Planet Superheroes recently announced its store expansion footprint to go beyond the metros of India. With six new retail stores in the last quarter – they have expanded into towns like Jabalpur, Surat, Mangalore, and Vapi making the total count at 25 across India. With 10 more stores opening in the next quarter, Planet Superheroes is leading the way in terms of its omnichannel footprint across both physical and online channels.
Planet Superheroes was launched in 2014 to cater to the huge comic fan community of India which was hungry for a brand focused on providing officially licensed character merchandise. In a market that had been widely polluted with counterfeit products, Planet Superheroes took the leap of faith that Indian customers wanted value for money and preferred official merchandise with consistent quality over counterfeit products. They have now established themselves as a market leader in just under five years both in terms of retail footprint and in the breadth of characters and categories they sell. They have also established a pan India distribution in the toys category to cater to the Mom and Pop Stores of India that still rely on traditional distribution channels.
In terms of licensing partnerships, they work with almost every major licensor from Disney, Warner Brothers, EONE, Viacom, Spin Master and Hasbro bringing joy to its end customers across age categories from Pre-School to hardcore Action Figure Fans who have no age limit! They sell 50+ categories from Apparel, Toys, Collectibles, Electronics and Accessories to name a few. They have also been winners of the Comic-Con Gold Awards for two years in succession.
Licensing in India
The Annual Global Licensing Industry Survey 2018 estimated that the global licensing industry is worth $271.6 Bn. However, licensing in India is still at a nascent stage. But the entry of licensees like Planet Superheroes, coupled with advancements in technology and ever-expanding marketplaces have provided the much-needed tailwinds needed for the growth of this sector. There is still a lack of retail players as traditional retailers do not understand the power of curation. As one of the earliest licensed merchandise brands, Planet Superheroes started focusing on creating ‘character merchandise’ as a category in itself and became a forerunner in bringing this concept to end consumers. While brands like Hamleys, Reliance, Lifestyle etc. also sell character merchandise in silos under Apparel, Electronics, Toys, Planet Superheroes has taken a contrarian “curated category” approach on the lines of other global players in the world that have succeeded in this space.
The most important challenge in retail is managing the expectations of the mall owners who often expect Planet Superheroes’ “trading density” (Revenue per square foot) to be on par with other premium fashion brands. This is a challenge because, despite the better than average conversion, the average price of these products are much lower compared to the bigger brands who command a much larger premium. However, after successfully executing its first 5 stores and proving the value addition, most mall operators now approach them to become a part of their upcoming mall launches because of the uniqueness and customer engagement value that they bring to the mall. They currently work with almost all the marquee mall developers from Phoenix Mills, Viviana, Nexus, Infiniti, VR Mall and Forum to name a few.
Planet Superheroes will continue to expand its retail footprint into territories that are underserved. Their next focus will be in the Eastern and Northern parts of India going as far as Guwahati in the North East of India. Planet Superheroes is a brand with a technology DNA – their technical ambitions surpass their current scale. While most retailers 5x their size have started thinking about these problems, Planet Superheroes has been quietly investing in leveraging automation, data-warehousing and intelligent algorithms to crack the complex world of omnichannel inventory management. They strongly believe that their robust tech infrastructure and process-driven expansion would be key differentiators as they scale from store number 25 to 100.
Special thanks to Jaineel Aga & Nikita Zankar from Team PlanetSuperHeroes.
WarnerMedia has announced the transfer of HBO Enterprises and Home Entertainment divisions to Warner Bros.The realignment will also see distribution of Turner Originals in the U.S. move to the Warner Bros. team.
Jeffrey Schlesinger, president, Warner Bros. Worldwide Television Distribution, will take leadership responsibility for HBO Enterprises and the distribution of Turner content produced in the U.S.
HBO Home Entertainment will transfer to Warner Bros. Worldwide Home Entertainment and Games under the leadership of the division’s president Jim Wuthrich.
“For the first time at our company, the diverse and unparalleled portfolio of genre-defining new and library programming created by HBO, Warner Bros. and Turner will be distributed globally by one group,” says Schlesinger. “This structure will enable us to speak with one voice, as we create new and innovative ways to license our top-quality programming to networks, channels and services globally, helping them grow their audiences and subscriber bases.”
The reorganization at WarnerMedia comes following a larger executive shift that occurred earlier this year. Changes were made with the aim to reform teams around entertainment networks, live programming, content production and sales.
The International Licensing Industry Merchandisers’ Association (LIMA) today announced that Michael Stone, Chairman and Co-founder of Beanstalk, and Pam Lifford, President of Warner Bros. Global Brands & Experiences, are the 2019 inductees to the LIMA Licensing Hall of Fame. This year’s Hall of Fame Induction will take place on June 4, at the LIMA Licensing Awards Ceremony during Licensing Expo 2019 in Las Vegas.
“LIMA is proud to celebrate these two widely respected licensing veterans who have dedicated their careers to driving the success of licensing among the broader business community,” said LIMA President, Maura Regan. “Michael has been instrumental in the evolution of brand extension licensing as a highly effective corporate strategy and Pam is responsible for the domestic and international licensing of some of the most highly regarded entertainment franchises in the world. Their recognition in the Licensing Hall of Fame is well-deserved.”
Michael Stone is the chairman and co-founder of Beanstalk, an Omnicom-owned, global brand extension licensing agency and consultancy. Beanstalk is the recipient of 23 LIMA Awards and is responsible for some of the most successful licensing programs of all time, including programs for Procter & Gamble, Stanley Black & Decker, Harley-Davidson, The Coca-Cola Company, HGTV, Diageo, and Mary-Kate and Ashley, among others. In addition to teaching the first graduate course in the country specifically on trademark licensing as an adjunct professor for Baruch University, as well as an undergraduate course at Long Island University Post, Stone is an authority on licensing and frequently contributes to Advertising Age, Adweek, Forbes, The Wall Street Journal, The New York Times and other media outlets. Michael has recently authored his first book “The Power of Licensing: Harnessing Brand Equity”.
Pam Lifford is president of Warner Bros. Global Brands & Experiences where she leads the alignment of large-scale brand and franchise strategies across the studio’s world-class characters and brands as well as overseeing Warner Bros. Consumer Products, DC, Themed Entertainment and a new Global Franchise team. Lifford’s vision for next-level development of fan-engagement drives the creation of business opportunities designed to reshape how Warner Bros. delivers fan-focused activities. Working in partnership with all divisions of the Studio, Lifford’s team ensures that every touchpoint for cross-company collaboration is maximized. Lifford joined Warner Bros. in 2016 as president of its Consumer Products division where she refocused the Division’s priorities and put strategies in place that increased the business by 47 percent in her first year alone. Prior to Warner Bros., Lifford held an executive leadership position at Disney and Quicksilver, Inc. as well as key roles at Road Runner Sports and Nike.
Just before the holiday break, at a time when companies normally try to bury bad news, Spin Master announced that had signed a deal with Warner Bros. Consumer Products (WBCP) to be the DC global licensee for boys’ action figures, remote control and robotic figures, games, puzzles and water toys. The three-year deal is effective in Spring 2020.
Rights in most (if not all) of those categories have long been held by Mattel. Spin Master, Mattel and WBCP officials weren’t available for comment. Mattel has had licensing agreements with WBCP across a range of properties since 2002.
The agreement will give Spin Master access to the range of DC characters, including Batman, Superman, Wonder Woman, The Joker, Justice League and The Flash. It’s expected that Mattel will continue to hold rights for girls’ toys with the DC Super Hero Girls license and preschool.
Gerrick Johnson, toy industry analyst for BMO Capital Markets, issued a comment Monday noting that for Mattel, “Initially, this loss will not look good to the press or stock market, but the license is not important to [its] turnaround. We believe the segments lost represent less than $50 million in annual run rate sales, and an impact of under $0.05 per share. The core business is often augmented by movie tie-ins. However, over the past several years, movie tie-ins have not shown growth and have been mostly underperforming expectations….
“While [Mattel] has not commented,” he continues, “we suspect the company sees better growth opportunities and return in investment in its own brands. [Spin Master] did not comment of the cost of the license, but if Warner had demanded high royalty rates and minimum guarantees, it could have made sense for the company to walk away. Mattel can potentially re-bid for the license in three years when the company is on firmer footing, as we expect it to do with Disney Princess when that license is up for renewal.” Also up for renewal in 2020 are Hasbro’s pacts for Marvel and Star Wars.
For Spin Master, the pact is the most recent in a series of licensing deals it has signed this year, including one announced this fall with Feld Entertainment (Monster Jam).
Spin Master President Ben Gadbois said in a press release that the DC license marks a “major milestone” for the company and is part of its strategy to invest in “successful licenses” that “further grow and diversify our business.”
To listen to the interview, scroll to the bottom and hit play.
He’s been a serial entrepreneur and the founder of the company which was established 19 years ago back in 1999 – has successfully managed to grow the company’s revenue from 1.2 Cr to over 80 Cr as of FY 16. The company was initially set up as a Home Entertainment line, Excel Productions Audio Visuals Pvt. Ltd. (aka THE EXCEL GROUP) but has since ventured into many product verticals in the licensing and consumer products space such as Excel Home Videos, Excel Interactive, Movies & More, My Baby Excels, StarWalk, Excel Innovators and Nitroid. My guest today is Muslim Kapasi – CEO of the Excel Group. Hi Muslim, thanks for your time.
Muslim (MK): Thanks very much for the kind introduction. I’m very happy to be speaking with IndiaLicensingPost. You know how it is with social media these days. Always saying a lot more about you.
ILP: You’re a fairly media shy guy. We couldn’t find too many interviews of you, which is why we are so grateful you allowed us to speak with you.
Today Excel is one of the largest licensees in India, please take us through your journey. What were some of the pivotal moments?
MK: We started as a manufacturing set-up. I don’t think many people know how we actually started with our home video business first, and what led us into licensing. That’s where the whole seed was placed. We had a whole manufacturing unit. We were the sole manufacturers for 20th Century Fox and CIC which was a JV between Universal and Paramount pictures who use to manufacture their own videos in India, they had their own offices in India (this is somewhere in the mid-90’s), and we had done an OEM deal with these manufacturing companies. While we went about building a state of the art manufacturing plant which would meet with Hollywood standards, we hoped Bollywood would follow as well, but that didn’t happen. So we had a manufacturing set up but we were struggling with very low capacity, and this went on till 1997 till Cable and Satellite television took off and more and more consumers were exposed to LIVE news etc prior to which we only had the standard Doordarshan fare or you would have to rent a VHS and watch it at home on your video cassette player. So that’s where we were at that time. Piracy was booming. Very little manufacturing being done at our factory, we had debts and we had no customers. Fox was struggling at that time, CIC had shut down, they decided that India was a lost cause. That’s when we realized, we could pitch for licensing the products of the brands we were working with and build a business out of that. In hindsight I think it was a great decision, but if it were today, I would tell anybody NOT to do it. Having said that we signed up the Fox license to run the factory. Coincidentally, 6-8 months later we realized, that we were much better as distributors than manufacturers and a year and a half later we shut down the manufacturing completely and we started outsourcing manufacturing as we didn’t have the bandwidth, we didn’t have the time and we needed more folks in the marketplace at the front end rather than the backend. That’s how we got into the licensing business. That was a foot in the door. Factory ko chalana hai, factories bandh ho rahi hai. Fox was shutting down and we had set up the manufacturing unit especially for them. It was very empathetic of them to give us a license at not very difficult terms at all. They must have realized that they owed it to us. In fact one of the Fox officials whom I will not name said “You will burn out in a year or year and a half”, but that was not to be. Soon Disney came our way and then Paramount. Then we realized, we should diversify and the closest thing we understood was gaming, because gaming was still very much a physical product, so we signed on Electronic Arts (EA games) for PC games. The pivotal moment is that we diversified in the right product at the right time. As you realize with technology businesses, change is inevitable and what was peaking now was about to sharply decline and we could sustain as we had moved on and we had something else supporting us in that fray.
ILP: Your company has exclusive licenses of various global brands like Twentieth Century Fox, Disney, Marvel, Mattel, DreamWorks Animation, Warner Bros., Viacom, Turner, etc. for various product categories for the territory of India, Nepal, Bangladesh and Sri Lanka – what made you opt to license 3rd party brands?
MK: where are the 3rd party brands? I see all frontline brands. And a brand is a brand, isn’t it? In many ways, we went to some brands, some brands came to us. That’s how it evolved. To quote someone it was “path-breaking” It was like a friend from the industry who was a licensor at one of the licensing conferences said to me, “we had 9 companies pitching to us for the business, but we went with the 10th company who was not pitching to us”. I think the passion also shows, isn’t it? When you’re out in the market and putting a product on the shelves and how your placing the product in the stores, and then that itself becomes the center of gravity and attracts the right partners, the right brands etc.
ILP: According to the LIMA Global Study 2017 report, Entertainment/Character licensing accounts for 45% of the $262 billion sales at retail. How big do you reckon the market is in India?
MK: Market size is something I haven’t been able to nail down and everybody has their own take on it and the methodology of coming to that number is very different and very unique, but there is very little connecting those numbers either. When we talk to retailers, they have a different number compared to the wholesalers who have a different math, for the various categories and there is a lack of transparency, there are unaccounted ways of conducting businesses and all those numbers are superficially extrapolated by a particular study or entity. Very rarely have I seen these numbers become meaningful when you get onto the ground and start working. The $262 billion number does seem heartening, but in India, the 45% figure for character licensing does seem inflated. I wouldn’t put it at more than 15-20% of the overall business. Much of this has to do with how we manage characters and also we have a different consumer. Our consumer is price loyal and not brand loyal. Very often he’s happy to settle for a counterfeit which is at half or 20% cheaper than a branded product, so the quality, the utility and the price is met. That probably keeps us restricted in that space.
ILP: What are the key tick marks you must have in place before investing in a licensing programme?
MK: I wouldn’t want to put it down to any specific tick marks as we are largely driven by instincts or guts.
ILP: At the CBME 2018 panel discussion on the future of licensing, you mentioned that the growth of the licensing business would depend on the coming together of many different parts to make the overall business stronger and hit a 1-3% of retail. What are the impediments the industry currently face which need to be overcome?
MK: Yes, I think there are many impediments we need to overcome. Largely I think is the cultural impediment. We are not in a very conducive ecosystem. We have become very short-sighted “Whats on the table kind of approach” instead of thinking long term. Everything is so dynamic as well. You don’t know which retailer or brand is going to get purchased. When youre working with a licensor – 10-year relationship and you’ve nurtured a brand or character like your own, and you’ve made products standout and then suddenly…. Very often its easier to SELL than become SOLD. There are also other issues like infrastructure etc which we’ve known for years which haven’t rapidly changed either.
ILP: You are one of the largest licensees in the country, what are your expectations from a licensor?
MK: Loyalty. Its one of the most important ingredients. Loyalty and Trust. Very often a licensee goes to a licensor for a new product or category and takes It up, nurtures it over 3-4 years and builds it into something that everyone notices and suddenly everyone wants to pitch for that product category and you don’t want to be put in a place against those pitches.Its very disheartening and disorienting. If this continues, I feel the whole licensee, licensor relationship is going to stay very fractured. This change needs to come from the larger brands, the market leaders. When a small brand comes and offers you a license, you know that licensee is also going to squeeze that small company and he is going to tie in that company for 10 years or 15 years or even for perpetuity. When that becomes big the licensor has very little left to exit.
ILP: Do you have aspirations to have your own home-grown brand?
MK: Not really. We have a lot of aspirations, but we don’t have space and the time, being such a force in the licensing space. Our DNA is a licensee. Whenever there is a new character we are always trying to figure which are the categories or IPs that are best suited to take that particular character to market? We are very licensing driven, but ever so often the thought does cross our minds since we work with so many brands. But I don’t think we’ve done enough in the licensing space yet. There’s still a lot to do and a lot of growth to be achieved.
ILP: How do you gauge customer appetite for a particular brand, since you need to be ahead of the curve?
MK: The simple answer is to BE the CONSUMER and satisfy those needs. And of course, while we are handling so many brands and categories, we do have customer insights coming through our feedback channels.
ILP: Which category of your range has proved best suited for licensing? Any key learnings you would like to share?
MK: I think I’ve already answered this. All have equal potential. There’s a lot yet to be done. If there’s a less important category I would say soft toys because that is so well covered. But there is so many new IPs being launched every day. SO many new movies coming out every week.
ILP: So you feel that’s a problem now? Too many new IPs launching?
MK: I think that’s the order of the 21st century. The problem of plenty. To digress we have more people suffering from obesity issue than the starvation issue. Likewise, we have a lot of content coming in with a lot of aspirational value but not enough takers. Or the consumer seems to be overloaded with choice – too many characters and within characters too many colors, shapes, sizes, concepts and that is going to remain for a while.
ILP: You seem to have a great desire to help upcoming entrepreneurs nurture their dreams and bring their vision to fruition. How does a budding entrepreneur build a license-ready brand?
MK: I think to follow your heart. Many times we got into categories when people told us not to get into them, and we realized the more somebody was telling us NO, the more we wanted to go ahead. That’s the advice I would give. Don’t let fear or somebody else deter you from your dreams. And many times that’s where the big pot of gold is sitting and nobody is uncovering it.