Licensing, a definition

“Licensing is the process whereby a person or firm which owns or controls a legally protected intellectual property grants to others the right (called a "license") to use such property on products or services. "Intellectual Property" could be in the form of a trademark; a logo; a graphic; a name; a title; a likeness; a signature; a character or personality; a design; a symbol, a patent or a copyrighted work (such as a book, play, movie, television series, etc.). The license is granted for specific products or services for a fixed period of time, for a defined geographic territory and channel of distribution in return for an agreed upon payment." - Gary Caplan

When someone asks me, “What business are you in?”

I reply, “I am in the licensing business.”

Their response: A somewhat confused look, a blank stare, and a quick follow-up question. “What kind of business is that?”

In the past, to try to answer that question without having to resort to the textbook definition above, I worked up a clever routine where I would provide a few examples of licensed products and hoped that the person asking the question got it – they usually did not. So, for many years, licensing had been a very difficult business to explain simply because so few had ever heard of it.

Today, the licensing business has reached mainstream America, and in fact, has exploded around the world. Retailers, the media, the academic community, major multinational corporations, and for sure, consumers have discovered licensing.

What is licensing? Is it a legitimate long-term marketing strategy, or is it simply an easy way for a few licensors and licensees to get in early and hope to make a few quick bucks, and then get out?

The truth is that both statements are true, but there is a lot more to the story.

In the early days of licensing, the “strategy” was simply to slap the property on a product and hope somebody would buy it.

While some of that still goes on, I can happily say for the most part, licensing has evolved into a real business and one that should be taken seriously. Those who are succeeding are managing their business better now than their predecessors ever dreamed of. While most of us would argue that product is still king, licensing has become as much about the marketing and management of the property as the product and properties themselves.

As a result, licensing is now recognized as a bona-fide marketing tool.

It is an exciting business with a new and different challenge every day. It is a serious business, but it can also be fun. (Do you enjoy attending wonderful parties, movie premieres or major sporting events?) Licensing is a business perfectly suited for the creative side of a person. It is also a business in which visionary marketers can prosper. You do not have to be the biggest either. Anyone and everyone has a chance. It is about how you handle those chances, and how you prepare yourself for each opportunity.

Licensing is a wonderful and unique business, and once you are established in it and become a “licensing expert,” when someone asks you what business you are in, you will answer with great pride, “I’m in the licensing business.” No further explanation necessary.