The importance of licensing within the publishing industry rises and falls periodically along with the number of licensed titles—as well as retailers' and consumers' interest in them. This year, the mood is upbeat.

"We're in one of those upswings in the continual cycle of licensing," said Doug Whiteman, president of Penguin Young Readers Group. "There's a greater willingness on the part of all of our accounts to sell licensed product." In addition to mass channels, where licensing always has a presence, Whiteman reported that book chains and even independents are supporting properties such as Strawberry Shortcake.

Retro, Retro, Retro

Any discussion of current licensing trends begins with the continuing strength of retro properties. "Nostalgia is still kicking around," said Emily Brenner, editorial director of the HarperFestival and HarperKidsEntertainment imprints at HarperCollins, publisher of My Little Pony. "It's lingering even longer than we thought it would."

Publishers are still adding retro properties to their lists. Scholastic, already on board for Care Bears, is introducing Rainbow Brite and Davey & Goliath for spring 2005, while Simon & Schuster is preparing an Alvin & the Chipmunks Christmas book for this year and is updating and licensing out its own nostalgic franchises, including Nancy Drew and the Bobbsey Twins.

A complementary trend is the licensing world's dependence on classic franchises, many of which are book-based. "Publishing has always recognized classics," said Christina Miller, senior v-p, global creative, at HIT Entertainment, pointing out that no other licensed product categories have anything analogous to the publisher's backlist. HIT licenses properties such as Thomas the Tank Engine and Fraggle Rock.

Children's books endure as the basis for TV programs and movies, and that's good news for book sales. Universal Studios, which licenses the Cat in the Hat and How the Grinch Stole Christmas films, also is licensing its forthcoming Curious Georgemovie and TV series. "We can take the publishing experience to a new level," said Cynthia Modders, v-p of Universal's Consumer Products Group.

"Licensed books are usually done as a mechanism to attract the reluctant reader," said Whiteman. "When [licenses] emanate from a book property, it gives us a chance to loop the child back to the original book."

Importance of Innovation

Creating innovative formats is important for any licensed line, but especially so for classic and retro properties. Licensors cite interactive electronic books from LeapFrog, Fisher-Price and Publications International, Reader's Digest's Movie Storybooks and Tokyopop's Cine-Manga as three recent examples of innovative and successful licensed formats.

"We've doubled our business by finding the really smart people who are doing that innovative thing," said Margaret Milnes, senior director of publishing for Nickelodeon. Milnes singled out Chronicle Books' Nick Jr. Block Books in a Box, along with Movie Storybooks and Cine-Manga, as innovation success stories. Of Cine-Manga, she said: "It's a brand-new format that appeals to a traditionally underserved market in terms of age, and is a perfect match for our properties," which include SpongeBob SquarePants and the Fairly OddParents.

"Tokyopop helped us find a way to make comics work in the U.S. again," agreed Jeanne Mosure, v-p of global retail books for Disney Publishing Worldwide, which recently expanded its licensing deal with Tokyopop. "They created a format that works at retail, and it speaks to how ready kids were for that."

Warner Bros. is getting into the TV-based manga business with its sister company DC Comics, which is introducing two Warner titles that, like Cine-Manga, feature frame-grabs of TV shows with word balloons. The two books are bind-ups tied to Cartoon Network and Kids WB, each highlighting five shows that appear on the networks.

Teen and Tween Power

Many manga titles speak particularly to U.S. teens and tweens, a market that is receiving significant attention from licensors. Many of the 1980s retro properties mentioned earlier began their recent life as "lifestyle" properties targeting teens and tweens with apparel, accessories, room decor, fragrances and jewelry. Licenses such as Curious George and Mickey Mouse have also been a hit, especially on trendy T-shirts. Meanwhile, licensors continue to create brands for this age group, as Nickelodeon is doing with EverGirl, which will launch at Kohl's this fall with apparel and accessories before expanding into books and other items.

In terms of publishing, live-action television series have translated well into books for teens and tweens, and that trend promises to live on. Warner Bros. has been active in this area, licensing HarperCollins for books tied to The Gilmore Girls and planning titles tied to The O.C. and One Tree Hill.

The Disney Channel airs several programs that appeal to tween girls, including Lizzie McGuire, which has an active book line, and That's So Raven, which will expand into books in September. The Cheetah Girls, which originated as a published series, saw a boost in book sales after being transferred to the small screen; over one million books have been sold to date. A new Disney initiative is W.I.T.C.H., a book series with consumer products and television planned.

Beyond TV and Film

While TV, film and toy licenses are always high-profile, publishers are seriously considering properties that are less print and TV—driven, including video/DVD, Web sites and video games. "We're looking at a lot of things we weren't looking at before," said Brenner.

Original DVDs and videos, in particular, are increasingly surrounded by licensed publishing activity. Publishers create titles tied to video-only properties and nearly always publish against made-for-DVD or video productions within the context of larger programs, as Random House and Scholastic are doing for Snowed Under: The Bobblesberg Winter Games, HIT's upcoming Bob the Builder release.

Properties such as Care Bears and Strawberry Shortcake are relying on made-for-video titles as their main entertainment support, while Warner Bros.' Scooby Doo is featured in direct-to-video/DVD releases each Halloween. Scholastic does tie-ins to each release, and "they are always better sellers than the Scooby originals," reported Paula Allen, v-p, worldwide publishing for Warner Bros. Consumer Products.

"[DVDs] are more impactful in the market than the TV series sometimes," agreed Ellie Berger, Scholastic's senior v-p, trade, and publisher of licensed properties. "That's the case with Scooby Doo."

DVD/video releases have become important marketing opportunities for movie tie-ins as well. "DVD has an impact," said HarperCollins's Brenner, who noted that retailers increasingly carry film tie-ins until after the DVD is introduced, rather than just during the three months surrounding the theatrical release.

Bringing Up Baby

Many licensors are emphasizing the educational elements associated with their properties. One growing sector of licensing encompasses products tied to educational videos for preschoolers—a development that takes into account both the education and DVD/video trends. Books are a leading category: HarperCollins acquired the license for Mommy & Me, Disney publishes Baby Einstein books and Bendon Publishing International offers Brainy Baby titles.

"If you can affix your company or product line to an educational brand, it can certainly drive sales," said Ben Ferguson, Bendon's president. "It's more about content than popularity. Kids aren't going to ask for it. But parents and grandparents will pick education over entertainment every time."

Milnes attributed the success of the Nick Jr. Block, which consists of series such as Dora the Explorer and Blue's Clues and whose publishers include Simon & Schuster and Random House, to the educational aspect of the programs. "It's inherent in the development of the shows, and it's a straightforward extension into publishing," she said.

The education trend has encouraged retailers such as Wal-Mart to increase the amount of space they devote to books. "It's part of why the book platform, in terms of mass market accounts, is so much bigger right now," Whiteman said.

Eye on Exclusives

An ongoing trend in licensing is the importance of exclusive deals, where a single retailer carries products tied to a given property for a period of time. In many cases, books are exempt from the exclusivity. If the retailer carries books—as Toys R Us, Sam's Club and Wal-Mart do but JC Penney, Sears and Mervyn's usually do not—then books are included in the promotion, but not on an exclusive basis.

Yet both licensors and publishers say they'll work with interested retailers to develop something exclusive, usually a bind-up, boxed set, supersized title, book-and-product package or some other repurposed product. "If Lowe's or AMS wants an exclusive book product, we'll do whatever we can to make that happen," said Milnes.

Miller cautioned that limiting distribution of books or videos is not necessarily good for a license. "Content gives context to the property, so it should have wide exposure," she explained.

There are cases, however, when a licensed book program launches exclusively with a retailer. This fall Wal-Mart will introduce a Disney book series tied to The Wonderful World of Disney, for instance, and it held an exclusive on the relaunch of Penguin's Dick & Jane books. Custom titles are also possible, especially in the coloring and activity area. Warner Bros. and Dalmatian Press have created exclusive titles for club stores featuring Tom & Jerry and characters from the Hanna-Barbera archive.

Whether or not publishers are involved directly, a retail exclusive in other categories can boost sales of books based on the same property. "If anything, it helps drive awareness," Ferguson of Bendon said. "It helps create a buzz that drives our products at other retailers."

The major book chains, historically not heavy participants in licensed alliances, are more frequently conversing with licensors. Allen reported that leading book retailers have approached Warner Bros., looking for ways to promote the studio's big releases. Elements in an exclusive deal could range from contests or ticket giveaways to in-store video displays of movie trailers, said Allen, adding, "It helps the retailer and it helps our property."

Tying into Trends

Publishers consider many factors when deciding whether to participate in a particular trend. "It's tricky," said Robin Corey, Simon & Schuster's executive v-p and publisher, novelty, media tie-ins and teens. "There are no clear-cut guidelines. We look at if we're going to be too late to the party, if there's a good property we can publish well, and we look at our own backlist." Most importantly, publishers said, they listen to their retail accounts.

No matter what the decision-making process, a trend-dependent licensed title requires a sped-up production process. "A trend is a trend because you don't know when it will end," Brenner said. And therein lies the biggest risk for publishers. "It's sort of like being a really good gambler," Brenner explained. "You push and you push and you push, but you come up a loser at some point."