Merchandising refers to any practice that contributes to the sale of a product. Some people refer to merchandising as the process of displaying products that creatively are for sale with the aim of enticing consumers to make more purchases.
In the film or movie industry, producers hardly manufacture products related to a film to promote it. However, what they do is give a license to companies offering them the right to sell products. Licensees are companies that make and sell products related to a particular film to promote it. When they do this, the producers, who in this case are known as the licensors, do not incur any risk. This is because the licensee caters to all the financial expenses of manufacturing and distribution.
The producer or distributor (licensor) is entitled to an advance payment for the products before they hit the market. This payment, also referred to as the royalty payment, has to be between 5-10 percent of the gross revenues from the products’ sales to the retailers and not the clients. In simpler terms, the royalty payments come from the wholesale price. During the process, the owners of licensable fil properties come up with Special Licensing Divisions that handle the copyrighted properties.
Influencers of Great Movie Merchandising
The licensor, in movie merchandising, is usually the producer or the distributor of the film. The licensor is tasked with giving a license to the best company to manufacture and distribute film-related products. The licensor usually explores different companies to make sure the license is awarded to the best one. Failure to do this would influence the success of the merchandising process and the overall marketing value.
The licensee is the company that is given the right or license to sell products related to a movie. The company gets to determine the type of products they will manufacture. This decision is made based on the kind of movie and its fan demographics. For instance, for a film like Toy Story, the licensee, in this case, known as the merchandiser, may produce products like toys and t-shirts. When the works take on a specific theme, they function better in their marketing task. Therefore, the licensee also influences the success of movie merchandising significantly.
What makes excellent movie merchandise?
With the awe and excitement that films tend to inspire, there is a long list of movies that have spurred on merchandise sales. Too long, in fact. In movie merchandising, a wide range of products can be applied. Below are some products that can make excellent movie merchandise:
- T-shirts- these are the most popular type of merchandise. T-shirts sell fast, and they target a broader demographic. They help to sell a product, even movies, when they are appropriately branded.
- Comic books- several movies have gained success from merchandising using comic books. However, they work for a specific genre of film.
- Video games- these are also incredible merchandising products for movies in different genres. They help create buzz for a film before they are released.
- Clothes- pieces of clothing like onesies and Halloween costumes are also great merchandising items.
- Toys- for kids movies, toys are an excellent means of marketing. Toys have worked well for a lot of movie franchises.
Note that there isn’t a specific manual for the best merchandise. It all depends on the licensee’s creativity and the reception of the products.
The sale of goods related to a movie can generate a lot of income. There are a lot of movies that have spurred on merchandise sales. Sometimes, the presale of merchandising rights can contribute to the budget of the movie’s production. Merchandising also plays a critical role when it comes to the marketing of a film. Therefore, it is used as a marketing strategy and often done before a movie is released. On average, at least 40 percent of movie-related merchandise is sold before the release of a film.
It is also worth noting that some movies, like the Harry Potter and Star Wars franchises, have made more money through merchandising than in the Box Office!