European characters are hot properties in the world’s second-largest licensing market
Characters are ubiquitous in Japan. They are used to help sell everything from mugs to overseas holidays, but behind their adorable façades lies the hefty property licensing industry.
According to License! Global magazine, the worldwide licensing market in 2009 was worth $182.4 billion (as big as railway construction). And Japan is the world’s second-largest market, with Character Databank, a marketing company, valuing it at ¥1.58 trillion in 2009 – bigger than either the shoe or mobile-content market.
The entertainment and character sector accounted for 18.27% of the global licensing market in 2009, according to EPM Communications. The share in Japan is probably higher.
The International Licensing Industry Merchandisers’ Association (LIMA) defines a licence as “an agreement through which a licensee leases the rights to a legally protected piece of property from a licensor – the entity which owns or represents the property – for use in conjunction with a product or service.”
Ownership of a licence for a popular character property can bring large monetary rewards. So it is important to consider why character properties such as Miffy and Peter Rabbit are such huge hits in Japan.
“Uniqueness is a crucial trait for a character property,” says Roger Berman, proprietor of ZenWorks, a Tokyo-based licensing consultancy.
“Hello Kitty’s unique point is that she doesn’t have a mouth, and so she can’t display emotions like happiness or sadness,” the Briton says. “Sanrio’s website says she speaks from her heart and isn’t bound to any language, and that makes her popular worldwide.
“For Peter Rabbit it’s the whole story behind Beatrix Potter – a woman [in a time when women were discouraged from writing], a feminist and a naturalist who loved animals. There’s also the heritage factor. The Japanese love England, afternoon tea and all that stuff.”
David Buckley, president of Copyrights Asia, a firm that holds the licences for British properties such as Peter Rabbit and Paddington Bear, expands on the blue-coated bunny’s lasting popularity.
“He’s a very classic character, one of the first characters in the world,” says Buckley. Potter patented a Peter Rabbit doll just one year after the book’s publication in 1902.
“[The property has] got nostalgia and quality of artwork; it’s upmarket, very collectible, and is sold in the nicest department stores. The Japanese consumer responds to the quality and stability of the property.”
Shogo Tetsuda, president of dick bruna japan, sees Miffy’s success stemming from the rabbit’s peerless creator. “Of all the classic characters out there, Miffy is the only one for which the creator is still alive and still drawing … Walt Disney died a long time ago and other people make decisions about Mickey Mouse now,” Tetsuda says.
“But with Miffy, it is completely down to the influence of Dick Bruna himself. He doesn’t do stuff because people ask him to, he does what he likes, and so his taste is respected.”
European characters seem to fare better than their American cousins, notes Goshi Nakano of Hit Entertainment, the licensor of children’s characters such as Thomas the Tank Engine. “With the exception of Disney, American characters don’t do so well in Japan. Characters from Dora, Marvel Comics and Warner Bros. don’t suit Japanese consumers’ tastes,” Nakano says.
“In Japan fluffy things such as dogs, cats and rabbits are popular. Very few human characters become hits.”
A peculiarity of the Japan licensing business is its seisaku-iinkai (production consortium) system. “It involves a number of parties interested in a character property, such as the original creator, advertisers, manufacturers, publishers and TV companies,” Berman explains. “They all invest together to produce their own property and reduce risk.”
“It’s important to build an audience for the property,” dick bruna’s Tetsuda stresses. “You can’t just make things and sell them. You have to hold events and demonstrations that grab people’s attention, and then you can start selling to people. You need this exposure.”
But adaptability is also required. “Licensors need to understand the Japanese consumer, who is extremely fickle and detail-orientated. It’s very important for the European licensor to have an open, flexible mind as to what will work in Japan that won’t work at home,” Berman says.
“Toilet seat covers can work as Japanese culture sees toilets as very clean places. Dog accessories also don’t really work anywhere else, except perhaps France.”
Sachiko Imaizumi, managing director of Plus Licens & Design Tokyo, a licensing agent of Swedish character properties in Japan such as Pippi Longstocking, believes firms should carefully consider the kawaii (cute) factor. “I think that kawaii is still very important, but it has more variations now, such as kowa-kawaii [scary cute], kimo-kawaii [gross cute] and yuru-kawaii [gentle cute],” she says.
As Japan’s population ages and the licencing market gradually shrinks, building on past performance is key, says Copyrights Asia’s Buckley. “Stable, long-term brands will continue to do well in the market,” he predicts.
Berman believes a new approach is needed: “The Japanese licensing industry needs to find new revenue sources. We’re going to have to appeal to an older demographic.
“The next generation of pensioners will not have any unease or embarrassment about using character products,” he says. “I imagine this might involve products such as walking sticks and other mobility aids emblazoned with Disney or Hello Kitty patterns.”