Brand licensing company Black White Orange (BWO) has tied up with Universal Studios, Paramount Pictures, HBO, and our very own Baahubali.
Think The Godfather phone covers that are a must have, or the Jon Snow bobblehead – licenced merchandise is a big market in India today, and to think of it, the industry was pretty much non-existent as recently as in 2012.
The year was 2012, and Viacom18 Media was venturing into brand acquisition seeing the potential. Acquisitions which was a part of the brand licensing team, was led by Bhavik Vora. The brand licensing team started out small with acquiring licenses for Snoopy- Peanuts and others but were convinced this was slated to be big business.
Viacom18 went on to acquire a license for FC Barcelona and the billions earned changed perspectives for many.
“Viacom18 now not only has its own portfolio but has also started acquiring outside brands. In 2015, I decided that I was really getting restricted with respect to what I wanted to do and also from a property perspective, there are certain limitations within the corporate sector,” says Bhavik.
So, he resigned from Viacom18 and went on to start Black White Orange, which acquires brand licenses. The company provides merchandising solutions and helps brands, celebrities, and retailers find ways to strengthen relationships with the consumer.
Starting from the Khar Social with a team of four, BWO now Cricketer Yuvraj Singh’s YouWeCan brand, and popular sitcom Taarak Mehta Ka Ooltah Chashmah as part of its portfolio.
It also raised undisclosed funding from Yuvraj Singh’s YouWeCan Ventures in December 2015.
Recently, BWO was roped in as licensing partner for the Baahubali series. The company, as of now, is the brand licensing partner for Metro-Goldwyn-Mayer, Universal Studios, Paramount Pictures, HBO’s Game of Thrones, and the Indian Premier League team Royal Challengers Bangalore.
What does it do?
BWO offers services in retail, distribution, syndication, brand consulting, and creative solutions, both in India and overseas. Essentially, for licenses, BWO gets permission to resell branded merchandise through different vendors.
The company, however, realised that Indian brands needed much more in terms of design and creative capabilities, and thus built creative solutions vertical, and now creates properties for brands.
BWO creates and designs themes that suit a brand, and gets vendors to manufacture and even sell the branded merchandise. For Baahubali, BWO tied up with design firm Paintcollar as one of its vendors. Bhavik says Universal doesn’t need that capability, but brands like RCB, Baahubali, and YouWeCan needed ideas and concepts to make their products and merchandise aspirational.
Explaining this, Bhavik says that in India, people only wear IPL jerseys on match days as they have 10 sponsor logos, and don’t look like fun to wear otherwise. In comparison, Chelsea, Manchester United or Barcelona have billion-dollar merchandising programmes for outside match days wear.
Once BWO gets a brand license, it pays a royalty for the same. For its own revenue, the company gets a royalty of between 11 and 14 percent from sellers on sales of branded merchandise. For creative solutions, the company charges Rs 10 lakh to Rs 15 lakh for a style guide, and other fees depending on the scope of work involved.
“The thing is, with goods and services tax and demonetisation, the wholesale market is suddenly turning into a legitimate business.” Global norms for brand licenses are in the ratio to 70:30 or 65:35 in favour of the licensor.
The grey market for merchandise was estimated at Rs 600 crore in India a few years ago.
Roping the biggies
Bhavik adds one of the most interesting things in the company’s two-year journey was the pitch and acquisition of Universal Studios.
“We were a core team of four, and had the legal and finance work outsourced. We were competing against big companies , who had all pitched to Universal. They had properties such as Minions and Fast and Furious, and we all wanted it. Their team came down to India and met everyone. They came to us in December and within two weeks of that, they decided who they wanted to go with.”
Another big moment was roping in Game of Thrones. Bhavik adds it took the company a year and a half to acquire it. He explains it wasn’t about the money, but the fact that he wanted to work with a brand he loved. Bhavik adds,
“For Game of Thrones, India was a small portion of their overall revenues. After a lot of due diligence and evaluation, they finally decided to go with us and we lost our breath for five seconds. It was around 10 pm when we got a call from the HBO office in New York and when I told my team, they were absolutely thrilled.”
A team makes it better
When Bhavik initially thought of starting BWO, he wanted a strong set of co-founders and reached out to Diksha Mehta and Mitali Desai joined. Both Diksha and Mithali had worked at Viacom18 for over eight years.
Speaking about the licensing business, Bhavik says, “While the people in the licensing world knew me, it was not enough to write this story alone. The funding which we got can also be attributed to the people we have.”
There is no product as such to show off in the licensing business, says Bhavik. People trust a business solely on the belief that it has the potential to deliver and take care of their brand.
“There was a lot of resistance and this was coupled with a lot of competition, by people who have been doing this for a very long time. One thing we have done is that we have never moved away from the fans. We do not subscribe to the market mentality of one size fits all,” adds Bhavik.
What helps is that the team is a fan of most brands it manages.
“We have Sesame Street, a brand that is so famous around the world but has never worked in India, because of the lack of ratings. We now have a few deals with Sesame Street that we are launching. The idea is that we will get brands that work, not only from a creative asset perspective but also for a certain community of followers. Our business is only about a community of fans and if you know where they are, you target them,” adds Bhavik.
The challenges in the market
When Bhavik started BWO, he saw there was not enough done to grow the brand licensing business in India. He adds that in India, many still view it as a children’s toy domain. He believes this doesn’t give the full potential of the market. “There are two things which can help us explore this business. We have to target the right audience, the older audience because that is where the propensity to spend is.”
Bhavik believes a majority of the buying population in India is the youth. “If that is where the business is going to go, we need brands to cater to that segment. Game of Thrones was a great starting point for that and so was Baahubali. They were all catered to the youth and they did incredibly well,” explains Bhavik.
He adds that the company has sold over 60,000 Baahubali t-shirts. The BWO team believes Bollywood is another big market that the brand licensing team can explore.
Bhavik says there is a huge market, both nationally as well as internationally, with the Indian diaspora. Shobu Yarlagadda, CEO, Arka Mediaworks, and producer of Baahubali says,
"Black White Orange has been a fantastic and enthusiastic partner in expanding our Baahubali franchise and world into the nascent licensing and merchandising space. BWO has worked closely with us in every aspect from creating the style guide to negotiating and signing partners across various categories."
A largely unorganised market
The market, Bhavik says, is largely unorganised in India, and pegged it at Rs 2,500 crore, driven by children’s merchandise, and distribution.
He says that in India, capitalising of music and films as brands are still at a nascent stage, as opposed to the US and UK markets. Explaining this, he says, “The problem here is that when we meet someone like Amitabh Bachchan, he does not have the rights to his own movies and we only have rights to him as a person.”
The grey market selling a few years back was estimated at Rs 600 crore.
BWO is looking to reach territories that others generally do not explore – Bollywood and sports - which has a huge market in India.
The team, as of now, is looking at its existing international licensing partners. Mark Low, SVP International Consumer Products, NBC Universal Brand Development says,
“Over the time we have worked together, the team at Black White Orange has lived up to the first impressions and delivered breakthrough creative and exciting business ventures. They are truly a fresh face in the licensing world."