How do I negotiate licensing rights for printing copyrighted images on apparel?

July 1, 2009 8:36 PM

MY BUSINESS PLAN: Negotiate the rights to make apparel with images from a movie that is coming out in a couple of years. The movie distributor has the authority over these rights. EXAMPLE: So, say the movie was Spiderman, I would want to acquire the rights from Sony Pictures to make Spiderman t-shirts, jackets, caps, etc and then sell them to distributors, wholesalers and retailers. WHAT I NEED: Tips from insiders how to put my best foot forward in making this proposal to the movie distributor.

What I have already done:

1. I have a deal with a friend of mine who is in printing and owns a t-shirt printing company.

2. I have contacted the movie distributor with my request and received a response requesting more information about my printing company. So the good news is: It seems that at this point the license is still available.


I am now at the point where I need to make a convincing case to the distributor so that they consider my company for rights (maybe exclusive?)

I would love to hear from someone who has been on the inside of either end of this type of deal or something similar so that I can get an idea of what they are looking for.

Thanks, friends!

posted by seatofmypants to clothing, beauty, & fashion (5 comments total)

I'm no expert or pro here, but I have a little, dangerous, bit of knowledge.

A distributor just distributes, they don't own any rights. Except maybe to distribute. Who you want to talk to is the money people, either the studio or the producers or the director (respective to descending levels of budget).

If there are trademark and copyright declarations on the film itself, you'll want to pay attention to those and start wherever they lead you. There's gonna be a big difference between Spiderman and Chocolate Rain, rightswise, and it may make a difference to your bottom line if you're looking to use illustrations or logos or enlarged frames from the movie itself.

You can certainly ask for an exclusive (maybe 3-6mos?) with an option to renew that exclusive, but we're already putting the cart pretty far before the horse.
posted by rhizome at 10:43 PM on July 1

What can you offer them that the large, well-established companies which have been doing this for years cannot? That's really what they're going to be looking at. They want to sell as many units as possible and make as much money as possible.

How well able is your company to cope with the anticipated demand - remembering the sheer volume we're talking about here? Can your friend's company produce millions of units on budget and on time and warehouse them until they are sold? Because if you acquire the rights, you're looking at having a huge amount of money tied up in stock until it is sold. Do you or your friend have connections to wholesalers, retailers etc?

Would you be better off being a supplier to a licensee, aiming to get a bigger and bigger share of their business over time? Unless you have a huge amount of capital with which to secure the rights, and then to carry the cost of both manufacture and distribute the merchandise, you might want to look at options which expose you less financially (I suspect that the licensing contracts will be written with certain KPIs in them, meaning you'd have to guarantee a certain return to the organisation granting you the rights).

I was involved with a company which acquired the local VHS rights to certain films in the early days of home video. My employers pretty much expected to just make copies of those movies and have the money come rolling in. It didn't happen that way, and they honestly wouldn't have even been able to service a high level of demand. They didn't have the equipment to produce thousands of units, let alone anywhere to warehouse the stock or any infrastructure to sell and distribute it. And they sure as heck didn't have the kind of legal knowledge needed to negotiate contracts with companies like K-Mart or other retailers, let alone the money to pay lawyers to do it.

Whenever you're pitching an idea to big business, they're going to want specific figures and details. What, when, to whom, how. Make sure you have all of that stuff at the tip of your fingers. Make sure you know the industry standards - especially on the financial stuff. Remember that the companies with whom you're looking at dealing have very expensive legal and financial teams with whom you'd be negotiating the details - can you afford negotiators of equal calibre? How will you deal with much cheaper, unlicensed knock-off merchandise?

Lots and lots of things to consider in turning this idea into reality.
posted by Lolie at 11:31 PM on July 1

Just did a quick Google regarding merchandising rights. According to this article for screen-writers about merchandising rights, most studios use outside licensing agents to license their merchandising, so these may be the peopel to whom you need to pitch.
posted by Lolie at 1:02 AM on July 2

I used to work for a licensing agency in years past. We represented Felix the Cat, Snoopy (for some items), the Beatles, WWF, etc.

Licenses are issued based on the type of merchandise and the price point of the merchandise. You are not going to beat out big manufacturers of t-shirts on sales volume, distribution (they've already got relationships with Target, Walmart, etc.)

Where you might have a chance is to go for a higher-end, very specialized area--something large mass-production manufacturers won't want to do. For example, making t-shirts that are hand embellished ("bedazzled" or embroidered or hand silk-screened) or incorporating the images into higher-end merchandise like leather jackets w/handpainted images from the film.

For example, we made agreements with a dozen different manufacturers for Snoopy watches. The highest end were 14k gold with precious stone embellishments. The lowest end were little plastic "gummie" Swatch knock-offs.

You'll need to have a marketing plan, and distribution lined up (i.e. for your high end t-shirts have a contract in hand from Bloomies) to even be taken seriously.

Good luck.
posted by agatha_magatha at 9:58 AM on July 2

To follow up on what agatha_martha said, you are unlikely to have any kind of "creative" control. If you're given a contract, it's likely to include extremely detailed specifications about what specific images you can use, the precise products you can manufacture, the quality of the materials you must use, and possibly even who you can sell to.

There's a UK TV show called The Dragon's Den which was all about people pitching business ideas to entrepreneurs. If you can access it, it will give you a very good idea of the kinds of things you need to consider when trying to launch business ventures involving IP rights.
posted by Lolie at 1:16 PM on July 2