Do Promotions and Consumer Products Belong Under The Same Roof?

Posted by Marty Brochstein on May 11, 2009

The sometimes uneasy relationship between promotions and consumer products licensing hits the headlines again.

Two years after laying off the vast majority of its consumer products licensing business to The Beanstalk Group, Universal Studios is bringing it back inhouse, creating Universal Partnerships and Licensing (UP&L). The move brings product licensing into the orbit of Stephanie Sperber, who previously headed Universal Studios Partnerships, and now is EVP of UP&L. Amy Taylor, who has spent much of her career in consumer products, becomes SVP, overseeing North American promotions, worldwide licensing and retail development.

With the change, Universal apparently assumes a structure similar to that of Sony, which brought its consumer products licensing and promotions under a single executive, George Leon (now EVP Worldwide Marketing), in 2004.

This actually is the second time around for Universal with this kind of structure. In 2002, it formed a Brand Group that cojoined licensing and promotions under EVP Beth Goss, who had been Universal’s SVP Promotions. That combiation dissipated over time, to the point that Universal left itself with a relatively barebones inhouse licensing operation, and hired The Beanstalk Group in 2007.

While the goal of both promotions and licensing is to generate revenue for the property and parent, the business models are vastly different. Promotional deals are meant to maximize viewership (in the case of TV), “butts in seats” and subsequent DVD sales (in the case of theatrical movies). Licensing revenue, of course, comes primarily via straight royalties and guarantees. For some properties, the interests of one facet can play against that of the other. For example, the revenue potential of a toy licensing deal might be hurt if high quality toys are slated to be given away at a fast food chain.

This is an ongoing saga in the entertainment business, and Universal’s new structure is only the latest chapter.