From bags to apparel to bed-sheets, TV content brands expand their product range to tap India’s growing Rs 600 crore licensing and merchandise market
If you are looking for clothes for extreme cold weather conditions and don’t know where to go, you could visit the National Geographic Channel (NGC) merchandise store in Singapore (or London). Customers can even test the suit in a special room at the store where the temperature can be adjusted to minus 50 degrees centigrade. The store also stocks other NGC merchandise such as stationery, calendars and bed-sheets with trademark NGC images.
The good news is that some of this merchandise may soon be available in India. Executives at NGC in Delhi are not saying whether a full-fledged NGC branded store is in the offing but admit that the company has signed its first ever licensee in the country. The product in the offing is currently under wraps. “Worldwide, NGC licensed merchandise is big business and it is definitely coming here,” says an India-based NGC executive who did not wish to be identified.
While NGC is just setting out to test the Indian market for its licensed products, television channels like Cartoon Network, Pogo, Disney, MTV and even Star Plus launched their licensing businesses three to four years ago. However, their consumer products division heads claim the business is taking off only now, thanks to growth in organised retail. “Television content licensing and merchandise is finally seeing rapid growth,” says Sandeep Dahiya, vice president, consumer products, at Viacom 18. Dahiya looks after Nick and MTV merchandise.
With an eye on the over 20 per cent growth in the category, television channels are quickly adding to their product range. Dahiya, for instance, will soon launch merchandise (apparel, bed-linen) based on Splitsville, the reality show that completed season two this year. Nanette D’ Sa, head of consumer products at Star India, is in the process of rolling out gold jewellery under the Star Parivar brand name. Cartoon Network Enterprises, meanwhile, is happily readying to introduce its character Gwen —the girl with magical powers — in the consumer market.
To be sure, there is no dearth of content brands from Cartoon Network Enterprises, the consumer products division of Turner’s children’s channels (Cartoon Network and Pogo). The division kicked off in 2005 and has, since, introduced products around its popular characters such as Ben 10, The Powerpuff Girls, Code Name Kids Next Door, Dexter and Johnny Bravo. The product range includes apparel, bed-sheets, toys, games, lunch boxes, bags, sippers, water bottles and much else. “There are 32 product categories that we’ve licensed. We have even licensed some popular third party characters such as Beyblade, Bakugan, Sesame Street, Galli Galli Sim Sim and Bob the Builder, among others,” says Jibi George, associate director, Cartoon Network Enterprises.
MTV is also present in the market through its range of apparel, watches, perfumes and deodorants. More recently, it launched products (cargoes, playing cards, wall-clocks and bags) around its sub-brand Roadies. “They’ve been a sell-out. Going forward, we plan to launch Roadies range of bed-linen, apparel, eye-wear, watches, helmets, shoes and much more,” says Dahiya. Nick, which has licensed characters such as SpongeBon SquarePants, Dora the Explorer, Diego and Avatar, is now negotiating to get rights to Ninja Hathori and Roary the Racing Car from its original licensors in Japan and the UK, respectively.
It’s not just healthy sales growth that inspires channels to license content brands. They genuinely believe it helps to take the brand “out” of television and into the consumer products market for a better “touch” and “feel” experience. “The greater the brand connect, the greater the loyalty,” feels Dahiya. Agrees marketing expert Jagdeep Kapoor: “Consumer products extend the brand offering…It becomes a total brand experience.”
Clearly, the idea is to make the “content” brand tangible and enhance its core values. “In our case, the merchandise is educational and not pure entertainment,” says the NGC executive. Such brand extensions are expected to fulfill both functional and aspirational needs.
In India, Nick works with licensees like Mattel, Primus, Crocs, BILT, Portico, Funskool, Eurokids and Colgate Palmolive, among others, to bring out products in 30 different categories. According to Jibi George, channels provide creative inputs on designing to ensure the products are as close to their on-air version and live up to their fans’ expectations.
With their licensees, most channels work on the minimum guarantee and royalty rate model, based on business projections. Today, merchandise’s contribution to MTV and Nick’s revenue is a healthy single-digit. “The good news is that it has the potential to grow into double digits soon,” says Dahiya. Disney, which launched its licensing division in India even before the channels went on air, is doing well with its consumer products range around Mickey Mouse, Disney Fairies, Disney Princess and now Hannah Montana. It is estimated that licensed merchandise contributes almost 20 per cent to the company’s turnover.
While licensing and merchandise divisions of TV channels are growing, the market is not without its challenges. “Indian manufacturers, distributors and retailers are used to doing business in a particular way. It is difficult to convince them of the value of the concept,” says Dahiya. “Piracy, that is infringement of IPR is our other challenge in the market place,” adds Jibi George.
Though growth in the category has been triggered by retail getting more organised, almost 85 per cent of Indian retail is still unorganised. Despite the odds, Nick products are present in 150 cities, while, Cartoon Network Enterprises range is available in over 60 metros/towns/cities including Madurai, Vishakhapatnam, Indore, Belgaum, Jhansi, Karnal, J&K, Sangli and Kolhapur.
Worldwide, Nick earns more from consumer products than from its television channel and in the US Cartoon Network Enterprises does business worth $1 billion. That probably is the next goalpost for these brands in India.
