NEW TRENDS IN NEW TRENDS IN LICENSINGLICENSING

Charles M. RiottoCharles M. RiottoPresidentPresident

International Licensing Industry International Licensing Industry Merchandisers’ Association (LIMA)Merchandisers’ Association (LIMA)

LIMALIMA1000 MEMBERS AROUND THE 1000 MEMBERS AROUND THE

WORLDWORLDTHE INDUSTRY’S MAIN THE INDUSTRY’S MAIN

SOURCE OF EDUCATION SOURCE OF EDUCATION INFORMATION AND INFORMATION AND

NETWORKING NETWORKING OPPORTUNITIESOPPORTUNITIES

LIMALIMASPONSOR OFSPONSOR OF

LICENSING 2003 INTERNATIONALLICENSING 2003 INTERNATIONALLICENSING LONDONLICENSING LONDON

LICENSING ASIALICENSING ASIA

LICENSINGLICENSINGENTERTAINMENTENTERTAINMENT

CORPORATECORPORATESPORTSSPORTSFASHIONFASHION

ARTART

LICENSING TRENDSLICENSING TRENDS

ENTERTAINMENT CHARACTERS ENTERTAINMENT CHARACTERS AS PRODUCT ENDORSERSAS PRODUCT ENDORSERS

LICENSING TRENDSLICENSING TRENDSCORPORATIONS:CORPORATIONS:

STRENGTHEN THEIR STRENGTHEN THEIR TRADEMARKTRADEMARK

PREVENT PIRACYPREVENT PIRACYADD REVENUESADD REVENUES

MORE EXPOSUREMORE EXPOSURE

LICENSINGLICENSING TRENDSTRENDSCOLLEGESCOLLEGES::

SUBSIDIZE THEIR SUBSIDIZE THEIR EDUCATIONAL EDUCATIONAL

PROGRAMSPROGRAMS

LICENSINGLICENSING TRENDSTRENDS

LICENSING IS A $150 BILLION LICENSING IS A $150 BILLION WORLDWIDE BUSINESSWORLDWIDE BUSINESS

LICENSING TRENDSLICENSING TRENDS LIMA’S STATISTICAL STUDYLIMA’S STATISTICAL STUDY

CONDUCTED BY RESEARCHERS AT CONDUCTED BY RESEARCHERS AT HARVARD BUSINESS SCHOOL AND HARVARD BUSINESS SCHOOL AND YALE SCHOOL OF MANAGEMENTYALE SCHOOL OF MANAGEMENT

LICENSING IS A $95 BILLION BUSINESS LICENSING IS A $95 BILLION BUSINESS IN THE U.S.IN THE U.S.

LICENSING TRENDSLICENSING TRENDS

$5.5 BILLION IN ROYALTY $5.5 BILLION IN ROYALTY INCOME IN THE U.S. IN 2001INCOME IN THE U.S. IN 2001

LICENSING TRENDSLICENSING TRENDS

44% OF LICENSING ROYALTIES 44% OF LICENSING ROYALTIES ARE FOR CHARACTER AND ARE FOR CHARACTER AND

ENTERTAINMENT ENTERTAINMENT PROPERTIESPROPERTIES

LICENSING TRENDSLICENSING TRENDSLICENSING REVENUESLICENSING REVENUES:: CHARACTER/ENTERTAINMENT $2.5 BCHARACTER/ENTERTAINMENT $2.5 B TRADEMARK/BRANDS $963 MTRADEMARK/BRANDS $963 M FASHION $911 MFASHION $911 M SPORTS $707 MSPORTS $707 M COLLEGIATE $175 MCOLLEGIATE $175 M ART $147 MART $147 M MUSIC $117 MMUSIC $117 M

LICENSING TRENDSLICENSING TRENDSLICENSING ROYALTIES BY PRODUCT LICENSING ROYALTIES BY PRODUCT

CATEGORYCATEGORY:: APPAREL $976.4 MAPPAREL $976.4 M TOYS & GAMES $958.3 MTOYS & GAMES $958.3 M SOFTWARE/VIDEOGAMES $536.8 MSOFTWARE/VIDEOGAMES $536.8 M ACCESSORIES $450.0 MACCESSORIES $450.0 M GIFTS & NOVELTIES $506.4 MGIFTS & NOVELTIES $506.4 M FOOD & BEVERAGES $418.3 MFOOD & BEVERAGES $418.3 M

LICENSING TRENDSLICENSING TRENDS ENTERTANIMENT LICENSING IN THE ENTERTANIMENT LICENSING IN THE

U.S.:U.S.:

$2.5 BILLION IN ROYALTIES$2.5 BILLION IN ROYALTIES$42.5 BILLION AT RETAIL$42.5 BILLION AT RETAIL44% OF ALL LICENSING 44% OF ALL LICENSING

REVENUESREVENUES

LICENSING TRENDSLICENSING TRENDSDISNEY CONSUMER PRODUCTS:DISNEY CONSUMER PRODUCTS:

MICKEY MOUSEMICKEY MOUSEWINNIE THE POOHWINNIE THE POOHDISNEY PRINCESSDISNEY PRINCESSPOWER RANGERSPOWER RANGERSLIZZIE McGUIRELIZZIE McGUIRE

LICENSING TRENDSLICENSING TRENDSWARNER BROS. CONSUMER WARNER BROS. CONSUMER

PRODUCTS:PRODUCTS:

LOONEY TUNES: BACK IN ACTIONLOONEY TUNES: BACK IN ACTIONHARRY POTTERHARRY POTTERSCOOBY-DOOSCOOBY-DOO

LICENSING TRENDSLICENSING TRENDSNICKELODEON:NICKELODEON:

SPONGEBOB SQUAREPANTSSPONGEBOB SQUAREPANTSDORA THE EXPLORERDORA THE EXPLORERBLUE’S CLUESBLUE’S CLUESJIMMY NEUTRONJIMMY NEUTRONRUGRATSRUGRATS

LICENSING TRENDSLICENSING TRENDSOTHER POPULAR ENTERTAINMENT OTHER POPULAR ENTERTAINMENT

LICENSORS:LICENSORS:

HIT ENTERTAINMENTHIT ENTERTAINMENT4KIDS ENTERTAINMENT4KIDS ENTERTAINMENTMARVELMARVELMATTELMATTELUNITED MEDIAUNITED MEDIA

LICENSING TRENDSLICENSING TRENDS

RETRO PROPERTIES ARE RETRO PROPERTIES ARE POPULARPOPULAR

LICENSING TRENDSLICENSING TRENDS

STUDIOS ARE USING STUDIOS ARE USING “FRANCHISE “FRANCHISE

DEVELOPMENT” DEVELOPMENT” STRATEGIESSTRATEGIES

LICENSING TRENDSLICENSING TRENDS

LICENSING OF MUSICAL LICENSING OF MUSICAL PERFORMERS IS GROWINGPERFORMERS IS GROWING

LICENSING TRENDSLICENSING TRENDS

CREDIT CARD AFFINITY CREDIT CARD AFFINITY PROGRAMS FEATURING PROGRAMS FEATURING

LICENSED CHARACTERS LICENSED CHARACTERS

LICENSING TRENDSLICENSING TRENDS

SALES OF LICENSED TOY SALES OF LICENSED TOY PRODUCTS ARE UPPRODUCTS ARE UP

LICENSING TRENDSLICENSING TRENDSCORPORATE BRAND LICENSING:CORPORATE BRAND LICENSING:

AUTOMOTIVE BRANDS HAVE AUTOMOTIVE BRANDS HAVE MAJOR LICENSING MAJOR LICENSING

PROGRAMSPROGRAMS

LICENSING TRENDSLICENSING TRENDSFOOD & BEVERAGE LICENSING FOOD & BEVERAGE LICENSING

ACCOUNTS FOR 25% OF ALL ACCOUNTS FOR 25% OF ALL CORPORATE LICENSING CORPORATE LICENSING

REVENUESREVENUES

LICENSING TRENDSLICENSING TRENDSCOCA-COLA LICENSINGCOCA-COLA LICENSING::

PROGRAM STARTED IN ORDER TO PROGRAM STARTED IN ORDER TO ENFORCE TRADEMARK RIGHTSENFORCE TRADEMARK RIGHTS

NOW GENERATES ABOUT $1 BILLION IN NOW GENERATES ABOUT $1 BILLION IN RETAIL SALESRETAIL SALES

LICENSING TRENDSLICENSING TRENDSCORPORATE LICENSINGCORPORATE LICENSING::

GROWTH IN HEALTH & BEAUTY GROWTH IN HEALTH & BEAUTY AIDS CATEGORYAIDS CATEGORY

LICENSING TRENDSLICENSING TRENDSCORPORATE LICENSINGCORPORATE LICENSING::

CABLE NETWORKS NOW INTO CABLE NETWORKS NOW INTO LICENSINGLICENSING

LICENSING TRENDSLICENSING TRENDS CORPORATE LICENSING:CORPORATE LICENSING:

FOOD & BEVERAGESFOOD & BEVERAGES 31%31%APPARELAPPAREL 16%16%ACCESSORIESACCESSORIES 7% 7%GIFTS & NOVELTIESGIFTS & NOVELTIES 6% 6%HOUSEWARESHOUSEWARES 6% 6%TOYS & GAMESTOYS & GAMES 5% 5%

LICENSING TRENDSLICENSING TRENDSCORPORATE LICENSINGCORPORATE LICENSING::

LOW-RISK WAY TO BUILD BRAND LOW-RISK WAY TO BUILD BRAND AWARENESSAWARENESS

PROMOTES THE CORE PRODUCTPROMOTES THE CORE PRODUCTINCREASE APPEAL TO DIFFERENT INCREASE APPEAL TO DIFFERENT

GROUPSGROUPSSTRENGTHENS TRADEMARK RIGHTSSTRENGTHENS TRADEMARK RIGHTS

LICENSING TRENDSLICENSING TRENDSCORPORATE LICENSING TRENDSCORPORATE LICENSING TRENDS::

INTEREST WILL CONTINUE TO GROWINTEREST WILL CONTINUE TO GROWUSED AS A MEANS TO ACCOMPLISH USED AS A MEANS TO ACCOMPLISH

DIFFERENT GOALSDIFFERENT GOALSGROWTH WILL SLOW DOWNGROWTH WILL SLOW DOWNROYALTY RATES WILL RISE SLOWLYROYALTY RATES WILL RISE SLOWLYDEALS ARE GETTING BIGGERDEALS ARE GETTING BIGGER

LICENSING TRENDSLICENSING TRENDSSPORTS LICENSINGSPORTS LICENSING::

$707 MILLION IN ROYALTY $707 MILLION IN ROYALTY REVENUESREVENUES

$14 BILLION IN RETAIL SALES$14 BILLION IN RETAIL SALES

LICENSING TRENDSLICENSING TRENDSSPORTS LICENSINGSPORTS LICENSING::

U.S. LEADERSU.S. LEADERS::NATIONAL FOOTBALL LEAGUE (NFL)NATIONAL FOOTBALL LEAGUE (NFL)MAJOR LEAGUE BASEBALL (MLB)MAJOR LEAGUE BASEBALL (MLB)COLLEGIATE LICENSING CO. (CLC)COLLEGIATE LICENSING CO. (CLC)NATIONAL BASKETBALL ASSN (NBA)NATIONAL BASKETBALL ASSN (NBA)NASCARNASCARNATIONAL HOCKEY LEAGUE (NHL)NATIONAL HOCKEY LEAGUE (NHL)

LICENSING TRENDSLICENSING TRENDSFASHION LICENSINGFASHION LICENSING::

$911 MILLION IN ROYALTIES$911 MILLION IN ROYALTIES$15.5 BILLION IN RETAIL SALES$15.5 BILLION IN RETAIL SALES

LICENSING TRENDSLICENSING TRENDSART LICENSINGART LICENSING::

$147 MILLION IN ROYALTIES$147 MILLION IN ROYALTIES$2.5 BILLION IN RETAIL SALES$2.5 BILLION IN RETAIL SALES

LICENSING TRENDSLICENSING TRENDSLICENSING AT RETAILLICENSING AT RETAIL::

DIFFICULT FOR SMALLER DIFFICULT FOR SMALLER PROPERTIES TO GET NOTICEDPROPERTIES TO GET NOTICEDLICENSORS NOW WORKING LICENSORS NOW WORKING DIRECTLY WITH RETAILERSDIRECTLY WITH RETAILERS

LICENSING TRENDSLICENSING TRENDSKEYS TO RETAIL RELATIONSHIPSKEYS TO RETAIL RELATIONSHIPS::UNDERSTAND THE RETAILER AND HIS UNDERSTAND THE RETAILER AND HIS

CUSTOMERSCUSTOMERSUNDERSTAND WHERE YOUR UNDERSTAND WHERE YOUR

PROPERTY FITSPROPERTY FITSHOW WILL IT DRIVE TRAFFIC?HOW WILL IT DRIVE TRAFFIC?WILL IT BRING NEW CUSTOMERS?WILL IT BRING NEW CUSTOMERS?WILL IT SELL MORE PRODUCT?WILL IT SELL MORE PRODUCT?

LICENSING TRENDSLICENSING TRENDSOTHER TRENDSOTHER TRENDS::

GUARANTEES GETTING GUARANTEES GETTING SMALLERSMALLER

ROYALTY RATES STABILIZINGROYALTY RATES STABILIZING

LICENSING TRENDSLICENSING TRENDSOTHER TRENDSOTHER TRENDS::

CROSS LICENSING GAINING CROSS LICENSING GAINING POPULARITYPOPULARITY

LICENSING TRENDSLICENSING TRENDSINTERNATIONAL LICENSING MARKETSINTERNATIONAL LICENSING MARKETS::

U.S./CANADAU.S./CANADA 65.0%65.0%WESTERN EUROPEWESTERN EUROPE 22.0%22.0%JAPANJAPAN 9.8% 9.8%AUSTRALIA/N. ZEALANDAUSTRALIA/N. ZEALAND 1.3%1.3%SOUTH/CENTRAL AMERICASOUTH/CENTRAL AMERICA 0.7% 0.7%SOUTHEAST ASIASOUTHEAST ASIA 0.5% 0.5%OTHEROTHER 0.7% 0.7%

LICENSING TRENDSLICENSING TRENDSSUGGESTIONSSUGGESTIONS::

ATTEND NEW YORK LICENSING ATTEND NEW YORK LICENSING SHOWSHOW

CONSIDER ATTENDING LICENSING CONSIDER ATTENDING LICENSING SHOWS IN LONDON AND TOKYOSHOWS IN LONDON AND TOKYO

LICENSING TRENDSLICENSING TRENDSSUGGESTIONSSUGGESTIONS::

JOIN AND SUPPORT ABRALJOIN AND SUPPORT ABRAL

JOIN LIMAJOIN LIMA

LICENSING TRENDSLICENSING TRENDS

THANK YOU!THANK YOU!