Licensing Royalties On the Rise

The battle in the retail marketplace wages on as manufacturers try to gain an upper hand; increasing licensing royalties is one way they’re going about it. The International Licensing Industry Merchandisers’ Association announced in its ninth annual study conducted by researchers at the Yale School of Management and the Harvard Business School that product marketers and manufacturers paid $6.04 billion in licensing royalties in the U.S. in 2006, up 1.5 percent from 2005. Other highlights of the study are detailed below.

* 44 percent of the market belongs to entertainment and character licenses, with total revenue growth up 2 percent from 2005 to $2.68 billion;

* 18 percent of the market is in trademark and brands, revenue grew 0.4 percent to $1.09 billion;

* 14 percent of the market is in fashion, with revenue growth up 1 percent to $830 million;

* 14 percent of the market is in sports, with revenue growth up 1.9 percent to 825 million;

Areas with the largest percentage of revenue growth included non-profit organizations with a 4.8 percent growth to $45 million; followed by art (4 percent) and music (3.1 percent), up to $182 million and $132 million, respectively.