How Virtual Worlds Can Set Up Successful Licensing Programs
With the rise and rise of Moshi Monsters, it’s become very clear that Toy/Game companies need to be abreast of the opportunities to license from Virtual world Brands. I’ve written about this elsewhere.
But lately I’ve been Consulting with several Virtual World Brands who needed help to embrace the world of physical product Licensing. So thought I’d post some Top Tips for Virtual Brands…some pitfalls, how to spot opportunities for Licensing Virtual worlds, and some practicalities.
1. Impressive Metrics – Potential Licensees will assess your Brand by analysing your metrics – topline stats on visitor numbers, engaged users and time spent in your online world. Make your stats as impressive as you can. Clearly you spend much of your time working to do this – so it’s obvious, but still critical! The bigger your reach, the greater the opportunity. And don’t presume that the same stats that are relevant for your core online business are the same for Licensees – Brand awareness is difficult to measure, but a combination of massive registered users and a strong core of devoted fans will work wonders.
2. Don’t Jump The Gun – Right now, this space is so hot for Licensee companies that you could easily get product on shelf before your Brand is ready. Your metrics may be good, but do you have a merchandisable Brand yet…not necessarily the same thing. if you do go too early you risk the product not selling off the shelf, which could kill the entire Retail opportunity stone dead.
3. Product Integration – Licensees generally struggle to get any product integration with Entertainmnt Brands. In some countries and with some Brands/media formats it’s easier, but you have a massive advantage. Virtual World content is not controlled to the same degree as TV or Movies, and often some degree of product integration can be easily executed, delivering significant benefit to Licensees over other types of Licensor. (Obviously this needs to be done with integrity so as not to damage your user relationships, but with care that can be done).
4. Plan for success – it’s comparatively easy to generate interest in your Brand if you have decent reach. However, you will find that nearly everyone will want to slap your label on any old product to shift some boxes when you have reached critical mass. To ensure you protect your Brand, and grow both revenue and Brand Equity (a major factor in any eventual Brand sale), it’s critical to map out what a Licensing program should look like, and to define what Licensees will need to do your Brand justice.
5. The Job isn’t finished once you sign the deal! – The product approval process for Licensors can be onerous. We might all aspire to Moshi Monsters level of Licensing success, however, with that comes a mass volume of product concepts and executions to consider, approve and argue about! This process can be made less problematic by Tip 4 – plan for it, there are ways to reduce the pain – either by using a 3rd party or staffing up for instance.
6. Start With The End In Mind – the old adage of “If you don’t know where you want to get to, you won’t get there!”. If you are a Virtual World start up, you can scope out your world to make it more merchandisable. If you have an established world, there are still tweaks you can make, or features you can add which will significantly increase your Licensing efforts.
7. Seek Expert help – the reality is that most Virtual World companies have plenty going on keeping their sites running, interacting with users and dealing with various tech issues. Bearing in mind investment levels in getting to the point where you can License, and the potential multiplication factor on your valuation should you look to sell, you should consider seeking advice/assistance from those who know the world of physical products Licensing. Aside from helping you plan out, they are also likely to fast track the process of engaging with the right Licensees, as well as having the ability to actively broker deals for you. They should also consider differences in culture and geography – some products work better in some markets, and not in others.
If you would like to find out more about how to set up a Licensing program, or want help with an existing one, please feel free to email me: firstname.lastname@example.org
All the best