Once a Side Gig, Licensing Has Become a Crucial Revenue Source for Publishers
Execs from Meredith Corp., Penske Media, and Nylon on the ways brand licensing extends well beyond selling the rights to a logo.
Battered by digital economics, hijacked by the ubiquity of screens, commoditized by aggregators, magazine brands remain remarkably resilient as distinct badges of curation, sober editorial judgment, and, for lack of a better word, class. And these are the very qualities consumer goods manufacturers need in a world that is cluttered with commoditized goods.
While Good Housekeeping seals of approval and Playboy Bunny shirts have been familiar parts of the zeitgeist for decades, product licensing always tended to be an incremental side gig for publishers. Now, many media companies are expanding this side of the business and entwining themselves more deeply into product marketing and supply chain development.
Penske Media recently announced a major new investment and expansion into global licensing across media, products and services.
“We are staffing up,” says VP of global partnerships and licensing, Kevin LaBonge, when referring to the company’s plans to further leverage brands like Variety, WWD and Robb Report.
The company already launched Robb Vices, a monthly luxury product subscription box, and expects to be making announcements soon with further extensions in travel, apparel, home furnishings, and hospitality.
But the trend is not exclusive to Penske.
“We are hoping that by the end of 2019, licensing is going to represent 20 to 30 percent of revenues,” says Evan Luzzatto, president of Nylon LLC. The company just started licensing its beauty products awards logo and is exploring attaching its brand to a range of relevant lifestyle products.
Like at many publishers, this piece of the business was once an incremental line item at Meredith Corp., but times have changed.
“Over the last decade [brand licensing] has grown in importance and now is a strategic part of the diversification plan,” says Sondra Newkirk, Meredith’s senior director of brand licensing.
With brands like Better Homes and Gardens, Shape, EatingWell, and now Time Inc.’s robust portfolio, Meredith is not only the goliath in magazine media, it’s ranked second by License magazine’s Top 150 Global Licensors—sitting only behind The Walt Disney Company in revenue generated—at $22.8 billion.
In addition to the expansion of licensing opportunities for magazine brands, the practice now reaches across corporate disciplines, including editorial, marketing, and product development.
“It’s no longer okay to just put a logo on a product,” says LaBonge. “These products need to truly have a sense of purpose and being, and equally important, they have to have the full buy-in and support from the editorial and commercial teams.”
He points to early success with the Robb Report’s editor-curated monthly subscription box, aimed at building an experience of the WWDMAGIC fashion trade shows with UBM. “The products and services we put into market have to feel like very natural and best-in-class products, otherwise we lose credibility with our audiences.”
Magazine brands carry special cachet in spaces where there is little product differentiation, because they bring both brand familiarity as well as editorial values. However, Newkirk points out that the best licensing deals require considerable research within an endemic market, while also looking into other markets a branded product could penetrate.
“Often the opportunities that come to us are not necessarily the best fit, she says.”
For example, EatingWell’s partnership with Bellisio Foods for a line of branded frozen food products. Meredith found that frozen foods that were advertised as being healthy really focused on low fat or dieting and not well-being and quality.
“We filled a void for someone focused on health,” Newkirk says. However, she admits it took some work, including a year of research and development before Meredith brought a project to the table for Bellisio to consider.
Far beyond simply lending partners the rights to its logo, EatingWell provided manufacturing guidelines regarding taste, nutrition, and ingredient purity and sourcing. The differentiation seems to have resonated in the marketplace. Since launch, the EatingWell frozen food line has reached 10,000 stores and grown from eight SKUs to 14.
Meredith’s licensing philosophy is grounded in longevity. In 2007, the Better Homes and Gardens brand entered a 100-year agreement (50 years + 50 year renewal option) with real estate agent services company Realogy.
“The industry’s jaw dropped, but it got us a lot of brokers,” Newkirk says. “We wanted to make a statement to the industry that we would stay iconic.”
The success in brand licensing for magazine media is a paradoxical antidote to narratives around so-called digital disruption. As content continues to be commoditized, a taste for editorial authority and values remain. That value to manufacturers is helping them convey value with trusted endorsements.
“I think today you see a lot of [consumer product] brands spending a ton buying reach and scale instead of spending money building a strong identity,” Luzzatto says. “We are really interested in deep engagement metrics we can show.”
LaBonge sees the advantage for magazines’ digital footprints in the rise of e-commerce and helping the licensor close the loop on point of sale.
“Increasingly important is that these brands have direct connections with tens of millions of consumers across platforms,” he says. “We offer the ability to transact from our platforms immediately. So it’s no longer the goal to just get into retail. You can become a key part of the retail equation by selling directly or guiding consumers to purchase on a partner’s platform.”
While media brand licensing has been with us for decades, digital has transformed the practice, as it has everything else. The often-stultifying sameness of the aggregated and crowdsourced environment makes us crave and notice signs of old-fashioned editorial discretion and distinction. This only enhances the value of magazine branded products in the retail world. But at the same time, digital allows magazine media to activate a dream they have held for over a century—to quantify their brand’s impact at the cash register beyond newsstand sales.