. At Playmobil, for example, there are games on a wide variety of topics such as dinosaurs, outer space or at home. Lego has done this very successfully with Ninjago. The company has even become a licensor itself, for example for clothing or other children’s equipment – this is, of course, the ideal case. Both manufacturers – Playmobil and Lego – also rely on foreign worlds. Star Wars is very important for Lego and Playmobil is active with Dragons and Spirit.

Which media do you use to reach the target group in order to make licenses known?

That’s still television. A great medium through which children can be addressed linearly and directly. TV has the greatest impact on children. Then come streaming platforms, which are becoming increasingly important. Because here parents have the feeling that they can better control consumption. The older the children get, the more difficult it becomes. Then consumption will be more fragmented. The nine to 13-year-olds use Tik Tok, after which it’s Instagram. This raises the question of how to reach customers in order to place licenses. Influencers are a possibility, but their number has increased inflationarily, so that their reach has declined.

What role does the trade play in the licensing business?

The dealers have a gatekeeper function. They are a threshold that the manufacturer must first overcome. The trade wants to be convinced. One must not forget: Especially at the beginning of the license business in Germany there were also failures. Harry Potter was massively invested in at the start of the film, but many licensed products were flopped. For many, this is still a trauma.

What should dealers look for when selecting licensed products?

There is market data on the attractiveness of licenses. This is an important criterion. Then you should ask yourself the question: What is the product used for? There are licenses that work better for inhome products such as cuddly toys and bed linen. Then there are topics that work well outhome, e.g. on clothes or school satchels, because the children proudly want to show this to their friends. Further criteria are popularity, awareness and coherence. In addition, the license must not be overused – some themes have simply been on the market for too long. And then, of course, both dealers and manufacturers are looking for ascending licenses. These topics have already reached a high popularity in the core target group, but are not yet so well known.

What are your current licensing tips?

That would definitely be Peppa Pig. The switch to Super RTL has done this topic a lot of good. The license is just beginning to develop in the infant sector. I see great potential here. Another favorite is Miraculous – stories from Ladybug and Cat Noir. This topic is growing very strongly. I’m also excited about the development of Star Wars and Avengers.

 

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Link: iconkids & youth keeps an eye on the license market for children.

Image: iconkids & youth

//KH