How to license magic

A glance at recent global box-office charts provides a telling insight into how successful the animated industry has become. Recent filmgoers saw the computer-generated magic of Dreamworks studio’s Puss in Boots capture more than US$150 million at the global box office, according to film industry website Box Office Mojo. That film has only just supplanted the Steven Spielberg-led animation of The Adventures of Tintin. In a canny marketing move, Tintin was released to global markets before the United States, and has so far rang up more than US$230 million in its first month.

Photo: www.tintin.com

CHINA BOX OFFICE

The China market, in particular, offers the biggest potential for the animation industry. With total box-office receipts last year topping US$1.5 billion, the Chinese mainland is the world’s fastest growing film market. The big animators have been cashing in—not just in the box office, but also through licensing.

Disney’s Kungfu Panda 2 made close to US$100 million on the mainland this year, while the results from the likes of the Transformers series —based on animated characters—have been similarly staggering, with the latest in the film franchise, Transformers: Dark of the Moon, collecting more than US$150 million at the Chinese box office.

Little wonder that global brand executives such as Guenther Hake, senior vice-president and managing director of Disney Consumer Products, Greater China, describes the market as both his company’s “strongest” and its “fastest growing.”

SELLING SHEEP

The rest of Asia also offers significant licensing opportunities. Take the Empire International Merchandising Corporation, which started in the Philippines some 25 years ago and has expanded across the region, with a Hong Kong operation, Empire International Licensing & Merchandising (HK) Ltd.

For Alexander Co, Empire’s general manager for marketing, linking up with brands that enjoy a global following makes business sense. “Success at the box office means more merchandise sales. It is a great help,” says Co. “Put simply, when a movie flops in the box-office, the sale of the merchandise involved slows down as well.”

Traditional broadcast media, including television, as well as the advent of computer tablets and smartphones are also opening new markets. “In our territories, exposure on local free TV makes it easier for us to close merchandise and promotional deals, as almost all retailers want all brands or characters on their retail floor shown on free TV,” Co says. “Cable TV exposure is sometimes not enough, as only a certain percentage of the population are cable subscribers in some territories. Having the home video license is a plus, too,” he adds.

The company also takes advantage of outside direct broadcast opportunities. “We always try to have a good balance of merchandise and premium promotional deals when launching a new brand,” Co says. “This way, we have brand awareness from TV, merchandise available to kids, and promotional campaigns through QSRs [Quick Service Restaurants] or other promotional deals.”

Co would like to see the industry supported by free television access across Asia, to broaden branding reach further. He believes that one way of achieving that is to link licensees from various territories.

UBIQUITOUS ULTRAMAN

Muse Communication (HK) Ltd., meanwhile, has based its success around the wildly successful Japanese animation industry. The characters Aria and Ultraman have long enjoyed a massive global fan base, taking advantage of a variety of activities, products and promotions. These characters—and the products built around them—are found everywhere in Asia.

“We acquire whole Asian rights from the principal and distribute to terrestrial TV, Pay TV, video and even new-media rights,” explains Lisa Hui, company general manager.

“Another focus is the merchandising part, which we license to different companies for their brand or image promotion. We also develop and generate products for animation and distribute to wholesale or retail outlets. The major elements of our success are the popularity of the animation itself and whether it gets good media broadcast exposure in Asia,” she says.

With the seemingly unlimited potential for licensing in Asia, Muse is now looking to expand its activities, setting a possible template for the licensing industry in the region.

“We have to keep acquiring good animation titles or character licenses, and develop the property to the market beyond kids or the teenage-oriented aspect,” she says. “Sometimes the potential of an animation or character can grow beyond the period of its exposure on media. So we need to work on how to sustain the popularity.”

“Licensing Magic” originally appeared in the December 21, 2011, issue of Hong Kong Trader, a Hong Kong Trade Development Council publication.