Who changed the music?

Years ago, farther back than I want to admit, I was an young and enthusiastic property investor just starting to work my way into the real estate market. Back then agents were full time professionals, the essentially secret MLS was printed out weekly on reams of computer paper, and commissions were pretty much fixed and non-negotiable. That was how it worked – tick tock the game is locked. But about that time things started to change: relaxed social norms meant women had been finding their way into the workforce, and in real estate that first manifested as an influx of part time agents, soon that became normal and very quickly the status quo had changed forever. Desktop computers made day to day operations easier but then along came the internet, and now everyone in that business is scrambling to predict an uncertain future.

Used to be that if you wanted to be a writer you had to commit yourself to a solitary existence marked by countless hours perched in front of a typewriter producing reams of paper, and years spent on investigation and research. Of course to get past the editors you had to be accomplished as well; it took real dedication and not many could make the cut. Enter the word processor. Suddenly manuscripts that previously had to be written, approved, edited and revised - numerous times - before they ever went to the print house could now be handed over on a floppy.  The barriers were going down, and with the arrival of the internet research could be done with the push of a button, and soon publishing could too.

 There are entire books written about the ongoing web-driven “mass amateurization” of skilled professions and the destruction of value therein, but this isn’t that discussion (and before you get your hackles up, I did not say women are the cause of it in RE, just a catalyst), so I will leave that alone …for now…

Perhaps you can see where this is going. Even though we are a new industry when compared to real estate sales or writing, art licensing had its own entry barriers which are now fading into history. This has altered the nature of the business, and the days of sitting down and showing individual designs in a book or on a screen are in large part going away. Licensees have unprecedented instant access to art and artists, so now many of them are looking for something more. A book of designs used to be the minimum entry, then it became a book of designs presented with associated product pages (commonly, but inaccurately, called “collections”), and now the bar has been raised to full blown design concepts that will connect with the retail customer. You gotta have a story to tell. The change has been downright startling over the last couple of years, and these recent shows have really brought it home - art licensing is alive and well but this is the new tune and we will just have to learn to dance it.

Finally - It's Monday!

It’s been a wild week: we started last Monday in Miami at the China Sourcing Fair, then spent a long day on Tuesday (and the week before) prepping to leave early Wednesday for the Atlanta Gift Market – got back about 10PM last night (Sunday). Pretty much a full week of non-stop tap dancing.

  

Oh, the glamorous life of a licensing agent.

We did, however, accomplish a lot. The traffic at the shows had the appearance of being down, and that is also what a number of our clients were reporting, but word is the retailers that attended were serious about writing orders and most of the manufacturers seemed OK with the volume. Not up but not down either – as one of them said regarding business nowadays, “Flat is the new up”. There does seem to be a strange disconnect between the current economic malaise and the future plans of  licensees – lot’s of new  projects in the works, a ton of designs going out and some really good things happening, so let’s all keep our fingers crossed that Washington doesn’t screw it up. Again.

Now, normally this would not be cause for celebration at most shows, but after walking every aisle of the China Sourcing Fair, we were happy to NOT find even one of our designs. Meaning that we found no unauthorized product. It has felt like the overseas knock offs are slowing (Etsy is a whole different nightmare), perhaps due to the anti-counterfeiting efforts that are ramping up worldwide. I am not quite naive enough to think that the problem is all better now because of this one event but perhaps we are headed in the right direction.

Let’s hope so – I have enough to do…

Snippets

Ah, the past Surtex and Licensing shows have been rich producers of snippets. I tried not to miss too many but when things heat up you just can't stop and write them all down, however still managed to get a few:

“If there is anything I have learned in this business it’s that manufacturers constantly want new, new, new.”

            - licensing agent

“The quickest way for an artist to scare off a creative director is to start talking about their brand.”

            - a creative director

“We’ve got 20,000 images in our library and they can’t find even one to license?”

            - agent about a licensee they can't connect with

“She has great technical skills but her art just doesn’t have much heart.”

            - in a discussion about an artist seeking a rep

“Mediocre has been outsourced”

-  in a discussion about artists

“Licensing is a process, not a formula”

            - agent in a discussion about art coaches

“There is no guidebook because everybody comes into this business from a different place.”

            - same discussion

“Don’t waste time learning the tricks of the trade, instead learn your trade.”

            - quote from H. Jackson Brown Jr.

“So many artists are paying so much attention to other people’s unsold designs – which really has very little to do with how you get product on the market.”

            - comment about artists walking Surtex

“Unfortunately they are leveraging these bad times into contract concessions.”

            - well known IP owner discussing his licensees

“I am tired of representing artists that only respond to requests and call outs.”

            - licensing agent

and my personal favorite...

“If they tell me they want a monkey on a table I only ask “How tall?”

            - in a discussion on client service

 

If you keep missing, find another target

I hope you watch the CBS Sunday Morning show – it’s always a great exploration of people and places, and unfortunately one of the few decent programs on network TV.  This morning they did a piece on Katy Perry, and as usual there is so much more to her story than you would think. She started out as a Christian singer (then Katy Hudson) after being raised by born-again parents, but after one album in 2001 her career fizzled and she left Nashville. She began to reinvent herself as a pop singer, and after a number of starts and stops finally recorded a hit song, seven years after her first try, and the rest is history.

As entertaining as the story was, I couldn’t help commenting (once again, while Ronnie rolled her eyes…) on the direction the road to success often takes. Of course being cute as a button is a big plus in her business, but that wasn’t enough to launch her career. She had to reinvent her offering, find a way to stand out and head back into the market. It's also another great example of the adage “it takes a long time to be an overnight success”.

Talent is becoming an accessible commodity in our fast paced digital world, so you need to find a way to focus your skills to meet the needs of the market – by not just working hard but working smart.    

Just keep ‘em coming

Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep.
    -Scott Adams (Dilbert)

We never go to a show without a number of new collections and a fair amount of new art, and we of course have our expectations about what is going to be a hit. Trying to predict which new art will be the hot ticket at the show has become kind of a game with us, and  I’ll let you in on one of the lessons we’ve learned over the years:
You never really know for sure what is going to work, and what is going to fizzle.

 I can’t tell you how many times we’ve sat down to analyze show results and wondered why a particular design or concept had no traction - especially when we had that unique and clever idea that we absolutely KNEW was going to be hot, and then…hmmm, not so much. (Fortunately it can work the opposite way too, which is always a nice surprise.)

Let’s borrow a couple of points from a Seth Godin post on making predictions:
1. It's really difficult to make accurate predictions, because success often appears to be random.
2. Based on #1, it's probably smart for you to initiate more projects that aren't guaranteed winners, because most winners aren't guaranteed.

Product markets can be both fluid and fickle, a difficult combination that keeps the targets moving. Successful licensors know this and they try to keep a stream of ideas flowing rather than settling in on one concept and constantly trying to push that rock uphill. What appears from the outside to be random success is usually not - more often it’s the result of the proverbial throwing things (things being successively better and more refined ideas) against the wall until the right idea sticks.

Maybe in our business we should forget the old trusted theory “if you build it they will come” and change it to “if you build enough of them they’ll buy one”.

And the Big Box goes empty

That's what happens to my Cheez Its all the time.

Interesting juxtaposition of several articles today – all of which arrived in my Inbox within a few hour period. The first was an analysis of the Amazon announcement that their sales of E-books have now surpassed those of print books by about 5 percent. That only took 4 years to happen vs the 500 some odd years (ok, 572) that have passed since Gutenburg launched the idea of movable type. Hand in hand with that, they have also announced that the Kindle reader is their all time best selling product – previously it had been the final Harry Potter book…kind of ironic…

Next was an article about Staples shrinking the size of their stores, followed closely by an article about Best Buy – you guessed it – shrinking their stores. Both are pointing at the shift to online sales as the driver for their plans. A Dartmouth biz professor is quoted in one article calling big-box stores “a pre-internet model”, and another source refers to them as  “Amazon’s best showrooms” since people often decide what to buy in the store, then go home and order it online from another (cheaper) supplier.  

It was just not that long ago that “big box” had become the Holy Grail for those of us interested in selling product. Then they learned how to buy merchandise and in doing so rewrote the models of production and supply, drove the margins ridiculously low and soon the royalties from a big box placement were no longer guaranteed to be breathtaking. Quite the opposite. Now it seems that big box is on the decline, supplanted by online sales and also in part by the surge of small stores stocked with high turnover items (think Dollar, Walgreens, CVS). Where does it go from here? Obviously some  products don’t translate well to online – people need to see and touch them, or they are last minute purchases, perishable, inexpensive and so on – but many do and that will move the licensing targets (pun intended) once again.

Haven’t given any thought to what effect this shift will have on where you focus your licensing efforts? Hmmm…

Another Licensing Show

Finally we’re back on the plane after a long week at the Licensing Expo in Las Vegas, I think our tenth time exhibiting. Day One of the show was a very good day for us. A measure we use to judge show traffic is the time we actually manage to eat something – Ronnie brought me a sandwich about 1:30 and I wasn’t able to eat it until 4 – that’s the kind of busy we like. Days Two and Three were not nearly that crazy but still a decent show overall. We met with a number of our established clients and (after reviewing our sheets in the airport lounge today) more than a dozen brand new potential clients at the show. We think a couple of those could be exciting relationships. The show floor seemed a tad bigger, the displays a bit better, and the floor traffic a little down. Rumor had it show management was claiming that attendance was up 12%, but you wouldn’t guess that by what we were seeing or hearing from the other exhibitors. Of course I have never exhibited at a show where mgmt did not claim that traffic was up.

 

We did see, once again, the continuing shift of this show away from being an “art” venue. Every year there are fewer attendees willing to sit down and look through portfolios, and more who are in the market for a particular product, or category, or who are looking for something concept driven and aren’t interested in  selecting individual designs a la Surtex. In reference to the various ongoing discussions about where an artist should exhibit: from this point forward I would not recommend Licensing unless you 1) have some experience, and 2) you really have that bigger concept piece nailed down.

And then there’s Vegas. While it is MUCH easier (and cheaper) to do this show in Las Vegas than NYC, it is just not my kind of place. We Floridians really don’t mind the heat – hey, only 107 degrees this time - it’s more about how perfectly normal people seem to immediately morph into packs of screaming fools upon arriving in this town. Hey, I’ve partied with the best of ‘em over the years but this is how it goes: five minutes after checking-in to the hotel that nice couple from your church will somehow become “Mr Playa” and his babe. He will turn his hat sideways, chain smoke and wear sunglasses indoors, she will wriggle into her hooker outfit, then they will spend the next few days stumbling around the Strip with yard-long beers until it’s time to crawl home. Along with a few thousand of their new close friends.

Somewhat amusing, but believe me when you are only there to work - the novelty wears off pretty quickly...