The business of International media licensing is rapidly changing on the back of trends driving change in the media industry as a whole. Whereas in previous years, finding good local partners (think in-market logistics, for instance) was an imperative, brand owners now have the option to develop international cross-border media licensing businesses without the need of a local partner.
However, that does not mean the need for local partnerships is dead – far from it. Take for example two pure play media companies – Huffington Post and POLITICO – and consider their partnering with “legacy” media companies in their internationalization drives.
Take for example Burda International with its successful vertical, 360º model to brand licensing (they will also share insights into the model – and how it works in different market “types” – at the Congress).
And take for example new cross-border developments such as online video syndication services.
John Cabell is an expert in international business. His company, Cue Ball has worked with hundreds of clients in over 20 countries and brokered more than 400 deals since its inception in 1997. Below, he shares the latest trends in International media licensing, joint ventures, M&As, divestitures, and strategic partnerships.
What trends have you seen in International media licensing?
The trends we’re seeing in the type of cross-border deals we’re involved with are really mimicking what’s going on across the industry. There has been a notable decline in cross-border print deals, for example, reflecting the decline in local magazine launches almost everywhere.
Of course, dominant brands in certain categories, such as Vogue in fashion, still have cross-border print opportunities. But, as you might expect, there’s a clear trend towards digital-led or digital-only transactions. Often, when there’s a print element, the local publisher is publishing with lesser frequency – saving on expense but retaining the value of print as the best brand-building tool.
What impact has these trends had on how deals are done?
The emergence of digital has enhanced the value of good content. Licensee publishers are ravenous for good content across all platforms, so licensor publishers need to be concerned about contributor rights. They need to make sure they have rights to use content anywhere, anytime, and across all platforms.
The old cross-border model of a magazine leading with print is long-gone. Nowadays, publishers need to be very clear about how they enter markets, and with whom.
What do these changes mean for the future of International media licensing?
First of all, I believe that there will be fewer traditional players going forward, and that the ones who survive will be bigger and more dominant in their segments.
I also think we will see new players entering the market; entrepreneurs, digital companies, marketing/advertising companies and financial concerns, to name a few.
Lastly, future International media activity will very much depend on what is working in each foreign market and what assets the outbound publisher could leverage. And, of course, the list of interested local partners.
Are you seeing different trends from segment to segment such as mass versus verticals?
Segments such as news, business and finance, and entertainment/gossip – most with weekly or fortnightly frequency – have suffered a lot in print. The immediacy of the online world has made many magazine brands irrelevant in print format. These brands have either changed or died.
Fashion and design brands, for example, have generally fared better. Readers of these titles have a great appetite for high production values and their advertisers continue to be print-centric in their buys.
Specialist titles also continue to perform well. Of course, they have loyal, well-defined audiences and endemic advertisers. The challenge for publishers has been to provide multiple engagement points for both, whether it be events, online, mobile, or video.
Are there segments that better lend themselves to ‘going it alone’ versus partnerships/licenses?
Even in the so-called borderless Internet world, there are a number of limiting factors to success that make it difficult to ‘go it alone’, as it were. These factors might include language, technology, content localization, and monetization of foreign traffic. Generally, content of global interest and/or of an evergreen nature – in English – could be successful in generating audiences.
Ultimately, however, the business will need to localize the business model to reach a reasonable level of local profitability. That said, one notable exception is Meredith’s Allrecipes brand, the world’s leading recipe site with 16 local-language sites around the globe. Currently, the entire business is managed and operated out of its Seattle headquarters.
Given the complexity around International publishing today, what’s your advice to those looking to enter the market?
There’s no longer a ‘correct’ or standardized licensing formula. In today’s and tomorrow’s worlds, globally-minded publishers will succeed by being open-minded about market entry strategy, by considering a variety of partners (traditional and new), and by deploying all of their assets across borders. Partnering will continue to be necessary for success.
What trends are you seeing specifically around M&A at the moment?
We’re seeing more consolidation in the magazine industry. Burda, Bauer and Meredith have all been active with acquisitions, and we hear and sense that M&A activity will increase further in most media sectors. Giant cash-rich Internet players such as Facebook, Google, Alibaba and Tencent are paying huge premiums for companies that complement their existing businesses. And, we expect to see more cross-media activity as well – such as the recent deal that saw Verizon acquire AOL.