Extracts from Ekstract: 2022 Out With The Old and In With The New (Strain)
By Steven Ekstract
Global Licensing Advisors
Welcome back from holidays and to 2022. Just when we thought we had turned a corner after two years of pandemic, the Omicron strain has temporarily reversed our progress. This new strain of covid that has spread so quickly and virulently may paradoxically be the strain of Covid-19 that gets us from Pandemic to endemic, where the disease becomes less severe and more like a cold or flu, allowing us a return to normalcy.
A study released last month by Oregon Health and Science University of the Omicron strain show that people who were vaccinated and had a breakthrough infection produced higher levels of antibodies, up to 1000%, higher than those produced two weeks after a Pfizer booster shot. The study’s author believes that with a combination of vaccination and exposure to the virus, the majority of people will be protected from future Covid-19 variants. Another study out of South Africa found that because of Omicron’s myriad mutations, exposure to it creates a much stronger immune response in the vaccinated and unvaccinated but healthy individuals.
I place a tremendous amount of faith in our health experts who believe this Omicron wave will dissipate quickly. In New York City, which was one of the first places in the U.S. to be hit with Omicron, cases are down 70% from two weeks ago.
Despite the current challenges we face with this latest highly transmissible strain, top Health experts believe by March we will have turned the corner and covid cases will fall throughout the globe. What we are learning after two years of living with covid is that, like the flu, it is significantly more contagious in chilly winter months of the Northern Hemisphere. While Covid-19 will be here to stay, with this latest strain of Omicron, most of us will develop what scientists call “super immunity”.
From a licensing business planning perspective, with our critical first quarter Trade Events having to cancel, our emphasis needs to be fully focused on Licensing Expo in May. If our health experts are correct, we should have a very safe window for in person trade fairs by March. Companies currently on the fence about attending or exhibiting need to throw the dice (see the Vegas analogy?) and double down on a return to a robust Licensing Expo. By early March, we will know how safe that return will be. As a central meeting place for our business, there simply is no substitute for Licensing Expo and the period of May reinforces the decision to be there. I am buying my ticket now while airfare prices are low.
Beijing Olympics-Live Events to move forward
Next week, the Winter Olympics is due to begin in Beijing. From a political, economic, and national perspective, China needs the Olympics to come off perfectly, as do the major Olympic Sponsors which include global brands like Airbnb, Alibaba Group, Bridgestone, The Coca-Cola Company, General Electric, Intel, Omega SA, Panasonic, Procter & Gamble, Samsung Electronics, Toyota and Visa Inc. Both China and the Olympic organizers have confirmed that there will only be domestic spectators. China appears to be enforcing rigid regulations around the Olympic events, and there likely is no country on earth that could enforce such regulations as well as China.
I predict that with a captive global audience sheltering in place during the omicron surge, the TV ratings from the Olympics will be the highest in history, good news for Brand Sponsors, Broadcasters, and advertisers. Hopefully, a successful Beijing Olympics could be the spark necessary to begin repairing relations between the West and China.
For the business of licensing, a quick dissipation of Omicron would provide a significant lift for visits to retail and live events (i.e., movie theatres, museums, concerts, festivals, sporting events, theme parks) as well as our hoped-for return to offices.
At the risk of sounding repetitive from my previous columns, I remain cautiously optimistic for our licensing business; despite the challenges we face from this current covid strain, shifting retail markets and supply chain snafus. IP brand extensions have never been stronger. The irony of the Pandemic is that is has reinforced consumers desire for trusted brands. In the halcyon tech driven years leading up to the pandemic, new, digitally native brands appealed to millennials and Gen Z, which naturally impacted sales of traditional brands. When covid hit in March 2020, fearful times led to embracing of these traditional brands. Sadly, the supply chain snafus have led to product shortages and disappointed consumers ready willing and able to spend on licensed brand merch. Still, the halo effect of traditional brands and their extensions is here for a while and our licensing business has fortunately remained strong as a result.
Steven Ekstract, Managing Director of Global Licensing Advisors and for more than two decades a leading voice in licensing, offers his opinions and perspectives on the licensing business each month in “Extracts from Ekstract.” He launched Global Licensing Advisors – a global, independent advisory service for companies seeking direction for brand collaborations — in September 2020. His involvement in the licensing business goes back to 1998, when he co-founded License! Magazine (now known as License Global under the ownership of Informa Markets). In 2018, Steven took on the Brand Director role for the Global Licensing Group at Informa Markets with new Expo launches in China and Japan.
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