YouTube® and Social Media New Frontiers – Licensing & Merchandizing
YouTubers and social media influencers have traditionally monetized their efforts through sharing in advertising revenue or sponsoring / promoting products. Increasingly, however, such online personalities have begun harnessing another – more potentially lucrative – source of revenue: merchandizing and licensing.
Years ago, the right to use intellectual property developed by the motion picture, television and publishing industries on ancillary merchandise was freely permitted – because it was perceived as “cost free” advertising of the intellectual property / underlying business endeavor. Around the 1970s, however, things changed. Businesses began recognizing the ability to generate meaningful revenues from such intellectual property licensing and merchandising. Today, YouTubers and social media influencers are similarly beginning to see that significant profits can be achieved from licensing / merchandising, in some cases, greater even than what they are achieving from direct sources of revenue such as shared advertising funds.
To build an effective merchandizing and licensing program, YouTubers and social media influencers need three key things:
- a “brand” representing the YouTuber or social media influencer that can be protected;
- a cadre of online followers amenable to purchasing “branded” merchandise which reflects their affinity for the YouTuber or social media influencer; and
- a method of manufacturing / distributing the “branded” merchandise.
This article discusses these three key points.
Developing a “Protectable” Brand:
Not all brands are created equal, and some – frankly – are more adaptable to licensing / merchandizing than others. For example, many YouTubers and social media influencers use their legal names or a variant thereof as their usernames. For example, some of the most followed Instagram accounts in the world include: Cristiano Ronaldo (whose username is @cristiano), Selena Gomez (whose username is @selenagomez), Ariana Grande (whose username is @arianagrande), and Kim Kardashian (whose username is @kimkardashian).
While using a name as an account username has benefits (e.g., media exposure for the personality “cross-pollinates” with exposure for the personality’s online following and vice-versa), there can be downsides. Names can be difficult to trademark – especially where only a first name is used. For example, the famous soccer player Cristiano Ronaldo has the most popular private Instagram® page in the world with over 154 million followers. However, Mr. Ronaldo would likely struggle to secure a trademark registration for the name “CRISTIANO” alone – which he uses as his Instagram® username. Similarly, other individuals may struggle to trademark their name either because it is too common (e.g., “John Smith”) or because another person or entity has already secured rights in the name (e.g., a person named “Ronald McDonald” would be incapable of securing any rights in his own name – indeed, as astonishing as it may seem, he would even be precluded from “using” his own name as his brand – but that’s the subject of another upcoming blog).
By working with a competent intellectual property attorney, YouTubers and social media influencers can work to select a “protectable” brand.
After the right brand has been selected, the next step is to secure rights to that brand by filing trademark applications. Initially, such applications can be limited to a YouTuber / social media influencer’s “core” content. For example, a YouTuber who posts video blogs (“vlogs”) may file an application in International Class 41 for “on-line video journals, namely, vlogs featuring non-downloadable videos in the field of … {filling in the field or subject matter}.” Later, i.e., once potential licensing opportunities are identified, additional, intent-to-use trademark applications can be filed to expand the brand’s protection to cover the soon-to-be-licensed / merchandized goods and/or services. Again, such work should be done in consultation with an intellectual property attorney.
Online Following:
YouTubers and social media influencers need to have an online community of followers who appear open to purchasing licensed / merchandized products. YouTubers and social media influencers should consider such things as the number of followers they have, the demographics of their average followers and the nature of the content they produce. For example, a YouTube channel with only a few hundred followers may not have the potential for monetization through licensed merchandise.
Average follower demographics and the nature of the produced content speak more to the type of merchandise than to the ability to merchandize per se. For example, licensing plush toys may be an effective strategy for an animated children’s cartoon YouTube channel, while such a venture would likely “fall flat” if employed by a twenty-something model with a large Instagram® following. Similarly, a LinkedIn® influencer with a predominantly professional, college educated audience might consider more expensive merchandise than a musician with a popular YouTube® channel with a demographically diverse following.
Good “clues” to look for are comments from followers: (1) asking for specific merchandise, e.g., asking that a particular meme or catchphrase be branded on a t-shirt; or (2) asking that a licensing program be expanded to cover other goods, e.g., asking that a logo being branded on t-shirts also be branded on travel mugs.
Manufacturing / Distribution:
Many YouTubers and social media influencers have an “if you build it, they will come” mentality to licensing / merchandizing. Indeed, the “marketing plan” is often to simply post a link to the licensed / merchandized products on the YouTuber / social media influencer’s accounts. Almost always, however, developing a licensing program and/or selling merchandise takes a lot more work.
First, approaching users with the idea of selling them merchandise needs to be done in a tactful way that is not seen as “inauthentic” to the YouTuber / social media influencer’s brand. For example, Dr. Sandra Lee is a dermatologist who routinely posts videos of herself popping pimples on her YouTube channel (which has over 5 million subscribers). In our opinion, Dr. Lee would be natural, authentic candidate for selling branded skin care products – and could do so with great credibility. However, Dr. Lee might be perceived as inauthentic if she tried to license sports merchandise – it simply would not “fit” with her brand.
Second, YouTubers and social media influencers need to find a way to have licensed merchandise manufactured and distributed. Sometimes, this is done totally by third party licensees who simply pay a royalty. Other times, YouTubers and social media influencers contract with third party, on-demand manufacturers such as CafePress or Teespring. Such third parties offer fulfillment services and can be a quick way to have branded merchandise manufactured for customers – especially for short, limited runs such as a t-shirt that include a humorous catchphrase from a viral video that may no longer be marketable in the time it would take to order a traditional print run.
Rewards of Licensing:
For YouTubers and social media influencers who have a protectable brand, the right audience and a plan for manufacturing / distributing licensed merchandise, the monetary rewards can be astonishing.
To help illustrate, Sellfy.com hosts an online tool to estimate potential revenue from both advertising and product sales. This tool purportedly creates these estimates by using data from “several thousands of YouTubers on Sellfy e-commerce platform who have created their stores and are successfully selling products on YouTube.”
As can be seen by experimenting with this tool, product sales for a YouTuber can easily outweigh advertisement revenue. For example, the Sellfy tool estimates that:
- a YouTube channel with 5,000 monthly views would earn between $1 to $20 from advertisements, but could earn between $170 and $870 from merchandise;
- a YouTube channel with 10,000 monthly views would earn between $3 to $40 from advertisements, but could earn between $340 and $1,740 from merchandise; and
- a YouTube channel with 20,000 monthly views would earn between $5 to $80 from advertisements, but could earn between $450 and $2,470 from merchandise.
If you are a YouTuber or social media influencer looking to protect and monetize your brand, call us today for a free consultation.
