The market for licensed products has always been one of the more complex areas of the entertainment business. But the explosion of content and noise in the digital age, which allows all properties and projects to live simultaneously, has increased the challenges for IP owners and creators to carve their place. In today’s market, new properties arrive, but nothing really goes away. What is an IP owner or licensor to do?

Here is a round-up of the top facts you need to consider in understanding how to be successful in today’s global licensing market:

Reflect trends, but do not chase virality. Be aware and participate in trend conversations, but virality is moving too quickly for reactive strategies to be successful. Focus on originality and authenticity. The bottom line is that growth in today’s licensing market is going to come at the expense of someone else, so it will be key to stand out from the crowd.

Incubators, partnerships, and collaboration are important for innovation. IP owners and creators should be tapping into these pockets to grow. Turn the content and channel noise on its head by looking to smaller markets, independent creators, and international collaborations to find creative product ideas and fresh aesthetic inputs. Global trends are popping up everywhere, from food and beauty products to toys and TV shows, as consumers expand their taste horizons.

Tap into the consumer desire for both freshness and familiarity. “Newstalgia” is a trend that pairs old favorites with a modern twist. From Barbie to Spider-Man, we are seeing a rise in nostalgic-inspired designs for intergenerational audiences. Related, Circana is also following the influence of parental affinity on licensed sales; are sales of a particular license impacted by how much adults themselves like it? Spoiler alert: yes. 

Content diversity may be good for consumers, but not for manufacturers and retailers vying for shelf space. Looking at the volume of toy properties, the big are not actually getting bigger; there are more mid-sized competitors and less revenue for each property. Smaller, newer properties – including but not limited to CoComelon, LankyBox, and Gabby’s Dollhouse – are in the highest growth segment of properties with a brand footprint of $50 million to $100 million in U.S. sales, while the biggest properties (generating above $250 million) are plateauing, according to Circana’s Retail Tracking Service. The result is that the biggest brands must spend money just to run in place, while smaller, more nimble brands are nipping at their heels with increased penetration and market share. This is an opportunity for emergent brands, but they need to be strategic in how they build their business, thinking incrementally, and planning for a longer timeline to reach scale.

Content discovery is spreading out and creating challenges in aggregating an audience. Consumers are using more video streaming services, causing viewership to spread and engagement on any single platform to erode, based on findings from Circana’s TV Switching Study. On top of that, social media continues to take share of time from traditional media, including long-form and episodic programming. It’s no surprise that this social media movement is more pervasive among younger consumers; however, let’s not overlook that nearly 30% of consumers aged 65 and older are watching user-generated video on social media platforms, according to the Circana study. It’s more important than ever to study which consumers are using which platforms to reach your audience, because the demographic profiles of who is using what varies widely.   

Being equipped with top-notch, cross-category data combined with the knowledge of what it means and why it matters is the way forward to making sense of the licensing market. These principles will be a starting point in charting your course and helping to guide strategic thinking.