Business Musings: Licensing Expo Recap
As I write this, it’s been a little over a week since the Las Vegas Licensing Expo ended and my brain is still trying to deal with the fallout. I knew that this Expo would be important to all my various businesses: I just hadn’t realized how important.
I visited a friend who was in Las Vegas for the Expo last year, and realized that we needed to attend—me and Dean, representing our writing businesses, and Allyson Longueira, representing WMG. Allyson was unable to come, due to a health emergency, but Dean and I went.
I had done enough reconnaissance to know that we needed to both walk the floor and take the classes that Licensing International offered. The Expo is free to anyone who wants to attend, but the classes had a $295 price tag before the Expo, and $325 at the Expo. (If you want to attend to get swag, forget it; this is the place where swag gets licensed, not given away.)
Unlike previous years, the classes were held during the Expo, which made it hard to walk the floor and take all the classes offered. Dean and I finally decided to split up, and share information with each other, which we’ve been doing these past several days.
We’ve been sitting at lunch, going over the slide presentations from the classes I attended or over his notes from the floor, what he saw while walking.
We have learned that we can’t assume anything. Even though he went to law school and studied copyright, trademarks, and patents, he didn’t know some of the trademark stuff in depth enough to get some of the points of the classes. And although I’ve been in business for a long time and have a passion for advertising, marketing, and branding, this Expo provided a deep dive into those areas for me.
Let me back up a bit: The Expo is the largest licensing Expo in the world. This is where the biggest brands come to license their products (mostly intellectual property [IP]) to various manufacturers to sell in retail stores around the world. Or that was how it used to work. Now, the digital space has disrupted licensing as well, and that was part of the discussion. Now the IP is being licensed to online companies who sell direct to consumer as well as a dozen other permutations of the old sales model.
More on that in a future post.
When I went to the Expo last year, I realized that we as writers could be doing so much more in the licensing arena. I guessed—and I turned out to be right—that book agents (or any other kind of agent who works with writers) know very little about this multibillion dollar industry. Even the movie/TV/gaming industries don’t always use their clout to license book/movie properties as well as they could—something else I learned this month—although they, at least, know enough to tie up the merchandising rights.
Many of those rights are licensed at this Expo.
But so are many others, smaller brands, smaller companies with a lot of IP. Some companies want to branch out into areas like, say, a science fiction game, and they don’t want to invent the property out of whole cloth. They want to license something, but they don’t want to pay an arm and a leg for that property. They want to grow with the licensor. (That’s us, writer folks.)
Last year, I only saw this tiny window and thought we could walk the floor like my friend and find licensing partners. And lo and behold, we did. But we aren’t ready to partner with them yet.
Because both Dean and I came to the same conclusion as we dove in those three days: We don’t know enough to know what we want or how to get it.
We know more than we did a few months ago. And we knew a lot for book people. We license all the time. In my email during the days of the Expo, I was dealing with a Chinese company that wanted to license translation rights to three of my novellas, a audiobooks company that wants to license a lot of my work, and two different TV producers who have already licensed some of my work (and who needed my help with a few things). In truth, we have been licensing our work since we sold our first novels (and in my case, before that), a detail that I will get to next week.
We knew a lot about licensing; we simply did not know anything (and I mean anything) about the way that this part of the industry works.
This part of the industry is both huge and open to new material. It took me a day or so to realize that the Expo provides licensing classes because licensing people want their partners to learn how to do this. That way every relationship works. It was all about making sure we had enough information to form long-term relationships. What a change from the other businesses I’ve been involved in—which rely heavily on the uneven power relationships and uneven knowledge between the parties.
The publishing industry is so engrained in my thick skull that it took almost 24 hours for me to realize that the licensing industry is extremely different.
Very few people make quick deals in the licensing world. They make informed decisions, figure out how to partner, and do research on each other (not trying to hide anything [movie industry] or lying about success rates [book agents] or praying that the other side is so stupid they’ll sign away everything [publishing/movie/TV]). Once the people in the licensing world decide that they can come to a working relationship, then they draft a deal memo, which is reviewed by lawyers, and the relationship begins.
One side does not keep the other in the dark (unless a partner is bad). In a standard agreement, for example, there are many clauses about auditing. Auditing here doesn’t mean making sure that the other side isn’t cheating or stealing money. Auditing here means auditing the contract, making sure that both sides are following it and doing what they’ve agreed to do.
Rather than cancel the contract should the auditor find a problem, both sides work to remedy the problem, so that they can continue working together.
There’s also a healthy realization that not all partnerships work, not all products will sell to their hoped-for capacity, failure happens more often than success, and sometimes trying again is the best option for everyone involved. These relationships, as everyone said over and over again, are business partnerships, with both sides sharing risk and reward, and so both sides have a vested interest in seeing the project succeed.
The standard licensing agreement (which I will deal with in a future blog) also has term limits and performance requirements, things that aren’t in traditional publishing agreements, for example. If a product doesn’t perform, the agreement might not get renewed…after its three year term. No one is tied to a failing product or an abusive business (I’m looking at you, book agents & traditional publishers) for the life of the copyright, with no escape clause.
Education allows both partners to work together, which was why everyone at the Expo encouraged each other to take the classes. The classes were fascinating, and people in them weren’t just the newbies to this arena, like me, but also some heavy hitters and people who have been in the industry for years.
Because, as one of the Licensing University panelists who handles global licensing for a major toy company, said, “You know, twenty years ago, this was a lot easier.” The industry was straightforward, as I described above. A brand licensed to a manufacturer who marketed to brick-and-mortar retail.
Now, there are products that don’t get sold in stores at all, like “experiences.” For example, one of the TV show Lip Synch Battle’s biggest licenses is to cruise ships…as an experience. If you want to battle against your shipmates karaoke-style, you can do it in a bar with Lip Synch Battle approved branding, and song material, and maybe even some kind of swag. There’s no retail store involved. It’s the experience of “singing” and performing for your cruise friends, while having a great time.
Nothing like that existed when this expo started thirty-some years ago. And there’s more and more “experiences” and online opportunities and apps and in-game products and all sorts of things that seem to be limited only by our imaginations.
Dean and I found ourselves in a firehose of information at the Expo, and we’ve been sorting it out ever since. I’m going to write a series of blogs all summer, because this information changed everything for me about the way I think about the writing business. I’ll be blogging about that. (Some of it is already on my Patreon page, with more to follow.) Dean did a Learn-Along which has over 50 videos (so far) as he analyzed what he learned, so that it would stick in his head. (The Learn Along is $200 and includes a classic workshop about copyright which retails for $150. He’ll only offer it for another two weeks or so, but if you want to deep dive into this, that’s the way to go.)
Thanks to the Expo, we now know firmly what we don’t know. That’s why we have ordered a bunch of books, and why I’m digging deeply into the materials that the Global Licensing Group provides through their magazines and blogs, as well as doing some business reading about all of this.
We’re making a large sea change in our business because of the Expo, and I will be blogging about this throughout the summer, as we grapple our way through it.
So…to answer some questions I’ve been getting: Yes, the Expo was really good for us. No, we haven’t gotten any new licenses yet out of this, but we might. Yes, the Expo was better than expected. Yes, it will help us expand our business in unexpected and really good ways.
Stick around this summer, and you’ll see how our thinking has changed. It’s rather like an extended Learn-Along in writing. I will continue to blog about some things in the publishing industry as they come up, such as the Barnes & Noble sale, which landed while we were in the middle of the Expo. So the blog will be very active during what Dean calls “The Time of Great Forgetting” and the rest of us call summer here in the Western hemisphere where, it seems, the only people who work are the people with actual jobs, not writers and such.
In short: this Expo provided an answer I’ve been seeking for a long time. Where is this industry going in the 21st century and how do we form a business around that new path? I’ve finally figured it out, and I’m feeling really good about that.
More next week.
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“Business Musings: Licensing Expo Recap,” copyright © 2019 by Kristine Kathryn Rusch. Image in the middle of the blog copyright © 2019 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2019 by Dean Wesley Smith