Non-fiction producers who find themselves with a ratings hit are faced with a licensing market more welcoming than ever before. This is partly due to TV’s ability to launch a brand. As Kenton Selvey, VP of international licensing for Discovery Consumer Products explains, ‘Industry wide, more licensees are interested in television than movie properties because it’s a long-term business, not a Hollywood hit or miss.’ Also, a recent string of hot factual properties has caused interest in non-fiction fare to spike among licensees hoping to attach their merchandise to a recognized brand.
Books, home video and DVD are the traditional markets for doc brands. Now, rights holders are venturing into other areas. ‘As factual programming broadens into lifestyle areas, the commercial opportunities grow considerably,’ says Rachel Barke. Barke spent four years handling program-related products for UK broadcaster Channel 4, and recently became head of consumer products for London-based RDF Rights. ‘Cookery, gardening and home improvement,’ she continues, ‘have shown great commercial potential.’
One doesn’t have to look hard to find proof. Jamie Oliver teamed up with T-Fal, inventor of the non-stick fry pan, to launch a line of cookware. Nigella Lawson has a range of designer kitchen products. ‘In the home improvement area, there are deals to be done with do-it-yourself stores and products,’ adds Barke. ‘Let’s face it, aligning an everyday product with a high-profile, sexy tv show makes paint look more exciting.’
Formats are also helping non-fiction properties break new ground with licensees. One, LA-based GRB Entertainment’s Next Action Star, a copro with LA’s Silver Pictures Television that involves a search for the next male and female action star, has third-party licensing deals in place for everything from apparel to action figures.
Sue Heilbronner, executive director of licensing, Discovery Consumer Products, says Discovery’s publishing yields the greatest revenues, but she notes that money isn’t everything. ‘We think about the monetary side and about making the brand important to consumers by virtue of their interaction with it at retail,’ she explains. ‘We view that as significant.’
To exploit licensing opps, indies need to know the product markets, which can distract from creating TV hits. For a fee, rights reps will handle things. Commissions depend on a deal’s potential value and scope. Merchandising contracts are the most labor intensive, for which commissions are about 30%.
How deals are structured between rights holders and third party licensees is highly negotiable. ‘When you have a hot brand, competitive bidding happens between multiple parties, so those deals end up being very substantial,’ says Heilbronner. Generally, licensees offer a small upfront guarantee, and then a percentage of unit sales. Says Barke, ‘The back end is where you can really win with product sales.’
Martin Hersov, director of commercial development for Nine Network in Sydney, expects The Block’s licensed goods to generate about AUS$500,000 (US$360,000)in 2004. The home renovation format has four couples redo identical properties that are then publicly auctioned. The contestants who make the most money win. The Block format has sold globally, with Hersov handling licensing for the Aussie market. There, EMI has the DVD and soundtrack rights. In March, Reality Games launched a board game.
London-based Pilot Productions is also counting on the back end. TV is still the prodco’s main source of income, but md Ian Cross is shifting the balance. ‘We planned over three years to reduce our dependence on broadcast from 95% down to 75% and we’ve hit it,’ he boasts.
Here’s a look at the non-fiction licensing activities of four companies across the globe.
ABC Australia: Lifestyle Brands Branch Out
To reduce reliance on government funding, the Australian Broadcasting Corp. has developed a pervasive consumer products operation that extends the reach of its programs and helps fund new shows. Rights arm ABC Enterprises is on track to return AUS$15 million ($11 million) to the ABC in 2003/04, and a good chunk of its growing franchises are factual brands.
Grahame Grassby, now GM of international sales for ABC Enterprises as well as GM of consumer publishing, is behind the division’s growth and works with indies across the whole spectrum of a project’s arc. ‘We intend to work with indies that don’t have tied distribution, to represent their international sales,’ says Grassby of his new remit. And, he has an appetite for docs in all categories. ‘ABC is Australia’s major [supporter] of docs, and this is unlikely to change,’ he says.
ABC began building non-fiction consumer product brands in 1995, and now has Gardening Australia, Delicious (food), Limelight (general entertainment) and Triple J (youth entertainment) in its portfolio. The brands have a vast off-screen presence via the ABC Retail operation, which consists of 40 shops across Australia and 85 ABC Centers within other retail outlets, as well as an online store.
Grassby reports ABC is experiencing increased support for branded merchandise from retailers, with the most interest centering on home-related lifestyle categories such as gardening, renovation and cooking. ABC’s food licensing program extends from TV to video and DVDs, books, CDs, cookware and apparel. The Gardening program also branches out from A/V products and books, to plants and tools as well as a kids gardening line. Grassby says there’s also opportunities in other categories: ‘Natural history, especially for older kids, is a growing business.’
A key component of ABC’s programs is lifestyle magazines, which are experiencing 25% annual revenue growth. In 2003/04, they’ll turn over $4 million ($3 million), up from $2.75 million ($2 million) the previous year. The deal model gives publishers a share of circ and ad revenues while ABC retains editorial control.
ABC’s delicious magazine launched in October 2001. Although there’s no Delicious TV show, it’s the masthead for the pubcaster’s cooking programs, which include Oz shows Kylie Kwong, Wicked and Surfing the Menu, and international properties such as Nigella Lawson, French Leave and Jamie Oliver. Delicious expanded into the UK in December.
The youth music brand, Triple J, has a magazine as well as a lifestyle line. And, Grassby says two more magazines are planned for this year, ‘including a natural history title for older kids and a lifestyle title focusing on Australians’ increasing interest in health and quality of life.’ MM
RDF: Selling the promotional rights
Rachel Barke, head of consumer products for RDF, bills the division as a one stop rights service for indies. ‘As long as it feels like a very commercial proposition, we’ll look at one right on one show, or we’ll look at a package for rights representation,’ she explains.
Faking It, the popular factual format that gives individuals four weeks to learn a skill well enough to pass themselves off as a professional, is one of the brands currently under Barke’s remit. Airing on Channel 4 in the UK, Faking It immediately attracted Smirnoff as an on-air sponsor. After the show gained a loyal fan base, the vodka brand approached Barke about off-air opportunities.
Barke says exploiting Faking It’s unique premise was key to creating a successful licensing initiative: ‘The show’s core creative proposition needs to be the driving force behind every decision.’ So, she cooked up a competition that aligned the brands and was marketed at point-of-sale, a lucrative spot in the retail environment. Executed in Tesco grocery stores in the UK, the contest gave consumers a chance to ‘fake it’ as a surfer, musician, actor or fashion photographer. Just like in the show, expert guidance was part of the winners’ package, in this case at locations around the world: Hawaii (surfer), London (musician), Hollywood (actor) and Paris (shutterbug). The flyer for the draw, which ran in February, also assigned a Smirnoff cocktail recipe for each profession.
‘They were hoping it would attract attention in stores to the Smirnoff brand,’ says Barke of the concept, which was conceived while she was at C4. In exchange, Smirnoff was charged a license fee for the promotional rights, a deal worth in the neighborhood of £10,000 ($18,000). ‘It’s a good way for rights owners to get a chunk of cash upfront, as it’s not based on sales,’ explains Barke. KB
AETN: History gets younger by going digital
Retailers are notoriously risk averse. Therefore, one of the great conundrums for entertainment brand owners is getting show-based merchandise in front of consumers. E-commerce is a popular option, but finding new ways to keep a brand popping up in front of people remains the licensing executives’ grail.
One area that AETN SVP Steven Ronson is focusing on is tech, looking at the potential market for moving content onto cell phones and pdas. For instance, one A/V deal is with Montreal-based mobile entertainment developer Airborne Entertainment, for a version of This Day
in History. Available by subscription on a variety of mobile devices, it includes historical facts from four different streams: entertainment, sports, general history and technology. Airborne also has a deal with a&e for Biography Alerts, Biography Birthday Alerts, American Justice Facts and Figures, and others. Plans are in the works for more rollouts over the upcoming year.
Ronson is bullish on the growing market potential of supplying service providers with video mobile entertainment that’s based on the network’s core content streams. Under this model, the content provider gets a percentage of the fees the service provider gets from selling upgrade packages, but there’s also value in reaching a desirable and elusive demographic. ‘One goal of brand extensions is to bring a younger demo to The History Channel,’ confirms Ronson.
Ground has been gained in this area with History’s game plan. The net inked a licensing deal with PC games producer Activision, and branded games have been rolling out since. The Civil War Game (in which players can change the outcome of history) hit shelves in January 2003 and moved 85,000 units, outselling Gods and Generals, a game based on the Ted Turner feature. The latest release, The Alamo, debuted in April, and a D-Day title is due out in June. The target demo for the games – 30-something men – is younger than the channel’s typical viewer, which dovetails nicely with History’s evolving consumer products strategy.
The History Channel-branded tours, launched in 2002, reaches out to a slightly different demographic. A worldwide travel program to historically significant sites, it ‘offers real life experiences’ with the brand. Operated in tandem with Colette Vacations and Wayfare Travel, the tours are showcased on the Web at historytravel.com, where viewers can sign up for the likes of a D-Day Anniversary tour ($2,789). Travelers can also customize a trip by inputting their preferences on a web program that shoots back a personalized itinerary. Although the risky travel environment of the past few years has dampened revenues (the client base is in the US), Ronson says 2004 is off to a good start. MM
Discovery: Exploiting brands within brands
Three years ago, Discovery staffed up its consumer products division and appointed leaders for each licensing category – publishing, toys and interactive, apparel and accessories, home entertainment and hard lines (a catch-all for consumer packaged goods). It was a good move. ‘We have seen a substantial up-tick in interest,’ says Sue Heilbronner, executive director of licensing for Discovery Consumer Products. ‘In 2001, a lot of my phone calls were outbound. In 2004, most are inbound.’
Having three breakout brands – Trading Spaces, American Chopper and Monster Garage – didn’t hurt. ‘We’ve had the opportunity to stretch beyond what people originally thought of as Discovery-oriented products,’ says Heilbronner.
TLC’s Trading Spaces is exploited in almost every area of licensing, an effort that began in 2002. ‘There was a huge emphasis on home post-9/11,’ says Heilbronner. ‘Trading Spaces tapped into that, and added an element of fun.’
The brand has about 15 home licensees alone, with products ranging from reversible bed linens and paint, to lamp jewelry, frames, pillows and other accessories. ‘We knew there were strong designer brands on the market,’ says Heilbronner. ‘This was about regular people finding their own style and implementing it in their home.’
Discovery Channel’s American Chopper and Monster Garage profit from a rabid fan base – mostly men, who Heilbronner describes as ‘gear heads.’ ‘We have fewer licensees as compared to Trading Spaces, but that’s not reflective of revenues,’ she says.
All three properties are now moving into the kids market. Action Value Publishing is developing PC software that’s inspired by Trading Spaces and will feature both a design and a game function. For littler tykes, Toy Quest is debuting a craft kit for kids ages four and up for decorating photo frames and even small furniture. Additionally, Hasbro’s Tiger Electronics division is releasing video discs based on Trading Spaces: Boys vs. Girls. All launch in the fall.
On the motoring side, Funline Merchandise is creating a line of die-cast replica vehicles, and Funrise Toy Corp. will manufacture battery-operated plastic cars, both for the Monster Garage brand.
Heilbronner says Discovery is now bringing its consumer products people into the programming process much earlier. ‘When our people go out to negotiate program deals, they’re thinking about merchandising,’ she notes. But, there’s also a renewed focus on the company’s evergreen brands. Petco, for example, recently graduated from spot advertiser to retail launch partner for a new range of Animal Planet-branded pet products. ‘Our focus now is on identifying strategic partners to achieve relationships that cut across different categories and different brands,’ says Heilbronner. KB