Licensing 101: An Overview of Brand Licensing Fundamentals

[00:00:02][Applause] welcome everyone to licensing 101 as you may know the international home and houseware show and Licensing Expo recently announced an alliance in where we will cross promoting each other's shows to bring the world of Licensing and housewares close together the webinar is the first of these initiatives and we're delighted to welcome Jessica I'm Stephen from LIC licensing Expo and license Global magazine who will present you today thank you jinny hello everyone and thank you for joining us for licensing 101 my name is Jessica blue and I'm the VP for licensing Expo I've been running licensing shows for advanced star for eight years now and previously ran brand licensing Europe in London before relocating to the US to run licensing Expo my colleague Steven extract is a license ing veteran and he is the publisher and founder of licensed Global magazine and we're also joined today by Kevin Henderson business development manager and Paul Sammons director of Licensing Operations from Electrolux Global brand licensing who will be giving you a case study presentation also um throughout the presentation you can fill in your questions in the chat box and we will um answer as many of them as we can at the end next slide Stephen I can't see the next slide Stephen oh it's on there who we are yes okay I can't I can't see what you can see for some reason I think I've I've lost my connection so we're going at this a bit blind but I'll go through my my slides and and and have you move on Stephen okay so who are we we are Advanced our Communications and we're a global Media company we've got 600 employees worldwide and we produce Publications and exhibitions and conferences for the fashion licensing Power Sports and science markets and the licensing team at Advanced star are 23 people and we live breathe eat and sleep licensing so we're the go-to resource for everyone in the licensing industry whether they're a retailer a manufacturer or a brand owner we organized the two largest licensing trade shows in the world brand licensing Europe in London and Licensing Expo in Las Vegas and we published LIC Global magazine and license Global keeps the industry updated with licensing news and in-depth features and interviews with brand owners retailers and manufacturers and our events are supported by the licensing industry merchandisers Association who represents the interests of the licensing industry next slide please so I'll quickly run through the content of our presentation um it's this presentation really is is for manufacturers and retailers that want to know how licensing works and what it can bring to their business however those that also own Brands hopefully will learn something from this too but this is really for people companies looking to license in Brands to their business so we're going to kick off with a section on what licensing is and how it works covering some of the terminology the types of Licensing the process of buying a license and how to choose the right license for your company and while we don't have the magic formula to spotting a Sure Fire winner for you hopefully we'll be able to point you in the right direction and enable you to ask the right questions to find the right license and finally we've got some great case studies to share with you next slide so first of all I think it's good to start with a definition so what is licensing put very simply it's a contractual permission to use a brand or a character or an image in association with a defined product for a defined period of time in a defined territory the brand is also referred to sometimes as the intellectual property or just the property and Licensing is the process by which the brand or property owner extends that brand out of its principal environment and onto products of a completely different nature so it's prob good to give you an example and I've put one up here SpongeBob SquarePants as you may or may not know is a yellow cartoon character um he lives in a pineapple under the sea and his principal environment is on the Nickelodeon channel on TV he grills crab patties at the Crusty Crab and he works for tanal boss called Patrick I know I know too much but I've got kids so it's always on in our house um but as you probably know SpongeBob has a huge TV following um an audience that's been built over a number of years and the rights to SpongeBob and everything related to him his image his friends his environment are owned by Nickelodeon however Nickelodeon don't make along clocks they make TV content and Nickelodeon have done a deal here with an alarm clock manufacturer to put SpongeBob on a product of a completely different nature I.E the clock so the alarm clock manufacturers tapped into the brand Equity that Nickelodeon has built for SpongeBob and they're going to capitalize on that the alarm clock manufacturer will pay a royalty on each clock sold back to Nickelodeon so in short the deal has added value and desirability to the product and has meant more clocks being sold probably at a higher price and this has been a win for the manufacturer and a win for Nickelodeon and this is licensing next slide so how does licensing work well consumers aren't really aware of Licensing they're not aware of Licensing as an IND industry certainly I mean they go into a shop or store and they just buy the products that they like next slide so this is some of the types of Licensing that that we see um certain ly at licensing Expo and all the brands that you can you see up there um exhibited at at licensing Expo last year um they come from a variety of sources and every program is unique but there are certain Trends and similarities detectable within each property type so the biggest um sector really for licensing and certainly the one um which where licensing kind of started was is in character and entertainment it's one of the most profitable types of Licensing and this property is dominated by the big players such as the movie studios and the broadcasting companies like Disney Fox DreamWorks and Nickelodeon there are licensing programs born out of famous books and Comic characters comic characters too like peanuts and Winnie the Pooh or Batman and also TV based properties like The Simpsons and Sesame Street or properties based on movies such as Star Wars which is one of the most successful licensing programs ever more and more licensing programs are stemming from apps and video games now such as Angry Birds and Skylanders um these these companies weren't really even um at licensing Expo until a few years ago and are now um certainly big players in in over in the character and entertainment side of the floor Sports licensing programs are prevalent obviously in the world of soccer Motorsports even poker um football baseball basketball and when you think of Licensing sports brands most of the PO product applications are obvious like football shirts and soccer balls but it also includes computer games such as the PGA Tour game sports equipment and even cakes and confectionary Brands when company names logos or brands are licensed on products this is referred to as corporate trademark or brand licensing and this is one of the fastest growing segments of the licensing industry and this area involves some firms with the highest brand equity for example Coca-Cola or harleydavidson and the housewi categories really really important for these consumer Brands to extend into again fashion really important for the housewares for the housewares category and one of the most wellestablished areas in the business so apparel Brands like Calvin Klein or Sketchers they're extending their name outside of apparel into lifestyle products jewelry fragrance Health and Beauty gifts music music licensing in includes individual artists or bands their images their logos or even their lyrics a good example of this is authentic Hendrick the license or behind the Jimmy Hendrick names name product extensions here like calendars gifts posters greeting cards playing cards drinks Etc art licensing is growing every year and product extensions are prevalent in the gifts greeting and housewi sector birthday cards wrapping paper wallpaper bedding table mats and so on and then finally the charity and Heritage and not for profit sector another area that's growing um licensing presents a great opportunity for Charities such as the ASPCA to drive much needed Revenue which is then invested back into the charity next slide so why do we buy these products well there's six main reasons we connect with Brands brands for us they're aspirational they speak to a certain lifestyle and that helps us replicate that style in our own home fantasy play this is particularly true of Entertainment Properties where younger customers they want to roleplay their Dora Dora the Explorer Story in real life with their toys souvenir to take something home from a special event to relive special memories Nostalgia and um retro brands are making a real comeback we're seeing a Resurgence in Old Brands coming back because people feel nostalgic about them and connect to them fanship people use Brands and buy Brands to show their affinity for something or to um to express a personality or an attit an attitude next slide please so the brand licensing industry is worth about 230 billion in retail sales brand licensing is all around us and it transforms products into Brands we have an emotional connection to us what we buy and where we buy it aligns ourselves with the brands and characters we love next slide please okay so the players the lens or and the licensing agent um you'll hear these terms a lot when you enter the world of Licensing the licensor owns the brand or the property and the lens or may or may not be represented by a licensing agent the lensey is a consumer goods manufacturer the app developer publisher or video games maker who buys permission to use the license on the products that he or she develops and makes the retailer buys the product from the license e in some instances the retailers buy permission to use the license direct from the license or and that's a direct to retail deal and then finally the consumer sees the finished product in store and buys it hopefully lots of it and everyone makes a profit next Slide the licensing agement between a license or and licy is a legally binding document to protect the interest of both parties the agreement is prepared by the licensor and then it's approved or amended by the license e the licensing agreement isn't a fixed price transaction you will pay the license or a royalty for use of the licensed property and it's normally in the format of an agreed percentage on sales a royalty can be anything from three to 22% and up and the percentage depends on the kind of property you're dealing with and the RO and the um and also the volume that you might sell it's vital to negotiate because obviously the license will wants as much as possible from you and you want to pay as little as possible and you have to meet in a in the middle that that works for both of you you may be required to commit to a guarantee which is a minimum fee or um level of renumeration that has to be paid by the lensey to the lense or a relevant of product or service sales and this happens generally at the end of the contract so to clarify the outset you will agree with the license or the minimum amount of money that will be paid in royalties over the period of the contract and if at the end of the contracted period this amount hasn't been met then you'll be required to Top This up next slide okay so you've decided you want to explore licensing a bit further and you want to start talking to some Brands and agents that could be a good fit for you so where do you start well you need to get to know the licensing industry who's licensing what to whom and need to start networking this business loves to shake hands and face-to-face exchanges are really important and there's lots of opportunities to do that through events like licensing Expo and brand licensing um you know licensing Expo and brand licensing they're both free to attend if you're a licenser you're a retailer um you should also subscribe to licens Global's free daily E news because deals are happening so quickly in this industry and that's the best way of keeping up to date with the the daily deals and licens GL glob also produces six magazine issues a year and then in there you have in-depth reports and Analysis and they publish two brilliant reports one is the top 150 Global leading lenses list and the other is top 150 Global Lors list invaluable information for you to have on your desk and then joining Lio is a good thing to do too they're our show partner and they represent the interests of Lies um manufacturers and Lors and they also host lots of good networking events next slide okay so having spoken to lots of lenses and retailers over the years about what they why they come to to the shows that we organize this is just some of the things that they say they do there so I thought it might be interesting to share those things with you um the brand owners exhibiting at at licensing Expo they know their brand inside and out and they live and breathe them every single day and they tell you the story the strategy and the future plans for the brand and you can start to build those relationships and then you can start comparing and contrasting the brands in one place rather than looking at them in isolation and many lurs there will show you the style guide this is the physical guide that dictates the colors and the treatments of the logos and imagery and then there's also a huge seminar series that runs alongside plus there's a 5H hour beginners Master Class A day before the show starts next slide okay so here's just some very quick tips um to prepare yourself so make sure you think about what you want to achieve at the show what kind of Brands you're interested in um and make appointments this is a very appointment driven show people like to take appointments they like to plan their Diaries um that's not to say you can't walk onto a booth you absolutely can but you know to have a good good diary solid diary to start with is also good lots of networking events relationships are everything bring business cards and open mind and obviously comfortable next slide okay so what makes a license successful well I've just kind of picked out some of these um a few things I mean this is a this is just hopefully to give you some idea so so basically a license should be relevant to the everchanging marketplace consumer interests always changing it should always be relevant and consistent in image and in quality then it should be preferred design over the competition so consumers will seek out pay a premium and it needs to be credible consumers need to believe in their brands Brands mean a lot to people and they need to believe that it's going to deliver what what what it says it's going to deliver is it inspirational you know is it leading the way in Innovation or design is it unique is it special and is it constantly refreshed is someone always looking at the content and the style guides next slide Okay so you're in a meeting you are at the show so you need to make sure that you have some control over the pitch too so it's always good to spend a few minutes on your business you know what's your demographic Target what are your business priorities what are you looking for making sure that you ask questions all the way through and asking what kind of marketing support you might expect be prepared to negotiate like I just said and leverage your assets and if you're interested but hesitant to commit fully maybe off to test it out next slide please okay so here's some of the jargon that you might hear um when you Embark upon your licensing program um some of these most some of these are more prevalent in entertainment licensing but you'll hear franchise and this is most often used in movie licensing so Shrek Toy Story Star Wars Batman Superman are all successful movie franchises um Evergreens Evergreen properties are proven well-known strong they have Heritage like Tom and Jerry or with Winnie the Pooh or Mickey Mouse and they're Classics their track record is known and lenes can see a history of associated licensing activity performance um you'll also hear the term hot and the term hot property is most commonly associated with apps video games movie releases or animation you'll also hear people talk about lifestyle lifestyle Brands which means that consumer might want to bring that property into their lives in many different product categories apparel home personal care or stationary and you'll also hear people talk about brand Equity What's The Brand Story and the play as in it's a tween play with teenage twist perhaps next slide okay so here's a few more things that we've touched on direct to retail um Stephen's going to talk about this in in a moment with the Food Network case study but direct to retail really means the retailer holds the license and pays the content provided directly and uses their own manufacturers to produce the product you'll also hear we're number one and not everything can be number one but you know lots of things are very popular and can be number one in certain categories or in certain areas so ask for just specific time periods compared to what get some context and then unprecedented support it's often very true but just ask for context and just some examples of support levels next slid Z so this is just some questions that you could ask licensors whether you're at licensing Expo or whether you're meeting a a a a brand owner in their office just understanding what they're trying to tell you so getting understanding the statistics they're giving you asking about competitors what are the content drivers how often refreshes will happen who is the consumer how did they select the target um and how have they selected other lenses to represent them um and other best practices so hopefully this will help you um have a little cheat sheet of of what to ask the licensors next slide thank you je hello hello everyone this is Step extract I'm the group publisher of licensed Global magazine and I work very closely with just blue um who you just heard from um before I uh launch into the case study on Food Network I just wanted to say that um my contact information as well as Jess's uh is on at the end of this presentation and um I am open to taking emails if we don't get to answer your questions at the end of this if you run out of time you can always send me an email also if you have a pen handy I'd like to just give you a quick uh web address to go to which is www. licens magag that's l i c NS M A g.com www.lens.com on our website licens mag.com you can sign up to get our daily ews which is free of charge or you can also sign up for a subscription to uh receive licens Global magazine which comes out six times a year in print and or dig digital format so uh I would encourage you to do that if you are interested in licensing we try to cover the Waterfront of consumer products licensing and again uh any questions you might have that don't get answered today or any interest that you have please feel free to email Jess or myself um anytime okay so I'm GNA uh take you briefly through uh a couple of case studies and then we actually are um quite honored to have two um uh major Executives from Electrolux on the webinar today um Kevin Hendricks and Paul Salmons are joining us and they're going to actually take us through an actual case study uh from Electrolux on the Eureka brand that uh occurred based on a meeting they had at housewares uh the last house show and it's turned into a very successful licensing program for them so um very brief I'm just going to take you through a few other examples just so you get a sense of what's available what's going on in the housewares area from a licensing perspective so my first example here is Food Network um if you uh watch TV I'm sure you're familiar with Food Network it's a major cable station that has uh mostly all cooking shows uh a lot of celebrity chefs have uh made their names on the cooking show there's been controversy like Paul Adine uh and uh there's a lot of um a lot of very successful chefs have come off that show but um from a licensing perspective Food Network because of its success and because of its audience its ability to draw an audience has been able to do some really successful licensing um the first example that I have here and by the way they on on an annual basis they do they sell 20 $220 million a year in um retail sales of licensed products and that is essentially all in the US Sur they don't really do anything globally because they're not yet um uh globally uh a global uh cable provider so this is all just Us sales so $220 million uh in retail sales of licensed merchandise um one of the Partnerships they did that was very creative is they did a um partnership with Delaware North companies to offer Food Network branded concessions and Inu dining in 23 stadiums and Arenas around the country so uh for example if you go to Yankee Stadium in New York there's a Food Network concession that you can go and get um you know your food from and certainly more attractive than just a generic uh food stand it's GNA it's going to attract you and and so the um the Delaware North companies willing to pay Food Network a royalty to use their name to attract uh customers uh another example of Food Network really smart licensing is their magazine that they've done the Food Network Magazine which is the fourth bestselling monthly magazine on newss and the number one magazine in the epicurian category now when you think about being they're the number one magazine in a very crowded Market of food magazines many of which have been around for 50 plus years okay so when you stop and think about all the mag magazines about food and wine and everything else that you see on the news stands or make you may get subscriptions to they are the number one magazine and this has happened in less than I believe seven years they've been out or less uh they did a partnership with Hurst which is a very big consumer uh magazine publishing company and um and it's been a huge success for them very big success for them and the other thing to think about is a in a time when everyone is going digital uh and people are not really reading magazines anymore they've created a very very successful print magazine so it shows you what licensing can do to really um sell your product and obviously they work very closely with Food Network on the content uh it's not just a a quick uh here here's our brand you can license it and come up with whatever you want they work very closely with a lot of the uh talent and and chefs that appear on food network but uh again very successful um they've also launched uh a line of scented candles and fragrances inspired by Food Network Kitchen recipes they've done a uh h a grab and go Gourmet Market in the Atlanta airport again branded with Food Network on it so those are just some of the examples now the the one that I really want to focus on though is the um what food network has done with coals many of you I'm sure are you familiar with the coal stores which are 1100 uh doors Across America uh it's a mid tier retailer and uh Food Network hired a licensing agency when they first started out in licensing about 10 years ago uh or a little less they they thought well let's hire a licensing agency because the licensing agency has a lot of the contacts they know a lot of the manufacturers they know a lot of the retailers um it's not it certainly wasn't a core competency of food networks to know what licensing was about so they smartly hired a licensing agency to go out and test the market and see if people would be interested uh this licensing agency brand genuity in New York City was able to get the interest of Cole's department store uh who actually was so interested that they said we want to turn our houseware section we want to take we want to take the Food Network brand and we want want to do a direct to retail we want to own that brand in our store uh and this is just touched on this earlier on direct to retail so the agency went back to Food Network and said okay we have this deal Kohl's wants to own the Food Network brand in housewares uh they have 1100 stores they do x amount of volume per year what do you think Food Network smartly said okay let's do it let's let's let's give it a shot so uh the the deal was done and and by the way sometimes these deals could take upwards of of two years to do you know it's not like they're not always quick and easy but um especially on something like this so the direct to retail deal is that cooh gets basically rents the rights to use food networks name for their all of their housewares and they have 1,450 houseware products branded under the Food Network and Bobby fle Brands Bobby fle in case you don't know is one of their top chefs at Food Network uh they pay a licensing fee to Food Network and when you walk into a Cole's housewares Department this is what you're going to see you're going to see Food Network and Bobby fle throughout uh it's it's really quite extraordinary I would if you haven't seen it I would I would really recommend you go into koh's and see what they've done with this because it's a great example of how licensing Works in housew the next example I'm going to take you through is jardan Corporation now you may not know the name jardan but jardan is a a is essentially a brand holder uh big corporation that owns Brands some of the brands they own are bionaire crockpot food saver Health om meter homes Mr Coffee Oster rival and Sunbeam so these are all really well-known Brands um not just here in the US but in Latin America and some part parts of the rest of the world they've they've taken uh some of these Brands and done what we what we consider be natural brand extensions and Jess Jess mentioned earlier in her presentation that when you do licensing right people don't know it's licensed that you just assume that that is a brand extension that's a natural brand extension so for example Oster cookwar and Gadgets in Latin America because Oster is such a strong brand in Latin America here in America they've done Mr Coffee coffee except accessories they've done pump pots travel mugs French presses uh with their crock poot brand they've done cookbooks recipe calendars seasoning mixes shelf stable dinner kits fresh roast for slow cookers and recipe apps all natural brand extensions that the consumer is not going to think that doesn't make sense it makes perfect sense and these are all great examples of again in the house where's categories uh of doing of of how licensing can really help sell help sell your product um another one of Jordan's Major Brands is a brand called Sunbeam we all grew up with Sunbeam we know the Sunbeam name uh they are licensing Sunbeam from consumer electronics home organization even butane lighters uh they have Sunbeam Garment Care sewing machines and garment Steamers again you look at a Sunbeam sewing machine and you would naturally just think oh this manufactured by Sunbeam you wouldn't think that's a license uh that there's another manufacturer actually paying um a fee to use that name to create sewing machines but in fact they are and they even make a gourmet dog treat uh maker that's available exclusively at petmart uh my last um case study that I'm going to talk about before I turn it over to the gentleman Electrolux is church and Dwight again church and Dwight is another uh name that wouldn't be something that consumers would really know the church and Dwight name but they own uh some brands that are pretty well known to the consumers uh one of them being Arm and Hammer pretty much every household you walk into someone's got a box of Arm and Hammer baking soda it's almost like it's almost like uh when you think of tissues you think of Kleenex well when you think of baking soda you think of Arm and Hammer it they've really branded themselves as the baking soda and what do we all know about baking soda baking soda is a about uh fresh and clean right so they've taken the armandhammer brand uh and they've done all kinds of brand extensions in licensing with uh with other manufacturers and they've licensed out the Arman Hammer brand name for shelf liners for food storage items with built-in Odor Control Petmate litter pans litter filters C mats deodorizer dispensers and litter liners natural brand extensions uh they've done a co-branding deal with Electrolux for for vacuum bags and filters again you know they can sell a premium product uh you know a vacuum bag is a generic you know it's just something that people go to the store and oh let me buy vacuum bags well you know if I if my wife sent me to the store to buy vacuum bags and I saw Arm and Hammer they're G to they're going to keep the odor down and be CLE more cleanly I would probably buy those at a premium price and uh munchkin for diaper pales and Nursery accessories another one of their uh licenses um some new licenses that they're launching are for their brand oxyclean uh with stain fighting use as well as a line of extended oxylean Cleaning Solutions and wipes a line of KaBoom moisture removal products for the bathroom is also in the works and uh Hefty ultimate with Arm and Hammer Odor Control trash bag so they've done a deal with Hefty a separate company to license their name for uh Odor Control trash bags makes perfect sense right and they've actually done a deal with Dutch boy for refresh paint um and also on in the bedding area London luxury for bedding among many many many many others uh examples that we could talk about so I'm going to turn over to um Kevin Henderson and Paul Samons now from Electrolux and they're going to talk take you through a really interesting case study on the Eureka brand and gentlemen can you uh take it from here yes we're here thank you Steve and hello everyone my name is Paul Sammons and I am director of operations for the global licensing group at Electrolux and I have Kevin Henderson with me who is in charge of Business Development for North and South America go to the next slide please so today we're going to talk briefly about Electrolux I'll give you introduction uh to the electrx company and then also to our global a licensing group we're going to talk a little bit about uh the Eureka brand today our case study is related to Ura so we're going to give you an introduction to that brand and kind of let you know what the brand personality is and then we'll move into uh our thought process and how we go about determining what product categories to license for Eureka brand uh and then Kevin will talk specifically about our new licy from the houseware show last year uh energy-wise during the case study next slide please so this is Electrolux uh 2012 it's a $15 billion in sales company based in Sweden but we're in 150 markets worldwide 61,000 employees in 60 countries and we are selling about 40 million products per year these are major app appliances small appliances uh vacuum cleaners and laundry products primarily but electrox is also into professional kitchens and we have a a pretty big professional group as well next slide please so the grover brand licensing group in Electrolux uh we're handling and in the next slide I'll show you will be uh some of the uh most active brands that we have but we manage about brands that we own we're present in 75 countries we have a 100 uh brand Partners probably over 100 now we call our lienes brand partners because we consider them a partner with our brand they're helping us maintain the equity in our brand and they're getting benefit from the equity in our brand so we call them brand Partners some of our brand Partners have more than one contract so we have 110 contracts and these contracts represent uh last year about about three billion in sales at retail for all our brand Partners which makes us number three among licensing agencies for corporate Brands next slide please and this is a pretty busy slide and I apologize for it but I wanted to give you a flavor for the number of brands that we have and our reach worldwide as you can see we have quite a few of the uh older American brands are Eureka filco frigid a uh Gibson taen but we're also in uh other countries with zeni in Italy and AEG in Germany so we cover uh quite a bit of of ground with the number of brands that we have and of course all of them aren't as active as as the most active but we enjoy all our all our customers and some of our customers actually have more than one brand depending on what Market position they want to be with uh with the product category that they're selling next slide please okay good afternoon again everyone this is Kevin Henderson again business development manager for North and South America for Electrolux Global brand licensing and I'm going to move right into a brief brand introduction summary as well as the case study summary as well so we know that we we want to discuss our Eureka brand which uh is the brand that we've chosen for this particular case study uh for the brand partner energy wise Solutions LLC and we know that you know we're dealing with a very much a a surplus Society a a crowded Marketplace and so what we know is that Brands can substantially reduce the uncertainty and accelerate the consumer trust and acceptance level in terms of products and specifically uh the associated brands with those products so we talked specifically about the Eureka brand which uh is a classic iconic American brand uh the brand was founded or the company I should say was founded originally in 1909 and as I've mentioned it has very much uh ties into the strong American uh D DNA and then there's probably no brand uh that more perfectly will demonstrate or convey the excitement and Innovation than the actual phrase or statement that says Eureka uh if you think about just Eureka as a phrase you think of it as almost as a aha moment or you know the light bulb has gone off because of some new discovery that has taken place and so the way the brand is positioned because all brands have some level of positioning I certainly not what we would consider an opening price point brand or an Op brand we have it positioned as a mid-market to mid-range brand specifically and so any brands that we would look to extend uh the Eureka brand into in terms of those categories would need to fit in that realm in terms of mid-range uh and certainly well above an opening price point or me to product next slide please and so we talk here in this slide about brand personality of everyone that's involved on the call today we all have our own unique and individual personalities and traits and brands are much like that uh from that perspective uh and we want to talk about the specific brand personality for the Eureka brand and that is a brand of a confident performer so when we think of uh the Eureka brand over all uh we really want to tie into and tap into I should say uh that confident performing DNA of the Eureka brand so it delivers on Performance Products that really help consumers achieve that successful confidence-building result so if we take nothing else away from this the primary takeaway is that the the Eureka brand delivers on the aspect of being a confident performer uh and also to take note of this slide is the fact that uh it's not always involved with uh trying to reinvent the will or create something that's completely out of the box many times it's really about taking a fresh look at an old way of doing things and then inventing new technologies from already established or older meth methodologies from that standpoint and the Eureka brand really ties into that and you'll see in the case study specifically for the product uh that we partnered with uh energy wise is it's really really an update to you know a previously existing idea or older me methodology of doing things next slide please and so we want to talk here specifically uh or briefly about the licensing process and and what goes into our mindset and and what our vetting process looks like uh in terms of the electrox global brand licensing group and how we manage the relationships internally with our internal stakeholders and determining how brand licensing can complement the overall core strategy of our company so obviously Electrolux is one of the world's largest manufacturers in the appliance category uh between major appliances small appliances and floor care so we have a great sense of what our inner core or what our core products are so what we look to do from a brand licensing standpoint is strategically try to fill in those gaps with brand building opportunities that really extend our brand from the core and we fan out from the core uh in order to grow our brand now of course there are limitations to you know every strategy we certainly would not want to take any of our Brands into territories that would dilute the brand and really tarnish or disparage the brand next slide please and so we take a deeper dive uh in terms of the previous slide and we look at specifically where we would like to go with the Eureka brand Fanning out from what is already established or associated with Eureka today I think if you were to you know ask 10 people probably 10 out of 10 people would tell you that their Association or thoughts that come to mind when they think of the Eureka brand is floor care or vacuum cleaner specifically so what we know is that the Eureka brand is one of our strongest Brands especially in the North American market and we know that strong Brands can take some calculated risk uh and if they can deliver on you know a few key pillars of authenticity relevance and differentiation then there's certainly other uh adjacent opportunities to move forward with uh in terms of the brand so with Eureka we move out from floor care which is our Core Business for the brand and then we look at other adjacent categories or new categories for the brand in terms of cleaning products uh any type of performance related products uh it could also Venture into heating and cooling products which we're going to uh specify in our case study today and then you know you start to look at some other uh third level areas perhaps uh Toys outdoor products or uh small domestic appliances would uh potentially be a possibility for the brand next slide please so now we'll move directly into the case study and before we get there we want to talk uh shortly about our lead generation process and it's a pretty involved and integrated process in terms of the way that we uh generate leads within our group uh obviously the trade show participation is a huge component uh in that arena in terms of generating leads and engaging uh potential brand partners because as I think it was previously mentioned it's still a people business and you very much have to engage potential partners and have those Discovery level discussions and vet the opportunity on both sides to make a determination as to whether or not it makes sense for for both parties so having said that we participate very heavily in trade shows uh and even to the point that we are Advocates of sending pre-show Communications for uh meetings ahead of time to really uh be proactive in setting up those meetings before the show actually takes place and also we want to walk the trade shows and look for companies that really correspond to product categories that are available uh to the brand in that licensing category uh now that doesn't mean that we just want to associate our brand with just any product that may may pop up but we want to make sure that there's an alignment there between the potential brand partner and our brand and to make sure then that that aligns overall with our overall uh brand strategy uh and again tying into trade show participation we purchased a booth at selected trade shows there's an advertising component as well in terms of uh print and digital advertising uh we also work with licensing agencies and various Geographic sales areas throughout the world to assist us as well in terms of generating leads uh and then one uh key tool for us as a group is our licensing inbox which is uh contained within our licensing Group website where we receive uh inbound inquiries for companies that are interested in licensing one of our Brands and then we also manage the relationship internally with our internal Partners uh we receive recommendations and and leads if you will from our internal Partners in terms of companies that we may already have existing relationships with that are interested in licensing one of our Brands so that's also uh a key benefit uh or you know a huge uh benefit for us as a group to work with our internal stakeholders as well and then just conducting General searches and research on target companies and products that's really where we vet the potential lead and the opportunity and make the decision to move forward through our process next slide please so here we we talk about energy wise Solutions LLC uh energy wise is a company that's based in Logan Utah uh their current brand is a private brand uh that they own which is called heat storm uh and they in a few uh retail spaces as you could see as evidence from the slide you know obviously there's the uh e retail component Amazon uh Ace Hardware uh Empire and uh orgill are some of their current retail channels so we en encountered uh energy wise Solutions at uh this year's house wear show uh and we began that process of uh engaging them in dialogue or opening a dialogue about potential licensing opportunities we talked to them about what their current product offering is and what that looks like uh and then it was a very much an involved process it's certainly not a you you turn on the switch and everything is green and you go so it's very uh detailed integrated process because what we want to do is make sure that there's a strategic fit for our brand and the company that we are considering for the brand next slide please so when we in our Discovery level conversations with energy wise again we know that in terms of this specific product category heaters uh like many categories uh it's very cluttered and almost Surplus uh space and what they were in search of is a brand that would deliver on some of the uh items that I mentioned previously is a brand that would reduce that clutter uh if you will reduce that uncertainty and really what they were trying to tap into is to tap into a brand that would accelerate the consumer trust and acceptance you know even we know that Eureka plays very strongly uh in the Floor Care category and we also know that very strong Brands can withstand some level of uh calculated extensions or calculated risk if you will and so what we're able to do is tie into their desire uh in terms of partnering with a very strong uh house brand or corporate brand that would gain them access into new retail channels new price categories new price points and then that could potentially or exponentially grow their business from where they are today so what resulted from that is from our initial discussions is that they wanted to bring to Market three products initially and then a funny thing happened is within some of their own conversations with the the retail channels uh the retail channels were very responsive to uh the Eureka brand being associated with the heater because it's certainly uh an unconventional uh category if you think about where Eureka is today uh and the response was so phenomenal that the retail Channel communicated to energy-wise Solutions is that hey we think this is a great idea for the Eureka brand we think uh the brand is very resilient it's strong it has clear clearly defined equities uh so so much so that we would like you to take your offering from three products to eight products so of course what that did is uh they had to go back to the drawing board a little bit because now you need to develop not not three products but eight products but uh that's certainly uh a very positive uh aspect of this whole entire process is that the retail channel was very receptive uh the part the brand partner energy wise was very receptive they're very much an in uh Innovative company uh we know that there other players in this space presently uh but with some of their Technologies and their uh sense of urgency to develop their products and some uh exclusive you know intellectual property uh advantages that they have we really think that this is going to be a very very strong partnership for both entities uh Electrolux Global brand licensing as well as uh energy-wise Solutions LLC and then of course it's going to really open up and increase their funnel and expand you know that opportunity with the retail channel uh for them taking them from where they are today to the next level with that expansion next slide please and so that Paul thanks go ahead I'm sorry I was gonna say that concludes our our uh summary of the case study and at that point we'll turn it back over to Stephen thank you that was that was really terrific so we're now going to open it up to questions um and please uh anybody who has questions please type them in and we'll try and respond the only question we have so far there's a couple questions regarding how do you identify a licensing agency to work with well licensing agencies are uh in some cases they're specific to different Industries in other cases they're global um so if you know what your brand is or brands that you want to Market uh you can kind of Target which agencies to talk to I would suggest that uh you simply uh maybe do a do a request for information from certain lenses get information in maybe have them do some proposals to you I mean uh it's it it's not that hard to find a licensing agent the main thing is you want the licensing agent excited about marketing your brand and going out and pounding the pavement finding licensees for you so you can probably find names of Agents but uh send them your information send them your brand uh guidelines and um brand personality and then let them come back and and present to you what they think they could do with that brand and uh and also sorry can I just at at licensing at licensing Expo a Brands and agents section which is just dedicated to to Brands and to Brands and agents and most of the the major agents that have been mentioned today Beano PLC um and um bran genuity they're all represented in that section and you can see just from you can see from their Booth what types of Brands they represent because they they hang all of the logos and and they put product samples up so you can kind of see at a glance that way um and also through the magazine um Stephen you probably want to add to that I'm not sure yes um you know again uh I would say if you subscribe to or go to you don't have to you can just go to the website licens mag.com we have a listing of top uh licensing agents that's not going to really give you much information other than the volume of what they report to us that they're doing in sales um again I would say there are certain agents that uh that work specifically that are very good at working specifically in certain categories uh and some that are much more generalized um you certainly want to do your due diligence as Jess said the best way to find an agent is really to go to licensing Expo or if you're in Europe to brand licensing Europe walk the floor uh I would say probably um 95% of all the major agents are represented on those show floors and and you can you can set up meetings with them ahead of time to sit down and talk about your brand with them you can certainly uh you know get an idea of who else they're representing and uh and you know have them take you through some case studies of what they've done for clients similar to what your brand is okay and I have a question for Paul how long did it take to close a licensing deal for electrox it's it's all over the place there's there's no way I can give you a general idea I've worked on deals that took you know six months to a year I've worked on deals that took two years so uh it it really depends on the buyin that you have internally sometimes you you find a good uh licensee and you want to you know give out a brand license but the people internally decide that they want to do the product instead or they're not really sure or they think they're going to do it in two years so um if you have good Buy in internally and you have a partner that's excited uh you can get a deal closed you know within a year we did energy wise I think we started talking to them in March and we just closed the deal about two weeks ago so so it's all over the place there's no guideline for that yeah but to Paul's point then there are some that you know could be on that accelerated track as well but again it it runs the gamut in terms of a a Time a timetable for sure the next question is what is the range of royalty and minimum electri seats with a partner well they there there was already a a um royalty rate range in the presentation um that of course that range is pretty broad because it includes uh the character licensing but uh you know we are looking uh with in that range I mean I can't tell you exactly what our our range is because it depends on the brand it depends on the market it depends on uh the company and the products we do a lot of businessto business uh Licensing in Europe and uh those rates are a little higher than business to Consumer so uh you there we have guidelines internally but uh we uh we probably run between uh three and 10% overall if you need a range more specific than that I couldn't give it to you the next question is what is the smallest deal size to consider well the smallest deal size to consider also cons is uh uh governed by the market that you're in we were looking at a deal in Zimbabwe uh on licensing some freezers and that deal in you know in the grand sense of things was pretty small about 20 20 to 30,000 en royalties a year but uh for the Zimbabwe Market it was a pretty nice deal and it got us in that country uh with a licensing uh with a licensing contract so uh you know it just depends on you know in the United States 30 grand may not be a lot but in some other countries just to get in the door or to expand your brand or to get into uh retail that you want to be in in that country uh you might want to go with a smaller deal and uh it might work out for you okay the next question we have somebody who who represents an Italian artist who won the Oscars for Apocalypse Now Reds and The Last Emperor our product is his collection of unique photos do you think that the Expo would be a good venue for us to present our images well we have a a dedicated Art and Design section on the show floor just next to the brand and agent section um so I think absolutely yes there is um there's an area that that would would they would feel right at home in um there's Contemporary Art Fine Art photographic art um street art um all represented there and and that that that section is really well trafficked by the by people from the house wies category as well as um other exhibitors shop that area too to look at um art and brand collaborations so i' would say definitely email me and I will um we'll we'll talk about that option the next question is how many deals per year in in inner core outer core and expanded areas do you have well that that's a uh a question that I really can't answer either because uh in the intere we probably do very few deals because that's our core product and the only way we would do a deal in the interc cor would be if we uh let's say we were in a country that uh had Kitchen products but we didn't have any laundry or you couldn't import laundry because of the import duties we might be able to license our laundry uh under one of our Brands that's also in the kitchen so we have a full range of products in that country um but the deals that come in are primarily uh outside of the interc cor and and uh it could be uh it just depends on how many people you have uh working the marketplace and how many marketplaces you're in so uh you know if I gave you a number it wouldn't mean anything because it would depend on who you have and you know how many Brands you have how many people you have working and how wide your brand can extend to um in a particular country okay yeah those are the kind of questions where we would you know have a you know almost the oneoff you know conversations to Paul's point you know based on geography and we would have those individual uh discussions with with the potential opportunity okay I'm not quite sure I understand this last question but bear with me it says what should be shown to an agent while at the Expo a full brand book and in parenthesis he writes character full with various product mockup to be licensed so I'm assuming that this person has a full brand uh book character and what should be shown to an agent at the Expo so it sounds like somebody who who's looking to be represented by an agent at the Expo is that may CL what's good to leave behind for them a postcard a pamphlet okay well that that's a difficult question to answer I think the the most important thing would be to um to talk to the agent first and to get an appointment I mean you can certainly walk on on spec that's fine um but certainly to try and engage engage the agent in advance and set up an appointment and actually ask the agent you know what what is it that you like you know like to see from me you know this is what I've got this is my brand Equity this is this is the audience I've got that's what an agent will be will be wanting to know they'll be wanting to know okay what sort of penetration do you have you know is your character is it in a book what are the book sales you know where is it um selling and is it um do you have a social um social uh media following you know how many followers do you have you know where where is your penetration what territories those are the kinds of things that an agent will want to look at to see if your brand is a brand that they that they want to represent that they you know that that will work for them also um so I I kind of think that that's that's probably probably the answer I don't know Stephen if there's anything else you would add to that well you always want to before you even enter into any kind of conversation about licensing with a licensing agent or um you you want to make sure that you're that the brand that you are that you own or you think you own is been protected through a copyright or trademark okay that's number one if it's not don't even bother because the agent won't talk to you okay they the agent is in business just to clarify the agent is in business to make money and time is money so don't waste their time don't waste your time make sure that your first order of business is to make sure you have a copyright or trademark depending on whatever the IP is once that's done then you can move on if it's you mention character if it's a character if it's an unknown character you're not going to have much success okay um it it needs to be a character that has some sort of media attached to it that doesn't have to be traditional oldfashioned media I'm not talking about books I'm not talking about movies and I'm not talking about television I'm talking about it could be social media it could be an app it could be a game there's so many new uh upand cominging um potential ways to to for your character to to come to life uh and and you know Angry Birds for example uh was something that no one knew about three or four years ago and it's it was the hottest selling license in in the business globally so you you never know what character is going to be hot but you need to have a strategic plan behind it what what am I going to do to roll this character out um where what's my plan behind it the agent is going to want to know that the agent most likely is not going to be a strategist the agent's going to be the uh deal maker the agent going to go out and do the deals the agent basically a very good sales person who has great great Rolodex of contacts and knows who to call with for that particular uh product or category okay and I believe that that's all of the questions and on behalf of Iha I would like to thank Jessica Stephen Kevin and Paul for a great very thorough presentation um for all that have attended uh this will be on our website at www.house.gov or Paul um but once again thank you all for attending and um this is a a great opportunity and a bird's eyee view for good things to come thank you thank you very much thank you everybody bye