Thursday, December 27, 2012

Ride That Wave

It’s hard to believe that a year has passed since I was looking over my unwritten blogs and wondering how to end the year. Yet here we are again at another December's end, wondering about how to succinctly sum up what we saw, and see, happening in the art licensing biz. And, by some weird coincidence, Blogger tells me this is post Number 100. Huh. There are sooo many things one could talk about, but I think it comes down to this:

It feels better out there.

No statistics or hard facts here, just a vibe that continues to be more positive. Clients are happier, ideas are being discussed and implemented, and contracts are coming in regularly. This is not to say that art licensing is “back”, because what it was will never come back. The one thing we know for sure is that it will continue to evolve, and that art licensing will not be the same in the future as it was in the past. This does not necessarily rate as a good or bad thing, it just… is… and it’s a waste of time to try and render judgment. Properties, participants, methodology, trends, terms, markets and marketing, products - any and all aspects of the business are fair game for disruption. The good news is that also means they all can present significant opportunities for forward thinkers. Kind of fun, actually.

Unfortunately this improved vibe is matched up against another observable but less attractive trend. Art for licensing is becoming a commodity, and commodity markets are governed by price. It’s easy to see it happening - everyone is now aware of the decline in advances and erosion of royalties over the last few years. Technology and internet access have brought millions of people into the creative arena, and by no stretch are all of them gifted or even talented. Yes, some definitely are, but there are just so many more now. “It’s very cluttered out there” as one of our clients said.

Of course all of that is old news. What is less obvious, but I believe just as real, is an insidious devaluation of the artist’s contribution in the licensed product business.

The relationship between business and art has always been complex: you can deliver quality work (actually you have to) but you cannot force someone to see the true value of the designer’s contribution, particularly if they can get by with lesser quality art. The sheer weight of all the available design is pushing down average overall quality, and perhaps more importantly, pushing down the perception of value held by some of the customers. This creeping devaluation will continue to impact all of us because your clients cannot be bombarded by a constant torrent of available art without it affecting, consciously or not, how they perceive it. And there’s nothing we can do to stop it, no more than King Canute could turn the tides back into the sea. Your feet are going to get wet.

Since we are unlikely to change the mindset of the market, then perhaps the only real option is to change how we approach it.

The art licensing market has always had a full spectrum of customers ranging from those driven to bargain for the cheapest price on up to those who want all their products to be a collaboration that accurately reflects the artist’s vision.  Common sense tells you that the vast majority of them are going to be somewhere around the middle of that spectrum, maybe leaning one way or the other, with fewer out at the extremes.
(You always see the questions in the forums: “What do manufacturers think about…?” Well, they hold lots of different opinions, because they are all different.) A typical art licensor would make a decent living by landing a mixture of smaller, price-driven jobs along with the less common (but more satisfying) named collections and collaborative projects. Now the small jobs have gotten even smaller and are being spread among thousands of artists worldwide, and the higher-end bigger collections are fewer and farther apart, so your typical art licensor has experienced a dramatic shift in opportunity.
But there’s the key – it’s a shift, not the end, of opportunity.

What’s the Big Idea?

My dear mother used to ask that (loudly and often…) as she tried to rein in her 4 rambunctious boys. It didn’t work so well for her, but it may have a better application in our business. The traditional advice has been that if you are in a business that only competes on price, get out of that business. It still makes sense.  This doesn’t necessarily mean that you should get out of licensing, although it will for some, but instead try to rise above competing for the everyday and the average. Set yourself apart and join the Big Idea business.

This is not a journey for the faint of heart. Plodding along the same old path to the same old place with the same old stuff is not an option. Big Ideas are elusive, and you need to ask questions to find them. The Six Honest Serving Men will be your constant companions. Big ideas are often hidden among groups of small ideas, so you need to dig, try and discard often -  the likelihood of constructing a “one in a million” concept increases very quickly as you approach the creation of a million ideas. Make some mistakes. If it’s been done, don’t just try to do it better, try to do it differently. The reaction you are shooting for is “why didn’t I think of that?” instead of “oh look another nice…”. Who knows where that Big Idea may lead you, both in licensing and beyond? There is opportunity here for those bold enough to see it, brave enough to expose their Big Ideas to the world, smart enough to seek feedback then listen and adjust, and tenacious enough to get launched.

These are the people who will always be in demand, the ones everybody else calls “lucky”.

“It’s like a wave – resist and you’ll be knocked over, but dive headfirst into it and you’ll come out the other side. This is a new and different world, and the challenge is not just to cope with it but to thrive.”
–from The Best Exotic Marigold Hotel

I wish everybody a Happy and Prosperous New Year. 
Now go get ‘em.

Friday, December 14, 2012

Lasso that Niche, Pardner

Well, we did it again. Out of all the cities where I could have spent the last 5 days, you know the last one I would chose… yup, Las Vegas. But that's where we were. Actually, if ya gotta go, Cowboy Christmas is a great time to be in Vegas. Cowboys and rodeo stars are everywhere and the whole town goes Western with an added Christmas touch. We got to spend some (hilarious) time with our friends in the Cowboy Cartoonists International and also some of our current clients while we prowled the shows for new ones.

Cowboy Christmas is a part of Rodeo Week in Las Vegas. (It’s actually 10 days). The National Rodeo finals and the associated events are a big production, bringing approximately 50 thousand people and 50 million dollars to the city, and there are five, count ‘em, five different merchandise expos during this time. The Las Vegas Convention Center, The Mandalay Bay Convention Center, The Sands Convention Center and the MGM Convention Center host the four largest gift fairs – more than a thousand exhibitors altogether - and we covered all of them. Along with, according to organizers, over 100,000 of our closest friends.

Even given all that activity, I would not recommend that the average artist attend looking for business unless you know what you are getting into – the dreaded Niche Market.

NICHE (adj.) 1. A distinct segment of the market having specific appeal: A niche market.

Niche markets are highly specialized market segments with a narrow demographic focus. Ethnic, Fantasy, Regional, Religion, Lifestyle and all its subsets, individual Sports, categories of Music (think Heavy Metal) are all examples, and there are of course many, many more. Tricky territory unless you know your subject and the participants well, therefore many artists and manufacturers avoid these segments like the plague. It is important to note however, that some of these markets can be huge, as shown in the cowboy/western example above. Niche participants tend to be loyal customers, so even when there appears to be ample opportunity be aware that it can be tough to displace the established players, and for that reason alone manufacturers are often hesitant to try anything (or sometimes anyone) new.

Most individual niche markets change slowly if at all. The characteristics that define the niche also become the parameters within which you need to work. You are unlikely to blaze a trail with innovative new design, however there is always room for quality design that recognizably fits into the category. These types of markets can evolve, however – the “rock n roll cowgirl bling” look is but one example – but it doesn’t happen overnight.  Many times in these “lifestyle” markets the participants see the niche as part of their identity, so tread lightly with change because anything too far outside of the “rules” will be actively ignored.

Jody Bergsma, Guy Harvey, The Hautmans, Terry Redlin, Wyland - just a few of the recognizable names who have done very well in niche markets. Why not think about adding yours?

Sunday, November 25, 2012

The Real Opportunity

“The real opportunity, I think, is in trying to build longer arcs.”
- Seth Godin

Yesterday’s blog post by Seth (here) accurately hits a message we have been pushing to our artists for the last couple of years. The design cycle (time on market) has shortened while at the same time the number of competitors trying to place designs has increased. It may seem that a shorter use cycle would provide MORE opportunities to license, which is in some ways true, however winning the prize ain’t what it used to be. Shorter cycles also mean smaller sku quantities (no time to build a line) and less royalties (no time to build those either). And I would venture to say that any increase in need is being dwarfed by the increase in available art for licensing, so no help there. To succeed in this churn requires a steady supply of new, new, and new. You need to turn into a design machine and keep turning out more. This is one of the reasons that agencies do well – they can consistently offer a bigger selection of new designs, often in a variety of styles, in one sitting. It’s difficult to compete with that scenario but certainly not impossible, there are plenty of single artists who do quite well.

Another way to win in this game is to not play it anymore.

Jump off of the hamster wheel and try to look at the bigger picture – what sets the big names apart? WHY do you continue to see their art on products everywhere? What is unique about their style (Kelly Rae Roberts), or message (Suzy Toronto), skill level (Susan Winget) or concept (our own Paw Palettes)? Why is it when you look at a Britto design you know it’s his? How does Life Is Good sell 100 million dollars in T-shirts, one of the most difficult categories around? People on every side of this business spend a lot of time asking and analyzing these kinds of questions, and if you want to compete at that level you should be too.

Get out of the soul-sucking Single Snowman business and get into the (insert Your Name here) business. No doubt this is a risk. It’s difficult. You need to reach deep and find something in yourself that no one else has, and then you need to have it connect to a fickle market. It is also a journey, not an event - many times the first, second or third iteration of your concept doesn’t work, but the fourth might. And sometimes things don’t work at all, and you need to go back and start anew, but hopefully now you’re smarter, and better, so not all was lost. In fact, you may be surprised what you’ve found.

Monday, November 5, 2012

Hey Pal, Can You Spare a Nanosecond?

I was directed to an interesting article recently about the rise of robotics; it made a valid case for grouping modern robotics with past life changing developments like gunpowder, the steam engine, and the computer. There can be no doubt this is game-changing technology that has a growing impact at every level of our society. Cars brake automatically to avoid collisions, correct lane wandering and even park themselves. Vacuums wander around the house unaided. Just tell your phone where you want to go and it will talk you through the route. There’s so much more, but what I find fascinating is that we no longer marvel at this technology because it is already so integrated in our lives.

If you think about it, you have an army of robots working for you now, and they have revolutionized our business of art licensing. Granted they have simpler programming than R2D2, but they are getting smarter by the day. Every time you pick up that Wacom pen you are operating a little interactive robot. Or when you load a pencil sketch in your scanner and tell it to take a picture, convert it to data and display it on a screen for editing – why, thank you little robot. Another one is posing as your website. It performs functions we previously had to do in person – answers the incoming inquiry, dispenses basic information about you, displays some samples and then gathers information for follow up. Some sites (like ours) also allow the client to search a library by subject and assemble a “portfolio” of selections for review and download. All while you’re in the shower. Ya gotta love it.

The web is becoming more visual by the day. If an art director needs some Christmas, what do they do? They send the Google bots out to scour the internet for Christmas art, currently by keyword but how long do you think it will be before an analytical visual search engine is viable? The need is here now: 300 million images are uploaded to Facebook every day, sites like Instagram hit billion dollar valuations, You Tube has played over a trillion videos, and making a video presentation is a possibility for anyone with a smartphone or pad. Content needs to be more than good, it needs to be SEEN. Companies are employing "visual curators” to analyze and improve their presence on sites like Pinterest, Tumblr and various social networks. The full global design market is still a fledgling, but as it matures and becomes readily accessible the impact on our business will be disruptive in ways we cannot predict.

Try picturing this: thousands of Net bots sifting through millions of images worldwide to pick designs. It could be any day now - have you thought about what your strategy will be to keep yourself visible in that scenario? Might be a good time to start.

Thursday, October 25, 2012

Stick with the WOW!

There is some fascinating work out recently in the October Journal of Consumer Research by psychologists Kimberlee Weaver, Stephen Garcia, and Norbert Schwarz in which they illustrate something they call the “Presenter’s Paradox”. What they’ve discovered, through a series of documented studies, is that the final perception formed by someone on the receiving end of a presentation tends to be an AVERAGE of the information rather than an additive approach to the individual components (which would lead to a higher valuation).

What does that mean? Well, basically it’s clinical proof of the old adage “less is more”. In many ways it seems irrational, but also head-slappingly obvious. Rankings of value go down when products are “bundled” to look more costly, or gift with purchase is offered, or a job candidate continues to rattle off excessive qualifications. It seems that offering more would be perceived as valuable, but because the receiver is unconsciously averaging the high value item (say an iPod) with the low value item (like a free song) they reach a final impression of lower total value.

Ronnie has always known this intuitively, and we’ve had a few…discussions…over the years about what and how much we are showing to a client. She has NO qualms about culling the old or weak designs from a portfolio and shelving any piece, even new work, that doesn’t measure up. One might assume that if a client is looking for a snowman, then the more snowmen you show them the better chance you have. Not so. What happens is people tend to automatically average out what they are shown in the pitch or presentation, so if you show them three great pieces, the “great” impression remains. If you show them three great pieces, 4 OK pieces and maybe a couple not so good pieces – they are left with the perception that everything was just OK, and you have significantly lessened the impact of your best work.

So what can you do? First, consider the showing of your portfolio to be a singular event, not a collection of individual pieces. If you are including items that are not your best work , realize that they are dragging the client’s perception of your best work down to a lower level. Say you assign a 1 to 10 ranking to every piece in your portfolio – when you add them up would the average land above 7? Maybe above 8? If not, dump the crap. This goes for any submissions you may make as well. Average is over, mediocre is done and typical is out. Learn to be ruthless - if you are tentative about a piece, pull it. 

Shoot for 10.