Licensing '95: a competitive edge in a non-product oriented market.

Some of the top studios and independent production companies will be exhibiting at the 15th Annual International Licensing and Merchandising Conference and Exposition.

The show is sponsored by the Licensing Industry Merchandisers' Association (LIMA), and held in New York, June 20-22.

MCA/Universal, Turner Home Entertainment, Warner Bros., MGM/UA and 20th Century Fox are among the major exhibitors. New to the show will be Collegiate Licensing, Flavia, the National Wildlife Federation, The Beanstalk Group, Campbell's Soup, Sketchers and the Pogs Federation. On display will be more than 2,500 properties representing characters, entertainment, sports, fashion, corporate, nostalgia, brand extension, graphics and lifestyle properties.

As always, the Show will offer a comprehensive seminar program specifically geared toward the complex world of licensing. Seminar topics range from "An Introduction to Licensing and Merchandising," "Corporate Licensing: Capitalizing on Brand Extension," to "International Licensing," "The Legal Side of Licensing" and "Expanding the Role of the Licensing Consultant."

In addition, Licensing '95 will showcase artists and designers from around the world. The Designer/Artist Showcase allows artists and designers alike to make contacts at the show through a specially designated area to display their work.

Diane Stone, show director, said there are approximately 230 exhibitors, with more than 10,000 people attending this year. International attendance is up 15 per cent due in part, Stone said, "to the worldwide appeal of U.S. properties that are desirable to both manufacturers and agents."

One new feature of the show that Stone is particularly proud of is the VIP Retailer Program. For the first time, conference organizers are extending an invitation directly to retailers for an exclusive visit on June 22 to the showroom before the floor is open to attendees. Even though Licensing '95 is not "product-oriented," Stone commented, the Show still gives the retailer a "unique opportunity to preview properties and begin the networking process that is key to licensing." She added: "The show gives merchandising, promotion and buying executives the opportunity to work with licensors from the beginning of a property offering through the merchandising program which will support it all in retail. Sending buyers to the next round of product shows knowing about the most powerful licensing and merchandising programs will give retailers the competitive edge and higher profits."

For exhibitor DIC Entertainment, Licensing '95 is a way to expose its hot new property, Sailor Moon. There will be more than 200 products at the Show supporting the launch of the Sailor Moon television series, which premieres this fall in more than 85 per cent of the country. Products range from apparel to back-to-school properties. According to Joy Tashjian, DIC's next phase of its licensing campaign is developing retail programs and forming a Sailor Moon fan club as well as working on a fast food, cereal, frozen product promotions.

Also exhibiting is Hearst Entertainment, which will be a part of its sister company's booth, King Features. Steven Herman, vp of Marketing for Hearst Entertainment will be at the show looking for new licensees for Phantom 2040 as well as meeting with existing licensees. Phantom was launched last September in the U.S., and was picked up for a second season in first-run syndication; international roll-out of the show, is scheduled for late fall. New properties Hearst Entertainment is launching at Licensing '95 are Quasimodo and Flash Gordon. In the case of Phantom, Herman said meeting with the retailers is very important: "As an already established property in merchandising, furthering Phantom product placement in retailers' chains is a must."

Attending the show on behalf of Westinghouse Broadcasting International are Joe Matesevac and Ray Donahue. Even though Westinghouse is not exhibiting, Donahue said they attend as a way to "maintain the momentum" of its successful Teenage Mutant Ninja Turtles property as well as to introduce its new property Prince of Atlantis, a co-production with the U.K.'s BBC. "The Licensing Show gives you an idea of what the competition is in the marketplace as well as a perspective on what's happening in the kid's world."

MGM, probably the exhibitor with the largest booth, has been exhibiting at the Licensing Show since it began 15 years ago. And Susan Notarides, exec. vp of Licensing and Merchandising for MGM, has been attending for the past 11 years. MGM's theme this year revolves around its upcoming release of All Dogs Go To Heaven II. In addition, it will be showcasing The Outer Limits, a new series currently appearing on the U.S. cable network Showtime and, in an unprecedented move, is also on its way to syndication at the same time. Validating the conference's focus on retailers this year, Notarides commented that "it is great to get retailers involved because they need to know who has what. And, since many are in different geographical regions, the Show facilitates contact between each other."

As attendance continues to grow, the Licensing Show will change its venue next year and move from the New York Hilton to New York's Jacob Javits Convention Center to accommodate the increase.

RELATED ARTICLE: The Legal Aspects of Licensing

Video Age interviewed Edward C.H. Chin, a partner of the New York City law firm of Hertzog, Calamari & Gleason. Chin's firm represents many studios in merchandising/licensing agreements.

Video Age: What forms the basis of a good licensing arrangement?

Chin: Careful planning with good counsel is key. The threshold issue is the scope of the license. The client should review with counsel general market conditions, accounting for the future as much as possible, i.e., changes in the marketplace and the universe of derivatives for the principal product.

VAI: What is involved in determining the scope of the license?

Chin: Good counsel will try to get the client to define the product: What is included and what is excluded? What territory is covered? How long will the agreement be in effect (term)?

VAI: What are the issues involved in distribution?

Chin: This is important because the mark (the license) can be adversely affected by how it is distributed and to what extent the product can be sold at a markdown. Basically this comes up as provisions restricting the ability of the licensee to sell below market at retail and in certain channels.

VAI: Who pays for the cost of promoting the mark?

Chin: Generally, the licensee pays. An item to consider is who will be responsible for undertaking promotion of the product. Basically few licensees are in a position to dictate implementing advertising.

VAI: Discuss the consequences of termination.

Chin: Termination has consequences for both parties. There is the issue of what to do with surplus goods and how to prevent a gap from occurring in the marketing and distributing the product. Provisions for grace periods should enable the licensee to continue selling the product bearing the mark on a non-exclusive basis during the overlap period as well as to enable the licensor to get a new licensee started.

VAI: How can a licensor protect himself against a loser?

Chin: The best way of handling this is by providing minimum performance parameters in the agreement.

VAI: What about royalties?

Chin: Aside from the percentage royalty and guaranteed minimums, timing and method of payments, auditing procedures and, for international licenses, withholding taxes and currency restrictions should be considered. - ET