LIMA’s Kelvyn Gardner (007): A license to… reap the benefits of infintiely reproducable intellectual property
In 1973 George Lucas approached Fox executives with an offer they couldn’t refuse: he would forfeit a 300 per cent salary increase in return for merchandising rights to Star Wars, and rights to any sequels.
Rubbing their mitts behind muffled laughter, they graciously accepted what seemed like a naive offer from the young director.
Of course Lucas is now the richest ever filmmaker, despite only having directed six films. The force is strong, clearly. Everything from figurines to beach towels to cookbooks and cereal has been licensed under the Star Wars brand.
While (and prove me wrong) it’s unlikely you’ll ever make tens of billions of dollars from licensing on a Lucas scale, for those in possession of intellectual property with a reproducible image, the time has never been better to try, says Kelvyn Gardner, managing director of LIMA UK.
Why
There are myriad reasons to license a product – primarily to protect intellectual property against counterfeiters and, of course, to make money. But licensing can be leveraged as a marketing tool, to create awareness of a brand through a third party producing and promoting goods on your behalf.
LIMA is a global trade body for the licensing industry that calls the Empire State Building home, although Gardner is based in the (slightly) less glamorous UK office, in Milton Keynes.
“We have about 1,300 member companies,” says Gardner. “A lot of the names you’ll be familiar with like Disney or Warner Brothers, but also Entertainment One, famous for Peppa Pig, and the BBC, or ITV. They’re typical members at the larger end, typical of intellectual property which can be turned into consumer brands.”
Digital
The digital age has made counterfeiting both more prolific and easier to get away with. Sites like Etsy, Instagram and Ebay are rife with knock-off goods, often handmade by fans, rather than dodgy wholesale operations destined for market stalls. “Using the 80/20 rule,” says Gardner, “lawyers would like to stop it but they simply can’t. You’ve got too many very small suppliers making very small quantities of merchandise. And I think they take the rule that, although they would like to stop it, it’s physically impossible.”
“Of course, the bigger the brand, the more likely you are to be counterfeited,” he says. “And I don’t want to denigrate the market stall community, but it has to be said that most mainstream retailers are clued up to the way that licensing works, and counterfeiters will not find it easy to get into significant retail outlets.”
China
The world of licensed goods is growing rapidly, nowhere more so than Asia – specifically, China. In recent years, as the Chinese middle class burgeons, new opportunities have become available for brands looking to expand their horizons beyond western shores.
“China just didn’t have the consumer base nor retail infrastructure to support licensed merchandise in any real way. There was less interest in, or support for, intellectual property rights at the time. But over the last 10 years we’ve seen an economic boom in China, and as the consumer base has grown very rapidly, the interest in western IP has grown simultaneously.”
One bit of anecdotal evidence for continuedexpansion Gardner gives is the relaxation of the One Child Policy. “A lot of licensed goods go to juniors, especially in the case of toys,” he says, half-jokingly. “Brands could probably see their market double within five years once the second children are born into these families.”
Of course, Asia is no panacea – most of the world’s consumer goods are produced in China, and, unsurprisingly most of the counterfeit goods as well. More staggeringly is that the UK, a country with 20 times fewer people, has a far greater licensed goods market that China.
Slow
But regardless of the uptake elsewhere, not all are so keen to enter the $240bn world of licensing. “Every day in my work I come across companies and corporations who still don’t know anything about licensing at all, so although it’s a big business, we’re still only scratching the surface of where we could be in 20 years,” says Gardner.
“They fear it could damage their core business and the shape of the brand. They think it’s haphazard, because they’ll be letting the brand out of control when, in fact, nothing could be further from the truth – there are experts at every level to enable you to manage that process very carefully.”