The Licensing Game

[Vigilante]

Ah I wish. My retained client is taking their time getting this one announced, and they are a publicly held company so I am waiting on them. Soon...

 

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[Roli]

Her next target is Donald Trump...

Did your friend ever sign him?

 

[samsig03]

Update?

 

[samsig03]

Update?

Any update?

Cheers

 

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[Ronak]

Awesome Thread! Thank you @Vigilante
I have licensed some of my own inventions and I was looking at selling the rights to the IP and the license. I have looked into the agreement and it allows this. Have you heard of any private equity firms or other entity buying out deals? And I am looking at doing this in the future so I am trying to make this opportunity as appealing as possible to the buyer. Do you know what they would be looking for?

Are you still trying to do this?

Anything that has consistent/growing cash flow can be sold. The most logical buyer is the current licensee. If the numbers look good, you can also sell to a private investor or another licensor in a similar market following a similar process that you would use to license to companies in the first place, basically making a target list and hitting the phones, apart from your personal network.

 

[Deleted29658]

I am trying to understand, if you get the connection to a celeb and get it to work with a product, you have to find a way to sell the product/market it and you also distribute it.

I have a product already with a manufacturer with a connection to a well known name.
I have zero sales experience and I don't have a sales personality. How would I go about getting the product into stores and in front of customers? That is my main concern.

What money do I have to put upfront myself? A few thousand dollars to the manufacturer or do I have to put a few thousand dollars up to the marketing firm I have to hire?

 

[Archer_Zero]

A friend approached me a few months back with a good idea that would require a license agreement. She didn't know where to start. She had an idea for a new product to bring to retail in conjunction with a celebrity slogan. She hit a wall.

I laughed. Why do people make this so hard? Why do we throw up mental barriers, and fabricate obstacles that don't exist? I picked up the phone and called the agency that represented the celebrity. Within a day, I had her on the phone with the president of that agency. Within three/four days, the concept was approved by the celebrity, and was moving forward towards contracting. All I did for her was make the phone call she didn't think she could make on her own. I gave her a boost over the wall. She did the rest.

She came to my office yesterday, exuberant. She had the signed license agreement in hand, and was moving forward with first production of her product in Asia.

There's no magic to this, folks. I was 100% guaranteed a return call from this guy's agent. Why? I called and offered him money. I offered to manufacture money for this celebrity. 100% of the people on the receiving end of that call are receptive to that. If I called you today, and offered you money for doing nothing, would you call me back? Her next target is Donald Trump... and she now has not only a template to follow, but instant credibility as she has her first deal under her belt that she can show to the Donald as an example. Everyone is accessible when demonstrate an ability to manufacture money for them.

I've done license deals with NASCAR, Dale Earnhardt Jr., the brand Akai, the brand Nakamichi, and a few others.

Main takeaway from this experience? Make the phone call. Action fakers sit with ideas and action paralysis. Action takers... pick up the phone and make shit happen. The person on the other end of the phone --- NASCAR, Donald Trump or whoever --- are ALWAYS interested in how you can make them money.

I would be happy to field any questions about licensing that I can. I am not the world's greatest licensor, but there's a myth that this is harder than it is. Using someone else's household brand name is a short circuit towards the Fastlane where you can capitalize on someone else's equity, someone else's years of business development, and someone else's existing revenue stream.

Need - businesses that solve needs win. As long as your product fits this criteria, a license deal meets the commandment of need.

Entry - license deals may be the ultimate in difficulty of entry, from the standpoint that once you have the license agreement, nobody else can do what you do. You will have no direct competition, and you will capture a controlled market. You still have outside competitors, but nobody else can bring your product --- with your license --- to market.

Control - depends on your license agreement. Is it perpetual if you meet performance requirements? The brand is not yours, but you have an element of control. This may be the weakest fastlane commandment to follow in the licensing arena. The commandment of control can easily be violated with the wrong partner, wrong brand or wrong terms. Definitely something to look out for in the early phases. Awareness of this vulnerability can help you look at this weakness and shore it up.

Scale - The whole point of a license agreement is to ride in on the coat tails of something that has massive scale. When we did NASCAR, we gained access to NASCAR's estimated 75,000,000 fans. Our product wasn't limited to JUST NASCAR fans, but we had a built in base of people that would buy our product. We also inherited existing distributors, and retailers that would buy NASCAR branded product that would not have bought the identical merchandise without the NASCAR logo on it. We short circuited the entire sales process.

Time - Licensing eliminates almost 100% of the traditional time required to develop a brand and bring a product to market. You still need to build a platform that can run without you... the commandment of time is mindful of using automation and systems designed so that you can extract yourself from the requirements of day to day management. So, the license agreement itself will NOT solve the fastlane commandment of time consumption. You still need to integrate time extraction into your business model. Using existing brand distributors is one way to do that.

Thanks a lot for sharing your knowledge,
I'm wondering about the process of getting the product into stores & to distributers.
- you have a license & a manufacturer ready to make your product, how do you actually sell it to distributers & get it into stores ?
- do they order directly from the manufacturer without you needing to buy inventory ?
- you do cold calling ?
- how are the logistics of this process handled ?

Thanks again.

 

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[DreSon]

@Vigilante, like many others before me have said, thank you for this post, and for all of your insight. I have read through most of these 300+ messages in this post and received some great tips and mindset advice from yourself and others.

I enjoy playing Magic the Gathering in my free time and I have noticed there are some websites that sell custom play mats for your tabletop, where you upload an image and they print it onto the mat for you. They've got different size options, card placement overlays, stitched edging, etc. In addition to that, they've got their own galleries of artwork to choose from directly on the website, if a custom image isn't something you care about.

A lot of these images that they have already on the website can be reverse google image searched back to the artist's Deviant Art or Red Bubble pages. Most of these artists already have prints for the image available for purchase.

One of my questions is, are these custom play mat websites likely giving them a royalty for every time somebody orders a play mat with their image? If you can still go and see their prints available at the artists' websites and other sites around the internet, then it isn't exclusively for sale only as a play mat, and the artist is just likely getting a piece of the pie for every time their image is sold (in whichever form of media, play mat, t shirt, etc?)

As for licensing, my local game store carries licensed Magic the Gathering play mats, with the MTG logo, and character artwork from the game itself. If one of those custom websites ever wanted to approach Wizards of the Coast (the company that makes MTG), would a licensing deal be off the table because there is already a deal in place with another company?

If this post gets any traction or if this thread be resurrected, I would be so deeply grateful. I would appreciate any insight

Thank you for your time.

Edit: I forgot to ask as well, how does it work if users are uploading copyrighted images and trademarked logos as their 'custom' image. Let's say for example somebody uploaded the Warner Brothers logo that you see at the beginning of their films.

 

[Vigilante]

@Vigilante, like many others before me have said, thank you for this post, and for all of your insight. I have read through most of these 300+ messages in this post and received some great tips and mindset advice from yourself and others.

I enjoy playing Magic the Gathering in my free time and I have noticed there are some websites that sell custom play mats for your tabletop, where you upload an image and they print it onto the mat for you. They've got different size options, card placement overlays, stitched edging, etc. In addition to that, they've got their own galleries of artwork to choose from directly on the website, if a custom image isn't something you care about.

A lot of these images that they have already on the website can be reverse google image searched back to the artist's Deviant Art or Red Bubble pages. Most of these artists already have prints for the image available for purchase.

One of my questions is, are these custom play mat websites likely giving them a royalty for every time somebody orders a play mat with their image? If you can still go and see their prints available at the artists' websites and other sites around the internet, then it isn't exclusively for sale only as a play mat, and the artist is just likely getting a piece of the pie for every time their image is sold (in whichever form of media, play mat, t shirt, etc?)

As for licensing, my local game store carries licensed Magic the Gathering play mats, with the MTG logo, and character artwork from the game itself. If one of those custom websites ever wanted to approach Wizards of the Coast (the company that makes MTG), would a licensing deal be off the table because there is already a deal in place with another company?

If this post gets any traction or if this thread be resurrected, I would be so deeply grateful. I would appreciate any insight

Thank you for your time.

Edit: I forgot to ask as well, how does it work if users are uploading copyrighted images and trademarked logos as their 'custom' image. Let's say for example somebody uploaded the Warner Brothers logo that you see at the beginning of their films.

First, always assume that any image that is being used that there is an agreement to use that image. And never assume you can use an image without permission or an agreement. The first step in any infringement is a cease and desist, and that is then followed with either a settlement offer, a license offer, or a demand of some sort. So there's a good likelihood that in the case of the mats, there's some type of agreement. If you uploaded the WB logo and started using it in commerce, one of the 1,000 attorneys they have on retainer would be in touch with you within a week. Happens all the time. I actually had one of my competitors taken out, because they were infringing on a big brand and I just called the big brand and told them. Resulted in a massive lawsuit, cease and desist, and settlement. So infringement is nothing to mess with. There's so many ways to work WITH a brand that to work AGAINST a brand is really dumb, especially if it's a brand with deep pockets.

As it pertains to your ideas, here's what to do. ASK. It NEVER hurts to engage in discussion. Don't do it through email. Find out who the players are, and do it on the phone. Email is too impersonal and too easy to blow off. Over the phone, start with "here's who I am and I have an idea to manufacture money for you." I've almost ALWAYS been successful at getting license deals done. The key is to make sure they know that you can scale, so it is worth everyone's time.

Let me know if you have additional questions - I'd be happy to answer them. This forum has spun off multiple successful entrepreneurs who did licensing deals.

 

[Archer_Zero]

First, always assume that any image that is being used that there is an agreement to use that image. And never assume you can use an image without permission or an agreement. The first step in any infringement is a cease and desist, and that is then followed with either a settlement offer, a license offer, or a demand of some sort. So there's a good likelihood that in the case of the mats, there's some type of agreement. If you uploaded the WB logo and started using it in commerce, one of the 1,000 attorneys they have on retainer would be in touch with you within a week. Happens all the time. I actually had one of my competitors taken out, because they were infringing on a big brand and I just called the big brand and told them. Resulted in a massive lawsuit, cease and desist, and settlement. So infringement is nothing to mess with. There's so many ways to work WITH a brand that to work AGAINST a brand is really dumb, especially if it's a brand with deep pockets.

As it pertains to your ideas, here's what to do. ASK. It NEVER hurts to engage in discussion. Don't do it through email. Find out who the players are, and do it on the phone. Email is too impersonal and too easy to blow off. Over the phone, start with "here's who I am and I have an idea to manufacture money for you." I've almost ALWAYS been successful at getting license deals done. The key is to make sure they know that you can scale, so it is worth everyone's time.

Let me know if you have additional questions - I'd be happy to answer them. This forum has spun off multiple successful entrepreneurs who did licensing deals.

Thanks for the info, What if the store is building custom products for each customer ? ( if a customer ordered a 3D printing store to print for him a marvel figurine ( like spider man ) ?

 

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[DreSon]

Hi, @Vigilante , sorry for the late response. I appreciate you getting back to me in a thread that is now years old. I wanted to clarify a part of your response to me with regards to my WB example:

If you uploaded the WB logo and started using it in commerce, one of the 1,000 attorneys they have on retainer would be in touch with you within a week.

The websites that I see allowing users to upload their own images to be printed don't have any disclaimer against using copyrighted or IP. If a user uploads the WB logo, or let's say some Marvel characters, and pays for the printing service, and the website receives payment for that service, is that not still infringement since they have profited from selling a product with copyrighted/trademarked material?

I also wanted to ask about scalability. If these large companies hear "dropship", or "print-on-demand", then would they consider negotiations closed? What if you're getting consistent, profitable sales using a dropshipping/POD service? Are companies providing license deals bias towards more traditional businesses?

I understand this thread isn't about dropshipping and I realize that that may be taboo/money chasing on the Fastlane forum, but I still see value in it as a new entrepreneur like myself, At least for getting some experience.