A Cure for Licensing Dyslexia

As an active participant in the ‘licensing industry’, I’ve seen a lot of change over the last few years. Celebrities have become licensors, retailers have become licensees, and virtually every market has become more competitive. Something that hasn’t changed for many licensors is the emphasis on royalty revenue.

For years, licensing has been used as strategy to generate revenue from established trademarks or brands. Indeed, royalty revenue remains the primary motivation for many licensors. That’s too bad, because royalties can represent only a fraction of the value that is created by a thoughtful, carefully executed licensing program.

The emphasis on royalty revenue over marketing value is backward. Focusing on royalty revenue is a common mistake because many licensors do not have a formal methodology to measure the brand benefits that are generated by licensed products.