royaltie$, september 2009

For International licensing information contact:

Jill TullyVP, International Consumer [email protected]

CELEBRATING10 YEARSOF HAPPY!A FLOOD OF FANS• Most watched Kids cartoon ever• Over 72 million monthly viewers• #1 animated program on all of TV 8 years in a row,

among K2-11 and 6-11**Nielsen: 7/17/99-12/31/08

NICK’S BIGGEST CELEBRATION EVER• $100 million in marketing and promotions including: - Ultimate Fansite: www.spongebob.com (January) - Three major TV events (April, July, November) - Two QSRs (April, November) - SpongeBob Documentary (July) - Global Day of Happiness celebrating

SpongeBob’s 10th Anniversary (July)• All new product lines, fi rst-ever co-brands,

innovative partnerships and re-imagined art styles• National sweepstakes promotion on over

15 million products

For US licensing and retail information contact:

Shaun Turner Kristi WasmerVP, Retail Development VP, Retail [email protected] [email protected]

©2009 Viacom International Inc. All Rights Reserved. SpongeBob SquarePants created by Stephen Hillenburg.

SB_TradeAd.RoyaltiesMag.rev.indd 1 4/22/09 5:46:19 PM

Volume 4, No. 9

September 2009

Features16 Hilco Consumer Capital:

Bringing Brands BackBY PAUL NARULA

18 Building a Home BrandBY PAUL NARULA

20 Sullied Celebrities asBrand Representatives

BY CHRIS ADAMS

22 Managing Througha Crisis

BY NANCY LOMBARDI

24 Brand Name vs. PrivateLabel: Reframing theConcept of Value

BY NANCY LOMBARDI

26 Michael Jackson: TheKing of Merchandise

BY NANCY LOMBARDI

OBSERVATIONS & OPINIONS PAGE 4

THE TICKER PAGE 6

REAL DEAL PAGE 8

ESSENCE OF STYLE PAGE 10

MAVERICKS IN THE MARKET:

JOSH ROMM PAGE 12

ROYALTIE$ MARKETPLACE:

HELLO KITTY PAGE 14

YOU’RE HIRED! PAGE 28

CALENDAR OF EVENTS PAGE 30

ENDCAP PAGE 31

ON THIS PAGE: On top is the House of Marley logo. The property ismanaged by Hilco Consumer Capital. The lower image is Sanrio’s

Hello Kitty, which is celebrating its 35th anniversary.

ON THE COVER: Bravado has begun introducing the first of itsMichael Jackson merchandise, The Beanstalk Group is building anHGTV licensing program, and Michael Phelps provides two exam-

ples—in the cases of Kellogg’s and Subway— of what happens whena celebrity endorser experiences bad publicity.

COVER BY DESIGN EDGE

Departments

ROYALTIE$

SEPTEMBER 20094

The dog days of summer are goneas is the annual summer lull thatbesets the licensing industry. This

summer has been particularly lulling. Ilook forward to the fresh, crisp air thatcomes along with September, as well asthe energy in our business that seems to re-appear along with fall.

There is no lull here at aNb Media,though. We have been busy preparing forthe sold-out Q4 media event forwww.TimetoPlayMag.com. More than 35companies—from toy manufacturers tomajor family entertainment studios—willconverge on NYC on Oct. 1 to presenttheir brands and to see what our esteemedteam of experts has chosen as its top holi-day toys for 2009. Members of the pressfrom all over the U.S., including the top“mommy bloggers,” will be on hand.

It seems as though the strengths of thisyear’s Licensing Expo outweighed theweaknesses enough that the “other” li-censing show—to be called THE Licens-ing Event—has decided it’s best not to tryto produce a competing New York City-based show next year after all. I think this

is a wise move. At this point in time, theindustry does not need or want another“Licensing Show.” Had Las Vegas beenunsuccessful, perhaps there could havebeen cause, but not at this time.

The stock market continues to creep itsway up—a sign some business punditsseem to think means the economy is turn-ing around and the recession may be sub-siding. Although I have my doubts that itis completely over, I would like to thinkthat we are on the verge of an upswing thatwill hopefully get consumers back into thecomfort zone for spending. Lately, con-sumer confidence indicators have alsoshown improvement along with the stabi-lizing unemployment rate.

And this just in: Disney is to acquireMarvel for four billion dollars. It’s tooearly in this story to try to anticipate howthese two entertainment giants will oper-ate, but I can’t imagine the combined en-tity is going to be an easy puzzle to piecetogether. We may not feel the reverbera-tions of this mega-acquisition for a longtime to come.

See you in Dallas next month!

SNAPPING OUT OF THE LULL

by Andy Krinner

PUBLISHED BY ANB MEDIA • Volume 3, Number 8

PUBLISHER ANDY [email protected]

ASSOCIATE PUBLISHER BOB [email protected]

ADVERTISING MANAGER AMY [email protected]

CONTROLLER MARY [email protected]

EDITOR IN CHIEF JIM [email protected]

EDITORIAL DIRECTOR NANCY [email protected]

MANAGING EDITOR CHRIS [email protected]

EDITOR AT LARGE CHRISTOPHER [email protected]

ASSISTANT EDITOR LAURIE [email protected]

ASSISTANT EDITOR PAUL [email protected]

WEB MASTER ERIK [email protected]

WEB CONTENT MANAGER BRENDAN [email protected]

CONTRIBUTOR MATT [email protected]

HONG KONG REPRESENTATIVE TONY LEESMART REGENT PRODUCTIONS LTD., 66–72 STANLEY STREET, ROOM 603,

KAI TAK COMMERCIAL BUILDING, CENTRAL HONG KONGPHONE: 2815 0166 • FAX: 2815 6911 • [email protected]

PUBLIC RELATIONS REPRESENTATIVE JOSSLYNNE WELCHLITZKY PUBLIC RELATIONS, 320 SINATRA DR., HOBOKEN, N.J. 07030

(201) 222–9118 EXT. 13 • [email protected]

INTERESTED IN A SUBSCRIPTION?CONTACT [email protected]

ANB MEDIA, INC.229 WEST 28TH STREET, SUITE 401, NEW YORK, NY 10001PHONE: (646) 763–8710 • FAX: (646) 763–8727

ROYALTIE$ is published 12 times a year by aNb Media, Inc. Copyright 2009aNb Media, Inc. All rights reserved. No part of this publication may be repro-duced or transmitted in any form, or by any means, electronic or mechanical,including photocopy, recording, or any information storage and retrieval sys-tem, without written permission from the publisher. Printed in the U.S.A. ROY-ALTIE$ is a registered trademark of aNb Media, Inc. Opinions and commentsexpressed in this publication by editors, contributing writers, or solicited orunsolicited documents are not necessarily those of ROYALTIE$ management.

www.aNbMedia.com

Correction to the August issue of ROYALTIE$: On page 10, it waserroneously stated that Anchor Bay Entertainment signed onfood licensees for Wow! Wow! Wubbzy! The food companiesAnchor Bay partnered with are cross-promotional partners andnot licensees. We regret the error.

BUILDING GLOBAL BRANDS

FremantleMedia Enterprises is the leading independent one-stop-shop for global brand representation. We have a proven track-record of groundbreaking programs across all licensing disciplines including consumer products, interactive, mobile, sponsorship, integrated marketing, live events, home entertainment and international television program distribution.

CONTACT US TO FIND OUT HOW WE CAN HELP BUILD YOUR BRAND

For further information, contact:

James NgoSenior Director, Consumer ProductsFremantleMedia EnterprisesT: +1 (818) 748 1145

E: [email protected]

www.fremantlemedia.com

NOW REPRESENTING

THIRD PARTY BRANDS

YOURBRAND

HERE

ROYALTIE$

SEPTEMBER 20096

SEARS OPENS TOY SHOPSOn August 15 Sears debuted Toy Shops inside 20 nationwide locations in the New York, Los Angeles, Chicago, and San Francisco areas.

The shops offer a mix of mass-market items from companies such as Mattel, Hasbro, Jakks, Spin Master, and LEGO. In addition, the shopsinclude a mix of specialty product from Schylling, Learning Curve, MadameAlexander, Gund, Russ Berrie, and Briarpatch. Private label offer-ings featuring Sears Craftsman and Kenmore brands are also available.

“We are bringing toys back to Sears,” says Dev Mukherjee, SVP and president of the seasonal and toys business units for Sears Holdingsduring an August media walk though of the Toy Shop in the Woodbridge Center Mall in New Jersey.

The core target is ages 3-5 with the Toy Shop aligned next to kids’ apparel. The Toy Shop also features a computer station with internet accessfor consumers to shop online. The Toy Shops are expected to carry 1,000 SKUs with a total of 5,000 toy SKUs available online.

“This idea came out of customer requests,” says Julia Fitzgerald, DVP, CMO for Sears Holdings. It is expected that the Toy Shops will con-tinue to open in additional Sears locations throughout 2010. Visit www.sears.com/toyshops

PROPOSED THE LICENSING SHOW POSTPONED DUE TO RECESSIONLinda Cohen, show director for the proposed THE Licensing Event trade show that had a planned launch in April 2010 in New York City,

recently announced that it has become clear that as a result of the terrible economic conditions over the past year, an event in 2010 will notwork for many in the licensing and retailing communities. It has been decided, in the best interest of the licensing industry, to postpone THELicensing Event until the effects of the current recession have definitively started to lift. Cohen adds that she looks forward to producing theperfect event in New York, at just the right time.

FREMANTLE AND PLANET HOLLYWOOD LAUNCH LIVE AMERICA’S GOT TALENTFremantleMedia Enterprises (FME) and Planet Hollywood Resort & Casino will launch a live version of America’s Got Talent.

Produced by FremantleMedia Enterprises and SYCO, in conjunction with Planet Hollywood, America’s Got Talent Live will kick off its10-week run on October 7, 2009 at Planet Hollywood’s 1,300-seat CHI Showroom in Las Vegaswith shows every Wednesday through Sunday. Tickets for America’s Got Talent Live are nowavailable at planethollywood.com and ticketmaster.com.

America’s Got Talent Live underscores FME’s reputation in building brands beyond tele-vision and follows on the heels of similar live extensions with The Price Is Right in the U.S.and Australia, Grand Designs in the UK, and The American Idol Experience at Walt DisneyWorld Resort in Florida.

SPIDER-MAN RETURNS TO MACY’S THANKSGIVING DAY PARADEMarvel has announced that Spider-Man will return to the 83rd Annual Macy’s Thanksgiving Day

Parade after a decade away from the parade. Spider-Man made its Macy’s Parade debut in 1987. Thenew Spider-Man balloon debuting in this year’s Macy’s Parade combines the classic pose of the pre-vious giant—its arms outstretched in front of it and his legs bent behind in full crawling mode—butthis time it will feature Spidey’s classic web-slinging pose coupled with a more modern look. TheSpider-Man balloon is scheduled to be a part of the Macy’s Parade through 2011.

A RECAP OF INDUSTRY HEADLINES

JAKKS PACIFIC AND ROUND 5 SIGN

MMA LICENSING AGREEMENTJakks Pacific, Inc., master toy licensee for Ultimate Fighting Championship (UFC),

announced a sub-licensing agreement with Mixed Martial Arts (MMA) collectibles compa-ny Round 5 Corp. to share UFC and MMA talent. The agreement will allow both compa-nies access to the biggest MMA fighters in order to manufacture, market, and distributeaction figures and related products under the UFC umbrella. As a result, both companiesnow have access to a significantly larger MMA talent pool, including Randy Couture,Andrei Arlovski, Matt Hughes, Clay Guida, Chuck Liddell, Forrest Griffin, Brock Lesnar,BJ Penn, and other top MMA fighters.

Jakks’ new UFC line of toys and collectibles is expected to be available at retailersnationwide starting this fall, with plans to roll out the newly acquired talent beginning asearly as spring 2010. Along with the full line of deluxe articulated action figures, Jakks alsoexpects to offer octagon playsets, accessories, and roleplay toys based on the UFC, PRIDEFighting Championship, and World Extreme Cagefighting.

STONE AMERICA SIGNS ON FOR SCRATCH DJ ACADEMYStone America Licensing announced the company has been appointed the exclusive

licensing agent by Scratch DJ Academy. Founded in 2002 by Jam Master Jay, the legendaryDJ from Run-DMC, Scratch DJ Academy operates locations in New York City, Miami, LosAngeles, four cruise ships, and three Caribbean resorts.

StoneAmerica will help Scratch leverage its leadership position among DJs, music insiders,and influencers to become an iconic national brand. Licensing categories available to manufac-turers and retailers include apparel, accessories, electronics, publishing, toys, games, and more.

FITZROY MEDIA SIGNS GAMING DEALS FOR

HEATHCLIFF AND FUNNY FACEFitzRoy Media has awarded worldwide gaming rights for Heathcliff and Funny Face to San Diego-based Axis

Apps in an agreement that gives Axis exclusive rights to develop and distribute games and applications foriPhones. As part of the four-year agreement, Axis plans to release the first games this fall with the November 2009debut of Heathcliff and Funny Face applications for the iPhone and iPod Touch. Both games will be availablefor download through iTunes.

Created in 1973 by cartoonist George Gately, today’s Heathcliff comic strip is written and drawn by PeterGallagher, who took over the comic strip in 1998 after apprenticing with his uncles, George Gately and JohnGallagher. Targeting an adult and tween audience, the new Heathcliff will focus on comedy set againsta hip, club-music sound.

ROYALTIE$

SEPTEMBER 2009 7

DISCOVERY

ANNOUNCES SEASON

2 OF BILLY MAYS’SERIES PITCHMENDiscovery Channel’s Pitchmen, the

12-part series that features the late BillyMays II and his business partner,Anthony “Sully” Sullivan, will be backfor a second season. The show, which isproduced by Original Productions, adivision of FremantleMedia, takesviewers behind the curtain into the bil-lion dollar infomercial industry, asMays and Sullivan helped everydaymen and women bring their inventionsto the masses. Discovery Channel isdeveloping the format of season twowith Mays’ son, Billy Mays III,Anthony Sullivan, and Thom Beers,CEO of Original Productions. A pre-miere date for season two of Pitchmenhasn’t yet been set.

ROYALTIE$

SEPTEMBER 20098

NICKELODEON AND SPIN MASTERSpin Master has been named the master global toy licensee for Nickelodeon Movies’

upcoming theatrical release of The Last Airbender, the feature film slated to hit theatersnext July. The licensing deal between Spin Master and Nickelodeon and Viacom Con-sumer Products (NVCP) will produce a full line of products including action figures,vehicles, playsets, and more. The Last Airbender is a live-action adaptation of the an-imated Avatar series, which follows the adventures of the young martial artist namedAang. The film will be directed by M. Night Shyamalan.

SONY PICTURES AND CEACOCeaco has signed a deal with Sony Pictures to be the exclusive licensee for jigsaw puzzles

based on the upcoming Sony Pictures film Planet 51, due for release on November 20. Planet 51follows the adventures of astronaut John Baker as he tries to escape from the white picket fenceworld of Planet 51. Ceaco will offer three different 100-piece puzzles in its CeacoKIDS line, fea-turing the Planet 51 characters. The puzzles will be available in October at retailers nationwide.

SCIENTIFIC AMERICAN AND STONE AMERICA LICENSINGScientific American has named Stone America Licensing as the exclusive licensing agent

for the Scientific American brand. Scientific American, founded in 1845, is one of the oldestpublished magazines in the U.S. and has published articles on developments in modern sci-ence, medicine, and technology, with contributions from more than 140 Nobel Laureates. Stone Amer-ica will be presenting the brand as a science and technology consumer brand, with products in toys,games, consumer electronics, exploration, publishing, gadgets, apparel, and more.

UNIVERSAL PICTURES AND UBISOFTUbisoft has signed up to develop a video game based on Universal Pictures’ upcoming action-

comedy Scott Pilgrim vs. The World. The film stars actors such as Michael Cera, Kieran Culkin,Mary Elizabeth Winstead, Chris Evans, Brandon Routh, Mae Whitman, and Jason Schwartzman.The game is being developed by Ubisoft Montreal through a licensing agreement with UniversalPartnerships & Licensing and is expected to launch worldwide with the film’s 2010 release. Thegame will feature the same characters as the film.

DISCOVERY COMMUNICATIONS AND MERCHSOURCEDiscovery Communications will continue to develop its Animal Planet brand with a new deal

with MerchSource. MerchSource willl be producing Animal Planet-branded pet care productsincluding pet beds, blankets, leashes, and other items to debut at retail this fall. The productline will roll out in conjunction with the world premiere of the network’s pet celebration seriesSuperfetch, which follows pet trainer Zak George as he helps pet owners tranform their pets intoactive “trick jockeys” and strengthens the bond between pet and owner. Animal Planet leash

from MerchSource

CLASSIC MEDIA AND MULTIPLE LICENSEESFollowing up the 75th anniversary of The Lone Ranger, Classic Media has signed

a number of new partners to the brand. Now & Zen will be producing apparel at de-partment and specialty stores. Disguise will be releasing newLone Ranger costumes forHalloween. Lionel Trains has created a collectible The Lone RangerWildWest train set.Dynamite Entertainment will continue its comic books series of The Lone Rangerwithsix additional issues. Classic Media will also continue to hold The Lone Ranger liveevents and historic railroads and is releasing a 12-disc DVDbox set of The Lone Rangertelevision series as The Lone Ranger 75th Anniversary Collector’s Edition.

TARGET ENTERTAINMENT GROUP AND MULTIPLE LICENSEESTarget Entertainment Group has signed its first licensing deals for PlayStation software IPs. Impact

International will be producing plush and accessories for LittleBigPlanet in the UK, Ireland, and theMiddle East, featuring the game’s Sackboy character. Bravado Retail and Licensing will produce men’sand women’s T-shirts for LittleBigPlanet, MotorStorm, God of War, and Resistance, as well as retrobags. Brazier and Co. have signed up to produce a line of PVC figurines based on LittleBigPlanet. GBEye Limited will develop a range of posters, 3-D posters, postcards, and more for PlayStation brands.

MARS RETAIL GROUP AND MULTIPLE LICENSEESMars Retail Group has announced three new licensees for its candy brands. Candy-Scents, Inc., will manufac-

ture candy-themed air fresheners designed for bedrooms, cars, gym lockers, and more. The air fresheners will in-clude a line that features the M&M’s characters with popular scents such as fresh linen or coconut, as well asfruit-scented fresheners featuring Skittles. The Hillman Group will produce customized house keys featuring theM&M’s brand early next year. Ecoist will manufacture and market a line of handbags made from ob-solete candy wrappers and other packaging misprints from various Mars brands. The partnership willprevent more than five million candy wrappers from going to landfills, according to Mars.

ROCKY MOUNTAIN CHOCOLATE FACTORY ANDWHITE COFFEEWhite Coffee has announced a new licensing agreement with Rocky Mountain Chocolate Fac-

tory to introduce a line of flavored Rocky Mountain Chocolate Factory gourmet coffees. The newflavored coffees will be available in 12-ounce bags in four different flavors, representing popu-lar Rocky Mountain Chocolate Factory flavors. These flavors will be Dark Chocolate Truffle, English Tof-fee, Hazelnut, and Vanilla Caramel.

BOY SCOUTS OF AMERICA AND ROBERT KAUFMAN FABRICSRobert Kaufman Fabrics will be introducing a line of cotton quilting fabrics with

unique designs, including patriotic themes, in a new partnership with the Boy Scouts ofAmerica (BSA). The fabrics will include Scout symbols, including badges, as well as thevalues and laws of the Scouts. The product will be available in two color palettes: one for Cub Scouts and one for Boy Scouts.

ROYALTIE$

SEPTEMBER 2009 9

The Lone Ranger WildWest train set

Sackboy

Fashionably StrangeGator Group, recently appointed global licensing agent for

Emily the Strange, signed Atomic Fashion Marketing Pty Ltd.as a licensee for the teen brand. The blue Be Your Own Heromessenger bag is 100 percent PVC. It featurespockets both inside and out, a fullyadjustable 1.5-inch wide shoulderstrap, zip closure, metal feet, anda bold all-over screen print de-sign featuring Emily.

Palomita Panties at SearsPalomita, a junior fashion brand with a focus on the Latino

market, announced its launch of its new panty “calzones” line atselected Sears department stores and online at Sears.com. Thepanties feature designs that highlight popular logos and imagesfrom Hispanic consumer products and characters such asBOING!, Lulu, and Lulu Cola. Palomita sleepwear and under-wear is manufactured and dis-tributed under license by HYP,Inc. Palomita was created byMolly “Molona” Robbins, aMexico City native and apparelindustry veteran. She has securedexclusive rights to use trademarks andvintage art from an array of Latino com-panies. Palomita incorporates these colorfulgraphics, providing a platform for individualstyle. The logos range from beverage companiesand confection manufacturers to original designs.

ROYALTIE$

SEPTEMBER 200910

A Colorful Planet for KidsThe imagery of artist Todd Parr will make its way onto a line

of children’s clothes, under the brand Planet Color by Todd Parr.The apparel is available exclusively at department stores, in-cluding Nordstromin the Midwest andNortheast regions,and is intended forboys and girls ages18 months–6 years.The collection isfrom U.S. manufac-turer, Jen’s ideas.The Planet Coloritems available from Jen’s ideas will include T-shirts and ther-mals for boys and dresses and thermals for girls. Sizes will rangefrom 2T–4T. Embroidered baseball caps will also be on handfor both boys and girls in toddler sizes.Planet Color by Todd Parr was created and developed by Parr

and his marketing partner, SupperTime Entertainment.

Playing for ChangeAct III Licensing signed Ripple Junction to create T-shirts for

Playing for Change, a multimedia movement created to inspire,connect, and bring peace to the world through music. The idea forthis project arose from a common belief that music has the powerto break down boundaries and overcomedistances between people. Rip-ple Junction’s T-shirts cel-ebrate Playing forChange’s ability to har-monize with different cul-tures throughout the world. TheT-shirts will launch this holidayseason at specialty retailers.

ROYALTIE$

SEPTEMBER 200912

There are many factors to success in theworld of licensing, but perhaps one ofthe most basic tenets is to find a licen-

sor and a licensee that work well together. Theright combination of brand and licensed productis what can carry a licensing program to theappropriate consumers. “Much like fusion ener-gy being generated when two atomic nuclei col-lide, when the right brand intersects with theright licensee, the result is a powerful brand andnew sustainable business entity,” says JoshRomm, president of Fusion Brand Marketing &Licensing. It was that power that Romm had inmind when he founded Fusion Licensing.

Romm has more than 20 years in the licens-ing industry under his belt. Prior to foundingFusion Licensing, he held positions atNeutrogena, Mattel, EMI, and Warner Bros. Hecut his teeth in the industry as a brand managerat Neutrogena.At Mattel, Romm was initially abrand manager for Barbie before moving on towork with Mattel’s action figures. These posi-tions gave Romm experience and helped himform the strategic approach that he continues touse to this day. From Mattel, Romm went on towork with EMI and then Warner Bros., expand-ing the types of properties he worked with. Hewas responsible for signing high-end motorcy-cle manufacturer Ducati to the Warner Bros.Matrix brand, creating a series of limited-edi-tion motorcycles for the property. It was fromthis deal that the idea for Fusion Licensingbegan, as Ducati suggested to Romm that hehelp it build its own licensing program.

Romm went on to workfor Ducati as a consultantthrough his new company,Fusion Licensing. Hebegan working with otherclients on a consultingbasis, including the U.S.Postal Service. He helpedhis clients get a grip on theworld of licensing andestablish the frameworkfor successful licensingprograms. After complet-ing his work with thesecompanies, Romm steppedback and decided to change Fusion Licensing’sdirection. “I decided to take the career path Ireally wanted—to have a full-service licensingagency.” The company is now a full-servicelicensing agency that acts as a worldwide brandmanager for properties such as Blue Note,Daisy Rock, and more. The company also actsas a North American sub-agent for brands suchas the Royal Mail and a variety of artists, suchas Salvador Dali and Victor Vasarely.

For Romm, one of the key parts of buildinga brand and one of Fusion’s strong points is theability to assess the potential of a licensing pro-gram. “We have to go beyond just the client’sperspective,” he says. Many brands haveuntapped potential that can go ignored, whichRomm learned while working with brands suchas Road Runner and Wile E. Coyote at WarnerBros., where he connected these properties to

licensing programs forinsurance and tires.Romm took this ability tolook beyond obviousconnections to translatethe Blue Note brand into alifestyle brand. “We madethe label itself into abrand, connecting withlicensees such as MightyFine and Friend or Foe,”says Romm. This createdmore licensing opportuni-ties for the brand.

In addition, Rommnotes that Fusion Licensing’s job isn’t overonce a deal has been signed. “We are veryresults oriented,” he says. “We will roll up oursleeves and get to work.” Fusion will connectwith its clients’ marketing and PR departmentsto help establish and support the program.

As Fusion goes forward, Romm is lookingto take his out-of-the-box style of thinking andapply it to not just establishing brands, but inchoosing brands to work with as well. “We aregoing to look for brand opportunities that justneed a market now,” says Romm. Romm hasindicated that Fusion Licensing has actuallyseen more interest in its programs this year thanprevious years. “We’ve found our fit in the mar-ketplace,” says Romm.Adedication to strategiclicensing and a willingness to take a brand fur-ther than expected have become FusionLicensing’s winning combination.

JOSHUA ROMM, FUSION LICENSING

by Paul Narula

FROM THE DIRECTOR

SHAUN OF THE DEAD...

LICENSING IN U.S. & CANADA: 818-777-2067

INTERNATIONAL: 818-777-5694

RETAIL: 818-777-6716

PROMOTIONS: 818-777-5789

IN THEATERS

IN THEATERS

A LIVE ACTION

MAJOR MOTION

PICTURE FROM

UNIVERSAL

PICTURES

A LIVE ACTION

MAJOR MOTION

PICTURE FROM

UNIVERSAL

PICTURES

20102010Scott Pilgrim

vs. The World M

ovie © U

niversal Studios. Licensed by Universal Studios Licensing LLLP. A

ll Rights Reserved.

FROM THE DIRECTOR

SHAUN OF THE DEAD...

OF HOT FU

ZZ AND

OF HOT FU

ZZ AND

UNV254 ScottPilgrimAd_BillingBlock

Round Number: PRS

Special Instructions: Crop Marks and Dieline on separate layer and DO NOT PRINT.

Date Release Date

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ClientClient ContactAlternate ContactClient Mockup Needed?

In what Round?

ColorsTrim SizeOutput %Software Version Fonts

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PREPARED BY:

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ROYALTIE$

SEPTEMBER 200914

In 1974, Sanrio released a coin purse inJapan that featured an anthropomorphizedcat with a red bow on her head. Now, 35

years later, Hello Kitty’s image spans a line oflicensed products that range from toys to cos-metics to candy. Sanrio has continued to sup-port the Hello Kitty brandas it grew into a successfulinternational girls’ brand.This year, Hello Kitty cel-ebrates its 35th anniver-sary and Sanrio is furtherexpanding the brand withnew exclusive deals andcommemorative events.Though Hello Kitty

started as just an imageon a coin purse, Sanriohas expanded that imageto create a character thatgirls can identify with.Hello Kitty has a fullfamily, including a twin sister namedMimmy who wears different-colored cloth-ing. She also has a boyfriend, named DearDaniel, and has a number of hobbies, includ-ing traveling, music, reading, and more.Hello Kitty is also joined by a host of otherSanrio characters, including Badtz-Maru,Keroppi, Pochacco, and others, often ap-pearing in product lines with them or along-side them. Hello Kitty has also been thesubject of a number of television shows, bothin Japan and the United States. The character

has also appeared in a number of themedvideo games for multiple systems. Sanrio haseven created an MMOG based on the brand,called Hello Kitty Online, linked with thecompany’s Sanriotown website where play-ers can register for a free account.

Sanrio is celebratingthe successful brand’s35th anniversary in a num-ber of ways, with a pro-gram called Hello KittyColors. The Three Applesin LA & NYC art exhibitwill run from October toDecember in the U.S. Theretrospective/art exhibitwill feature modernartists, such as Ron Eng-lish and Buff Monster,showing their own inter-pretation of Hello Kitty’sdesign. The exhibit will

also include costume retrospectives, unusualHello Kitty merchandise, and more. In addi-tion, Sanrio will continue to expand the HelloKitty brand licensing program with new li-censees, such as MAC Cosmetics, Kodak, DellComputers, Swarovski, and more. iPhone ap-plications and accessories are also in theworks. More event and licensing deals willcontinue to be revealed this year. With HelloKitty remaining a strong brand after 35 years,one can only wonder what the next milestoneanniversary will bring.

SANRIO’S HELLO KITTY

Fast Facts

° The UK Royal Mint is

releasing a line of coins to

celebrate Hello Kitty’s 35th

anniversary, featuring Hello

Kitty at various UK attractions.

° Hello Kitty is as tall as five ap-

ples and weighs as much as

three apples.

°Hello Kitty is drawn without a

visible mouth to show that she is

not bound to one language, but

can “speak from her heart” to her

friends, family, and fans.

° The Hello Kitty character is

the Goodwill Tourism

Ambassador for China and

Hong Kong.

° Hello Kitty is one of the main

attractions at Sanrio’s

amusement park in Japan,

Sanrio Puroland.

by Paul Narula

ROYALTIE$

SEPTEMBER 2009 15

PACIFIC CYCLEPacific Cycle has announced the intro-

duction of new Hello Kitty-brandedbikes and protective gear. The com-pany will introduce a line of 12- and16-inch bicycles, as well asbicycle helmets and othersafety gear. The multi-year li-censing agreement permits Pa-cific Cycle to develop and distributebicycles, tricycles, protective gear, andmore for the U.S. and Canadian markets.

KODAK GALLERYSanrio has teamed up with Kodak Gallery to create an ex-

clusive Hello Kitty photo book featuring the Hello Kitty brand.Consumers can now combine their photos with Hello Kitty’s de-signs and characters using one of the photo books available atwww.kodakgallery.com.

MAC COSMETICSMAC Cosmetics has created

a full line of products based onthe style of Hello Kitty. Work-ing with Sanrio, MAC has cre-ated eyeshadow, lipstick, lipgloss, nail lacquer, and more,featuring the colors and stylesof the Hello Kitty brand.

HAWAIIAN HOSTHawaiian Host will be selling a new line of

candy that features Hello Kitty in Hawaiian dress,including a grass skirt, lei, and hibiscus flower, onthe package. The chocolate-covered macademianuts will be available in single boxes or in a HandyPack of six boxes in a collectible plastic bag witha Hello Kitty bracelet.

PURE DIGITAL TECHNOLOGIESSanrio has partnered with Pure

Digital Technologies to introduce newHello Kitty Flip Mino camcorders.The camcorders are compact, weigh-ing roughly three ounces, and comewith a built-in USB port, an internalrechargeable battery, and two GB ofon-board flash memory for 60 minutesof high-quality video. The camcordersalso feature Flip Video’s new Flip-Share on-board software platform,which allows the camcorder’s flip-out USB arm to pluginto any computer for video organizing and sharing.

Whentimes are tough, even success-ful and well-known brands canfeel the pinch. The past few years

have seen a number of formerly strong compa-nies buckle under the pressure of the economyand a changing world. However, to declarethese companies gone would be premature. Astrong brand name can last for a long time.Sometimes, all it takes is the right steps to revi-talize a brand.And revitalizing a brand is one ofthe specialties of Hilco Consumer Capital.

Part of the Hilco Organization group ofcompanies, Hilco Consumer Capital (HCC) is aprivate equity firm that invests in consumerproduct retailers, wholesalers, manufacturers,and intellectual property, specifically focusingon North American properties with strong con-sumer brands. The company focuses on proper-ties and brands in the categories of consumerelectronics, sporting goods, fashion, home, andiconic personalities. Recently, in a partnershipwithGordonBrothers Brands, HCC secured theassets of major brands that have fallen intobankruptcy and ceased their normal businessoperations, such as Polaroid, Linens ’n Things,and The Sharper Image, which Hilco intends toredesign into strong brands once more.

One of the things that attracted Hilco tothese brands was the high level of awarenessthat each company possessed, even whilefalling into bankruptcy. “Brand awareness iskey,” says James Salter, CEO of HCC. “Forexample, in Polaroid’s case, the brand aware-ness was nearly 100 percent in the U.S. andCanada.” Hilco also examines potential brandexpansion and demographic appeal beforechoosing to acquire a company’s assets.

Part of the reason that HCC is able to moveforward with restructuring companies likeLinens ’n Things and The Sharper Image is thatit is supported by all arms of the HilcoOrganization. “When we show up at an auctionor a meeting, it’s not just Hilco ConsumerCapital showing up; it’s all of us,” says Salter.By utilizing thisadvantage, HCCcan quickly turn abrand around.

Once Hilco has pared down its acquisitions,it begins working to expand the intellectualproperty into a successful business. InPolaroid’s case, the company decided to expandthe brand past the core business into new cate-gories. Polaroid’s licensees include SummitGlobal for digital and video cameras,StyleMark for eyewear, Pandigital for digitalphoto frames, and others. For companies suchas Linens ’n Things and The Sharper Image,HCC converted the base of the business frombrick-and-mortar storefronts to purely internet-based retail outlets and independent retailbrands (there are currently no immediate plansto work with the remaining Sharper Image realestate and Hilco does not own the Linens ’nThings real estate.) “While the storefronts wereimportant, we felt there was much more to thebrand,” says Salter. To garner more interest inthe new online and retail brand incarnations ofthese former retailers, Hilco utilized a series oftargeted e-mail blasts for Linens ’n Things,combined with affiliate marketing. The compa-ny avoided direct consumer advertising for TheSharper Image, instead focusing on buildingretail relationships for the brand.

The new online version of Linens ’n Things,LNT.com, will focus on bedding, bath, kitchen,toys, pet products, décor, home electronics, andbaby products. The target demographic willremain mostly women 25–65, married withchildren. Sharper Image’s online storefront,sharperimage.com (which will officially launch

this fall), will offerSharper Image brandproducts for a numberof demographics in a

variety of categories, from health and wellnessto fitness and travel, including third-party goodsand non-branded Sharper Image products.

Of course, Hilco’s business isn’t relegated tosimply reviving brands in trouble. The compa-ny was named as manager of the House ofMarley brand, which represents the work forlate artist Bob Marley and his family. HCC willbe responsible for developing, building, andlicensing the BobMarley 65thAnniversary pro-gram for 2010, as well as other Marley-relatedbrands such as One Love, Tuff Gong, andmore.

Hilco Consumer Capital will continue tostick to the categories it has built relationshipsin. “We’re going to stay with our formula sothat we can continue to work with the samepeople,” says Salter. However, there are majordevelopments in the works for the Hilco organ-ization as a whole, as the arms of the companywill eventually be brought under one roof.Salter attributes this to the strength of thosemanaging HCC’s brands. “When you havegood managers, you’ve got a good company,”he says. As HCC continues to manage brandsfrom bankruptcy into the limelight, it seems likeall of Hilco seeks to follow that example.

HILCO CONSUMER CAPITAL: BRINGING BRANDS BACK

ROYALTIE$

SEPTEMBER 200916

by Paul Narula

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The word “home” can mean differentthings to different people. For some,it’s a house in the suburbs. For others,

it’s a townhouse in the city. However, regardlessof the meaning of “home,” the meaning of thephrase “home improvement” is universal.Whether it’s redecorating, gardening, renovat-ing, or entertaining guests, people have beenlooking for advice on how to make the most oftheir homes for years. One of the most trustedsources of this advice is the television networkknown as HGTV. The 24-hour network featuresshows that cover a wide variety of topics, rele-vant to today’s homeowner, and features per-sonalities such as Kim Myles (Myles of Style),Chris McWatt (Weekend Warriors), andRebecca Kolls (Rebecca’s Garden). The chan-nel also has a strong presence at HGTV.com.Asthe channel’s popularity has grown, HGTV hasnamed The Beanstalk Group the exclusivelicensing agent for the developing HGTVlicensing program.

The Beanstalk Groupbelieves that the time isright for HGTV to expandinto a consumer productsbrand. “There is a trendthat seems to be growingin people caring more andmore about their homes,”says Michael Stone,CEO/president of TheBeanstalk Group. “People are traveling less.They’re looking indoors. It’s all about comfortand being home.” In addition, the recent hous-ing market downturn has actually resulted inincreased HGTV ratings. The network has

adapted its programming to suit the times byintroducing new shows that focus on helpingconsumers buy and sell in a down market andhow to redecorate on a budget. Since buying anew house today is prohibitive, more con-sumers are looking at ways to build up whatthey already have either for their own sake or asan investment in the future. “This creates acompelling opportunity for the home categoryin consumer products, and a perfect opening forHGTV to enter the market with educational andinspirational products,” says Stone.

This consumer trust is a part of what willmake the HGTV brand appealing to a licensee.“We want to take that dynamic of trust andadvice and turn it into products that will helppeople style their homes and solve their prob-lems,” says Stone. Not only will licensees beable to capitalize on the growing trend thatStone points out, but they will be able to do sowith a brand that has already established a greatdeal of goodwill with the consumer base.

HGTV reaches nearly100 million homes andthe website receives morethan five million uniquevisitors a month. HGTVwill be providing supportfor the brand via televi-sion and internet advertis-ing on its channel andwebsite. The channel also

has a number of personalities that could supportthe licensing program through use of the HGTVproduct line on shows or in featured spots.“There’s a lot of marketing power that HGTVcan bring,” says Stone.

The Beanstalk Group will focus the HGTVbrand around the four cornerstones of the tele-vision channel’s programming—decorating,renovating, landscaping, and entertaining. Thebrand will appeal to the channel’s core viewers,which are women that span the 25–54 agegroup. “Consumers tend to make home productpurchases at key life stages: their first apart-ment, their first house, a major renovation,among other key events,” says Stone. TheHGTVbrandwill help “demystify the shoppingexperience” for consumers, according toStone—whether they are first-time home own-ers examining their options or empty-nestersgetting back into home improvement.“Products are going to appeal to this widedemographic because of their solution-orientedpositioning,” says Stone.

As a result, this is also one of the few brandsthat will have a distinct appeal to the over-40female consumer, which is a demographic thatis often overlooked in the licensing businessdespite its purchasing power.

The intended range of products means thatno one retailer will carry all of the HGTVproducts. Gardening tools and hardware willshow up at gardening, hardware, and do-it-yourself outlets. Many products will be avail-able at mid-tier department stores. While TheBeanstalk Group could not make anyannouncements at press time, HGTV productis expected to hit the shelves in late 2010.Stone is confident in the brand’s potential, asaccording to him, “At the end of the day, con-sumers look to HGTV for advice, informa-tion, and inspiration, and that’s what theHGTV products will bring them.”

BUILDING A HOME BRAND

ROYALTIE$

SEPTEMBER 200918

by Paul Narula

Michael Phelps, Chris Brown, AlexRodriguez, Martha Stewart, Jon& Kate Gosselin: What do all of

these celebrities have in common? They haveall been a part of celebrity endorsement cam-paigns, licensing programs, or prospectivelicensing campaigns. Well, that, and they allhave received high-profile negative publicity.What is a brand owner to do when a celebri-ty client goes off the rails? Does it mark theend of the marketing campaign or is it truethat there is no such thing as bad publicity?These questions are not easily answered

and the answers depend on many factors. Thecase of Michael Phelps is a perfect exampleof two sides of this coin. The 20-somethingOlympic Gold Medal winner was pho-tographed smoking some weed out of a bongand news of his youthful transgression spreadlike wildfire. Did the incident spell the end ofhis lucrative endorsement career? Well,Kellogg’s almost immediately cut him, whileSubway is still forging on with its Phelpscampaign. What is the difference betweenthese two? Kellogg’s, whose key market ismoms buying for their family, knew that itsconsumers may not like to convey that doingdrugs is alright to their families. On the otherhand, there is Subway. Subway basically said,what was the transgression? He was caughtsmoking pot and a lot of people smoke pot, solet’s see how the public reacts to this. Thedetermining factor that both of these brandsanalyzed is how public opinion, and their coreconsumers in particular, reacted.In the case of Kate Gosselin, who is in the

midst of a messy, public divorce, the verdictis still out on public reaction and how it willeffect her licensing and endorsement poten-

tial. For instance, her clothing line promotiondeal with Healthtex is up in the air.Living celebrities are human, and as

humans they are prone to making huge mis-takes, sometimes exercising poor judgment,and going off the rails. So why use them asendorsers in the first place?“You have a very limited amount of time in

a very crowded market to capture a con-sumer’s attention,” says David Reeder, vice-president of GreenLight, an entertainmentconsultancy that is comprised of a traditionalrights-clearance business as well as rights rep-resentation for iconic estates. “Celebritieshave instant recognition factor and have beeneffective in capturing a consumer’s attention.”GreenLight focuses primarily on

deceased celebrities and their estates with itsportfolio. This protects them from the kind ofnegative publicity that can affect livingcelebrities. The public has processed, andsometimes even mythologized, the deceasedcelebrities’ past transgressions.The potential downside of using a living

celebrity as the face for a brand is so great thatsome marketers are weary of the practice.“There is no upside; it is all downside,” saysRob Frankel, a branding expert and author ofThe Revenge of Brand X: How to Build a BigTime Brand on the Web or Anywhere Else. “Solong as celebrities are human, they are going todie, get in trouble, or say something really stu-pid, which will drag the brand down with it.”The risk of dragging a brand down with

celebrity transgression seems to weigh moreheavily in the world of celebrity endorse-ments in advertising than in the licensingworld. There are some high-profile examplesin licensing that highlight this.

“At the height of our Mary-Kate &Ashleyprogram Mary-Kate went to rehab for an eat-ing disorder, Britney Spears crashed a year ortwo ago, and Martha Stewart went to jail andthere were no blips in the sales of consumerproducts,” says Michael Stone, president ofThe Beanstalk Group. “The only conclusion Ican draw from this is that the American pub-lic is very forgiving—as long as a celebrityhasn’t committed some heinous crime theywill forgive you. They will forgive an eatingdisorder, a meltdown, and securities fraud.”While the American public can be very

forgiving, they do draw a line and the adagethat there is no such thing as bad publicitydoesn’t always ring true. Because of theseverity of the crimes that he plead guilty to(assaulting his then-girlfriend, Rhianna), it islikely that Chris Brown will never again bethe face for a brand. And even though theNFL reinstated him, Michael Vick, who pleadguilty to federal dogfighting charges, willhave a hard time rehabilitating an image thatwas beyond-tarnished because of the crime.Managing celebrities as endorsers or as an

intellectual property is never easy. Sometimesbad publicity can make a celebrity (ParisHilton, anyone?) and other times a sulliedcelebrity’s connection to a brand can tarnish it.There are so many ins and outs and there areno easy answers. The upside can be tremen-dous, but that potential isn’t without risk.

ROYALTIE$

SEPTEMBER 200920

by Chris Adams

Michael Phelps: a taleof two endorsements

SULLIED CELEBS AS BRAND REPRESENTATIVES

All companies experience crisis sit-uations. But it’s how a companydeals with that crisis both internal-

ly and externally that makes all the differ-ence in not only solving the problem but inmaking sure the brand emerges strongerthan before the crisis began.Those interviewed for this piece cited

the 1982 recall of Tylenol, which stemmedfrom the death of seven people whounknowingly ingested tampered capsulesthat contained cyanide, as the benchmarkfor perfection when handling a crisis. Yetwhen discussing what not to do, many citedthe Perrier benzene situation. In 1990 astudy found benzene at Perrier’s watersource, discrediting its claims of purity.Although no one was harmed and a mas-sive recall went into effect, the companyflip flopped on the reasoning and wasalways behind the story. Some interviewedsay that the company never fully recoveredfrom the bad publicity.Over the past few years, there have been

numerous recalls including pet food, humanfood, juvenile products, tires, vehicles, etc.The toy industry, most notably, experiencednumerous recalls and bad publicity. Therewas Mattel, HIT Entertainment, RC2,MEGA Brands, and Spin Master, among oth-ers. Yet what places one company ahead ofits crisis while another missteps behind andnever recovers? Those interviewed offeredtips on how to tackle a crisis.

RULE NO. 1: The first rule may seemincredibly obvious but it’s one that is oftenoverlooked and it’s simply: don’t panic.“Everyone’s first instinct is to react,” saysHarold Chizick, vice-president of marketing

and corporate communications for MEGABrands. “Stop. Think. Evaluate the situationand then ask yourself what you are not think-ing about. Make sure you have all the infor-mation and the right people to discuss the sit-uation,” he says. Chizick also recommendsinvesting in outside help, depending on theseverity of the crisis. A firm that specializesin crisis management can help a company seethings from a different vantage point.

RULE NO. 2: Internal communicationis key. First, address the situation withemployees. “Employees are your first duty,”says Susan Tellem, partner in TellemWorldwide. “You have a responsibility tokeep them in the loop. They are going to feelleft out if you don’t communicate and that’swhen the rumor mills really get going.”It’s important that employees under-

stand the situation and are given a clearand consistent message because they aregoing to be on the front line talking to thetrade and consumers.It’s also important for the employees to

remember their role in the brand’s message.“It’s not just some logo,” says Brian Rafferty,managing director of research and strategy forThe Brand Union. “It’s the reputation of thecompany. It’s what all the work stands for.”

RULE NO. 3: Communicate to thepublic/take ownership of the situation.Regardless of the severity of the situation,companies must make an immediate statement.“Consumers need to know that they are dealingwith a company that cares and has a plan inplace and a solution for them,” says Chizick.Certainly in some cases the less said the

better for legal reasons, yet the worst thinga company can do is say nothing and hope

the story goes away. It certainly won’t goaway and in taking this approach it’s onlygoing to escalate.“It doesn’t have to be big news but small

intermittent information that you are ‘work-ing on the situation,’ or ‘are fully cooperat-ing with the agencies involved’ lets cus-tomers know that something is happening,”says Tellem. “Give non-specific updates ona regular basis that give people the feelingthat you are on top of it. Do it again andagain until the crisis passes.”Those interviewed noted that all mes-

sages should come from a CEO or similarperson at the top. There should be onepoint person with a consistent messagedelivered from a prepared statement. Don’tlet this person do interviews, but state-ments should be released.

RULE NO. 4: Remember who youraudience is and address them according-ly. Reach the public in the same mannerthat the story first took off. If you are get-ting bad publicity from high schoolers onFacebook it will not do you any good tohave CNN’s Lou Dobbs interview the CEOfor a response. Get the CEO on Facebook.Don’t discredit the power of social media

and don’t fear it. So many of these storiesare now born on the web. Social media canbe an asset to a company. It comes off as amore personal way to address consumerscompared with issuing press releases.This is where employees can be so cru-

cial. Companies that have deep corporatecultures such as Johnson & Johnson orCoca-Cola have employees with an affinityfor the brand, which they are anxious todefend. Johnson & Johnson has even used

MANAGING THROUGH A CRISIS

ROYALTIE$

SEPTEMBER 200922

by Nancy Lombardi

employees in ads to put a human face onthe corporate name.“Your workforce can be your brigade

putting out fires,” says Dr. Peter Sealy, whoserved as the first global marketing directorfor Coca-Cola.

RULE NO. 5: Move quickly. The story isgaining traction and it’s imperative to get outin front of it. The days of issuing a pressrelease a few days later are over, says Dr.Sealy. “At one time you had days to respond,”he says. “Now you barely have hours.”Crisis management has become even

more important during the age of socialmedia, according to Lerzan Aksoy, author,

expert in loyalty management, and associ-ate professor of marketing at FordhamUniversity. “Companies can’t hush things,”she says. “Consumers have the power.”This was evidenced by the “United

Breaks Guitars” video that received morethan five million views on YouTube. It’s asong by musician Dave Carroll, frustratedby the non-response from United Airlinesafter handlers broke his guitar. Judgingfrom the articles on the internet about thissituation, this can now be filed under “whatnot to do” when dealing with bad publici-ty—or handling customer service for thatmatter. United Airlines should have nipped

this in the bud. They didn’t and now Carrollhas a sizeable web following.Now that you have addressed the situa-

tion immediately—and with the right mes-sage—use this crisis as an opportunity toreinforce the positive attributes of the brandin statements to the media. A brand is allabout perception, according to BrandUnion’s Rafferty, and it’s all about how youinfluence that perception.Now is the time to ramp up positive com-

munication with the public through themedia, traditional ads, and through socialnetworking. The crisis can turn into a posi-tive for the brand if it is dealt with correctly.

ROYALTIE$

SEPTEMBER 2009 23

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As the recession drags on, the mediahas been focusing its stories on howconsumers can save money. There is

a back-to-basics movement in progresswhether it’s growing your own vegetables, uti-lizing the library, bartering with neighbors, orpurchasing private label items, particularly inthe supermarket. For consumers who alreadylive their lives in this manner, listening to themedia talk up frugality makes them laugh. Yetit is no laughing matter to many consumergoods companies whose sales are being hurtby consumers who have switched to privatelabel, forgoing the brand names they havebeen purchasing for years—oftentimes with-out a thought given to its price.The Private Label Manufacturers

Association (PLMA) commissioned GfKCustom Research North America to conduct apoll of nearly 800 main household groceryshoppers. The poll, conducted in June 2009,showed that “nine out of 10 shoppers agreedthat the store-brand products they buy are justas good as, or better than, national brand prod-ucts. Additionally, 91 percent of those polledsaid they will continue to purchase storebrands once the recession is over.”While it may be true that private label is just

as good as, or even better than, the nationalbrands, it is impossible to predict the actualnumber of shoppers who will stick with privatelabel once the recession ends. It can be arguedthat the frugality movement that is now under-way is nothing more than a passing fad and onceoverconsumption comes back into fashion, theAmerican mindset will once again swing theother way. Those interviewed all surmised thatconsumers will switch back to the nationalbrands they once purchased, even though thepolls say otherwise, because their reason forchanging was only temporary to begin with.In the meantime what can national brands do

to stop consumers from making the switch to

private label? Those interviewed agree thatnational brands can’t compete on price so theconcept of value needs to be redefined.“National brands have to make value

something other than dollars and cents,” saysScott Lucas, executive director, Interbrand.“It has to be about product performance, trust,emotional connection, innovation.” It has tobe about anything but price.He explains that a price-based conversation is

a short-term fix. “Once national brands introducecouponing they encourage consumers to startthinking dollars and cents and compare prices,”says Lucas. In that type of scenario the nationalbrand will lose to the private label every time.Selling a product based strictly on price

leads the brand down a slippery slope. “If youare not careful, you can let the brand nameslip and once it slips, it’s hard to get it back,”says Jamey Boiter, principal, in charge ofbrand and strategy development for BOLT.The brand name vs. private label discus-

sion seems to be most pronounced in thesupermarket and part of the reason, accordingto Bill Cross, vice-president of restaurant andfood brand licensing for Broad StreetLicensing Group, is that the national foodbrands have done a terrible job fighting pri-vate label. They are not taking it seriouslyenough and, in some cases, they are manufac-turing the private label products, says Cross.“Stop manufacturing for your competitor

and make sure that your brand has distinctivevalue points,” he says. “One of the best ways todo this is through food licensing, for examplewith restaurant-licensed products.”PLMA agrees that licensing will become

more important over the next three to five yearsas retailers try to become more sophisticated intheir offerings, according to Brian Sharoff,president. National brands vs. private label is amuch more complicated marketplace thanWalmart ketchup vs. Heinz ketchup, according

to Sharoff. “That is an oversimplification thatdoesn’t reflect what’s out there,” he says.What is out there, he explains, are stores

such as Whole Foods, Trader Joe’s, Aldi, andSafeway that have developed extensive, highquality product lines “that have driven storebrand sales over the long-term,” he says. “It’sin that mix that licensing can start to have anappeal for further differentiation.”Although not part of the supermarket dis-

cussion, those interviewed mentioned Sears’Craftsman and Kenmore brands as examplesof successful private label brands. No onethinks of them as private label but they are.Also, “look at Archer Farms within

Target,” says Marty Brochstein, senior vice-president of industry relations for LIMA.“Probably on one level people know it’s aTarget brand but you don’t see it referred to asthat.” This could be a whole new opportunityin licensing because, for example, ArcherFarm could do a deal with Disney, SesameWorkshop, or just about anyone else.

WHAT’S NEXT?Once the economy turns around those

interviewed expect there to be many changesat retail. The entire sector has a long, uphillbattle ahead. However, what remains to beseen is just how much the mindset and shop-ping habits of the American consumer havechanged or will change.This will either be “a protracted period of

difficulty or a protracted period of opportuni-ty,” says Sean Heitkemper, vice-president ofbusiness development for IMC Licensing.Either way it’s been a profound period ofchange. It’s one that is not easy to define.There are many sectors within national foodbrands, many facets of private label, and vari-ous aspects of licensing that all are crossingover in ways never before seen and whoselasting impact has yet to be determined.

BRAND NAME VS. PRIVATE LABEL: REFRAMING THE CONCEPT OF VALUE

ROYALTIE$

SEPTEMBER 200924

by Nancy Lombardi

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Michael Jackson died on June 25,2009, at the age of 50, and fornearly 45 of those years he was a

global entertainer. In that time, he wentthrough numerous phases—some of whichare unforgettable for positive as well as neg-ative reasons. Despite what one’s opinionmay be about the man or his music, no onecan deny that the King of Pop is poised tobecome the King of Merchandise. As largeas he was in life, a merchandising programmay make him even larger in death.Michael Jackson is unique among the

many deceased celebrities whose estatescontinue to be successful. Those inter-viewed for this piece were quick to compareJackson to Elvis Presley, whose estate isvery successful more than 30 years after hisdeath. The comparison stems not just fromfinancial success but in how their lives mir-rored each other in tragedy and triumph. Yeteven with the comparisons to Presley, allinterviewed expect Jackson’s program to be

much larger. (Elvis Presley EnterprisesLicensing Division declined an interview.)“There is a bigger market for Michael

Jackson than for any other deceased celebri-ty,” says David Reeder, vice-president ofGreenLights Rights Services. “Elvis is cur-rently the benchmark but Jackson is a muchbigger star than Elvis, especially globally. Youalso have to remember that when Elvis diedthere were simply less people on the planet topurchase stuff than there are today. In thattime the population of the world has grownexponentially and places such as China haveopened up [to merchandising],” says Reeder.

When referring to deceased icon status,others mentioned Marilyn Monroe, JamesDean, and Bob Marley. Yet Elvis Presley,Marilyn Monroe, and James Dean are allquintessential American icons. Bob Marley isalways associated with Jamaica. MichaelJackson is a true worldwide icon. ElvisPresley died in 1977 and in the 30-plus yearssince his death the world has been trans-formed through technology. Events areinstantaneous and global, making the impactof Jackson’s death a worldwide event.Jackson is set apart from so many other

entertainers for another reason. He is relevantfor so many generations. Each generation offans associates him with an era of his life thatmirrored an era of the fan’s life, whether it’sthe Jackson 5 years, theOff the Wall, Thriller,Bad, or Dangerous albums.When Jackson died, fans were quoted as

saying a piece of their childhood died withhim—and at that point all the negative public-ity that surrounded him over the past fewyears was suddenly forgotten. As is often thecase with entertainers, their deaths take on

this mythic quality freezing the entertainer’spositive attributes in the fans’ collective psy-che and washing away the negative.

Jackson-Approved Products

In the months before his death, Jacksonwas practicing for 50 live performances thatwere to have taken place beginning July 8through the end of September at London’sO2Arena. The tour was to resume in January2010 and run through February. The 50 per-formances, called the “This Is It!” Tour, werereportedly to pay off a staggering amount ofthe debt that Jackson had incurred.In addition to the live performances, a

licensing agreement was signed withBravado for the company to manufactureglobal merchandise for the tour, whichBravado also had the right to sell into retail.Now a recently signed new agreement

builds upon the deal already in place betweenBravado and AEG Live, promoter of the “ThisIs It!” Tour, that placed Bravado as the exclu-sive merchandiser for Jackson’s London tour.With this new deal, which has been done

directly between the estate and Bravado, thecompany will now exclusively create, mar-ket, and distribute the majority of MichaelJackson-related products on a global basis.“We met with Michael in May,” says Tom

Bennett, CEO of Bravado. “We got a real out-line from him as to what he wanted. A monthlater when we presented him with ideas, hehad quite an extensive retail and merchandis-ing vision for himself. Unlike a lot of othermusical acts, he was very keen on merchan-dising. Going back to the 1980s there were alot of merchandising deals for him. This was-n’t new; he had done it before,” says Bennett.

MICHAEL JACKSON: THE KING OF MERCHANDISE

ROYALTIE$

SEPTEMBER 200926

by Nancy Lombardi

The More Things Change theMore They Stay the Same. . .

July 23, 1984—25 years ago this summer—thisquote from Jack Friedman, then president of LJNToys, now CEO of Jakks Pacific, ran in a numberof newspapers about LJN’s Michael Jackson doll.

“It probably won’t make anybody forget thereal thing. After all, it cannot sing and dance.And it stands just 12 inches tall. But its makerundoubtedly hopes the public will think it’s athriller. It’s the Michael Jackson doll. ‘MichaelJackson is the No. 1 talent in the entertainmentbusiness today,’ said Jack Friedman, presidentof LJN Toys. ‘People love his music, his sense ofstyle. And we think young people, both boysand girls, will love the Michael Jackson doll.’Each doll comes with a glittering silver gloveand a model of a handheld microphone.”

Bravado’s Michael Jackson OfficialStore at MichaelJacksonMerch.com shows ahost of items currently available worldwidethat were approved by Jackson for theLondon shows. In addition, these items arealso now available in the U.S. at JCPenney,Kohl’s, and Target, among others.

These products coincide with the release ofSony’s Michael Jackson: This Is It, which isexpected to release on October 28. The moviewill feature rehearsals as well as behind-the-scenes footage from the planned London tour.Tickets go on sale at the end of this month.Sony’s Columbia paid a reported $60 millionfor rights to the project. The deal was reachedwith Columbia; concert promoter AEG Live,which is looking to recoup money invested inthe London concerts; and Jackson’s estate.

Bennett explains that the products currentlyon the market are, in a sense, movie-relatedproducts because these are the pre-approveditems that Jackson greenlit for the concerts.

The Next Step

Bravado is now in the process of crafting alicensing program for Michael Jackson for thelong-term. Initially, there are time-sensitivelicensing deals such as calendars, posters, andHalloween costumes that will be signed with-

in the next two weeks. The goal is to haveitems on shelf for the remainder of 2009,according to Bennett.

From there, Bravado will craft a programwith the estate. “We will be very selective.We have a lot to do in a short time and we arelooking to work with the top licensees in eachcategory,” says Bennett. “We don’t want totake risks with this. We will watch the ElvisPresley licensing program carefully to seewhat has worked and what hasn’t.”

Bennett points out that product is expect-ed to be on shelf in 2010 globally.

Stop the Counterfeiting

As Bennett points out, the company has alot to do in a short time. Part of the reason isthe estate wants to feed the demand from thefans. The other reason is the estate wants tofeed that demand by placing officiallylicensed merchandise in stores/online. Theestate must combat the avalanche of counter-feit material that is being produced.

It is really important that the estate goesafter the counterfeit items, according to PaulCohen, vice-president of Hilco ConsumerCapital, which manages the Bob Marleybrand. “It’s not the small mom-and-popoperations that are the problem. It’s the bigcompanies that have manufacturing capabil-ities overseas that are penetrating develop-ing territories such as South and CentralAmerica, India, and Asia where brand pro-tection is paramount,” Cohen says.

But going after these groups will certain-ly pose a challenge. “One of the key thingsis enforcement,” says GreenLight’s Reeder.“You don’t want to cheapen the brand notjust with inferior merchandise [from unau-

thorized product] but with a glut of mer-chandise [from legitimate licensees]. Therewill always be the ‘garage makers’ of T-shirts but if you have dedicated licenseesthen there are many ways for it to be taste-fully done. That will overcompensate forthe junk out there,” explains Reeder.

Certainly Bravado agrees. “The good newsis the retailers are always very careful aboutwhat they buy,” says Bennett. “They makesure they are authentic, official products.”

Bennett explains that Bravado deals withcounterfeiting on a regular basis due to thenature of its clients. “We hired a ton of peo-ple and now we just have to expand quite dra-matically,” he says. “We have legal teams inplace from Japan to Korea to Australia to theU.S., UK, and Europe. It’s going to be a bigtask but we are up for it and should make a lotof headway in the next 30 days.”

Now that all facets of the plan seem to betaking shape, the world will watch the lega-cy of Michael Jackson unfold. ElvisPresley’s estate made an estimated $50 mil-lion-plus last year. Those interviewed esti-mate that Michael Jackson’s estate could farexceed that, which is good news for themusic and licensing industries.

Top-Earning Dead Celebritiesin 2008 (as of October 2008)

1. Elvis Presley—$52 million2. Charles M. Schulz—$33 million

3. Heath Ledger—$20 million4. Albert Einstein—$18 million5. Aaron Spelling—$15 million

Source: Forbes Magazine throughBBC.com article, August 2009

Fast Facts

Bravado has the global rights to exclusivelycreate, market, and distribute

Michael Jackson-related products.Visit MichaelJacksonMerch.com

The music rights from the Jackson 5 yearsuntil the launch of Jackson’s solo career

are retained by Motown, which is ownedby Universal Music. Universal also ownsBravado. The rights for the Off the Wall

album and the remainder of his solocareer are retained by Sony Music.

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ICSC REORGANIZESThe International Council of Shopping Centers, Inc., (ICSC)

announced a strategic reorganization of the department that or-ganizes the association’s deal making and trade shows. Thechange will enable ICSC to better serve its members’ needs witha team of professionals dedicated to facilitating all exhibitionaspects, including sales, setup, and on-site coordination.In addition to the supervision of the Leasing Mall and Trade

Exhibition at RECon, the world’s largest retail real estate con-ference, the Deal Making and Trade Show Services Team willhave oversight of the exhibits at the New York Deal Making,Chicago Deal Making, RetailGreen Conference, Asia Expo,RECon Latin America, Fusion, Canadian Convention, WesternConference, and Retail Connections Europe.Tim McGuinness, staff vice-president, global trade exposi-

tions, has assumed responsibility for ICSC’s Deal Making andTrade Show Services Team. He joined ICSC in June 2008 afterspending four years as executive director at NYC & Company,the convention and tourism bureau for the City of NewYork. Inthat role he managed the tourism, convention sales, member-ship, and visitors information centers.Reporting to McGuinness are Rita Malek, global trade

show sales manager; Douglas E. Lugo, trade expositionsplanner; Peter Bordes, coordinator of leasing/deal making;Sally Stephenson, senior advertising executive; and SuzanneTanguay, global sales manager. Assisting the department areLiz McKinney, trade exposition coordinator, and VivienZhang, project assistant.Phyllis Peterson, who built ICSC’s trade show and deal mak-

ing programs from small local events into large and productivecommercial real estate business-to-business venues, is retiringfrom ICSC after 31 years with the organization.

KIDZ BOPSASHA JUNK, VICE-PRESIDENT, PUBLIC RELATIONSKidz Bop named Sasha Junk as

vice-president, public relations. In hernew role with the music brand for kids,Junk will employ her broad experienceto develop and promote Kidz Bopbrand platforms, including audio andconsumer products, website, liveevents, brand extensions, and strategicpartnerships across all media platforms.In addition, she will work closely withthe management team to build further momentum for the com-pany’s website, KidzBop.com.

Junk was most recently the senior vice-president and managingdirector at TheMorris + King Company. There she spearheaded inno-vative publicity campaigns for the company’s client roster includingAOL,ClassicMedia, Dolphin Entertainment, Broadway producerKenDavenport, Marquis Jet, and The Ritz-Carlton Club.

FRANK SINATRA ENTERPRISES ANDRHINO ENTERTAINMENTSARA NEMEROV, SENIOR VICE-PRESIDENT OFCONSUMER PRODUCTS AND BRAND LICENSINGFrank Sinatra Enterprises and Rhino

Entertainment hired Sara Nemerov as sen-ior vice-president of consumer productsand brand licensing. She will be chargedwith handling the consumer products pro-gram for Frank Sinatra Enterprises (FSE),and similarly for Rhino-affiliated artists.Nemerov will be identifying and securingnew opportunities featuring Frank Sinatra’sname and likeness, as well as expandingexisting FSE efforts. Nemerov will alsohandle licensing with respect to other artists within Rhino. Ne-merov joins Rhino and FSE from The Trump Organization, whereshe was most recently vice-president of global licensing.

MARVEL ENTERTAINMENT, INC.THEO PAPHITIS, INTERNATIONAL ADVISORY BOARDMarvel Entertainment, Inc., added Theo Paphitis to the com-

pany’s International Advisory Board. Comprised of business lead-ers from key international growth markets, the Advisory Boardworks with Marvel executives to explore opportunities for ex-panding the presence of the Marvel brand and key character fran-chises in international markets.Paphitis is an entrepreneur who acquired and revived notable retail

brands, including Ryman the Stationer, Contessa and La Senza lin-gerie chains in theUK, Partners the Stationers and Stationery Box, andturned them into profitable businesses. He combined the stationerybusinesses under the Ryman Group, where he is now chairman. Pa-phitis sold his interest in La Senza and Contessa in 2006 and now re-tains a minority share. In 2005 he acquired Red Letter Days, the UK’sleading gift experience company, in partnershipwith Peter Jones. Ear-lier this year, he was appointed patron for Skillsmart Retail, the Sec-tor Skills Council for Retail, which is committed to driving up skillslevels in the industry.

FREMANTLEMEDIA ENTERPRISESJON PENN, CEOFremantleMedia Enterprises (FME)

appointed Jon Penn as CEO of its businessfor Asia Pacific. Penn is responsible fordeveloping, setting, and implementing thestrategy for FME’s businesses in Aus-tralia, New Zealand, andAsia, and he willalso look at growing the business in piv-otal territories such as India and Japan. Heis additionally charged with raising thecompany’s position in the market as ahighly creative entertainment company and extending FME’s newand established brands as widely as possible, in addition to secur-ing high-quality third-party product and content, while developingnew brand extension business areas. Previously, Penn was seniorvice-president of licensing for FME, Asia Pacific.

CAREER OPPORTUNITYFANTASMA SEEKS SENIOR CUSTOMERSERVICE/MARKETING LIAISONThis position encompasses the following responsibilities:

quoting major retailers using their format, sending orders to ei-ther our Hong Kong office to be written or to our domesticwarehouse to be processed, coordinating letters of credit withour credit department, working with our HK or domestic officeto ensure orders are shipped out on time, providing shippingdocuments to our credit department to ensure payment, issuingUPC numbers and item numbers, keeping track of all weightsand dimensions of the product line, coordinating samples forthe sales reps as well as having art department supply photosfor ads, and having fun and enjoying being a part of the No. 1brand in magic toys.Fantasma will train any enthusiastic and intelligent person.We

prefer a candidate with retail experience who is proficient in Exceland other programs. Salary depends on experience. This positionoffers health insurance and other benefits. Interested candidates,please contact Roger Dreyer at [email protected]

CBS CONSUMER PRODUCTSHART & VAN CITTERS, PROMOTIONSCBS Consumer Products promoted Veronica Hart to vice-

president, licensing, and John Van Citters to vice-president,product development.Hart will be responsible for managing an expanded portfolio of

licensing categories, including toys and gifts, video games, slot ma-chines, live events, exhibits/attractions, and food/beverage. She han-dles these areas across a vast array of properties including Star Trek,current television shows, and a classic TV library. Hart was previ-ously director of licensing.Van Citters is responsible for all product development and

approval for the Star Trek franchise, including product from thissummer’s movie. He is also the key liaison to the Star Trek com-munity of partners, talent, and fans. Van Citters was previouslydirector of product development.

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OOCCTTOOBBEERR5–9 MIPCOM mipcom.com Palais Des Festivals Cannes, France6–9 Fall Toy Preview toyassociation.org Dallas Market Center Dallas17–22 High Point Market ihfc.com International Home Furnishings Complex High Point, NC22–25 iHobby Expo ihobbyexpo.com Donald E. Stephens Convention Center Rosemont, IL27–29 Dubai International Character & Licensing Fair character.ae Dubai International Convention Centre Dubai, UAE

NNOOVVEEMMBBEERR3–5 SEMA/AAPEX aapexshow.com Sands Expo Center Las Vegas15–17 PLMA plma.com Donald E. Stephens Convention Center Rosemont, IL26–27 Brand Licensing India licenseindia.com Hotel Ashok New Delhi, India

DDEECCEEMMBBEERR7–10 International Halloween Show hiaonline.com Halloween Building New York City

JJAANNUUAARRYY7–10 International CES cesweb.org Las Vegas Convention Center Las Vegas11–13 Hong Kong International Licensing Show hklicensingshow.hktd.com Hong Kong Convention & Exhibition Centre Wanchai, Hong Kong11–14 Hong Kong Toys & Games Fair hktoyfair.com Hong Kong Convention & Exhibition Centre Wanchai, Hong Kong25–28 NATPE natpe.org Mandalay Bay Convention Center Las Vegas

FFEEBBRRUUAARRYY10–12 KidScreen Summit kidscreensummit.com New York Hilton Hotel New York City14–17 American International Toy Fair toyassociation.org Jacob Javits Convention Center New York City26–1 Halloween Costume & Party Show hcpshow.com Donald E. Stephens Convention Center Rosemont, IL

Licensing Show 2010June 8–10

Mandalay Bay Resort, Las Vegas

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POSTED BELOW IS A SAMPLING OF WHAT AMERICAN CONSUMERS ARE INTERESTED IN THIS MONTH.

by Christopher Byrne

MARKETERS USING SOCIAL MEDIA

Source: Social Media Today’s Survey of 900 Marketers• Using social media for marketing—88 percent• Using social media for less than three months—72 percent• Using social media for more thanfive hours each week—64 percent

• Using social media for more than10 hours each week—39 percent

• Using social media to generate exposure—81 percent• Top tools used: Twitter, blogs, Facebook, LinkedIn

TEXT MESSAGING STATS, YTD 2009Source: Neustar• 203 million people in the U.S. have a text plan(72.2 percent of wireless users)

• Texters 13+ represent 57 percent of the total• Increase in texting in the U.S. versus 2008—107 percent• Number of text messages sent daily in the U.S.—2.5 billion• Average texts per month per cell phone—357• Average phone calls per month per cell phone—204• 138 million U.S. users have senta text in the past three months

• Number of recognized texting abbreviations—1,100

MOST POPULAR CELL PHONE MODELS, Q3 2009Source: Mobiledia1. RIM BlackBerry Tour2. T-Mobile myTouch 3G3. Apple iPhone 3Gs4. LG enV35. LG GM7396. Nokia N86 8MP7. Palm Pre8. Samsung Instinct9. Samsung Propel Pro10. Nokia E75

TOP RINGTONES, AUGUST 24, 2009Source: iTunes1. “Run This Town” by Jay-Z2. “Big Green Tractor” by Jason Aldean3. “Use Somebody” by Kings of Leon4. “Good Girls Go Bad” by Cobra Starship5. “I’m Yours” by Jason Mraz6. “Break Up” by Mario7. “She Wolf” by Shakira8. “Toes” by Zac Brown Band9. “Fire Burning” by Sean Kingston10. “Hotel Room Service” by Pitbull

TOP-SELLING APPS FOR BLACKBERRY, AUGUST 2009Source: LaptopMag.com1. Bolt Beta—Free2. DataViz Documents to Go Premium—$69.993. Facebook—Free4. Google Voice—Free5. Guitar Hero World Tour Mobile—$9.996. Qik Live Streaming—Free7. Slacker—Free8. UberTwitter Beta—Free9. Viigo—Free10. WeatherEye Mobile—Free

CELL PHONE OWNERSHIP, YTD AUGUST 2009Source: C&R Research• Young children (6–9 years)—22 percent• Tweens (10–14 years)—60 percent• Teens (15–18 years)—84 percent• 8–12 year olds who will have a phone by 2011—54 percent• Teens who say they can’t live withouttheir phones—37 percent

For Licensing Opportunities:4KidsEntertainment.com • 1414 Avenue of the Americas • New York, NY 10019 • 212-758-7666 • [email protected] Building Through Licensing • A Division of 4Kids Entertainment© 2009 American Kennel Club, Inc. © 2009 Cat Fanciers’ Association, Inc.