Marketing and Licensing

An ant farm, a book on military blunders, a dinosaur model, and nematodes ('good' gardening grubs) actually share one common trait - they were all inspired by non-fiction programming....
February 1, 2000

An ant farm, a book on military blunders, a dinosaur model, and nematodes (‘good’ gardening grubs) actually share one common trait – they were all inspired by non-fiction programming.

Long associated with children’s TV shows, licensing and merchandising opportunities are becoming increasingly apparent to broadcasters of factual programs. Both public and private channels have identified advantages in developing ancillary products, though the benefits tend to be different for each.

For U.S. cablecasters A&E and Discovery, which have each been in the licensing game for less than five years, the primary appeal is brand marketing. Licensing and merchandising offers the chance to reach viewers in different venues and through different media.

In the case of the BBC (which launched a licensing department just over a decade ago), and Australian pubcaster ABC (which has revved up its efforts to acquire and act on rights over the past five or six years), the focus is on boosting program funding. Because public monies tend to be limited, any extra income often has a direct impact on future production budgets.

Products and profits

‘All the money generated from every merchandise activity we get involved in goes back to broadcast,’ says John Howson, head of millennium licensing for BBC Worldwide. ‘The whole point of what we do is to make sufficient money to generate funds [in order] to make the next series. And we’re almost at that point.’

Most recently, Howson has been working on licensing related to Walking With Dinosaurs, a 6 x 30-minute BBC series (US$9,980,000), coproduced with Discovery, TV3 France, Japan’s TV Asahi, ABC Australia and ProSieben in Germany. A follow-up series, which is currently in

development, will benefit from merchandise sales. ‘Without the commercial activity, we arguably wouldn’t be able to do [the follow-up],’ says Howson.

Australian pubcaster ABC has an entire division dedicated to building revenues from programs – ABC Enterprises. Merryl Mills, abc’s head of licensing, explains that the extra income is becoming a necessity. ‘We are dependent on government funding, and we do need to raise some additional revenue so we can continue to offer more quality television broadcasting, especially with the move into digital television. Often the funding we get from the government – well, it’s never enough, is it? So, we look to other ways to boost our revenue stream.’ ABC Enterprises made close to AUS$10 million (US$6.5 million) in profits last year, she says.

ABC has focused on two lifestyle shows to develop related product: in-house produced Gardening Australia and cooking program Two Fat Ladies (from London’s Optomen Television). Mills says this strategy is meant to tap into an older demographic, one that has been somewhat neglected in the past, despite significant spending potential. ‘With Gardening Australia, you’re looking at people who own their house, who are perhaps retired and they’ve got plenty of time on their hands. They watch the program for its intellectual value, and then want to be able to purchase products that maintain the same integrity as the program that they’re watching.’

The possibilities are endless

Whether promoting the brand or generating funds, broadcasters agree that the best licensing/merchandising strategy is to come up with a new product, or at least find a new twist on an established product. Using this line of thinking, ABC began offering backyard gardeners in Australia an environmentally friendly way to preserve their lawns this past Christmas – nematodes. ‘It’s like a little bacteria that you sprinkle on your grass,’ Mills explains. ‘It’s not a chemical or a pesticide, it’s a parasite that eats the worms in the grass. The worm just organically dissolves into the ground.’

abc employs an outside horticultural consultant, who advises staff on innovations in the world of gardening. ‘We want to develop products that are unique to the Gardening Australia program, so we look at leading, cutting-edge types of products that would make a difference in a gardener’s life,’ Mills explains. In addition to nematodes, ABC offers its own strain of both pansies and petunias, and fertilizers are also in the works. Other Gardening Australia merchandise includes gardening gloves, heat pillows, aprons and kneeling pads.

ABC Enterprises also spied an opportunity when the channel picked up the television rights for the Two Fat Ladies nearly three years ago. Says Mills: ‘We approached Optomen and the BBC, and said we were interested in the book and video rights. The books and videos went to market in abc shops, but also in other marketplaces around Australia, and sold extremely well.’ Encouraged by the success, abc requested and received licensed merchandising rights. The result is everything from Two Fat Ladies air fresheners to tea towels.

‘They’ve proven to be really good sellers because I think once again it’s a demographic that is untapped,’ Mills says. ‘The demographic that watches the Two Fat Ladies is roughly the 50 to 65-year-old female who loves cooking and doesn’t have to worry about her waistline anymore.’

The under-18 crowd is the target market for the BBC’s Walking With Dinosaurs products, and it’s not an easy sell. These much-sought-after young consumers have already been exposed to a glut of generic dinosaur toys, so the BBC had to find a way to distinguish its merchandise. Working with established Hartfordshire, U.K.-based licensee Toyway, they came up with seven dinosaurs from the series, ‘scaled-down versions of exactly what was seen on screen,’ Howson says. ‘That was the most important thing, to have them be as real as possible.’ The models went on the market last October, selling in such venues as the British Natural History Museum.

Although the Dinosaurs series aired on the BBC last fall, new products will continue to roll out throughout this year, including board games, textiles, stationary and more models. ‘We haven’t looked upon this as being a fashion-led item, which lots of licensing opportunities are,’ Howson explains, adding that revenue generation tends to follow program sales by a year to 18 months on average.

Building the brand

Unlike the pubcasters, privately-owned channels tend to be more interested in licensing and merchandising as a tool for brand extension. ‘You’re putting your name in front of the consumer in different ways,’ observes Robin Sayetta, Discovery Communications’ vice president of merchandise & promotion licensing. ‘You’re giving the consumer a chance to interact with your brand in new and unusual ways, and if you’re putting out good product, then you’re building good will.’

Focusing on the brand also allows the broadcaster to eliminate negotiations with the middlemen, namely the producers. Explains Sayetta: ‘We don’t own the rights to all the programming that’s on our air, but we do consistently feature programming of the same genres – nature, science, technology, history and exploration. Our approach was to create a line of products themed on those five genres and branded Discovery Channel.’

Sayetta acknowledged that licensing is a revenue stream as well as a marketing tool for Discovery. For A&E, however, that isn’t the case. Jonathan Paisner, A&E’s manager of consumer product development, says they just haven’t reached that stage yet. ‘We still see it really as a marketing vehicle that pays for itself and then some. It’s not the pot of gold at the end of the rainbow. We’re not selling Star Wars here.’

Most of A&E’s forays into licensing have been in publishing (i.e. Days of Infamy, a companion to the History Channel’s Military Blunders series), and earnings per project have averaged in the low five figures, says Paisner. ‘I think if you get a hit, like [NBC journalist] Tom Brokaw’s book [The Greatest Generation, Random House:1998], then that’s a different story. We have not had that kind of experience yet. When that comes, that can certainly get into the hundreds of thousands of dollars.’

A&E plans a more comprehensive approach. Paisner says they are developing a project in which a TV program, soundtrack, book and CD-ROM will be developed concurrently. ‘The major challenge is the different timelines that you work with. The timeline on television is relatively short, the timeline in the music world is shorter. For books it’s longer and for CD-ROMs its longer still. If you really want all this stuff to happen simultaneously, you’ve got to start with maybe the CD-ROM, or whatever takes the longest.’

Look before you license

According to Sayetta, several of DCI’s merchandising ideas are generated internally, by a product development team. ‘Very often, we will invest in creating new creative materials for licensees to work from, so that their product line will be continuously refreshed.’

Access to consumers often depends on strategic partnerships with licensees. Animal Planet recently signed a deal with U.S. toy retailer Toys R Us, which will likely enhance the network’s exposure. ‘We’ll be developing a line of Animal Planet toys exclusively with Toys R Us, and the toys will be branded Animal Planet,’ Sayetta says. ‘It’s basically meant to replace their entire line of generic animal toys, everything from farm animals to domestic animals to wild animals.’

However, should a broadcaster chooses the brand-building route, it can sometimes limit merchandising opportunities. A&E’s Jonathan Paisner recalls one occasion in which he decided against developing a companion book for a show because of concerns that it conflicted with the overall perception of the brand.

‘The History of Sex was a phenomenal success for the History Channel, and we looked very seriously at a book project,’ Paisner says. ‘We’d worked with the producers in the past and we had the timing, but the simple fact was it was a bit of a racy show . . . It probably would have sold very well, but looking at it in the whole, I think it probably still was the right way to go. Once it’s out there, it becomes a very permanent thing.’

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