TOTAL LICENSING
Marcio
Domingues takes
a look at the
In 2006, Brazil increased its Gross Do- for Brazilian companies seeking to ex- ers reach 90% of Brazilian households
Brazilian
mestic Product by 3.7% compared to pand their licensing business beyond and account for the bulk of audience
marketplace,
2.3% growth in 2005. Inflation at 7.2% Brazil; to help North American, Euro- share.
both in terms of in 2005 decreased to 4.2% annually in pean and Asian companies seeking to Companies with children’s properties
how the
2006. grow their licensing business in Brazil; looking to launch significant licensing
licensing
Average annual GDP growth is pro- and to advance professionalism in the programs in the territory are relying
jected to be significantly stronger in licensing industry in Brazil. more and more on Pay Cable and Sat-
industry
2007-2011 than in 2002-2006, al- LIMA will offer a variety of services to ellite TV (the so called Pan-Regional
performed in
though weaker than in other large Brazilian members and assistance in Channels such as Cartoon Network,
2006 but also emerging markets. However, domestic creating trade events and conferences Discovery Kids, Nickelodeon, Jetix
looking ahead at
demand will be a more powerful en- and identifying appropriate speakers. and Disney) in order to reach specific
trends that are
gine of growth in the next four years In return, ABRAL will provide LIMA market niches, as the subscriber base
than in 2002-2006. with quarterly updates on the lo- increased significantly over the past
developing in the
The currency exchange rate stood cal licensing market three years to approximately 5
territory.
at R$ 2.18 to the dollar in 2006 (the to be used by million subscribers.
local currency has been appreciating LIMA to help cre- It should be noted though
considerably against major currencies ate and promote that whilst Pay TV locally only
over the past 3 years, which trans- awareness of op- reaches 11% of households,
lates into more US$ of royalties). It is portunities in Brazil the bulk of its audience is com-
forecast to reach R$ 2.00 in 2007 due for foreign licensing prised of families with above
to the solid numbers achieved by the companies. average purchasing power.
steady growth of exports, fueled by an ABRAL estimates that
expansion of investment. in Brazil during 2006, Retail Climate
From the licensing perspective, more sales of licensed products The prevailing mood among local li-
specifically, it has been a good year, amounted to R$ 2.7 billion censing executives regarding the retail
with many traditional sectors such as Reais – wholesale (approximately climate remains generally the same
toys, school supplies and food prod- US$ 1.24 billion) and in this year the - competitive, tough and consolida-
ucts experiencing significant increases increase in revenues is estimated to tion occurring in all major categories,
in overall licensing revenues. In addi- be around 11% in nominal terms. To- most notably in hypermarkets and su-
tion, apparel, shoes and toiletries saw tal royalty revenues are expected to permarkets, which account for nearly
a surge in new contracts. reach approximately R$ 170 million 70% of all retail activity in Brazil, gen-
In all, there are approximately 400 (US$ 85.0 Million) erating revenues of R$ 125 billion
licensed properties available From their research, ABRAL has iden- (US$ 57 billion) in 2006, according to
in Brazil and around tified the following trends regarding ABRAS (National Association of Su-
800 licensed compa- broadcasting, the retail climate and permarkets).
nies covering all seg- market developments: In fact, hypermarkets that make up
ments of the industry only 11% of the total number of
locally. Broadcasting stores in the country are responsible
2007 may well be remem- In 2006, the majority of Open Ter- for 44% of revenues.
bered as the year that a co- restrial Television Networks in Brazil The trend towards direct-to-retail li-
operative agreement/frame- slightly increased the time slots for censing is particularly strong amongst
work between ABRAL (The children’s related series and cartoons department stores majoring on ap-
Brazilian Licensing Associa- from an average of two and half hours parel such as Casas Pernambucanas,
tion) comprising 35 com- daily to around three hours (the ex- C&A, Lojas Riachuelo and Renner
panies and LIMA will come ception being São Paulo Public Sta- (JCPenney). There is also a detect-
into effect. The two entities tion TV Cultura and state Public TV able trend for major supermarket
will work together under stations notably TVE – Rio de Janeiro chains such as Carrefour, Wal Mart
the name ABRAL/LIMA who currently broadcast almost 9 and CBD (Pão de Açucar) to launch
in order to create new hours and 5 hours respectively). their own or licensed labels in cat-
business opportunities Major terrestrial television broadcast- egories such as food and apparel.
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