Defend yourself!

My friend Ketra is one of the more astute people I know, she has one of those nimble minds that can quickly hone in on the realities of a situation. She is also unencumbered by years of experience in the “old” licensing world – which gives her a fresh perspective, something that is difficult to achieve for those of us limited by our hard-earned certainties.
She used the phrase “a property that is defensible in the market” in conversation a while back, and it keeps popping up in my head. It’s a little twist on one of the commandments of investing – that the company you are considering is able to maintain a defensible market position – but it nicely highlights what is happening in our business right now. I have harped aplenty about the changes wrought by technology and the influx of new artists, but when I think about it in terms of maintaining a defensible position, I come to this conclusion:
It is no longer possible for the majority of artists in this business to gain a competitive advantage in the market, and without that they are simply another one of many with essentially the same offering.
When that happens, in any discipline, the perceived value drops away and your customers are no longer willing to pay a significant price for your services. You need to look no further than logo services or website design for examples – either can be had for 99.00 now. It’s not that there won’t always be a need for another Santa or snowman or stylized flower – certainly for the immediate future that will be true. But will it be worth your time to compete with 500 other artists to supply it? Actually, is it now?

But we don’t have to worry about the competition because we all have a unique product!

But do you really? From Julie Rains of Wisebread:
“The harsh truth is that your customers may not understand, need or even value the differences between your company’s solutions and those of your competitors. Cheaper versions that fulfill similar functions are preferable.”

When your product is a commodity, customers tend to choose solely on the basis of price or even on how much they can get for free. However – if you can bring a rare and truly unique set of skills and designs to the market and can show them something they haven’t seen before, or they can’t get from anyone else, then you can stake out your turf and charge admission – and that’s a whole lot more fun.

Think Like A Brand

Most artists in this business would agree that their goal is to someday be a “brand”. So have you spent any time picturing what that would look like? Visualization is a powerful tool for helping to achieve your goals – so lean back and think about it…if you were a brand, you would….
Define the essence of your brand. Successful brands are perceived by their customers as the best or even the “only”. But this is a lot more than just product awareness, it is an almost automatic recognition of what they are, or in your case what you do. Can you define that for your brand? No? Then most certainly your customers can’t either.
Know your category cold. How much data do you think Coke and Pepsi have on soft drink consumption? How much do the Radisson people know about business travelers? How much do you know about art licensing? About your customers?
Protect your territory. Do you think the people at Lee are Tweeting their followers at Levis about a great new distribution channel they found? Of course not. You may have noticed that the big names in this business almost never reveal client names or share specific opportunities. If you want to be a professional you need to act like one.
Nurture your followers. Brand followers believe that “their” brand exists for the benefit of the customer, and successful brands work hard at never giving them any reason to doubt that. Brand loyalty, and how to keep it, is primary in everything they do. If your client wants it tomorrow, send it tonight. If they ask for an alternative sketch, send them two. Happily.
Be consistent, and consistently excellent. A tall order for sure, but a basic building block of a successful brand. Whether you walk into a Starbucks in Seattle, Minneapolis or Miami, you know the experience will be the same – and it will be almost perfect. The same goes for a McDonalds, or an Apple store, or a Nordstrom…this is what makes them who they are.
Innovate. Constantly. Everyone expects the best from the best. Brands have a laser-like focus on making their product better and keeping it the best on the market. Followers look to their brands for the next big thing, and if you can’t provide it they will soon look elsewhere.
Believe in your product. The people at Tom’s of Maine know they have the best personal products on the market, at Method they know they have the best soap, at Ben and Jerry’s they know they make the best ice cream. If you know you are putting out the best art available for that product then your clients will too.
If not, well, go back to Starbucks and learn how they do it….

Call me when you have something

There has been a bit of a brouhaha bubbling on Linked In over a posting by a UK-based wanna-be licensee. Seems he claimed to have a hot new product, POD (print on demand) decorated audio speakers, and that they were a featured product at the last Pulse products show. Apparently no one can verify that. He claims to have an exclusive license for the product for the UK and Europe (like to see that…) but when you look at the website it appears they import little speakers, like dozens of others do, and it has every indication of being a start-up operation.  Of course there are hundreds of these already available on Zazzle.
So why do we care? There are over 140 responses to this fishing expedition and it’s still growing, however some of them are starting to smell a rat and have begun to question the legitimacy of the request.  Unfortunately this is another example of one of the downsides of our technological revolution – that anybody can jump into art licensing, qualified or not – but remember it is now true on EITHER side of the fence. We are approached all the time at the shows and off the web by people with great plans who are interested in licensing some art, even if they don’t quite know what that means yet. Of course ya never know, so we will always talk to them, gather some information and then do the research, but 9 times out of 10 that’s where it ends. We have a long standing rule at our company – we don’t work with start ups. No website, no history – sorry, no contract. It may sound a bit arbitrary but the fact remains that with start up companies you rarely get paid.
Yes, everybody has to start somewhere, and yes, every rule is made to be broken, but consider my advice before jumping in and you will save yourself a lot of grief:
No history, no website, no product yet – no thanks.

Mine and mine alone…

Kind of interesting that in the last three days we have had two clients inform us (pretty much how it went, not much room to “discuss”…) as we executed contracts that they are no longer willing to print the artist’s name as part of the copyright notice on their products. Both are doing it to protect their art sources – meaning “we don’t want our competitors raiding our licensed talent”. They are both national leaders in their categories, so yes, we are going along with it. About all I can say is…really? Is designer poaching that big of a problem out there?
We have seen variations of this “protection” previously, occasionally agreements have been executed stating that the artist will not do any work for a direct competitor during the term of a license agreement (sometimes even naming the  competitor) but this is new twist.  Flag companies and some of the smaller fabric companies have long wanted exclusive artists, and in fact one of the biggest suppliers recently announced they will only work with artists who are exclusive to them from this point forward.
  
I can’t wrap my head around whether all this is part of something larger that’s brewing, and what that would mean, or just a few loosely connected coincidences. On the retail side it’s no news that design exclusivity is all the rage but I don’t see how that filters backwards…yet.
Any similar experiences out there?

Hey – what if…

Interesting review today by Matthew May of the Derek Sivers book Anything You Want: 40 Lessons For a New Kind of Entreprenuer. You can read it here. It’s a little book with a big message, one that breaks out of the usual step by step, follow your biz plan type of advice. 
One of my favorite highlights from May:
Switch if it’s not a hit
 If everyone is shouting for more—”I need this! I’d be happy to pay you for this!”—you’re probably on to something, and you should do it. If it’s anything less, don’t pursue it. Don’t waste your time banging on locked doors and fighting uphill battles. Innovate until you get the massive response. “Success comes from persistently improving and inventing, not from persistently promoting what’s not working.”
Read that several times, and then highlight (it’ll wash off your screen) the sentence “Innovate until you get the massive response”.
This is pretty much what it’s all about now in art licensing. Treat your portfolio as an idea book, not your finished product. We call them the start of the conversation – we love it when a client studies a design and muses “what if…” or “how could we…”. I can’t tell you how many sketches are made in the margins as we discuss alternatives, then finished up and fired off to them afterwards. Its fun, its fast and the idea may or may not work – but that’s OK because we’ve got a million more…

Who changed the music?

Years ago, farther back than I want to admit, I was an young and enthusiastic property investor just starting to work my way into the real estate market. Back then agents were full time professionals, the essentially secret MLS was printed out weekly on reams of computer paper, and commissions were pretty much fixed and non-negotiable. That was how it worked – tick tock the game is locked. But about that time things started to change: relaxed social norms meant women had been finding their way into the workforce, and in real estate that first manifested as an influx of part time agents, soon that became normal and very quickly the status quo had changed forever. Desktop computers made day to day operations easier but then along came the internet, and now everyone in that business is scrambling to predict an uncertain future.
Used to be that if you wanted to be a writer you had to commit yourself to a solitary existence marked by countless hours perched in front of a typewriter producing reams of paper, and years spent on investigation and research. Of course to get past the editors you had to be accomplished as well; it took real dedication and not many could make the cut. Enter the word processor. Suddenly manuscripts that previously had to be written, approved, edited and revised – numerous times – before they ever went to the print house could now be handed over on a floppy.  The barriers were going down, and with the arrival of the internet research could be done with the push of a button, and soon publishing could too.
 There are entire books written about the ongoing web-driven “mass amateurization” of skilled professions and the destruction of value therein, but this isn’t that discussion (and before you get your hackles up, I did not say women are the cause of it in RE, just a catalyst), so I will leave that alone …for now…
Perhaps you can see where this is going. Even though we are a new industry when compared to real estate sales or writing, art licensing had its own entry barriers which are now fading into history. This has altered the nature of the business, and the days of sitting down and showing individual designs in a book or on a screen are in large part going away. Licensees have unprecedented instant access to art and artists, so now many of them are looking for something more. A book of designs used to be the minimum entry, then it became a book of designs presented with associated product pages (commonly, but inaccurately, called “collections”), and now the bar has been raised to full blown design concepts that will connect with the retail customer. You gotta have a story to tell. The change has been downright startling over the last couple of years, and these recent shows have really brought it home – art licensing is alive and well but this is the new tune and we will just have to learn to dance it.

Finally – It’s Monday!

It’s been a wild week: we started last Monday in Miami at the China Sourcing Fair, then spent a long day on Tuesday (and the week before) prepping to leave early Wednesday for the Atlanta Gift Market – got back about 10PM last night (Sunday). Pretty much a full week of non-stop tap dancing.
  
Oh, the glamorous life of a licensing agent.
We did, however, accomplish a lot. The traffic at the shows had the appearance of being down, and that is also what a number of our clients were reporting, but word is the retailers that attended were serious about writing orders and most of the manufacturers seemed OK with the volume. Not up but not down either – as one of them said regarding business nowadays, “Flat is the new up”. There does seem to be a strange disconnect between the current economic malaise and the future plans of  licensees – lot’s of new  projects in the works, a ton of designs going out and some really good things happening, so let’s all keep our fingers crossed that Washington doesn’t screw it up. Again.
Now, normally this would not be cause for celebration at most shows, but after walking every aisle of the China Sourcing Fair, we were happy to NOT find even one of our designs. Meaning that we found no unauthorized product. It has felt like the overseas knock offs are slowing (Etsy is a whole different nightmare), perhaps due to the anti-counterfeiting efforts that are ramping up worldwide. I am not quite naive enough to think that the problem is all better now because of this one event but perhaps we are headed in the right direction.
Let’s hope so – I have enough to do…

Snippets

Ah, the past Surtex and Licensing shows have been rich producers of snippets. I tried not to miss too many but when things heat up you just can’t stop and write them all down, however still managed to get a few:

“If there is anything I have learned in this business it’s that manufacturers constantly want new, new, new.”
            – licensing agent
“The quickest way for an artist to scare off a creative director is to start talking about their brand.”
            – a creative director
“We’ve got 20,000 images in our library and they can’t find even one to license?”
            – agent about a licensee they can’t connect with
“She has great technical skills but her art just doesn’t have much heart.”
            – in a discussion about an artist seeking a rep
“Mediocre has been outsourced”
 in a discussion about artists
“Licensing is a process, not a formula”
            – agent in a discussion about art coaches
“There is no guidebook because everybody comes into this business from a different place.”
            – same discussion
“Don’t waste time learning the tricks of the trade, instead learn your trade.”
            – quote from H. Jackson Brown Jr.
“So many artists are paying so much attention to other people’s unsold designs – which really has very little to do with how you get product on the market.”
            – comment about artists walking Surtex
“Unfortunately they are leveraging these bad times into contract concessions.”
            – well known IP owner discussing his licensees
“I am tired of representing artists that only respond to requests and call outs.”
            – licensing agent
and my personal favorite…
“If they tell me they want a monkey on a table I only ask “How tall?”
            – in a discussion on client service

 

If you keep missing, find another target

I hope you watch the CBS Sunday Morning show – it’s always a great exploration of people and places, and unfortunately one of the few decent programs on network TV.  This morning they did a piece on Katy Perry, and as usual there is so much more to her story than you would think. She started out as a Christian singer (then Katy Hudson) after being raised by born-again parents, but after one album in 2001 her career fizzled and she left Nashville. She began to reinvent herself as a pop singer, and after a number of starts and stops finally recorded a hit song, seven years after her first try, and the rest is history.
As entertaining as the story was, I couldn’t help commenting (once again, while Ronnie rolled her eyes…) on the direction the road to success often takes. Of course being cute as a button is a big plus in her business, but that wasn’t enough to launch her career. She had to reinvent her offering, find a way to stand out and head back into the market. It’s also another great example of the adage “it takes a long time to be an overnight success”.
Talent is becoming an accessible commodity in our fast paced digital world, so you need to find a way to focus your skills to meet the needs of the market – by not just working hard but working smart.    

Just keep ‘em coming

Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep.
    -Scott Adams (Dilbert)

We never go to a show without a number of new collections and a fair amount of new art, and we of course have our expectations about what is going to be a hit. Trying to predict which new art will be the hot ticket at the show has become kind of a game with us, and  I’ll let you in on one of the lessons we’ve learned over the years:
You never really know for sure what is going to work, and what is going to fizzle.
 I can’t tell you how many times we’ve sat down to analyze show results and wondered why a particular design or concept had no traction – especially when we had that unique and clever idea that we absolutely KNEW was going to be hot, and then…hmmm, not so much. (Fortunately it can work the opposite way too, which is always a nice surprise.)
Let’s borrow a couple of points from a Seth Godin post on making predictions:
1. It’s really difficult to make accurate predictions, because success often appears to be random.
2. Based on #1, it’s probably smart for you to initiate more projects that aren’t guaranteed winners, because most winners aren’t guaranteed.
Product markets can be both fluid and fickle, a difficult combination that keeps the targets moving. Successful licensors know this and they try to keep a stream of ideas flowing rather than settling in on one concept and constantly trying to push that rock uphill. What appears from the outside to be random success is usually not – more often it’s the result of the proverbial throwing things (things being successively better and more refined ideas) against the wall until the right idea sticks.
Maybe in our business we should forget the old trusted theory “if you build it they will come” and change it to “if you build enough of them they’ll buy one”.