By John Styring, CEO of Igloo Books
Winning licensing contracts can be a much welcome additional or even sole revenue stream for publishers. For small- to medium-sized publishers it can also be an excellent means of growth. Within the scope of my own experience, licensing has been highly influential in growing Igloo Books and raising the profile of the company within the industry. We now require a separate licensing division at Igloo — only a year ago licensing represented around 5% of our revenue, but it has recently grown to become a much larger part of our business. It almost seems too good to be true, and whilst licensing does have some big benefits, it’s a tough road, and publishers need to be informed before they take the plunge, so here are some top tips:
1. Research Reaps Rewards
Licensing represents big opportunities for publishers; it’s big business after all, with big brands. But big business comes with big risks. Before dipping your toe in the water its worth understanding the waters you intend to swim in. Immersion in the sector is essential, and it’s necessary to see the sector as separate from your developed contacts within the publishing trade proper. The Las Vegas Licensing Expo in June is an indispensable visit and well worth the expense to build your understanding of the sector. Make the most of the opportunities presented at trade shows: prepare as much in advance as you are able to, research targets, speak to the big licensors ahead of your trip in order to set up meetings. And nourish relationships after shows have finished. Research will facilitate a true appreciation of which licenses (properties) are best for your business.
2. Brands Aren’t Built by Bragging
Once you’ve selected the properties you want to pitch for, you must demonstrate to the licensor that you can effectively portray and enhance their brand. This is your chance to highlight the originality and quality that will set your company apart from the competition. It’s an opportunity to establish that you really and truly appreciate and understand the brand. In book publishing especially, you find you will be giving a voice to characters which must be in keeping with the brand image.
Although an enamoured pitch will win you votes, claims of passion and creativity must be underpinned by sturdy practicalities. For example, don’t be tempted to pitch for licenses that you don’t have the distribution channels to support. A level of self-confidence is essential, but punching above one’s weight is a drain on resources and damaging to your reputation. Instead of going straight for the biggest licenses, instead aim for smaller “evergreen” licenses. Efficiently delivering these smaller contracts will earn you recognition within the industry that will facilitate the transition to bigger contracts, whilst providing you with time to grow your business sufficiently in order to undertake larger projects.
3. Make Sure You are Pitch-perfect
The pitching process can be long and drawn out. Publishers need to go in with their eyes (and purses) open. Always bear in mind that you are there to service a licensor’s brand, you need to be able to communicate and work together effectively, and part of this implies frank and transparent dialogue. Don’t be afraid to talk about financials and money — licensors are looking for the best deal and expect you to be on the lookout for the same — although be aware that you may need to compromise along the way! It’s best to pitch for exclusive rights as this protects your interests and safeguards your revenue stream for the duration of the contract. Be prepared to pay the licensor a minimum guarantee and royalty fees.
The approval process can also be extensive, as your editorial team is charged with bringing a brand to life and may have to work to within very specific guidelines. It’s really important to keep these processes as structured and organised as possible so that work is continually moving forward.
4. It’s a Marathon Not a Sprint
A typical license requires about fifteen months of work from initial pitching through to getting the product out to market. Licensing is not a quick fix, a quick product line to be rushed out. It is a long slow process with a fair amount of expenditure. This should be viewed by publishers as a positive thing. It gives you time to get your product ranges correct, it gives you time to establish and improve distribution channels and supply chains. It even gives you the time to build a solid working relationship with a new set of contacts. Licensing provides so many routes for internal and financial growth, and publishers really should be wise to them all.
Most importantly, publishers shouldn’t write off smaller licenses solely as stepping stones to greater things. Smaller licenses can on occasion bring a greater level of creative freedom, but also give the publishing arm a real chance to work amongst the genesis and growth of a brand. I’ve known brands explode in popularity, and an existing and developed relationship with a licensor will always stand you in better stead than a fledgling untested offer.
Licensing is not a quick fix revenue generator, although it often reaps serious rewards if you are prepared to put in the time and effort. Regardless of whether you win or lose your first pitch, your first three pitches, building your network of contacts, your distribution channels and priming your editorial staff with the challenge of new projects can only improve your existing business and content.
5. Temper Ambition with Practicality
The key to licensing success is to temper ambition with practicality. First the practical part — pitch for licences that you can win, build your skill level with realistic and achievable goals. Then the ambition: I do believe it is important to treat licensing as a serious new investment, and I do think that whatever size the business you should consider licensing as a new arm, and allocate time and manpower accordingly. It’s a great way to build your business and challenge your creativity…I look forward to seeing you all in Las Vegas in June!
Formed in 2003, Igloo Books publishes adult and children’s books which are sold nationally through some of the UK’s largest commercial outlets. Its books are published in 33 languages and are sold in 55 countries. For more on Igloo and its success, see Publishing Perspectives’ story “Amid Recession, UK Publishers Profits by Focusing on Value, International.”