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Licensed to grow

Internet will help biz click with its customers

NEW YORK — The $132 billion worldwide licensing industry may not have gotten much respect in the past, but pre-opening signs from Licensing ’99 suggest that’s about change.

“The spur,” said David I. Cutbill, a senior manager at Arthur Andersen, “is the Internet.”

Cutbill, who with consulting colleague Peggy Smyth is distributing the results of an extensive survey as the licensing show kicks off today at New York’s Jacob K. Javits Convention Center, believes the Internet will ultimately transform licensing from Hollywood’s backwaters to entertainment’s cutting edge.

The Licensing Industry Merchandisers’ Assn. actually jump-started the annual convention Monday night by awarding its License of the Year to the Itsy Bitsy Entertainment Co. for its Teletubbies campaign.

In addition, the Teletubbies helped its master toy licensee Hasbro win Licensee of the Year (hard goods) and allowed its apparel licensee Children’s Apparel Network to walk off with the same prize for soft goods.

Kudos for ‘Clues’

The entertainment/character category also saw FAO Schwarz win Retailer of the Year for Blue’s Clues, while Sony Signatures picked up Promotion of the Year for its Godzilla/Taco Bell campaign.

As for licensing’s future, Cutbill believes it couldn’t be brighter given the high-cost, high-risk dynamics of Hollywood.

“Using today’s product-driven model,” he explained, “a studio makes movies it thinks will be popular. But by using a customer-driven model, it’ll be able to make movies that customers tell it they want to see.”

Licensing’s importance will rise, Cutbill told Daily Variety, as it stands at the center of the customer-driven model.

“Say a ‘Rugrats’ Web site is still selling a lot of stuff to 7- to 10-year-olds,” he explained. “It’d be really easy to survey their interest in a sequel, which in turn could take a lot of risk out of producing it.”

What’s more, the consultant believes that Hollywood, though “still very much product-driven,” is finally waking up to the Internet’s possibilities.

“Just look at the program (for Licensing ’99),” he said, citing, in addition to the 3,700 potential licensing properties on display, such educational offerings as: Mastering the Internet, E-Commerce — The Next Retail Revolution and Building Your Brand Online.

Shelfless sales

The Internet promises to affect the licensing process as much as it does entertainment content, as Cutbill co-writes in the Arthur Andersen report:

“Currently, an apparel company may only manufacture shirts using characters from a limited number of licensees because of the shortage of shelf space and demand from retailers. With the Internet, the consumer may want to choose the same shirt, but have a large choice of the character that appears on the front.”