The License Market for Children – What’s Going On?

What is the size of the license market? Is it growing?
What is the potential of my new pre-school character?
Which categories should I cover based on the age target?
Where is the gap in my product offering?

NPD Eurotoys’ new U.K. License Tracker service can give you the answers to these questions. The service measures sales of licensed and other product within key children’s markets, such as clothing, publishing, footwear, accessories, cycling, stationery, DVDs and toys. The service, launched this year, tracks sales of products for children aged zero to fourteen.

License Tracker Trends for Quarter Four 2003
Parents are only too aware how much they spend on their children, but they may not realise that almost one-fifth of what we spend on children in the U.K. is licensed product, at least during the last quarter of the year.

Publishing (which includes magazines, story books, colouring books and calendars) is a highly license- driven market as more than one out of every three products sold is a licensed product. School equipment is also very important for the licensing industry – one out of every five products purchased is a licensed product in this market sector.

The largest revenue generator for licensed products in the U.K. is clothing, which is the biggest sector of NPD’s License Tracker market, despite having a license penetration of only 18%. Of all the market areas tracked by NPD Eurotoys, clothing is the only segment where more revenue comes from boys’ products compared to girls, largely due to the strength of male-oriented action figure licenses such as Action Man and Power Rangers. This is attributed to the GGOY (Girls Getting Older Younger) factor, as girls move away from traditional toy licenses at a much earlier age than boys. At the age of eight, many girls are already shifting toward lifestyle or “aspirational” products such as jewelry, makeup and fashion accessories.

  Source: The NPD Group/Eurotoys/License Tracker Consumer Panel

The chart above shows the top five licenses within the U.K. children’s clothing market, revealing two classic pre-school properties: Winnie-the-Pooh in first place and Bob the Builder in fifth position. This illustrates the importance of licenses for the pre-school child and in the case of Winnie-the-Pooh, the endurance of classic licenses. In fact, it is this age group (zero- to five-year-olds) which has the highest license penetration in the U.K., at nearly one quarter of the total licensing spend. Mothers purchasing licensed products for their young children are clearly the group to target for this sector of the market.

As children grow older, we observe a change in behaviour, as their horizons widen and interests change: license penetration for eight- to ten-year-old boys is 22%; for girls of the same age, license penetration drops to 12%. Barbie remains the leading licensed property for girls in this age segment.

For further information about NPD’s License Tracker Service, please contact Frédérique Tutt at frederique_tutt@npd.com.