The Licensing World
A well-managed licensing program can go a long way in protecting a product from knock-offs.
By Lisa Ashcraft and Barney Stacher -- Gifts and Dec, 6/1/2005 12:00:00 AM
One of the most often heard complaints these days comes from manufacturers, artists, reps, and retailers alike; it's about knock-offs and the effect they have on everyone's business. We're not talking about the proliferation of products in a successful category (candles, personal care, jewelry), or a common theme that makes its way onto a plethora of products — those fall into the “imitation is the sincerest form of flattery” department.
What we're referring to are blatant design copies that are so obviously stolen they fall into the “I'm calling my attorney” department. Anyone who finds their original design and idea in the marketplace without their name or logo knows the long-range effects.
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For artists and designers it means someone loved your work so much that they stole it, and are now depositing checks that should be yours. For a starving artist, that's the biggest offense of all.
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For manufacturers it means that someone else is making money on the research, testing, development, and marketing you've done. For a manufacturer who plans and budgets every penny, this means war.
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For reps it means not only that someone else got your hard-earned commission, but that someone else has encroached upon the hard-earned trust you've established with retailers. This loss can directly impact a rep's life, allowing one less tank of gas, one less month until a bill is paid off, or one less decent lunch when you're on the road.
For retailers it means an additional layer of “baloney” to plow through, including questions such as: Why should I buy the original? Shouldn't I try to give my customers the best price? Which really is the original? The job of a retailer is tough enough without all that hassle.
One solution
Is there a way around all this (aside from closing our eyes and wishing really hard that knock-off artists will stop their bad deeds)? Licensing is one answer. If you think about it, it's a lot more risky to take an original design — say a Mary Engelbreit or a Gary Larson — and casually copy it. Not only does a good artist have a look and feel that is obvious to everyone, but a good artist also has agents, manufacturing partners, and attorneys to help fight off the rip-offs. Good artists create continuity, synergy, exclusivity, confidence, and history — adding up to the ability to create collections, and garner the support of a network of licensees who have a vested interest in making sure that thefts don't occur.
Twenty-plus years ago, when I was a sales rep for Recycled Paper Greetings, Sandra Boynton licensed her whimsical animal designs for a wallpaper line. It was the coolest, smartest thing ever. Yet because that kind of thing wasn't done back then, I didn't wonder why she hadn't licensed onto figurines, tree ornaments, cocktail napkins, or cutting boards. How times have changed. Now licensing is a full-blown industry, employing agents, accountants, marketing pros, designers, and, of course, plenty of artists.
The benefits
Like many industries, licensing is often misunderstood. Some manufacturers view it as one more fee that subtracts from their bottom line. Some artists view it as someone else taking control of their design. Some art departments see it as a resource for ideas or art that can serve as “inspiration.” Admittedly, all those are occasionally the case, but the huge benefits that licensing brings to our industry far outweigh such occasional negatives.
Think about some of the images that have been reproduced on myriad product profiles, such as Mary Engelbreit's classic “Life Is Just a Chair of Bowlies.” If a manufacturer licenses Chair of Bowlies onto a coffee mug, the contract they sign insures that their coffee mug is the only one bearing Chair of Bowlies — that's exclusivity. When other manufacturers then put “Chair” onto a variety of product profiles, synergy is created. Good licensing also makes it easy for retailers to create collections within their store, and collections and commitment to a license create repeat consumers who come back time and again for more of an artist's work.
From the artist's perspective, licensing is the easiest and best way to get their work to the marketplace. Yes, there are many amazing artists who are content to sell originals themselves, and if they're happy and making all the money they should keep on doing that. However, artists who love the process of designing and creating, and don't like venturing into the world of commerce, have another option. A good licensing agent acts as liaison between manufacturer and artist, ensuring that the developed product is top quality, that it gets placed in the right stores, and that there's opportunity for growth. The agent will also make sure the artist gets paid.
More upside
Granted, licensing an artist does mean that a manufacturer has to pay a royalty fee. But the upside is that a manufacturer doesn't have to rely on hitting pay dirt every season using in-house artists. Rather, manufacturers can focus on what they do best, and allow reputable artists to add looks and dimension to already successful lines.
A good agent is also a huge asset to the manufacturer. Agents play an important role in developing new ideas and art, working to meet deadlines, and sharing information on other licensees who are using the same designs. They create synergy, develop marketing ideas, and keep up-to-speed on what's happening within the industry. All that for the price of a monthly royalty check.
Licensing a great artist won't stop industry thieves from knocking off good looks. But licensing is a business whose time has come, and one which can provide an excellent boost to bottom lines in all channels of our industry.
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