Atlanta – A Study in Contrasts…and Not

Even when you’re from Minnesota (15 years ago and counting) a temp of 10 degrees accompanied by a howling wind is freakin’ cold. Welcome to Atlanta in January. Fortunately it didn’t last, a few days later it was up into the 40’s, however were quite happy to get back to Florida: 80 degrees and humidity. Ahhhh.

Bldg 3-2

Bldg 3 atrium

The January 2015 Gift Market was good. Noticeably better than 6 months ago. A lot like one year ago. Which concerns me a little bit, because one year ago everybody was trumpeting to the heavens what a great market it was, setting sales records and selling like crazy. (See here). On our end they were looking at new collections, expanding current ones and asking for more. Then… nothing exceptional happened. The following July market was ho-hum and just OK, traffic was down and in between those dates the expanding lines didn’t expand. We sent out a ton of designs after Jan ’14, but then some of those “sure-thing” projects became less sure (not that THAT is anything new…). So, while it’s always great to experience an up market, we have worked a few dozen of these and I am not remodeling the office just yet. Keep your fingers crossed, do more good work and ask me in July how January went.

That being said, we did have a few observations. Traffic was good but still not up to previous levels; elevators were sometimes jammed, some ladies’ rooms had lines and occasionally people were sitting in the hallways eating the free lunches. As opposed to all of them all the time, as is the case in a really busy market. Everybody we talked to, bar none, said it was a good market. Our clients are planning things, but in a more cautious way: they (mostly) know what they want and aren’t asking for a lot of fluff to consider later. Instead of “maybe” we heard a lot more “no”, which actually is a better answer. A number of them have reduced their footprints in the rep showrooms, streamlined their operations (and unfortunately staff) and tightened the purse strings on product development. Apparently lessons were learned over the last few years.

There’s always a little bit of everything across the showrooms, but as we walked we noticed a lack of man cave stuff, Duck Dynasty, moustaches and non-traditional Christmas. Definitely a nod toward rustic and homespun, coarse fabrics, hand stitching and earth tones. There was also more artist promotion and artist signings, which is good and we hope will continue. What I wish wouldn’t continue is the “me too” products that show up in so many showrooms. Everywhere you turn someone has their version of Kathy’s Primitives, or Kelly Rae, or Glory Haus, or Natural Life, or Simply Southern, or anything that has sold well elsewhere. We spend a lot of time going “Hey – that looks like (fill in the blank)” – but then it’s not. Just another reason to keep those fresh ideas flowing.

Bldg 3

Bldg 3 atrium

 

So there ya go—another successful ATL market, and in the words of one of our clients:
“I think we’ve got it this show.”

Sounds good, I’m in.

The Great! Idea Company

There has been a lot of talk about how the product licensing market has changed for people on all sides of the equation. There has been an ongoing flood of new art and artists, designers and concepts, coaches and contests, all competing for attention in the market. At the same time to further confound things an economic downturn created widespread risk aversion among both licensees and retailers, and new retail buying models continue to force both sku counts and prices downward. But not all models have changed along with the times – in particular agency representation. Yet.

We are updating how we work to better serve our clients.

Two Town Studios (The Great! Idea Company) will now represent product concepts and design-based collections without requiring that those intellectual property owners enter into a full representation contract. We will be able to help our clients cut through the clutter inherent in today’s busy market by providing them with a steady supply of fresh, fully curated, product-worthy designs. For artists and designers we can provide an exposure opportunity for those who have a noteworthy concept they want to market but either don’t have, or don’t want, full representation. We will also continue to represent a very select group of designers in the traditional manner as well.

If you are a licensee who is not currently on our email list (hundreds are) please contact us to receive regular updates of new designs – we would love to have you! If you are an artist, designer or product developer and have a collection or concept that you would like us to review, please see the Submissions page on this site or contact us with any questions.

Come along, it’s going to be an exciting ride!

 

Days of Wine and Roses


Someone said to me once, about being rejected, “It’s a lot easier for you guys because you are agents and you really don’t care.” Aw, come on, I’m not THAT mean! While it’s true we have grown some pretty thick skin over the years, we really do care about the art, the concepts and the designers, however to thrive we have learned to put those “no’s” behind us and to keep on movin’. It’s a great business to be in but that comment got me thinking about all those other “things” that pop up… the things that are not all wine and roses, like…
(cue the blurry dream sequence)
Trying to explain to our licensee that yes, we had submitted that same design to their competitor, but no, we did NOT give them permission to manufacture something with it…
Reviewing a portfolio that is filled with perfectly presented but awful designs and knowing that 1) they worked their tail off creating it, and 2) then paid somebody to teach them how to present it…
Going back to the artist with yet another change request, or worse, going back to the client with a refusal to change it – all the while knowing that either one is going to kill the project…
Learning that your favorite product director has left a company and is now replaced by one from another company – one who would never give you the time of day…
Having to tell an artist that the client has changed their mind and now they are not going forward, even after the many requested changes….
Explaining that we really do need more new concepts from you even though (actually because) we have not been able to license the ones we already have…
Not having a ready explanation for why, since the other five submissions to this client did not go anywhere, you should submit something new the sixth time…
Not being able to explain why the best license we ever signed for you only paid royalties for one quarter…
Having to end a designer/agency relationship when you really like them as a person but the professional part of the relationship is just not working out…
Seeing the full header on a big client’s Design Call email because they forgot to BCC everyone, and counting 67 competitors… and worse yet, knowing that they send those emails out in batches so there are actually many more…
Looking at the trade show invoice and wondering how 35.00 a square foot is now 50.00 a square foot, and also wondering if you actually get any ROI from it…
Looking at every design you see through Licensing Goggles – which can really take some of the fun out of art fairs, galleries, others people’s walls and shopping…
 These are just a few of the situations that tend to make us squirm – but I’m not whining here, just giving you a peek over the neighbor’s fence at the dandelions. Every biz has it’s up and down moments, however, when all is said product licensing is a career with lots of rewarding moments – regardless of which side of the fence you are on.
Just don’t ask me to make two of these calls in a row!

Fire Yourself!


There’s an interesting story about the early days of Intel back when they were primarily a memory chip manufacturer. They were starting to get hammered by the cheaper Asian chips and the CEO sat down with the Chairman to discuss what to do. They discussed what would happen if they were fired – what actions would the new incoming CEO take? They would probably get out of the chip market was the conclusion, and so they made some adjustments, switching priorities to growing their microprocessor business and the rest is history.
It’s a worthwhile exercise for anyone in business, from the individual working alone to someone running an established company – if you were let go, what would a newcomer, a turn-around exec with a mandate to clean house do with (to?) your business? Take a long hard look through the eyes of a newcomer at what you are doing: What is going right? What is going wrong? What are they going to axe? Or keep?

Are you…
Still showing those old collections or products mostly because you worked so hard on them? (Clean house.)
Still devoting time to a client who hasn’t paid you any decent royalties since 2011? (Back burner.)
Still submitting to the cattle calls of big manufacturers without any results? (Let someone else do it.)
Still adding “me too” designs based on what you see in the stores? (You’re too late.)
Still holding back that new work because it is not quite perfect? (Get it out there.)
Imagine explaining to this new person WHY you do what you do (note that was not “what” you do). If the explanation starts with “Because I…” instead of “Because they…” maybe it’s time to evaluate whether your focus is on your customers. Every business needs a well defined and clear mission that can not only be understood but also explained or you will eventually lose your way. We all tend to muddle that up after a time and need to go back and look for the clarity. It may not be exactly the same as when you started – markets, strategies and even your goals may change – but you need to find it.
Try it – sit down with a pen and paper and fire yourself!

You May Be Right… They May Be Crazy…


(Ya gotta sing it like Billy Joel)
So… this time you actually DO know what’s perfect for the client and their market. You have that great product or collection, it hits all the right notes, has their name written all over it. You did everything right but the deal still fizzled due to circumstances WAY out of your control. It happens, more often than you think, and there is little or nothing to be done about it.
Here are a few snafus that have tripped us up recently:
In a big company division rivalries are killing some of our products as they fight over which categories belong to which division;
We design a line for a key retail account, we like it, the art director likes it, management thinks it’s too smart for the market and suggests that we need to dumb it down;
We have a unique category-killer concept, great feedback, the VP of Product Dev is championing it in the company but then the top management leaves and everything goes on extended hold;
An experienced art director is hired at one of our better clients and comes in with her own set of favorite artists, and now submission requests (and our submissions) disappear into a black hole;
We are doing some work with an old client, get some items into a big catalog supplier for testing and he suddenly closes the company down.
Happily we have a lot more going on at any given time, but this is where the danger lies for the “one idea” person – even when your concept may work on its own merits a roadblock can boomerang out of nowhere and then – poof ! the deal’s gone. Now what do you do? Hitch up your dungarees and trot out the next idea, the next client, the next…

Don’t have the next one? Might want to work on that before you need it!

Put Up Yer Dukes, Infringer


There was a long discussion on Linked in recently about registering groups of copyrighted images, and eventually copyright in general, and as is usual with these discussions a whole lot of conjecture, opinion and misinformation mixes in with the facts and sorting one from the other can be difficult. The first thing we want to do is get the nomenclature correct:

1. “Copyright” is a legal concept that grants the creator(s) of an original work exclusive rights to it’s use for a specified period of time. Copyright can be shared, assigned, divided and sold (and it may be owned by your employer if you have one). In countries that apply the Berne Convention standards the creation of the copyright is automatic upon placing your idea into a fixed form, i.e. on paper, sculpt, canvas, jpg, video, etc.

2. “Registration” of your copyright provides public evidence that you own the copyright and gives you certain rights in a court of law to (attempt to) obtain damages and recoup legal fees if someone infringes upon your copyright.

PLEASE don’t say that you are going to “copyright” your work with the US Copyright Office (it is not a verb), the copyright already exists and you are going to “register” that copyright. Using the correct terminology will help to understand the concepts. So here’s the problem – the government grants the registration but makes no judgment about the originality of the work, nor will they defend the validity of the registration or the rights of the copyright holder. The scrap of paper they give you is only as good as YOUR ability to defend it.

So, outside of the fact that some licensing agreements will require it, why register your copyrights?

It has been said that the only reason to register your copyrights is so you can be awarded legal fees when you need to enforce your copyright. Simplistic but not entirely off base either. A valid copyright registration not only looks nice on your wall but it is a tool, a club that can sometimes be used to bring an infringer into compliance due to the threat of damages and fees being levied against them in court. And it works great as a club until they pull a gun on you (or more accurately a fat bank account) and decide to fight.

If we are going to bandy about terms like copyright, register, copy, infringement and lawsuit, then let’s be realistic about the arena you are playing in: the U.S. legal system, where anybody can sue anyone for anything and defending Intellectual Property (IP) can be particularly messy. Infringers can challenge the originality of your work or the validity of the registration, or both. They can claim Fair Use or first to publish and make you prove otherwise. Licensees can claim ownership of a copyright or claim an artist’s style as trade dress (trust me on this one). Welcome to IP litigation.

If you’re caught lifting somebody’s wallet it’s pretty clear that you did it. But when someone claims that your design kinda looks like the green one they created sixty days before you registered the copyright on the purple one, and you licensed it to their competitor causing them irreparable harm in a certain market segment and they sue, and you disagree – it’s gonna get really expensive. The average cost of a copyright action (for royalties under 1 million) is over 200,000 dollars BEFORE it reaches trial and almost 400,000 if it goes to trial. For royalty amounts over 1M it is over 500,000 and just under 1M if it goes to trial, and it climbs from there (from the American Intellectual Property Law Association). The costs are staggering and IP litigators do not usually work on a contingent fee arrangement because 1) there are often no insurance companies to settle with and 2) the outcome is NEVER assured in an IP case. So that means hourly attorney rates in the 200 to 500 dollar range, research and discovery costs, doc prep, expert witnesses, court costs and more, all of it coming due on monthly bills. For the next year or two.

So here’s what I think:

– Register your copyrights, it’s cheap. And do it early.
– Keep a record of everything you send out – what to who and when.
– Never assume. In our experience (and we get knocked off regularly) most domestic corporate infringements occur at a low level and many are mistakes, so before leveling accusations start from a position of compromise – try to turn the infringer into a customer and execute a contract with back royalties.
– ALWAYS act on infringers, starting with “friendly” contact and escalating as necessary. If you can’t get to agreement, consider working with an attorney to put together a minimal cost cease and desist letter.
– The majority of art licensing infringements will not merit the cost of litigation since you are likely dealing with royalties in the hundreds or a few thousand range. Make a business decision, not an emotional one, about whether you should pursue legal action. Get used to the idea that sometimes you will just have to walk away. Yes, it sucks.
– Think very carefully before crowdshaming, it can work but it can also leave you open to serious liability, and you cannot shame a real crook because they just don’t care (or overseas factories when you can’t figure out who they are).
– Be unique, because being the first to market with a signature look is the cheapest protection you can get.

Please note: I am not an attorney nor do I play one on TV. The plan here is to explain some concepts in real life terms, NOT to give legal advice or to argue the finer points with some PO’d attorney who is now fuming after reading this… even though that may be kinda fun.

Snippets – Talking It Up In Atlanta


And so I sez to the guy I sez…
Were they talkative or what! Did I happen to mention in the last post that Atlanta was a good market…? Maybe once or twice? Happy people tend to be more forthcoming, so I guess they were pretty darn happy at the Mart judging by the number of worthy snippets. They had me scribbling like crazy: 
“Fashion accessories are doing great – without all these handbags and jewelry who knows if this building would still be here? This (gift) industry needed a good push and that’s what provided it.”
– the President of a gift company
 “All this stuff with words – how many things can you have in your house that are either barking orders at you or telling you to be fulfilled?” – an agent
“This is really nice but I’ll have to ask the reps if it will sell.”
– a manufacturer in a meeting
“Some concepts just need to die a natural death – I have boxes full.” – a well known artist
“We are definitely in plaque and mug overload now, there are just way too many to choose from.” – a retailer
“I used to do a ton of them but I haven’t painted a snowman in five years.” – a well known artist
“We’re trying to downsize the number of artists we work with, there are a billion of them now. We would much rather sit down and develop a line as opposed to picking up a piece of it here and there” – an art director
“To me it’s like a giant garage sale, pretty soon it looks like all the same crap everywhere.” – an art director about walking the Mart
“My puzzle royalties are down so that must mean other products are selling – puzzles always do better when the economy is bad.”
– a successful licensed artist
“We’re doing a lot of net and Amazon sales now, and internet skus have to build for months before you have anything so those production schedules are completely different than our regular retail one. It’s a crazy model but we’re really having fun with it.”
– from a garden company
“My God, those are so ugly! You have to wonder who is buying that.” – overheard in the Mart hallway
“We’re trying to get away from words.”
– a product director (and a very telling statement…)
“Success in this business can be very hard emotionally because one day you are the flavor of the week and the next day they have moved on.” – a successful artist
“Your world changed so of course our world changed along with it.” – a gift company owner to a retailer
“It used to be a great category but China destroyed it.”
– a manufacturer
“Here’s the problem – too much content in a catalog is worthless. You get their attention for one line and a picture, maybe 3 or 4 seconds max. If it takes more than that it won’t work.”
– a retailer about a sku-heavy line
“Our first day open was the best single day we have ever had.”
– a rep on the phone in the hallway
“Every artist who wants to stay in this business has to look at things differently now – because it IS different.” – an agent
“Trend is hard. It’s great when you hit one but you cannot get stuck with one single item in inventory because you will never, ever sell it afterwards.” – a manufacturer
“Artists don’t realize that what works in New York may not work at all in California, and they need to pay attention to that.”
– a gift manufacturer
“I love the idea but I don’t like the art.” – an art director in a meeting
“It’s a nice holiday (design) except for the lime green, we can’t sell any holiday with lime green on it.” – a retailer
“It’s more about the reps than the retailers. If you can get one person in the agency to like it, they will tell some others and eventually rep management decides to push it, then other reps notice or hear about it from their retailers who want it, so they all push it and then it really takes off.”
– a gift manufacturer about marketing a new line
And finally, something we all need to keep in mind….
“This is hysterical but it’s going to be one of those products where, to make it work, we need to figure out who we are selling it to and why they are buying it.”
– owner of a gift company about a humor collection

Runnin’ Wild in Atlanta


Five days in the Atlanta market and I can tell you this – if I see another wall sign/plaque/wall-anything/ with block/script/hand-drawn letters using the same shopworn messages that can be found on a hundred others it will be way too soon. And chalkboard design – it is so pervasive now that they have all morphed into the same look and feel so you absolutely cannot tell one company’s from another. Usually that means bye-bye trend.
But enough of that. Great show even if the traffic was a little off. The place was reeking with positivity. Overflowing with opportunity. Or if Bush 43 was still around, maybe he’d say it had oppor-tivity-posi-tunity.
We decided the Word of the Week was “positive”. Everybody we met with (and in 5 days of running we met with a lot) was up, they were happy with the way the market was going, the customers were buying and they wanted to talk product. There was a lot more of “I think we have something here, expand this, add X more designs and send it to me” rather than the “well, send it over and we’ll look at it” that used to be the norm. Of course you never really know until it hits the paperwork (and maybe not even then) but the message was much more encouraging. We talked with the owner of one of the bigger rep agencies and she was quite happy with sales at the show because on Thursday they had their biggest single show day ever with orders topping seven figures. Ya gotta love that!
One of our end-of-day meetings with a gift company was particularly interesting – we were sitting around chatting with the owners and a couple of their long term retailers when they asked if the retailers could sit in on our meeting. We were absolutely on board – what an opportunity to get immediate feedback from the people who make the final decisions. It turned into a great session, two hours of presentation, analysis, questions and answers while we all swilled wine and gobbled handfuls of Chex mix. You can’t pay for that kind of education. If I had my druthers it would be an annual event (well, as long as it’s the last meeting of the day). 

What’s Next? is always the question in this business, but it seems to have taken on a new urgency as of late. If you take away most of what dominates in the market today – signs with words, chalkboard, Duck Dynasty, various redneck approaches, camo, woodland creatures – there’s not much of anything left. It’s a great big hole that everybody would like to fill – a genuine huge opportunity for creatives if they can find something fresh and new for the market. What it will be is anybody’s guess at this point, but if you think you know, please call me ASAP, let’s talk…

You Are Not Going to Make It in Art Licensing


If you follow any of the social groups organized around art licensing for very long you will notice a pattern that emerges: new artists regularly log on full of hope and excitement, ready to chronicle the launch of their career in this newly discovered field of art licensing. Questions are asked and answered, loads of information assimilated, art is sent out and some attend or exhibit at a show or two. Occasionally there is an announcement of a first license but often not, and eventually after a frustrating year or two of banging on the doors the majority fade away.
Licensing your art is hard.
It takes a while to reach this conclusion, but once you finally get there it’s a shorter leap to another one that can give clarity to your endeavors: financially successful licensed artists are the exception, not the rule. And by definition, most people cannot be the exception. You are likely to look back at your path into licensing and think “this has been a huge amount of work to get to this point and it’s not getting any easier, I still have to do all the same things to succeed.” And there you will have it, that reality juncture where you need to decide if you want to keep doing these “same things” for years to come – because that is how the business works – or, do you decide that you have fought the brave fight but it’s time to bid adieu and ride off in search of greener pastures? Problem is – both decisions are valid.
Art licensing today is an industry in search of a workable model. The scramble is on – agents and artists who used to make their money by licensing art are now finding ways to collect from (mostly newbie) artists in ways that run the gamut from coaching to holding contests. Some agencies are accumulating artists, hoping that more people earning less money can make up for the reduced sku counts and short market runs. Branding agencies are taking on artists and art agencies are promoting brands, and both are consulting for manufacturers who are buying art worldwide and licensing art only when they have to. It’s a wild time in the biz.
You Are Not Going to Make It in Art Licensing.
Does that make you angry? The world has always told you to follow your passion, and you’ve decided licensing your art is your passion and now some bald-headed jerk is telling you it won’t work?
First, passion is overrated. Actually, it’s probably more accurate to say its relation to your career is widely misunderstood. Ours was the first generation to believe that what you enjoy doing was the most important factor in choosing a career. “Do what you love and the money will follow” seems like great advice – right up until you have to go get a job so you can eat. Cal Newton, in his book So Good They Can’t Ignore You (yes, the Steve Martin quote) talks about the difference between the “craftsman mindset”, where you focus on what value you bring to your job, and the “passion mindset” where you focus on what your job does for you. It’s interesting to note that those craftsmen types are much happier, more successful, and eventually, as they build valuable skills, actually end up being more passionate about their careers.  According to their research, the real passion comes AFTER you have put in the hard work to become excellent at doing something valuable, not before. It’s also important to note that most new businesses fail, not due to a lack of passion but instead a lack of customers. Reality is mostly unimpressed by how passionate you are.
The point is: It’s a mistake to think passion can substitute for competence.
Over ninety-eight percent of the books submitted to publishers are rejected. Three out of four Broadway productions never make a profit and close. Ninety-seven percent of patents filed never make enough money to cover the cost of filing. You know all those creators were passionate about their projects. We have no way to know how many millions (seriously, millions) of designs are created around the world for licensing but it’s a safe bet that the submission rejection rate is similar to the above. There are thousands of artists in this country alone, millions worldwide, all looking for someone to give them a break. And what does it take to get that break in art licensing? Try these:
You have to BE somebody, as in star power or have a well established platform; or
You have to be BETTER than everybody else; or
You have to be DIFFERENT than everybody else.

Artists trying to break into licensing tend to work on learning more, and hopefully some on getting better, but I think mostly they need to work on being different. A friend said a while back when discussing a business setback “I’m not a look-back kind of guy”, and for me that sums up how to approach monetizing our work. Licensed product is a thriving, dynamic industry driven by millions of customers paying out billions of dollars for items they want to own, so there is no shortage of opportunity for innovative design. There are plenty of people in art licensing who are still fighting a rear-guard action, trying to squeeze the last nickel out of how this used to work. You can try that too, but of course remember it no longer works for them. Or you can look forward and get excited about what will be. Study how start-ups work, learn about marketing in a digital age, read books on innovation, sign up for smart business newsletters and apply that information to your career, follow and read Seth Godin, James Altucher, David Aaker, Steve Blank, Danielle LaPorte, Stephen Key and a hundred others who can feed your mind and fire your soul. Tune out the elegiac laments and flood the market with your ideas, get them in front of people, test and measure, and when they don’t work move on to new ones. When they DO work move quickly to place them across the market, try various iterations and refreshes until they don’t work anymore – for surely that day will come – then be ready to move forward with a fresh idea. Become a dynamo and give off sparks.
Go back and read that headline again. Does it still make you angry?
Good. What are you going to do about it?
Ducks-B4

Lessons from the Woods

Which of these scenarios sounds more appealing to you:
A close knit but wacky family living in the woods who love nature and hunting and share their goofy hijinks with the world;
Or…
An intolerant, bigoted group of extremely wealthy people who have amassed many thousands of acres which they use as a private game farm where they can enthusiastically slaughter animals because God gave them the right to do so?
It doesn’t take long to figure out which of those images an entertainment company would prefer (and I can only hope most people would too… which is of course what worries them).
The current hoopla over the suspension of Duck Dynasty’s Phil Robertson mostly stems from the fact that Duck Dynasty, as most people know it, doesn’t really exist. It’s a manufactured product. And the company that owns that product has taken action against an employee who acted contrary to the interests of the product owners by making public statements that they believe will tarnish the image.
The boys prior to the show
When art meets commerce the rules change. And when you are compensated for the use of your art you take on certain responsibilities in exchange for that compensation. It isn’t about what’s fair, nor is it an infringement of anyone’s rights because you can always refuse to participate (as in “no, you can’t replace my turtle with a walrus”) – but if you decide to take the money you need to acknowledge what comes along with it. 
As the saying goes “The devil always arrives carrying cash”.