What steps are taken to bring licensed costumes to life?
Retailers know that licensed costumes are a huge part of the Halloween and party industry. Licensing gives manufacturers and retailers a bit of exclusivity within the marketplace, and a majority of the top costumes each year are reflective of the current Hollywood films, TV shows and pop culture icons. While some quality generic counterparts exist, many consumers still prefer the real thing.
What retailers might not know is what goes on behind the scenes of those licensed costumes they sell. Party & Paper Retailer talked to some of the top manufacturers of licensed costumes to find out what makes a license important and the steps that are taken to produce licensed costumes they sell.
PPR: How many licenses does your company hold and which have been the most popular?
We currently hold nearly 90 licenses and among those, Marvel, Disney, Hasbro and Sesame Street have been incredibly successful at retail.
General Manager of Licensing
Rasta Imposta currently holds more than 30 licenses. On the branded side, our Crayola, M&M’s and Coca-Cola products continue to perform very well in the Halloween market. For character-based licenses, our new “Ted: The Movie” costumes, Gumby and “Dumb and Dumber” costumes continue to be great items in the Halloween marketplace.
California Costumes currently has 14 active licenses. Our newest licensing partnership with NASCAR Team Properties has done very well this year.
PPR: How do you decide which licenses your company would like the rights to?
It’s my job to ensure we look at every opportunity that is presented to us. Every year we also have a wish list of properties and brands we would like to work with, and I ensure we are speaking to the companies and educating them on how being part of the Halloween marketplace can enhance and help their brands and characters.
PPR: From start to finish, what is the process that a company must go through to secure a particular license?
Every license agreement starts with a negotiation of advance and guarantee dollars, along with the term and royalty rate to be paid for a specific property. The property owner then issues a standard licensing contract that is reviewed by lawyers on both sides to come up with an agreement that everyone can work from. Previously agreed upon business terms are added to the contract as an appendix.
A company can open up license opportunities with a good reputation, an enticing guarantee offer and plain perseverance. Once an interested party is in talks, the next steps are to negotiate payment terms.
The contract will usually have the following four payment segments: payment upon signature/advance – the amount of money agreed to be paid up front; minimum guarantee – an amount of money the licensee guarantees to pay the licensor over the term of the contract; royalty rate – a percentage of each sale the licensee pays to the licensor; advertising allowance – an additional percentage of each sale the licensee pays to licensors. This money is used by the licensors to promote the licensed property.
When multiple parties are vying for the same license, the bidding is usually won on the minimum guarantee. Once payment terms are reached, a tentative contract is drafted stating the terms and stipulations. Once all parties sign off, an official contract is executed.
PPR: Once you have secured the rights to the license, what steps are taken to create the product?
Securing a strong license is only the beginning. It takes a very talented team of designers, product merchants, sourcing specialists and marketers to make sure the licensor’s view is translated into designs that are appealing to consumers and that accurately reflect current fashion and lifestyle trends.
At Disguise, we kick off every season with intensive research on consumer, holiday and fashion trends to make sure every item that’s brought to market is something with great potential for success.
The licensor will issue a style guide that shows exactly how the character or brand needs to be represented in licensed product. We spend a lot of time working with and educating licensors of the dynamics of our category and changes that need to be made to their guides.
Many times, when following the style guides exactly, products are created at too high a price point to sell at retail. Licensors need to be alerted that we must have some creative license to change a few things while still keeping their characters or brands intact to make our costumes “sellable” at retail friendly price points.
It’s a multi-step process that involves creative discussion with the property managers; concept submissions, revisions and approvals; prototype submissions and approvals; sourcing of components in approved colors and fabrications; final sample submission for production approval and production samples for approval prior to shipping to customers.
PPR: There are many “knock-off” products out there. How do you deal with a product that infringes the licensor’s rights?
Knock-offs come in all different shapes and sizes and usually take the most iconic elements of a character and recreate them in similar, but not completely accurate, styling.
Take a knock-off of a Disney Princess and you’ll notice the product names are not the Princess names, nor do the designs replicate the exact character look. At Disguise, the official Disney costume licensee, all our Disney Princess costumes go through a rigorous approval process that includes fabric approvals, graphic approvals and final prototype approvals to ensure accuracy in character look and adherence to all licensor requirements. Our costumes ensure authenticity with a Disney tag and a character cameo present in every dress.
Infringement comes when a manufacturer passes a non-licensed costume as an original either by using a copyrighted character name in their product description or using copyrighted graphics and icons that they are not authorized to work with. It is not very common to see this in the industry as it could result in hefty lawsuits and fines. It is a lot more common to see a general knock-off, and even then, why pay for one when you can have the official one for only a few dollars more?
We keep a very close eye for knockoffs on our licensed products. It is the licensor’s job to protect both their brands and their licensee. We are always sending potential bad products to the licensor’s attention to make them aware of these potential illegal products. At the end of the day, illegal product on the marketplace hurts both the licensor and the licensee.