So, you can get to know team-Fabacus, and we can share our thoughts, opinions and expertise, we are doing sessions to deep dive into the world of licensing, our thoughts for the future and how technology can aid both businesses and consumers. This week, the spotlight is on Jonathan Baker, our EVP Licensing:
Hi JB, thanks so much for your time today, firstly perhaps you could introduce yourself and tell readers a bit about your background before joining Fabacus, and how you got involved with licensing and consumer products.
I have been working in the consumer products sector for the past 15 years. I originally pivoted after training in the FMCG world at Pepsi Co. to BBC Worldwide, where I moved into the world of media companies and licensing within Entertainment.
I did a 10-year stint at the Walt Disney Co. over a number of different roles and departments, both back and front office, and then I went on to set up the International Operations for Dreamworks out of the London office, covering all global territories aside from the US. And post-acquisition of Dreamworks by Universal, I then ran the EMEA Licensing operations, including all Universal properties and Dreamworks.
I first met Andrew and the Fabacus guys about 18months ago and it really piqued my interest, especially coming from the licensor background and how the needs can be looked at from that lens and perspective.
You mentioned you moved into licensing and consumer products quite early on, was this a conscious choice and something you saw being a long-time career?
To say it was down to my own insight and planning would probably be a mistake! Like a lot of people, you sort of fall into something, and it should be something that interests you, for me, it was simple: I wanted to experiment after my time in FMCG and I had a really soughtafter skill set and the BBC was an amazing opportunity, which then led me to Disney, and on.
I came from a background of vertical manufacturing and so fully understood the world of licensees and their objectives, the shipping, the retail, their risks, principles, and their pain points – then moving into being a licensor, I could fully understand and sympathize with their ways of working and needs, making collaborations and the partnerships more evenly balanced.
That must have been a hugely valuable insight and put you in good stead to understand the different aspects and details of the value chain within licensing. Having that broad experience, major changes you’ve played out within licensing?
Where do I start! Generational shifts, purchasing shifts, taste preferences, the list goes on!
One of the big changes has been the fact that there are many more players in the licensing arena now. I think there are pros and cons to that; it gives consumers the opportunity to experience brands through the medium of consumer products, but then it becomes a crowded and competitive space.
Thinking of that evolution, there have been a lot of mergers and acquisitions taking place, which has led to some concentration. There are the big guys owning portfolios, challengers who are super interesting in their own right, and then emerging players, also very big, in sectors that didn’t really exist before on a mass consumer level as now, like gaming.
That coupled with the changing consumer landscape and how people consume media – whether that is podcasts, TV, streaming, gaming, music, social media – that world of ‘connected leisure’ or entertainment has seen a huge explosion in terms of what is available to consumers and how they can interact with brands and different IPs. That means new brands can come to the fore much more easily. So, whilst there’s concentration, there is also a fragmentation and explosion of new players, which all trigger a change in shopping behaviour.
If you layer onto that a generational shift too. Usually, they take place every 30 years, the biggest shifts anyway. Aside from Covid, we have just seen a big shift in purchasing power from an older generation to a younger one – and their preference, behaviours, needs, and choices are different. It has been a seismic shift.
The consumer base has shifted, and you really have businesses catching up – and it’s mainly been down to the role of technology. If you are a technology firm, or are around it every day, you get this, you saw it coming, you know the ins and out of how to get data and interrogate it, if you’re not, then you are figuring out how to adopt it.
I would say today being analytical and data driven is a huge business necessity.
Totally agree, across the board people need governed data in order to be making more strategic decisions and most consumer-led campaigns. How do you think technology can play a part in this, within the licensing sector specifically?
Well licensing is characterised by an incredibly long ‘supply chain’ or value chain, whether that starts with the licensor’s brand all the way through to something being consumed – everything in between is an incredibly long process and chain. When you think about the role of technology and what that can do, applying technology to that chain, in lots of forms, it is only going to help the efficiency and transparency of how the supply chain operates.
Licensing has always been a highly creative sector – and that is necessary, I hope and am sure it always will be. What perhaps it has maybe been lighter on is the analytical approach in terms of how to improve things on a wider scale, not just within one business but across the board, and that is also where technology can aid and play a huge role in the evolution of success within licensing. Over the past year of course, from a business perspective, there has been shrinking economies, tight demands on cash flow and a better emphasis on efficiency.
Efficiencies are right to be addressed now and technology will provide a role in not only creating efficiencies but giving us insights to help solve problems that we don’t even acknowledge today.
You mentioned about the licensing value chain, which culminates with the consumer; we’re all aware now that there is a huge shift for a new generation of consumers who want to know and understand how the products they’re buying have been made ethically and sustainably. With Licensors one step removed from the manufacturing process, how can they find ways to ensure that information and data is front of mind, when it comes to products holding their IP?
We need to gain more transparency in the market. Ultimately there needs to be a new degree of trust in the supply chain between all parties involved, that’s so important.
When we think about a licensor and licensee partnership – and it is, or should be, a collaborative partnership – there are three main elements:
One is trust, which is then linked to authenticity of products, then there is visibility and transparency, which underpin and build that trust, and then lastly the structural economic value-add needs to be evenly distributed.
What I mean by that is: as when you look at that value chain and you see who makes what from each area, not in terms of revenue but in terms of net margin profit… In order to create transparency and trust that chain needs to be more open and more evolved economically, to make each element a little more equal – and that means entering into a more deep and meaningful relationship.
As brands become more accountable for product extensions and as licensees become more transparent with their manufacturing processes, then I think there is a natural coming-together of insight, education and trust working together to change the system for the better. At the moment, it’s feels slightly transactional. We need a new consideration, understanding and appreciation of each other
Where do you see the industry in the next 5 years? What key changes do you think there will be?
There will be further innovation in the channels in the way people consume content and consume ‘brands’ whether than be through traditional content or streaming, gaming, social media platforms and extending their shopping experiences and functionality further.
The other thing, particularly for new brands making their mark, is that a brand lifecycle, particularly within media, will become shorter and therefore working to fill consumer demand whilst the brand is front of mind and relevant will be key. This will mean the need for speed of response and efficiency in internal processes will be huge, and that’s where technology will play a huge role in aiding that agility.
Look at print on demand, whether that’s apparel-based or through the rise of 3D printing, I can see a world where this kind of delivery system and this technology is going to be more important.
My biggest thing in looking at key changes in the speed of operations is how technology can make things quicker, more efficient, and ultimately more affordable.
With all these changes though, the thing to keep hold of is that there are some constants and something that will not and should not change. These being creativity, teamwork, and brand popularity; consumers wanting to be an owner of that brand, whether it’s through shopping, downloading, or just being part of a fandom, that will not change.
Really great to keep that in mind with the many changes over this year alone. In speaking about constants, through your years of experience, is there perhaps one main pain point you’ve consistently seen occurring across businesses within the licensing industry?
In summary, I’d say managing expectations. If you’re working in a world where not much is proactively measurable or visible, then it’s a world of promises and projection. And whilst that’s great, certainly when it goes well! I do think introducing some science, some data, some robust and authoritative fact will only help to manage expectations in a fairer and more honest way, which will allow for data to full drive strategies and business decisions.
I would suggest licensors are perhaps spending 90% of time thinking what their royalty will be and currently it’s very difficult to know what they will be upfront, until it’s being reported at the end. Imagine a world whereby all the data is connected and proactively reported, you have a list of all products and pricing up front. If you never know what you have got, then you’ll never know what you could have.
Very true, and of course still will only help to solidify that deeper partnership and collaboration. Hopefully that’s a world not too far off in the evolution of licensing with Xelacore Register.
Thanks for your time and JB, it was great to get your insight and thoughts.
Jonathan Baker is EVP Licensing at Fabacus, to get touch with any questions, or to learn more about Xelacore Register or anything you’ve read, please contact info@fabacus.com
