Streaming can cause an IP’s popularity to rise and fall faster than ever, which means the approval process for brand licensing needs to speed up, according to industry executives at the Brand & Licensing Innovation Summit in New York last week.

The approval process was built—especially in the case of theatrical films—for a predictable release cadence, but sudden streaming hits like Stranger Things, Squid Game, and Ted Lasso have upended that calculous.

With the addition of streaming, what was once a 12-week window for selling consumer products tied to a film has, in some cases, narrowed to four weeks. At the same time, the turnaround time for some cut-and-sew products from factory floor to retail store has lengthened to 9-12 months (up from seven months) due largely to logistics issues, but also as the result of an approval process that hasn’t kept pace with changes in the market.

“As a retailer, we are waiting for the product and it’s a question of whether the consumers will want to buy it after the spoiler comes out on streaming and time is not on our side,” said Winnie Jaing, VP of licensing strategy and partnerships at Hot Topic. “We are facing the shorter window for entertainment and, while people once waited for that midnight movie premiere, now they are just waiting at home for Disney Plus to switch it on. Because of that, it is changing the way people buy and they are buying after they see content rather than preparing for it.”

To speed up this process, some licensing executives suggest deploying artificial intelligence to help with digital approvals rather than waiting for a licensor’s physical sign off. Another suggestion includes establishing a subset of a licensing group that is dedicated to hot market, quick-turn product to help cut down on timelines.

“Consumers want immediate gratification, but with the logistics situation lead times are getting longer,” Jaing said.

Contributing to those logistics issues is the restructuring happening at many companies. Warner Bros. Discovery completed its merger in April and is combining licensing teams, for example. Further complicating the situation across the board is an approval process that includes not only the studio, but production companies, actors, writers, and others, all of whom have to sign off on deals.

“We are down resources and it is [a questions of] how do you do more with less and how do you work together and become nimbler?” said Robert Oberschelp, SVP for franchise management and brand product at Warner Bros. Discovery. “When new IPs comes out… we have to decide what our big bets are going to be.”

Meanwhile, with retailers canceling or delaying orders as they seek to clear excess inventory—especially in apparel—some licensees are pushing to amend contracts to extend the period for earning out minimum guarantees as well as reduce royalty rates in the face of declining sales. Many of these requests are handled on a case-by-case basis and, while Warner tries to be “kind and fair,” some things licensees are “going to have to own” because reducing royalties is a “slippery slope,” Oberschelp said.

“The numbers we saw in 2020 and 2021 were enormous because everyone was home during Covid,” said Maya Assis, VP of licensing at childrenswear supplier Komar. “Now, people aren’t spending as much and there has to be some understanding by the licensor. They are asking for [sales] forecasts as high as 2021, but because we aren’t selling as much product, we don’t know what 2023 and 2024 are going be like.”

There is recognition of the need to potentially meet some licensees’ requests for relief in an approach similar to that used during the pandemic, said Michelle McLaughlin, CEO of licensing agency Brand Activation Consulting.

“As agents and brand owners, we need to work as partners with our licensees,” McLaughlin said. “We found that during Covid and, if we want our licensees to be successful going forward, we need to do something because they have been hit pretty hard.”