Animation licensing, branding and business prospect.

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Licensing and Merchandising (L&M) is a sizeable business globally, the Walt Disney Company is probably the largest character licensor in the world. India’s L&M industry is making its presence felt and is poised to grow significantly in the coming years. Industry experts estimate that the Indian L&M market is currently projected at approximately INR 30,000 to 35,000 million and is growing at more than 12 per cent year-on-year. With issues such as the ad cap on advertising, there is a limit to which channels can grow their revenue and this is being looked at as an additional stream of revenue for channels. The L &M primarily functions on two different models, one where IPs are not owned by the channel and they acquire rights for a particular tenure while paying royalty to the IP owner. Second, TV broadcasters create their own brands and hence own the IP rights enabling them to create consumer products and distribute it themselves. Today broadcasters like Viacom18, Disney India and Turner International are successfully turning towards this model. Viacom 18’s consumer products across various categories which include brand IPs that are network owned and non- network owned and they have been monetising their own brands such as ‘Motu- Patlu’, ‘Ninja- Hatori’. In terms of growth, Viacom 18 expects the consumer products division to grow from 500+ Shop Keeping Units (SKU) to 2000+ SKUs, more than 1 million products in the market and a footprint of more than 10,000 in distribution and retail platforms. Flipkart has tied up with Viacom 18 for the licensing of three of their largest brands ‘Teenage Mutant Ninja Turtles’.

Read: Scope of Animation in Kolkata.

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Animation characters with strong brand values can be used for successful partnership with other brands, products and movies. The trend of partnership and collaboration with other brands is on an upsurge. Many product brands from FMCG, auto, insurance and others are proactively using characters like ‘Chhota Bheem’, ‘Motu Patlu’, ‘Krish’, etc for marketing campaigns. Some examples of such collaboration are as below:

KPMG 3

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India’s animation L&M business despite several positive factors, faces key challenges that we need to overcome in order to realize and utilize our full potential. Firstly, in a diverse nation like India, having multiple choices and preferences which would differ in terms of characters, type and size of merchandise. Secondly, there is no special law in India to deal with any issues related to character licensing. Hence, any concern is dealt with by taking into consideration trademarks, copyrights and common law principles. Thirdly, nuances like piracy is a serious challenge that has crept into character licensing too.

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Animation branding and L&M as a segment is currently under- exploited. This segment, if effectively tapped, can become an important part of long term growth strategy of broadcasters and studios.

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Source: FICCI-KPMG report 2016. 

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