Licensing wisdom

In a candid conversation with license India, Kelvyn Gardner, Managing Drector, LIMA - UK talks about operations of LIMA, global licensing industry and the challanges faced by Indian licensing industry.

What inspired you to take up licensing as a career?

Like many people, I entered licensing by a roundabout route. As the UK Sales Manager for an Italian publishing company back in the early 1980s, I was involved in selecting titles which could be launched in the UK market. Soon I began questioning why my company was offering titles not suited to UK customers and that is how I landed up in licensing - where the suitability to the customer's needs is of utmost importance - from there it's only a short step to finding out what is suitable for our customers and suddenly, you find yourself making licensing decisions.

Tell us about the inception of the Licensing Industry Merchandisers' Association (LIMA) and the countries where it is operational. Are you planning to open offices and provide licensing services in India?

LIMA began in USA in 1985. We currently have branches in the UK, Germany, Japan and China. As far as India is concerned, we began to look at the market in 2007, when we sponsored a member visit. In the short term, we will not be opening up a fully-fledged branch office, but we will be watching developments and looking for the right opportunity.

How can the concept of licensing work in India, and which all industries can be a part of licensing?

We believe that the right licence exists somewhere for almost every consumer product or service. India is a new but growing market. There are already around a dozen licensing agency businesses in India, and major world players like Warner Brothers and Disney are working hard to establish themselves there. The recently announced tie-up between India's Reliance Entertainment and Steven Spielberg's movie empire shows that major Indian businesses, too, can see the potential.

Elaborate on the origin, growth and success of licensing across the globe.

Licensing has been around for ages and it made its mark in the eighteenth century, thanks to the endorsement of 'Saintbury Chemical Fluid for the Obliteration of Marks on the Skin' by the Right Honourable Countess Dowager of Spencer and Jersey, which resulted in an escalation in its sales. Licensing is now well established as a major marketing tool. It is estimated that the worldwide retail sales of licensed merchandise exceed $190 billion.

What challenges, do you think, is the Indian licensing industry facing at present and what measures do you suggest to overcome them?

Realising the value of Intellectual Property (IP) Rights and communicating this value to manufacturers, retailers and consumers is always a major challenge for a new market. Like all emerging markets, counterfeit merchandise will be an issue, so communication as to the benefits of trading within IP law is vital. The way to get off to a good start is to ensure that all parts of the licensing matrix—licensor/agent/ licensee/retailer—work together with a common goal.

What is a licensing program? What are the steps involved in taking up a licence by the licensee and the offering of a licence by the licensor?

This is the heart of the licensing business and cannot be explained in a few words. In brief, we take a piece of intellectual property such as a brand, TV show or movie, and professionally market the core IP to suitable manufacturers and marketers, also seeking retail support for licensed products based on the core IP.

Which are the various industries where licensing is followed internationally and what is the market share of each industry?

Most industries have at least some involvement in licensing, wherever licensing has established itself. Whilst precise market shares are difficult to ascertain, toys, publishing, apparel and promotions are usually among the industries that are most active in licensing.

What are the key points to be kept in mind, while signing a licence agreement, for both the licensor and licensee?

The key considerations are awareness and acceptability - in our market, are consumers aware of our IP, and if so, is it acceptable to them? Everything must start here. You cannot market a piece of IP if there is no awareness, and neither should a licensee buy rights without being confident of awareness for the brand.

What role does licensing play in the marketing and promotional strategies of a company?

Licensing is a part of the marketing mix but for many companies it can be the single most important part of that mix. A relatively small company can greatly increase its profile by associating itself with a well-known licence / brand, both to retailers and to consumers. Similarly, licensed promotions can enhance the value of strong but 'unexciting' brands. For instance, basic foods like rice or bread, washing and grooming products like soap or toothpaste, can gain much by a licence with a 'glamour' brand, such as a movie or a hot TV show.

How do you perceive the future of the Indian licensing industry?

I expect to learn a great deal by my participation in the Delhi licensing conference. As previously stated, Indian business can learn valuable lessons from more established licensing markets. Retail infrastructure is the single biggest weakness that India faces, compared to more mature licensing markets, but I hear that this has already begun to change. With the western world facing a major economic recession, India has a chance to carve out a big slice of the licensing business in the next five years.

What, according to you, are the strengths and challenges of the licensing industry worldwide?

Despite the progress we have made, licensing is still utilised only as a marketing tool by a small proportion of manufacturers and marketers worldwide. In terms of strength, we have a fantastic business proposition: utilise the world's best-known and most popular brands and characters to drive business. Our challenge is to convert more companies to understand that, and the value of choosing licensing over alternative marketing strategies.

How would you compare the Indian licensing scenario with international licensing?

The Indian market is small, but full of potential. Given India's highly-educated and growing middle class, the market could build quickly. Indian businesses can acquire licensing expertise and know-how relatively easily, so rapid growth is a realistic prospect. The UK is one of the world's main centres for licensing rights, so India's strong links with Great Britain should help its growth.

Interviewed by Nimran Dhaliwal Grewal