A License to Drive Revenue

As the book publishing industry continues to shift and evolve, many publishers are seeking to incorporate additional revenue streams into their existing business models. One channel that more and more publishers are experimenting with is product licensing—allowing the use of a brand name, patent or other proprietary right in exchange for a fee or royalty.

Highlights for Children, a publisher of educational books and magazines for kids, is one of those companies that is dipping its toe into the product-licensing waters. Robin Sayetta, Highlights for Children's vice president of licensing, recently spoke with Book Business Extra about launching the company's product licensing program, which includes its top-20-ranking iPhone app.

Book Business Extra: How is Highlights for Children incorporating product licensing into its marketing efforts?
Robin Sayetta: Licensing will become an important brand extension for Highlights. Our brand and content [are] appropriate for extension to a variety of products, ranging from video games, games and puzzles, toys, stationery, crafts and more. Right now, our licensing program is in its infancy. It's an integrated effort, so the licensed products will be woven into our marketing efforts, [which] could include something as simple as featuring licensed products on our website and selling them through our proprietary channels, to coordinating [our print publications] with licensed products at retail [locations].

…One example is the Highlights Hidden Pictures iPhone app that we developed with our partner MoBad LLC. [Highlights publishes a "Hidden Pictures" series of books.] We promoted the game on our website with a unique page, via email blasts to select customers, and we even created a cover burst for our reception-room magazines announcing the availability of the app.

Extra: What steps needed to be taken in-house at Highlights to establish a product licensing program?
Sayetta: … The most important step was to ensure that we translated our core values [and] real commitment to children and families into our partnerships and products.

I was hired to initiate the licensing effort for Highlights. My background includes founding the consumer products licensing business at Discovery Communications, and also a five-year stint at Scholastic during the launch of its licensing business. I’ve been able to bring these experiences to bear here, and made recommendations regarding important steps when launching a licensing initiative.

The first thing we did was develop a strategy for licensing that's a blueprint for the extension of the Highlights brand. It addresses the categories, distribution channels and approach that we believe will best support our overall brand objectives. We then created a licensing style guide to ensure the consistent use of our brand and assets by partners. And we're working closely with our editorial team to establish product development processes and to create the best model for translating their vision to a product line. There were also operational steps we needed to take, such as developing a standard licensing agreement and a procedure for tracking contracts and royalties that's tailored to licensing.

Extra: What challenges can publishers that are experimenting with product licensing expect to encounter?
Sayetta: The biggest challenge today is the retail climate and limited availability of shelf space. It's a tough environment to launch a new initiative at retail. It’s also a tough time for visionaries—there are a lot of practical realities, such as cost and space limitations, that need to be taken into account.

Extra: What advice can you give publishers to help them overcome these challenges?
Sayetta: Your vision needs to be very clear; you must know exactly who your potential customer is and why they would be interested in your brand or property. And, of course, the most important thing is to protect your brand by taking care and adhering to licensing industry standards and guidelines.

Extra: What results has Highlights had with product licensing so far?
Sayetta: We're in the launch phases of our licensing effort. The Highlights Hidden Pictures iPhone app has been very successful—it's ranked in the top 20 paid kids apps since its launch in October. Beyond that, we'll be announcing a new slate of licensing partnerships with a number of industry-leading manufacturers at the upcoming Licensing Expo. We’ve heard from our customers that they're excited to see our brand translated into new arenas. And for us, that's a critical measure of the effectiveness of licensing.