Going in to films with eyes open
The Hong Kong Trade Development Council is hosting a free seminar tomorrow at the Convention and Exhibition Centre on how Hong Kong and mainland toymakers can profit from film licensing.
The focus of the event may be profit, but it also aims to educate manufacturers about the risks and pitfalls associated with licensing, which many companies have run afoul of, according to Anita Leung, partner at Jones Day law firm and chairwoman of the Legal Committee of the Licensing Executive Society China, Hong Kong Sub-Chapter, who will be speaking at the seminar.
'A lot of toy companies, particularly in China, are unaware of the complexities involved when they start looking at licensing. They don't do the necessary due diligence and this often leads to costly mistakes and legal problems further down the road,' she said.
The focus on risk at the conference is especially important because many manufacturers walk into these negotiations only focusing on the potential windfall, regardless of the pitfalls, according to Michael Roth, vice-president of international operations of the Tin Box Company of America, which holds several licensing agreements with content owners Disney, DC Comics and Nickelodeon.
'There is a significant risk with licensing. You are paying, say, US$500,000 for a licence and they don't always pay back. Hopefully you win, but it is like gambling in a sense. If you don't go into it with your eyes open, you are going to get burned,' Mr Roth said.
He said that licensors and rights holders had also become more risk conscious, and that Hong Kong manufacturers must be prepared to meet rigorous product safety and production requirements if they wanted to gain a licence - something which could be capitally expensive.
To make manufacturers aware of how the licensing process works, the seminar has invited stakeholders from across the full licensing spectrum to speak at the event, including rights holders, agents, industry associations and legal experts.
Organisations that will be represented are the International Licensing Industry Merchandisers' Association, DreamWorks Consumer Products, Click! Licensing Asia, Jones Day law firm and the Legal Committee of the Licensing Executive Society China, Hong Kong Sub-Chapter. The seminar takes place on the sidelines of the shows.
