Pre-school children's entertainment producer and rights owner Hit Entertainment has entered the licensing business in India. It has come up with a licensing programme for its show Bob The Builder which airs in India on Cartoon Network.

For this purpose, it has tied up with Licensing Plus India (LPI). Products based on Bob The Builder that will hit stands include toys, games, figurines, puzzles and tableware. Indiantelevision.com's Ashwin Pinto and Manisha Bhattacharjee caught up with LPI director G.P. Singh on the sidelines of a media briefing.

Excerpts:

Could you give me an overview of your company and the services it provides?
Set up in 1998, the company is an Indo-Australian (Licencing Works Australia) joint venture with an objective of bringing international brands and characters, preferably high profile ones, to the Indian consumer.

So far our strategy has been very good and we find that our success rate is growing. On the other hand, international licensers who own these products from apparel to television characters also want to bring them into India. They look for an effective medium on how to introduce them to the Indian markets.

LPI provides them with this medium. Through our expertise we are able to source prospective licencees for them. We also see that they develop viable marketing strategies and also see that they partner with us for a long period of time.

In what way has your strategy evolved since starting out?
It keeps changing all the time. I remember when we first came in people were unaware of the concept of licensing. For example they would wonder “Why do I have to take a license to wear a T-Shirt that says Bob The Builder?."

Today, the Indian consumer has become more aware of the requirements of the international community. He is aware of the foreign company that owns a product and the fact that he has the full right to take a royalty on it. A foreign company like Hit Entertainment is allowing the Indian company to promote his sale while at the same time getting an added value on his product.

Which brands have worked really well for you so far and what made them tick?
Popeye is doing very well. We also have Garfield, Mr. Men & Little Miss, Face Offs, Fred Bare, Phantom, Betty Boop. LPI is presently working with more than 30 companies in India such as Nestle, Titan, ITC, Funskool, Pantaloon, Stic Pens and Wisdom Tree. International brands we represent include Beverly Hills Polo Club, Hang Ten, No Rules, Gasoline, Jordache.

At the same time, all the characters that our partners represent in Australia and New Zealand do not necessarily come down to India. An example of that would be Fosters Larger. Also some portfolios have worldwide deals, which we have to respect. Bob The Builder already had a deal with RC2 and Lego before we came into the picture. So we have to fall in line.

Do licensing and merchandising feed on each other or they can be treated as separate entities?
They do co-promote each other. There is a pattern here but it is not clearly defined. Licensing refers to finding the right medium to bring the product into the country. Merchandising, on the other side, is the job of the licensee to decide on how he would like to project his product without compromising the international brand or image of the product.

A potential licensee would come to a licensing agent like me to obtain a license. Once he does that he tells us how he wishes to merchandise or promote that product in a particular territory. Then we work with him to make sure that his "Is" are dotted and "Ts" are crossed so that there is no hassle of getting the product out into the market. We have to make sure that the displays are good, whether it be in a shopping mall or in a standalone store.

Bob The Builder is a relatively new character on Indian television. What does research indicate about the extent to which kids identify with him to the extent that they would be interested in purchasing themed products?
Bob the Builder arrived in January 2003. He came on Cartoon Network and then went to Pogo. Now he is back on Cartoon Network. I have been informed by Turner that 12 of Cartoon Networks top-rated shows for last year were Bob The Builder episodes.

Normally a product is launched three or four months after the thing is on electronic media. For a variety of reasons, it has not happened that fast for Bob The Builder. One partner that had already signed on through RC2, Funskool has sold 70,000 units. I don’t think that they can believe it. Excel Video has sold 27,469 units.

In the case of Bob The Buiilder, despite the gestation period, the consumer has not lost his taste so fast. There is always the danger that he could. But Cartoon Network’s character has built a strong following. While one could see spikes and drops for products, Bob The Builder has maintained a high level of interest.

Which companies have come on board on the Bob The Builder platform and how will they benefit from the alliance?
In a short span of time, you will see products come into the market. I cannot give you the companies names at present. The companies get to promote their product. The Indian consumer is getting acquainted with a certain lifestyle.

A clothes company, for instance, can make its own line of Bob The Builder apparel. Their own product might not be marketed at such a high value addition or generate as much brand recall among customers as Bob The Builder. We can provide the Indian consumers with a better than international quality product at home. Why should they ask someone to go to America to get the same thing?

Are you talking to companies as far as licensing characters for television ads is concerned?
Yes. It is a part of licensing agreements that are set up. They are entitled to use certain types of footage to promote their brand. Bob The Builder is one character that you will see companies make use of in their television commercials.

What kind of growth do you see happening in the licensing and merchandising business in India as far as kids' brands are concerned?
It is looking very healthy which is why Cartoon Network has done a deal for Bob The Builder. He will infuse new energy. While Disney has been here for a long time, Bob stands for different values.

The “Can we do it? Yes we can” philosophy is as popular with mothers as it is with kids. I see proper licensing structures coming into the country in the next three to five years. You will see a huge difference.

World Bank's Human Development Report which was published in 2003 had estimated that 20 per cent of India's population owns 46.1 per cent of the income. This means that there are 200 million middle class consumers with purchasing power. When you consider the fact that 31.7 per cent of the population is below the age of 14, then it means that there is a huge potential for growth in the licensing business.

If 50 million homes spend at least Rs 50 a month on branded merchandise, that translates into merchandising revenues of Rs 30 billion a year.

One of the problems with merchandising is piracy. What needs to be done to tackle this problem?
I do not believe that piracy can be completely eliminated. However, with sustained efforts this can be brought down to a single digit figure. But you will always have the situation of the odd fish getting out of the net. You have to live with that. Once you get into single digits, the SMS of the operation is not affected.

What are the requirements a licensee has to satisfy before he comes on board?
We have set parameters under which we look at licensees. The licensee must be involved in doing the same type of business. He must have a sound financial standing. He must be able to drive the product for a long period of time without compromising quality.

We visit the facilities of licensees to see what they have to offer and what else they do. We have quality control processes which the licensee has to go through. Price points, colours, specifications are all looked at. If it is okay in our eyes, then it is forwarded to the principal who gives his comments. Only then is the product released into the country.

Earlier you mentioned Popeye and Garfield as two characters that have done well for your company. Could you talk about the deals that are in place for these characters and the expansion plans?
Just to give you a backgrounder on how important Popeye is globally, more than 300 licensees produce Popeye merchandise that exceeds 1000 items. Everyday, a Popeye cartoon is on television somewhere in the world. Popeye is known as Iron Arm in Italy, Karl Alfred in Sweden and Skipper Skraek or “Terror of the Sea” in Denmark. It is the number one licensed food character in the world.

In fact Popeyes Chicken & Biscuits boasts $ 1.3 billion in sales world wide. Globally Pepsi, Kimberly – Clark, Duracell, Mazda, Toyota and Master Card are some of the major brands that use him in their ad campaigns. Later this year, a new line of Popeye breads will launch in the key global markets.

In India we have negotiated with different companies for a variety of products. These include apparels from Pantaloon, puzzles & games from Funskool, watches from Titan, greeting cards and party goods from ITC, plush toys from Hanung, figurines from Plastech, Rainwear from TopGear, SMS comic strips from Indiatimes etc.

Our strategy to build the franchise further is through the use of Baby Popeye. He knows he’ll be a sailor when he grows up. Even when Brutus throws a tantrum, he always plays fair, especially when it comes to sharing toys with his teeny sweetheart, Olive. Baby Popeye is ideal for merchandise targeted at infants or toddlers. In India, our research shows that awareness of Baby Popeye is catching up.

As far as Garfield is concerned when 20th Century Fox released Garfield The Movie last November in 35 theatres all over India, we at Licensing Plus felt that the fat, lazy and lovable cat with loads of attitude had come of age in the Indian consumer market.

In time with the launch of the movie, VCDs of the Garfield TV series were launched in October. Promotions were organised with Garfield costume appearances at major kids centers. We took advantage of the fact that Garfield has this unique ability to immediately relate with consumers because Garfield says and does things that people would like to say and do – if only they could!

In India products based on the cat that are available include greeting cards and party goods, stationery, apparel, writing instruments, plush toys and rainwear. This year we will be coming out with a toothbrush line based on the character.

Outside of comics and character related books and home videos, what are the new merchandising outlets that are opening up?
Opportunities for licensing depend on the product. Generally you will see apparel, home ware, maybe textiles, board games and puzzles.

In India more and more people want to do things the right way. They want to buy licensed products. They want to see that what they pay for is what they get. This is not to say that the grey market does not exist. We are trying to get to a scenario where we can give people a product in India which is not a fake. The price would be equivalent or sometimes lower than the grey market. So why wouldn’t they buy it?

Three years down the line, where do you see Licensing Plus India?
I definitely see it on a far better wicket than it is today. That is not to say that the scene today is bad. Some of the international well-known brands are actually approaching us.

There was a time when an Indian licensing agent would have to travel to the other end of the world and encourage them to come to India. Now they are coming to us. This gives us great satisfaction as it shows that we seem to be doing our job well.