case study of korean licensing and merchandising business
TRANSCRIPT
A case study of
Korean character
Licensing business
Nov 18 2015
Sam Lee / Ocon
Sam Lee [Currently] 2012 – Present
Managing Director / Ocon Inc ( Job) Licensing and merchandising business
Animation production, co-production International business
2012- Present Jury of Government support program for Animation and Character license part
/ KOCCA, a Gov’t org Jury of Government support program for content business / RAPA , a Gov’t org Consultant of Content business / KOCCA
[Formerly] 2010 -2011
Managing Director / Isis contents co ( Job) Licensing and merchandising business
International business (Company ) Master licensee of Sanrio including Hello Kitty
2006 -2010 Chief Manager / Doolynara co
( Job) Licensing and merchandising business Animation production , co-production International business
(Company) Licensor of Dooly, the little Dino
OCON
18 years history
CGI Animation and Character related business
Co-owner of Pororo IP ( * IP : Intellectual properties )
Emmy awards ( 2014) and many awards by Pororo and Dibo
Master Licensee of “Kakao friends “
Master Licensee of “ Ani-Pang “
Today
Character Licensing and merchandising Market status of Korea
Case study : Kakao friends
Case study : Korean Children animation : PORORO and DIBO
L&M business in Korea
Character usageCharacter recognition
Local foreign
Recognition route
Character goods Animation friends Smartphone internet
What characters ?
Toddler Children Adult
Different ?
90 % Korean licensees are not importers but
Manufacturers
70% Licensees are SME 30% Chebul
Licensees are not only buyers but life time partners
They should invest money to launch the new character products
CEO is the PIC , fast decision making
Different ?
Strong Local brands >Global Brand
More chance to watch local programs due to animation quota
= More watch , More consume
Typical National Traits
Local Market chain >> Walmart, Carrefour
Local search engine ( Naver) >>> Google
Local instant messenger ( Kakao talk ) >> whatsapp , Line
Production
sell $50Buy $25Production
Factory Wholesaler Retailer Consumer
sell $75 sell $100
Royalties are imposed to Retail or Wholesale ?
Royalties ?
Most of the licensing agreement are made on Wholesale price not retail price ( global standard )
-General merchandise : 8 % of wholesale price - Foods and beverages : 0.5 – 1.5 %- Minimum guarantee ( MG ) : USD5,000
Very cheap price _ Let licensee decide easily No.1 Brand PORORO and KAKAO as well
“ NO ENTRY BARRIERS “
Case study : Kakao friends
Kakao friends
- Launced licensing biz only 2 yrs- 10 offline shops - USD 2Mil / Month Offline Sales- USD 1Mil / Month Online Sales - USD 400,000 / Month royalties - 500 of merchandises- OCON successfully launched L&M Model
Most Hot characters in L&M Market within 2 years
2 main types character goods production
Licensing OEM
Let licensees make merchandise productions “Lend IP”
Licensor make their own productions
All products are from licensees
All are OEM
* IP : Intellectual properties
Mixed Model
Licensing (Out) OEM
Well selling productions _ toys , stationeries
Uncertain productions _ fashion , appeals
; Do OEM first -> make market -> go to licensing
Current Cash cow Future Cash cow
DISTRIBUTION – Shops , Wholesales
Future licensing ? collaboration
Classic licensing Collaboration
1 year agreement Short terms
1 – 3 months
SME mainly Big and Giant
Relatively week brand Strong brand
No sign of own brand
Only can see character
granted
- e.g Pororo pencil
Granted character and own
brand both alive
LG X Kakao
Distribution by Licensor
- Meaning doing wholesales, Retail shops- Buying licensing goods from licensees to help keep production-Guarantee licensee’s rigid sales volume
HELP LICENSEES TO MAKE MONEY is HELP YOURSELF
New distribution model _ Popup store
-Limited time shop : 2 weeks – 1 months - Strong advertisement by SNS , Internet (Aiming young generation) - Limited goods - young generation friendly place : Near collage - Interior Design Oriented
Case study : Korean Children animation
PORORO and DIBO
Pororo
-Produced by 2 companies co-work : Ocon , Iconix
- Season 6 under production now
- Annual Licensing income : USD20 Mil
- Licensing goods sales : USD500 Mil a year
- Partner companies : 600
- Licensing goods : 1,000
Make money with animation -You can only recoup 20% of invested money by TV Sales - Rest of 80% or over should come from OSMU
Animation
Broadcasting
TV , IPTV ,
cable, …Exhibition
/
performan
ces
Video /
Music
Video
games
General
Licensing /
Franchise
Movie
OSMU ( One-source multi-use )
- Children’s Musical performance
** The slogan of korean animation
Dibo Musical in Philippines
-Indoor theme park (Pororo park)
Korea, China now Singapore ( Marina Square)
- Indoor theme park ( Dibo village )
-Movie
Pororo, Ice racing adventure(2013 .12 )
Pororo2 , Snow fairy Adventure (2014.12)
Pororo 3, Cyber space Adventure ( 2015.12)
Millions of visitors
Success factors of PORORO
- Cooperation of two companies Iconix : comes from advertising company Ocon : Korea’s leading animation studio
-Right business partner : EBS Not 3 Major TV EBS : specialized for children contents
- Strict pre-marketing research English name , penguin and etc
-Strict licensing policies : Only for Children goods
- Gov’t support
