An Executive Voices Blog by David Born, CEO of Born Licensing and Born to License

In 2002, a toy collector cold called New Line Cinema to ask if he could get a license to launch a product inspired by the upcoming film Austin Powers in Goldmember. The agreement—the collector’s first ever entertainment-based license—resulted in approximately 100,000 units of an Austin Powers bobblehead being shipped.

That collector was Mike Becker, the founder of pop culture collectible manufacturer Funko. Funko is now said to have over 1,100 licenses and licensing has become a critical part of the company’s hugely successful business. I thought of Funko’s incredible story while on a call recently with a big brand owner. We were talking about the challenges involved when working with companies that are new to licensing. “Our typical policy is not to work with anyone who has no licensing experience,” they said.

Their rationale? There is simply too much hand holding needed. It’s an educational process and they don’t have the time or resources to play teacher. When discussing the same issue with other licensors, it seems clear that this is a position shared by many.

And I totally get it. I’ve worked with almost every major licensor throughout my career, and I’ve seen their bandwidth reduce significantly in recent times. These days, there is barely enough time to support existing licensees, let alone new ones who don’t have a clue about licensing.

But throughout my licensing career I’ve also worked with companies that are new to the industry. While at Haven in Australia, I worked with a supplier of eggs that licensed Sesame Street. At Warner Bros., I worked with a food manufacturer whose sausages wrapped in puff pastry became Scooby-Doo Puffy Dogs. At Born Licensing, almost every ad campaign we work on is with teams that have never licensed IP before.

It is certainly true that working with companies that have little to no licensing experience is more effort than if they knew the ropes. These new licensees need to learn about layered approval processes, royalty reporting, the need for central marketing funds, and everything else that the licensing process involves. And just fielding exploratory calls takes up time. We can be contacted by as many as 10 individuals or companies a day that want assistance with licensing. That’s 2,500 calls a year.

Of course, many of these companies are not ready for licensing or not the right fit, period. But some of those requests for help come from huge companies that have successful businesses and products that lend themselves perfectly to licensing.

Some of them have tried unsuccessfully to reach out to brand owners directly. Others are intimidated by how licensing works and need guidance. Others simply don’t know where to start. The barriers of entry to our wonderful industry seem to be unnecessarily high.

What would have happened to Funko if New Line Cinema decided not to provide a license to Mike Becker to create the Austin Powers bobblehead, all because he hadn’t licensed an entertainment property before? How will the industry discover the next Funko if we are not open to working with those who are new to licensing?

Welcoming new companies will help us continue to evolve as an industry and ensure that we are at the forefront of emerging trends, technology, and innovation. Although there is a lot of additional guidance and support needed, the industry ultimately benefits from more companies embracing licensing as a key part of their future growth strategy.

There are a few ways that licensors can do this. Introducing an efficient system to assess prospects is a great start. I appreciate that licensors must be inundated with requests, and having a robust process to help them determine which opportunities should be explored further will help identify the companies that have potential to be great future licensees. Another is by lowering expectations around the upfront financial commitment. I’m aware of some licensors having blanket rules around minimum guarantee levels. If a prospect has high growth potential but limited funds for initial investment, licensors should recognize the opportunity for royalties in the long term and make an exception.

Licensors that have appointed licensing agents could also go as far as setting KPIs dedicated to signing on with licensees that are new to the industry. For example, setting a goal of signing 10% of total deals with these types of licensees.

But we need to go even further than simply welcoming them in. We must ensure they walk away from their first licensing experience with a positive feeling and a true understanding of the value of licensing. Licensors can do this by ensuring that the licensee is getting the best support possible, particularly throughout the product development process. Guiding them through royalty reporting and other processes that are new to them will also help.

Brand owners should also make sure that the licensee is getting the full value from the license by encouraging them to develop marketing, social media, and PR strategies that leverage the strength and popularity of the property they’ve licensed.

Licensors will know if they’ve done a good job when the licensee firmly establishes licensing as a key part of their strategic focus and starts investing more heavily in new licenses. A positive first experience for companies that are new to licensing will ultimately result in more licensing deals and continued growth for our industry. And, just maybe, you’ll find the next Funko. 

David Born has been in the licensing industry since 2007. He was previously a Licensing Manager at Warner Bros. and Head of Food and Promotions at Cartoon Network. In 2014 he opened Born Licensing, the first ever licensing agent focused on the licensing of IP for advertising campaigns. Since then, he has negotiated licenses for major advertisers such as Uber, GEICO, Facebook, Ford, British Airways, Samsung, and Google. He has secured licenses from Disney, Warner Bros., Universal Studios, Paramount, Hasbro, Matte,l and many more. In 2024 he announced Born to License, a new area of the business that provides services to companies that have limited experience in licensing.