August 2, 2020
We’ll detail the state of licensing in the top three countries earning the most licensing revenue, and our projections in upcoming years.
Since 2018, we’ve encountered international growth of the licensing industry with key companies taking advantage of opportunities through various brand collaborations. With Licensing International’s data from 2018, we were able to determine what may come in the next couple of years and the growth potential of top players within the licensing ecosystem.
Top 10 Countries by Licensing Revenue
While analyzing licensing revenue generated by the top ten countries in 2018, we looked into the specific properties that the top three countries have an upper hand in. The US takes first place generating 52.5% of royalty revenue in the world through continuous activity within the categories of character/entertainment, corporate, and fashion. The immense gap between the US and UK, around 7 billion USD in royalties, is further established when comparing consumer spending amounts between the top two countries. Nearly 13 trillion USD compared to around 2 trillion USD leaves the US with greater market opportunity for companies to license their products.
Most of the UK’s royalty revenue lie in character/entertainment (567.8 million USD), creating a large gap between that, sports (86.2 million USD), and fashion (68.5 million USD). Japan comes in third producing 5.5% of royalty revenue in the world. Compared to the UK, Japan generated more royalties in character/entertainment (657.3 million USD) and is active in both fashion (59 million USD) and corporate properties (65 million USD).
Forecasted 4-Year Total: US, UK, and Japan’s Growth Rate
Over the span of four years, we were able to forecast the changes that may happen from 2020 to 2022 using Licensing International’s previous data from 2018. By compounding the annual growth rates for products and properties, we saw that Japan had the highest growth rate at a 16.34% increase. They eventually surpassed the UK in total royalties earned in 2021 by 1 million USD. While the US remains the top country in royalty revenue with a 13.79% increase, the switch between the UK and Japan could mean there will be major changes in companies prioritizing different product categories and geographical locations.
Though the UK and Japan had the same impact in similar product categories (character/entertainment, sports, fashion, and corporate), Japan’s growth rate in characters/entertainment increased 10.5% compared to the UK’s 7.21%. Japan’s higher growth rate projects them to surpass the UK in 2021.
This growth analysis not only enables us to prepare for emerging product categories in licensing, but it gives us insight into how companies prepare themselves for the changes in consumer tastes. We’re excited to witness major brand collaborations in all sectors of licensing, as well as be the tool companies use to help manage their partnerships. 2020 is off to an amazing start, and we’ll only see continuous growth in all top ten countries in upcoming years!
Annual Global Licensing Industry Survey 2019 Report. Licensing International, 2019, pp. 17–25, Annual Global Licensing Industry Survey 2019 Report.
Christian, Traub. “TAM_Licensing_Final.” Germany, 2020. Commissioned by Brainbase Inc. and prepared by Kutalla