Perhaps it’s the uncertainty emanating from the political winds buffeting some of the world’s major economies, but licensing professionals who responded to our flash survey (conducted in December and early January) are slightly less bullish than in past years on overall prospects for their licensing businesses for the new year.

That’s not to say that most aren’t predicting jumps in their licensing-related revenues in 2017; indeed, nearly three quarters (72%) project increases, and the largest group are those predicting jumps of seven percent or more. But a year ago, when the same question was asked, 84% of respondents — 12 points higher — were expecting their licensing business would increase in the year ahead.

Several respondents raised the volatile political and economic landscape as major challenges for the two year ahead. One U.S.-based licensee talks of the industry having to deal with “political unrest affecting the economy with such a populist/isolationist administration. No one understands the benefit of globalization anymore.”

A UK housewares licensee mentions “Rising prices resulting from increased product costs, currency fluctuations and royalty rates [and a] downturn in consumer spending resulting from retailers increasing their prices and general economic uncertainty.”

Others in Europe and the UK mention the disruption caused by last summer’s Brexit vote, though that long term story is still to be written.

Interestingly the aggregated answer to the question of how the 2016 licensing year ended up for our respondents closely mirrors their predictions for the year ahead. For 2016, 34% said their licensing-related revenue jumped 7% or more, 21% showed increases of 4% – 5%, and another 17% had revenue gains of 1% -3%.

As always, the comments offered by our anonymous licensing industry executives gave an interesting perspectives about both industry-specific and broader business developments. As always, several licensees raised the linked issues of royalty rates (too high!) and their effect on margins and COGS. Entertainment licensors – with varying degrees frustration, admiration and envy — talk about the difficulty of breaking onto store shelves dominated by Disney.

And EVERYONE is faced with adapting to the increasingly important digital world – both in terms of dealing with and maximizing their effectiveness in social media, and in adapting to a retail marketplace roiled by the rise of ecommerce and shrinking brick-and-mortar footprint. And any discussion of e-commerce brings with it a discussion of what one calls the “whac-a-mole” pursuit of online counterfeiters and pirates.

What were some of the positive aspects of 2016? One corporate brand licensor happily cited the “Recognition that corporate brands better fulfill long term, strategic retail needs without the ‘flash and burn’ of a celebrity or entertainment character. Retailers are getting that corporate brands fill a special role and several categories that can drive YOY sales.”

More generally — particularly among those in the entertainment/character sector – there was lots of good feeling about better retail pickup in general, and more openness by retailers to smaller properties. A licensee was happy about the “overall support by retailers on the back of previous years success with Frozen and Minions.”

A corporate brand agent noted a significant “uptick in manufacturers looking to become licensees both in the U.S. & internationally.”

Technology also came into that discussion. “The movement into the digital/AR space is providing a way for established brands to capture the interest of millennials,” responded one brand-oriented licensee/licensor to the question about positive developments.

Some companies are trying to figure out how to take that next step in business development. One brand owner talks of the challenge of “continuing momentum. We are at a crossroads with our business where much of the ‘easy’ partnerships have been achieved. Now we are faced with extending our brands into more difficult categories along with pushing the current partnerships to grow/expand.”

IN a similar vein, a corporate licensor writes that there are “fewer big elephant deals to catch out there; [we’re] moving into a second tier of good but not exceptionally large opportunities. [We’re looking at] mindful expansion and balancing the P&L of new business against existing resources, and getting additional resources deemed necessary” by management.

So what faces the licensing business? While technology has changed, the retail landscape is ever changing, a lot of the fundamental opportunities and challenges are strongly reminiscent of those of years past.

Writes one (obvious) industry veteran about the challenge: “Same as it ever was: tough competitive market, need for properties to license to companies that can bring real added value to products in order to stay relevant in the marketplace. Same challenges now as they were in 1980. Different labels, same concepts.”