By Richard Gill,
McGill and Associates
The international marketplace for Toys and games is huge, at least as big again as the US! How should you approach this market? This is a big wide reaching subject and this article will serve as an introduction only – I will add region specific papers at a later date.
When you present your concept to a large multi-national such as Mattel, Hasbro or Spin Master they will ask you to assign worldwide rights to them. This makes perfect sense for them and, in certain circumstance can make sense for you however, be aware of your rights. Never forget that in addition to the US based multi-nationals there are many overseas companies who have great penetration and reach, either regionally or worldwide e.g. Lego, Giochi Preziosi, Ravensburger to name a few!
The worldwide market can be broadly broken into regions:
East Europe – Northern, Southern and Central
If a multi-national offers you a sufficiently strong deal and gets behind your concept they can generate huge sales for you however, these opportunities are very few and far between. In my personal opinion no ONE company has the best representation in all these regions and even they will admit to using 3rd party distributors in some parts of the world! If you grant rights to one company ensure they have deadlines for launching your property into different regions/markets – if they fail to exploit the rights in these markets, put a timeline in place to ensure the rights return to you and you then have a further opportunity to seek another potential licensee or distributor for that market/region.
TOP LINE some key pitfalls to consider includes the EU. The EU in its eagerness to provide a safe and open market has made it illegal to limit a European company’s distribution rights within the EU or sell White Paper 2012 within the EU a product that does meet their standards – much more stringent than the USA! So, if you license your concept to a German company, they have an absolute right to sell it anywhere within in the EU. One way to avoid this is to limit your license to German language specific rights only (they still have the right to sell into France, Spain, Denmark etc. but who will buy German packaged goods in those markets?) – the local companies understand this point well but it is easily overlooked from outside the EU.
To Summarize then:
a) grant rights specific in scope and territory
b) ensure you have the right to reclaim rights to markets or territories if a licensee does not use those rights
c) ensure your product is suitable for the markets you license (safety, name, color preferences, content etc.)
d) understand market differences (including, if you have the resources, visiting the various Toy Fairs around the globe)
e) take steps to legally protect your trademarks, copyrights and, where appropriate, patents.
f) US multi-nationals may be your first stop but definitely not your last
By way of illustration we helped launch Telestrations by USAopoly into 30+ markets in just over 18 months with multiple publishers in different regions, 5 Second Rule by Patch Products into 20+ markets with multiple licensees and over 20 products into the Indian market in 2 years – none (if you live in the US at least) with a company name you are likely to recognize!