The Impact of Licensing in Interactive Entertainment

The report examines the increasing importance of licensing in the video game market and provides new insight into how entertainment companies develop and create attractive properties. In addition to weighing the pros and cons of licensing for video games, the report provides a guide for publishers to build their licensing relationships, as well as identifies areas for licensing development and explores the importance of marketing a licensed brand. Case studies and profiles of leading licensors serve as examples for success and failure as this new interactive entertainment model evolves.

NOTE: This report is now included with an order for The Business of Computer and Video Games 2004

I.     Overview... 6

II.       Do Consumers Value Brands Over Product?. 7

III.      The Landscape for Licenses. 10

    A.       Understanding Movie “Peaks” and Television “Plateaus”. 10

    B.        Movies Create “Peak” Brands. 11

    C.        TV Develops Extended “Plateaued” Brands. 12

IV.      Why Licensing? Rewards & Risks. 13

    A.       PROS. 13

    B.        CONS. 15

V.        Fields for Licensing.. 17

    A.       Kids. 17

    B.        Entertainment. 17

    C.        Actors/Talent. 17

    D.       Sports. 18

    E.    Music. 18

VI.      License Acquisition Alternatives. 19

    A.       Bidding On Individual Properties As Available. 19

    B.        Developing Long-Term Partnerships With Content Developers. 20

    C.        Building Own Brands and Establishing a Profit-Driven Internal Licensing Unit  21

VII.     Marketing and Launch Timing.. 22

VIII.       Licensor Profiles. 24

    A.       4Kids Entertainment. 24

    B.        Case Study: Yu-Gi-Oh! Three-Prong Strategy. 25

    C.        Case Study: The Failure of Ultimate Muscle. 25

    D.       Disney. 26

    E.    Pixar. 26

    F.    Dreamworks. 27

    G.        Fox. 27

    H.       FUNimation. 28

    I.     Marvel. 28

    J.     Neopets. 29

    K.       Nickelodeon. 29

    L.    Case Study:  The Power Of Tak-Building An Entertainment Brand From A Video     Game          30

    M.       Sony Pictures Entertainment. 31

    N.       Walden Media. 32

    O.       Warner Bros. Studios. 32

        1.     Warner Bros. Pictures. 32

        2.     Cartoon Network. 33

        3.     Warner Bros. Animation. 34

        4.     DC Comics. 34

    P.    Case Study: WB Got Game--Is Warner Bros. Getting Into The Video Game Business?  35

IX.      Conclusion.. 38

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