‘Frozen’ A Mixed Blessing For Licensed Merchandise As Business Changes – Report

Hard to imagine that anyone in the licensed merchandise business would have a bad word to say about Disney’s huge success selling Frozen-related toys, clothing and other merchandise. But many people consider it “both a blessing and a curse,” according to the latest annual industry study from the International Licensing Industry Merchandisers’ Association (LIMA).

On the plus side, the broad array of stuff with images or connections to the film “brought the understanding back to retailers that they can sell a character license throughout the store,” the report says.

The problem? Frozen was so successful that it “was viewed as ‘freezing out’ other attractive licenses.”

That could be dangerous. LIMA identifies consumer “brand fatigue” as an issue for Entertainment and Celebrity properties due to the “oversaturation” of movie and TV-related merchandise on store shelves.

That’s taking place at a time when manufacturers are growing reluctant to offer high minimum sales guarantees, and want studios and other licensors to share the risks. That could include promotion efforts for retail merchandise sales, and cracking down on online sales of unofficial products.

LIMA disclosed last month that the industry generated $241.5 billion in retail sales globally in 2014, including $107.2 billion from Entertainment and Characters. The category also accounted for $6.2 billion of the $13.4 billion in royalties from licensed merchandise.

But today’s study adds more detail and context to the numbers. (It also uses a new methodology, making it inappropriate to compare the results to previous years.)

The breakdown shows that toys accounted for 25.1% of the retail sales for Entertainment and Characters licenses, followed by apparel (11.9%); software, video games and apps (8.4%); fashion accessories (7.9%); publishing (6.2%); music and video (5.6%); and food and beverage (5.2%).

Toys also were the biggest category in the breakdown for royalties collected for Entertainment and Characters merchandise: toys (27.2%); apparel (13.1%); software, video games and apps (9.4%); fashion accessories (8.3%); publishing (5.7%); music and video (5.2%); paper products (4.8%); food and beverage (3.4%)

Looked at another way, Entertainment and Characters accounted for 88.1% of the retail sales and 89.2% of the royalties for all music and video licensed properties followed by toys (82.8% of retail and 83.3% of royalties), publishing products (77.5% and 77.9%), products for infants (70.5% and 71.7%), promotions (68.6% and 69.0%), paper products (65.9% and 66.3%), and software, video and apps (59.5% and 60.8%).

The U.S. was by far the world’s biggest market for Entertainment and Characters with $41.6 billion in retail sales. It was followed by the UK ($7.7 billion), Japan ($7.5 billion), Germany ($5.4 billion), Canada ($4.0 billion), and China/Hong Kong ($3.4 billion).

The trade group sees sales growing, even though the North American market is becoming saturated, and brick-and-mortar stores are losing shelf space.

“Economies are finally starting to rebound on a more global basis leading to strong growth trends in the licensing industry,” LIMA says. “Non-traditional retail channels and on-line commerce are and will be key sources of growth going forward.” What’s more, “on-line shelf space is multiplying at a very rapid pace.”

This article was printed from https://deadline.com/2015/07/frozen-licensed-merchandise-sales-lima-1201485900/