As retailers and licensees seek to harvest consumer products from a dizzying array of content from a host of SVOD platforms — not only Netflix, Amazon and Hulu, but also from more traditional sources such as CBS, Fox, Time Warner, DirecTV and others — they are trying to unlock a complex market. In all, there are now close to 100 video subscription services in the U.S. and Canada; Netflix, Amazon and Hulu account for the lion’s share of that, according to Parks Associates.

Unlike TV and film, where well-established measurements such as Nielsen ratings and box office receipts are good barometers of commercial success, streaming services don’t release viewership data. That leaves retailers and licensees frequently chasing deals for product tied to suddenly popular series as opposed to the carefully orchestrated marketing and consumer product programs that accompany a major film release or TV series debut.

For example, when Netflix’s “Stranger Things” was suddenly popular last summer, it caught not only retailers and licensees by surprise, but also the streaming service itself, say industry executives. Plans were quickly put together for Hot Topic to exclusively sell Hybrid Apparel’s licensed apparel. And that was without Netflix having even created formal licensing plans, something that are only now being developed with the hiring earlier this year of Tara Sinclair as Licensing Director. (Netflix also reportedly is seeking a senior licensing executive.) And so far, there hasn’t been any word on licensing for the second season of “Stranger Things,” which airs Oct. 31.

“It is a function of how nimble you can be to chase these opportunities” for a license and consumer products, says Spencer Gifts’ Eric Morse.  “On the original content side, it is a question of what structure these services want to create and do they see themselves as wanting to be in the consumer products business, because not everyone does.”

Indeed, for the time being, licensing is playing a secondary role. That will likely change as the consumer products licensing world and the SVOD services learn to do business with each other. Netflix is still a newcomer to the game, having only recently started owning the rights to the programs it produces with “Stranger Things” being among the most prominent. Amazon Studios has been an exhibitor at Licensing Expo in recent years, largely for its slate of original children’s programming. Hulu doesn’t own the rights to many of the series on the service so licensing isn’t part of its strategy yet, says a Hulu spokesman.

“I don’t know that licensing is a driving factor with any of them right now, but they are well aware of the marketing and revenue benefit,” says Striker Entertainment’s Russell Binder, whose firm has represented several Netflix series, including “House of Cards” and “Orange is the New Black.” “Anyone who has a series that is well received and creates pent up demand among fans will draw interest from these platforms. But their priorities right now are getting those eyeballs and putting out fabulous content as often as they can” to drive subscriber growth.

Among the potential licensing deals on the horizon:

• Striker is handling licensing for “Ultimate Beastmaster” a reality TV series that launched on Netflix on Feb. 24. The 10-episode series features 12 contestants (two from each of six countries — U.S. Brazil, Mexico, South Korea, Germany and Japan) competing on a “Beastmaster” obstacle course. The series is produced by 25/7 Production and David Broome for Netflix, which owns the consumer products licensing rights.
• Sinking Ship Entertainment recently hired HiHat Media to handle licensing for its “Dino Dana” preschool series that premieres on Amazon Prime Video in the U.S. and the UK on May 26. The series is a spin-off of 2015’s Dino Dan: Trek’s Adventure that features encounters with dinosaurs.
• The CBS All Access streaming service recently completed a 10-week run with “The Good Fight,” its first original series and a spin off from the “The Good Wife.” A CBS spokeswoman declined comment on consumer products plans for All Access programs, noting that it is “still in early days.” But CBS Interactive President Marc DeBevoise recently told Vulture.com that CBS All Access was designed for the networks’ “superfans.” CBS also is developing “Star Trek: Discovery” for CBS All Access, but hasn’t set a release date, having run into delays including the departure of Co-Creator Bryan Fuller.
• DC Entertainment and Warner Bros. Television are launching their own digital streaming service in 2018 dedicated to DC Comics characters. Presumably a product licensing program will be developed at some point. The initial programming line-up will include a flagship live-action series “Titan,” which was originally in development at affiliate TNT, and the third season of the animated series “Young Justice,” which reached 25 million unique viewers in each of its two seasons on Cartoon Network.

Without viewership data, licensees and retailers are relying on social media and old-fashioned word of mouth as they gauge the licensing potential of streaming properties. Sony’s “Powers” original series had a short, two-season run on the Sony PlayStation Vue streaming service. But licensing was part of the strategy for the series from the start owing to a fan base in the comic book world, says Binder. Likewise, when Warner Bros.’ “Animaniacs,” a 1990s animated comedy, was revived on Netflix in April 2016, Spencer’s quickly put together a t-shirt collection and tested it for a few weeks before rolling it out to all stores to meet a growing demand among its customers, says Morse.

Streaming content licensing programs that have “worked so far have largely been built on word of mouth where there is only a small amount of build up from of marketing,” says Trends International’s Paul Beck. “‘Stranger Things’ was released in July and people were watching it until well into the holiday season. It had a solid 5-6-month engagement time, whereas some movies are in and out in a few weeks. It is going to be hard to get out in front of these from a retail perspective so for the time being it is going to be a chase business.”

Genius Brands International’s Stone Newman acknowledged during a panel discussion at the Kidscreen Summit earlier this year that the product licensing business is “downstream” from the primary concerns of the streaming and other SVOD companies. At the same time, though, “any entertainment company is really narrowing in on knowing their… fans. Fans engage by watching, by talking about what they’re watching and, of course, the ultimate form of brand worship is having a piece of that, buying a part of that — clothing or toys or whatever the product may be.” So consumer products are indeed part of the ultimate equation.

In the case where a streaming service is reviving a classic film or TV or comic book series, being able to gauge consumers’ “awareness and affinity” for a property are “key components” in deciding whether to license it for consumer products, toymaker PhatMojo’s Bill Graham said during the Kidscreen discussion. While how potential licensees evaluate properties for licensing hasn’t changed, “the menu has gotten longer” to include streaming services, he said.

“It is a question of how people are discussing the content through different social media and whether it lives beyond the place” where it launched, he said. “If people are talking about a property outside of the primary channel where it can be found, that means something to me.”

Yet reaching that audience with streaming properties is going to require patience with as many hits as misses before a steady flow of programming creates a market for licensed products, say industry executives.

“It is planting seeds, and in trying to grow these brands we are not going to have full grown programs out of the gate,” says Binder.

Contacts:

Amazon Studios, Michael Cummings, Senior Product Mgr., 310-458-6360

CBS Consumer Products, Veronica Hart, VP Licensing, 212-975-6894, veronica.hart@cbs.com

Genius Brands International, Stone Newman, Pres. Consumer Products Group, 917-371-0779, Stone@gnusbrands.com

HitHat Media, David Jacobs, Pres., 201-394-6440, djacobs@hihatmedia.com

Hulu, Craig Erwich, SVP and Head of Content, 310-571-4700, craig.erwich@hulu.com

Netflix, Tara Sinclair, Licensing Specialist, 408-540-3700, tsinclair@netflix.com

PhatMojo, Bill Graham, Chief Development Officer, 917-204-3528, bill@phatmojo.com

Spencer’s Gifts, Eric Morse, VP License and Product Development, 609-645-5380, eric.morse@spirithalloween.com

Sinking Ship Entertainment, Kate Sanagan, Head of Sales and Distribution, 416-533-8172 x2242, katesanagan@sinkingship.ca

Striker Entertainment, Russell Binder, Partner, 818-225-9355, russell@strikerent.com

Trends International, Paul Beck, Licensing Mgr., 317-388-1212, pbeck@trendsinternational.com

Warner Bros. Consumer Products, Maryellen Zarakas, SVP Worldwide Franchise Management, 818-954-4170, maryelen.zarakas@warnerbros.com