Character Licensing
Granting permission to use fictional characters from entertainment properties on products or in other media.
Definition
Character licensing allows third parties to use fictional characters from films, TV shows, games, or other entertainment on merchandise, in promotions, or within other creative works. Licensees pay royalties for this usage, typically 5-15% of wholesale revenue.
The entertainment property owner maintains brand control through approval processes covering usage, quality, and market territories. Character licensing extends intellectual property value beyond core content into consumer products, experiences, and partnerships.
Why It Matters
Character licensing generates substantial revenue from popular entertainment properties. Major franchises earn billions from merchandise, sometimes exceeding content production revenue.
For brands, licensed characters provide instant recognition and emotional connection. Licensing partnerships can elevate product launches, marketing campaigns, and retail presence through association with beloved characters.
Examples in Practice
A studio's animated film generates $400 million theatrical revenue and $1.2 billion in global merchandise licensing across toys, apparel, and home goods.
A quick-service restaurant licenses characters for a promotional campaign, driving 20% traffic increases during the partnership period.
A video game publisher licenses their character for an energy drink collaboration, reaching gaming audiences while generating licensing revenue outside traditional sales.