24. September 2008
The colorful world of licensing: an infinite variety.
David Beckham perfume, Diddl-Maus mugs, Swarovski cellphones, FC Bayern bedclothes – it's all possible thanks to merchandizing. The same applies in the toy industry: licenses are very much sought after. Uwe Weiler, the Simba Dickie Group's COO, explains the opportunities – and the risks.
YO-YO: So, Mr. Weiler, how does merchandizing work in the toy industry?
UWE WEILER: Licenses are driven by the merchandising – movies, TV, music, comics, and books. The licensee aims to transfer their success to the product in question. If a film or TV series is given the right sort of hype, children will want the logo on absolutely everything. Licenses help manufacturers steal a march on the competition and focus attention on their products. Sometimes they can also be a way of reaching new target groups.
How does Simba Dickie fit in with the industry's efforts in that direction?
We are one of the biggest licensees in Germany. Not counting the automobile licenses for Schuco, Dickie, and Carson, we own over 20 others, covering over 1,000 products in our group. Take Walt Disney, for example: we are strategic partners for Princess dolls, wooden Winnie the Pooh and "My friends Tigger & Pooh" toys, and for racing we're strategic partners for the whole of Europe and also the Middle East.
And how is the licensing business going?
Very well, thanks. Everything relating to the movie series Die wilden Kerle ("The Wild Soccer Bunch") is going really great. There are lots of competitors after it, but we all have our own share. We have one advantage: we can create synergies among our brands. What can't be achieved by one brand can be achieved by three of them working together. For example, Die wilden Kerle is handled by Simba, Dickie, and BIG. Dickie Toys will be the first licensee to advertise on TV: commercials will appear in October 2008 on the SRTL, RTL2 and Nick channels.
What criteria do firms apply when looking for potential licensees?
Core skills, know-how and reputation. We've been selling licensed products since 1982. In the doll and automobile segments we're simply unbeatable.
What are the biggest toy licensees worldwide?
As you'd expect, the "master toy licenses", which include almost all branded products and can cost hundreds of millions of dollars, mostly go to the big players that have been collaborating for years with firms such as Walt Disney and the Hollywood film studios.
To take an example, how did the collaboration with Paris Hilton begin?
The idea came from our CEO, Michael Sieber. He's got an infallible nose for trends. Paris is the It-Girl, and so something had to be fixed with her. From there it was a short step to Steffi Love. We worked out a strategy and submitted a concept to her agency.
Is that typical of Simba Dickie – that the boss has the big ideas, I mean?
Michael Sieber has a fantastic nose for products. What's more, we are deeply involved in international trade. And film producers always know one or two years in advance what films are coming up in cinemas and what licenses will be the most attractive to the toy trade.
And then there are the trade fairs …
Yes, there are the licensing fairs. The world's biggest is in New York; then there's London, Cannes, and also Nuremberg. We also get information from international events staged by licensers.
Would you say licenses are a sort of insurance for toy manufacturers?
If only! But this is a very fast-moving business and the pressure is enormous. There's always a time limit on licenses, usually two years.
What creates all that pressure?
For one thing, you have to act fast to have your products ready in time. For another, you never really know if a particular film or trend really has the pulling power you hoped for.
Can you give us an example of something that really worked?
Our Disney Princesses have been going successfully since 2002.
Has licensing got a future?
Absolutely. Germany, for example, is still lagging well behind the rest of Europe. This is because the parents tend to be conservative and would rather buy traditional toys. But the market is going to grow. Licensing themes are gaining strength all the time on the international market.
Are there some themes you don't go in for?
A license theme has to fit in with our philosophy and ethics. The aim is always to make children happy, not to give them something disgusting or frightening.
What's the most exciting thing about merchandising?
It's being in tune with the times. We know what the future holds, and that often means exciting discoveries. Take "Hannah Montana" or "High School Musical", for example: the target group is getting younger all the time. This is going like a bomb in Britain. Little six-year-old girls are listening to the music and modelling themselves on the stars. In Germany they don't start doing that until they're nine.
Are you going to be building up the license business even further?
We want to improve on our present level. This is an important business, in parallel with our own product development. Combining both strategies is the royal road to success.
Would you say licenses are a sort of insurance for toy manufacturers?
If only! But this is a very fast-moving business and the pressure is enormous. There's always a time limit on licenses, usually two years.
What creates all that pressure?
For one thing, you have to act fast to have your products ready in time. For another, you never really know if a particular film or trend really has the pulling power you hoped for.
Can you give us an example of something that really worked?
Our Disney Princesses have been going successfully since 2002.
Has licensing got a future?
Absolutely. Germany, for example, is still lagging well behind the rest of Europe. This is because the parents tend to be conservative and would rather buy traditional toys. But the market is going to grow. Licensing themes are gaining strength all the time on the international market.
Are there some themes you don't go in for?
A license theme has to fit in with our philosophy and ethics. The aim is always to make children happy, not to give them something disgusting or frightening.
What's the most exciting thing about merchandising?
It's being in tune with the times. We know what the future holds, and that often means exciting discoveries. Take "Hannah Montana" or "High School Musical", for example: the target group is getting younger all the time. This is going like a bomb in Britain. Little six-year-old girls are listening to the music and modelling themselves on the stars. In Germany they don't start doing that until they're nine.
Are you going to be building up the license business even further?
We want to improve on our present level. This is an important business, in parallel with our own product development. Combining both strategies is the royal road to success.
