Monday, April 7, 2014

Fire Yourself!

There’s an interesting story about the early days of Intel back when they were primarily a memory chip manufacturer. They were starting to get hammered by the cheaper Asian chips and the CEO sat down with the Chairman to discuss what to do. They discussed what would happen if they were fired – what actions would the new incoming CEO take? They would probably get out of the chip market was the conclusion, and so they made some adjustments, switching priorities to growing their microprocessor business and the rest is history.

It’s a worthwhile exercise for anyone in business, from the individual working alone to someone running an established company – if you were let go, what would a newcomer, a turn-around exec with a mandate to clean house do with (to?) your business? Take a long hard look through the eyes of a newcomer at what you are doing: What is going right? What is going wrong? What are they going to axe? Or keep?

Are you…
Still showing those old collections or products mostly because you worked so hard on them? (Clean house.)
Still devoting time to a client who hasn’t paid you any decent royalties since 2011? (Back burner.)
Still submitting to the cattle calls of big manufacturers without any results? (Let someone else do it.)
Still adding “me too” designs based on what you see in the stores? (You’re too late.)
Still holding back that new work because it is not quite perfect? (Get it out there.)

Imagine explaining to this new person WHY you do what you do (note that was not “what” you do). If the explanation starts with “Because I…” instead of “Because they…” maybe it’s time to evaluate whether your focus is on your customers. Every business needs a well defined and clear mission that can not only be understood but also explained or you will eventually lose your way. We all tend to muddle that up after a time and need to go back and look for the clarity. It may not be exactly the same as when you started - markets, strategies and even your goals may change - but you need to find it.

Try it - sit down with a pen and paper and fire yourself!

Saturday, March 8, 2014

You May Be Right… They May Be Crazy…

(Ya gotta sing it like Billy Joel)
So… this time you actually DO know what’s perfect for the client and their market. You have that great product or collection, it hits all the right notes, has their name written all over it. You did everything right but the deal still fizzled due to circumstances WAY out of your control. It happens, more often than you think, and there is little or nothing to be done about it.

Here are a few snafus that have tripped us up recently:

In a big company division rivalries are killing some of our products as they fight over which categories belong to which division;

We design a line for a key retail account, we like it, the art director likes it, management thinks it’s too smart for the market and suggests that we need to dumb it down;

We have a unique category-killer concept, great feedback, the VP of Product Dev is championing it in the company but then the top management leaves and everything goes on extended hold;

An experienced art director is hired at one of our better clients and comes in with her own set of favorite artists, and now submission requests (and our submissions) disappear into a black hole;

We are doing some work with an old client, get some items into a big catalog supplier for testing and he suddenly closes the company down.

Happily we have a lot more going on at any given time, but this is where the danger lies for the “one idea” person – even when your concept may work on its own merits a roadblock can boomerang out of nowhere and then – poof ! the deal's gone. Now what do you do? Hitch up your dungarees and trot out the next idea, the next client, the next…

Don't have the next one? Might want to work on that before you need it!

Wednesday, February 19, 2014

Put Up Yer Dukes, Infringer

There was a long discussion on Linked in recently about registering groups of copyrighted images, and eventually copyright in general, and as is usual with these discussions a whole lot of conjecture, opinion and misinformation mixes in with the facts and sorting one from the other can be difficult. The first thing we want to do is get the nomenclature correct:

1. “Copyright” is a legal concept that grants the creator(s) of an original work exclusive rights to it’s use for a specified period of time. Copyright can be shared, assigned, divided and sold (and it may be owned by your employer if you have one). In countries that apply the Berne Convention standards the creation of the copyright is automatic upon placing your idea into a fixed form, i.e. on paper, sculpt, canvas, jpg, video, etc.

2. “Registration” of your copyright provides public evidence that you own the copyright and gives you certain rights in a court of law to (attempt to) obtain damages and recoup legal fees if someone infringes upon your copyright.

PLEASE don’t say that you are going to “copyright” your work with the US Copyright Office (it is not a verb), the copyright already exists and you are going to “register” that copyright. Using the correct terminology will help to understand the concepts. So here’s the problem – the government grants the registration but makes no judgment about the originality of the work, nor will they defend the validity of the registration or the rights of the copyright holder. The scrap of paper they give you is only as good as YOUR ability to defend it.

So, outside of the fact that some licensing agreements will require it, why register your copyrights?

It has been said that the only reason to register your copyrights is so you can be awarded legal fees when you need to enforce your copyright. Simplistic but not entirely off base either. A valid copyright registration not only looks nice on your wall but it is a tool, a club that can sometimes be used to bring an infringer into compliance due to the threat of damages and fees being levied against them in court. And it works great as a club until they pull a gun on you (or more accurately a fat bank account) and decide to fight.

If we are going to bandy about terms like copyright, register, copy, infringement and lawsuit, then let's be realistic about the arena you are playing in: the U.S. legal system, where anybody can sue anyone for anything and defending Intellectual Property (IP) can be particularly messy. Infringers can challenge the originality of your work or the validity of the registration, or both. They can claim Fair Use or first to publish and make you prove otherwise. Licensees can claim ownership of a copyright or claim an artist’s style as trade dress (trust me on this one). Welcome to IP litigation.

If you're caught lifting somebody's wallet it’s pretty clear that you did it. But when someone claims that your design kinda looks like the green one they created sixty days before you registered the copyright on the purple one, and you licensed it to their competitor causing them irreparable harm in a certain market segment and they sue, and you disagree - it’s gonna get really expensive. The average cost of a copyright action (for royalties under 1 million) is over 200,000 dollars BEFORE it reaches trial and almost 400,000 if it goes to trial. For royalty amounts over 1M it is over 500,000 and just under 1M if it goes to trial, and it climbs from there (from the American Intellectual Property Law Association). The costs are staggering and IP litigators do not usually work on a contingent fee arrangement because 1) there are often no insurance companies to settle with and 2) the outcome is NEVER assured in an IP case. So that means hourly attorney rates in the 200 to 500 dollar range, research and discovery costs, doc prep, expert witnesses, court costs and more, all of it coming due on monthly bills. For the next year or two.

So here’s what I think:

- Register your copyrights, it’s cheap. And do it early.
- Keep a record of everything you send out – what to who and when.
- Never assume. In our experience (and we get knocked off regularly) most domestic corporate infringements occur at a low level and many are mistakes, so before leveling accusations start from a position of compromise - try to turn the infringer into a customer and execute a contract with back royalties.
- ALWAYS act on infringers, starting with “friendly” contact and escalating as necessary. If you can’t get to agreement, consider working with an attorney to put together a minimal cost cease and desist letter.
- The majority of art licensing infringements will not merit the cost of litigation since you are likely dealing with royalties in the hundreds or a few thousand range. Make a business decision, not an emotional one, about whether you should pursue legal action. Get used to the idea that sometimes you will just have to walk away. Yes, it sucks.
- Think very carefully before crowdshaming, it can work but it can also leave you open to serious liability, and you cannot shame a real crook because they just don’t care (or overseas factories when you can’t figure out who they are).
- Be unique, because being the first to market with a signature look is the cheapest protection you can get.

Please note: I am not an attorney nor do I play one on TV. The plan here is to explain some concepts in real life terms, NOT to give legal advice or to argue the finer points with some PO’d attorney who is now fuming after reading this… even though that may be kinda fun.

Monday, January 27, 2014

Snippets - Talking It Up In Atlanta

And so I sez to the guy I sez…

Were they talkative or what! Did I happen to mention in the last post that Atlanta was a good market…? Maybe once or twice? Happy people tend to be more forthcoming, so I guess they were pretty darn happy at the Mart judging by the number of worthy snippets. They had me scribbling like crazy: 

“Fashion accessories are doing great – without all these handbags and jewelry who knows if this building would still be here? This (gift) industry needed a good push and that’s what provided it.”
– the President of a gift company

 “All this stuff with words – how many things can you have in your house that are either barking orders at you or telling you to be fulfilled?” – an agent

“This is really nice but I’ll have to ask the reps if it will sell.”
– a manufacturer in a meeting

“Some concepts just need to die a natural death – I have boxes full.” – a well known artist

“We are definitely in plaque and mug overload now, there are just way too many to choose from.” – a retailer

“I used to do a ton of them but I haven’t painted a snowman in five years.” – a well known artist

“We’re trying to downsize the number of artists we work with, there are a billion of them now. We would much rather sit down and develop a line as opposed to picking up a piece of it here and there” – an art director

“To me it’s like a giant garage sale, pretty soon it looks like all the same crap everywhere.” – an art director about walking the Mart

“My puzzle royalties are down so that must mean other products are selling – puzzles always do better when the economy is bad.”
– a successful licensed artist

“We’re doing a lot of net and Amazon sales now, and internet skus have to build for months before you have anything so those production schedules are completely different than our regular retail one. It’s a crazy model but we’re really having fun with it.”
– from a garden company

“My God, those are so ugly! You have to wonder who is buying that.” – overheard in the Mart hallway

“We’re trying to get away from words.”
– a product director (and a very telling statement…)

“Success in this business can be very hard emotionally because one day you are the flavor of the week and the next day they have moved on.” – a successful artist

“Your world changed so of course our world changed along with it.” – a gift company owner to a retailer

“It used to be a great category but China destroyed it.”
- a manufacturer

“Here’s the problem – too much content in a catalog is worthless. You get their attention for one line and a picture, maybe 3 or 4 seconds max. If it takes more than that it won’t work.”
– a retailer about a sku-heavy line

“Our first day open was the best single day we have ever had.”
– a rep on the phone in the hallway

“Every artist who wants to stay in this business has to look at things differently now – because it IS different.” – an agent

“Trend is hard. It’s great when you hit one but you cannot get stuck with one single item in inventory because you will never, ever sell it afterwards.” – a manufacturer

“Artists don’t realize that what works in New York may not work at all in California, and they need to pay attention to that.”
– a gift manufacturer

“I love the idea but I don’t like the art.” – an art director in a meeting

“It’s a nice holiday (design) except for the lime green, we can’t sell any holiday with lime green on it.” – a retailer

“It’s more about the reps than the retailers. If you can get one person in the agency to like it, they will tell some others and eventually rep management decides to push it, then other reps notice or hear about it from their retailers who want it, so they all push it and then it really takes off.”
– a gift manufacturer about marketing a new line

And finally, something we all need to keep in mind….

“This is hysterical but it’s going to be one of those products where, to make it work, we need to figure out who we are selling it to and why they are buying it.”
– owner of a gift company about a humor collection

Tuesday, January 14, 2014

Runnin' Wild in Atlanta

Five days in the Atlanta market and I can tell you this – if I see another wall sign/plaque/wall-anything/ with block/script/hand-drawn letters using the same shopworn messages that can be found on a hundred others it will be way too soon. And chalkboard design - it is so pervasive now that they have all morphed into the same look and feel so you absolutely cannot tell one company’s from another. Usually that means bye-bye trend.

But enough of that. Great show even if the traffic was a little off. The place was reeking with positivity. Overflowing with opportunity. Or if Bush 43 was still around, maybe he’d say it had oppor-tivity-posi-tunity.

We decided the Word of the Week was “positive”. Everybody we met with (and in 5 days of running we met with a lot) was up, they were happy with the way the market was going, the customers were buying and they wanted to talk product. There was a lot more of “I think we have something here, expand this, add X more designs and send it to me” rather than the “well, send it over and we’ll look at it” that used to be the norm. Of course you never really know until it hits the paperwork (and maybe not even then) but the message was much more encouraging. We talked with the owner of one of the bigger rep agencies and she was quite happy with sales at the show because on Thursday they had their biggest single show day ever with orders topping seven figures. Ya gotta love that!

One of our end-of-day meetings with a gift company was particularly interesting – we were sitting around chatting with the owners and a couple of their long term retailers when they asked if the retailers could sit in on our meeting. We were absolutely on board – what an opportunity to get immediate feedback from the people who make the final decisions. It turned into a great session, two hours of presentation, analysis, questions and answers while we all swilled wine and gobbled handfuls of Chex mix. You can't pay for that kind of education. If I had my druthers it would be an annual event (well, as long as it’s the last meeting of the day). 

What’s Next? is always the question in this business, but it seems to have taken on a new urgency as of late. If you take away most of what dominates in the market today – signs with words, chalkboard, Duck Dynasty, various redneck approaches, camo, woodland creatures – there’s not much of anything left. It’s a great big hole that everybody would like to fill - a genuine huge opportunity for creatives if they can find something fresh and new for the market. What it will be is anybody’s guess at this point, but if you think you know, please call me ASAP, let’s talk…