Wednesday, July 15, 2009

It Takes a Village

“IT TAKES A VILLAGE”
Hillary Clinton


Two wise women are in my thoughts today. When Hillary (now Secretary of State) Clinton, coined her now famous quote, she was referring to the raising of children. We at Simply Licensed believe it is equally true in our business community. A community of artists, manufacturers, agents, lawyer and accountants who work in tandem to create the products that adorn and enhance people’s lives.

Judy Rebick, an activist, author, and academic, believes technology and globalization have put power in the hands of the people. In an interview on March 16, 2009 with Antonia Zerbisias, a columnist with the Toronto Star, Judy addresses what can be accomplished when we all work together:

“The other important idea [in her book] was having a different kind of leadership, one that helped us do things for ourselves. That's what we're seeing in Barack Obama. He always talks about how "together we can do this."

We can harness the power of this online community to forge our own path in business – to better control our individual and collective destinies.

Many of you tell us that you regularly refer your artist friends to our website. And we appreciate it, for as you know, we need to build the Simply Licensed community in order to maintain its vitality. But there are many others in your life that could benefit from logging on to the site. Do you know of a bright person who is looking for a new career and loves your artwork? Well, send them to Simply Licensed to learn about the field cost effectively. Then empower them to approach manufacturers on your behalf for a percentage of your royalties. In other words, you don’t have to wait for an established agent to agree to represent you; you can train your own using Simply Licensed and all the other wonderful online tools easily accessible.

The greater your presence online, the more likely opportunities will find you. Link all your social networking sites to each other, including your Simply Licensed page. You never know where the next best lead will come from.


Terri Mandel, co-owner

Wednesday, March 25, 2009

How the Positive News on our Economy Today Affects the Licensing Industry

Today, via the major news reporting agencies, it was reported by The Commerce Department that durable goods orders rose 3.4 percent to $165.6 billion in February, the biggest gain since December 2007. As you probably know, in economics, a durable good is one which does not quickly wear out, or more specifically, one that yields services or utility over time rather than being completely used up when used once (such as food). I proffer that this screams licensing. If you think about the types of products that are manufactured using licensed properties (art, characters, trademarks, brands, etc), it becomes apparent that the vast majority are, by definition, durable goods. Products such as home d├ęcor, textiles, housewares, wall art, paper products and more are all durable goods. If the orders for these products are truly on the rise, as indicated by the February increase, then I would say this is a very good sign for the licensing industry.

Interestingly, the same report also provided that inventories of manufactured durable goods fell for a second consecutive month in February, easing 0.9 percent to $336.8 billion, after dropping 1.1 percent in January. This means to me that manufacturers will need to restock these lower inventories in order to meet the increased demand, as identified above. Or it means that demand has increased faster than manufacturers anticipated and they have to ramp up in order to keep up with demand. Thus, now is the perfect time to be submitting your newest and greatest designs to as many design departments as possible because, presumably, manufacturers will be in full product development mode now.

Moreover, another benchmark, new home sales, also rose for the month and, as the collapse of the United States housing market was considered a primary trigger for the current economic slump, stability in that market is seen as a key ingredient for the economy's recovery. This suggests that if the overall economy is slowly on the rise (or at least decreasing slower) individual areas of growth will be fueled and rise independently. Soon everyone will begin to exhibit positive attitudes and start spending some of that hard-earned money, thus further fueling the growth.

Now is the time for everyone to do their part to force this ever-so-slight positive report into the landslide we so desperately need. I like to think of it as a listing ship that is on the verge of toppling over. With this positive data we were just able to push it a little back towards center, but we need many more people on the right side of the ship to make sure it rights itself completely; otherwise it will fall back over to the bad side. In order to get back to perfect balance, we all need to capitalize on the momentum generated so far and add our collective weight to the side of the ship that will prevent it from capsizing. If we can all being to gradually take advantage of the upswing and start spending cash, investing funds, buying real estate, etc., we can positively affect a turnaround of the economy. And to think, it all leads back to licensing … simply.

Monday, March 16, 2009

Excerpt from Lee Iacoca, worth reading and discussing

The following is an excerpt taken from Lee Iacoca's forthcoming book entitled, "Where Have All the Leaders Gone." This is not an endorsement of Lee's book, nor are we explicitly or even implicitly agreeing with his comments. We are posting this in order to start a discussion about a very important topic.

Lee Iacocca Says:

“Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder! We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, ‘Stay the course.’ Stay the course? You've got to be kidding. This is America, not the damned, ‘Titanic’. I'll give you a sound bite: ‘Throw all the bums out!’

You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving 'pom-poms' instead of asking hard questions. That's not the promise of the 'America' my parents and yours traveled across the ocean for. I've had enough. How about you? I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have. The Biggest 'C' is Crisis! (Iacocca elaborates on nine C's of leadership, with crisis being the first.) Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you’ve never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.

On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. A hell of a mess, so here’s where we stand. We’re immersed in a bloody war with no plan for winning and no plan for leaving. We’re running the biggest deficit in the history of the Country. We’re losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.

But when you look around, you've got to ask: 'Where have all the leaders gone?' Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the point. Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when ‘The Big Three' referred to Japanese car companies? How did this happen, and more important, what are we going to do about it? Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry. I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bonehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?

Had Enough? Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope - I believe in America. In my lifetime, I've had the privilege of living through some of America’s greatest moments. I've also experienced some of our worst crises: The 'Great Depression,' ‘World War II,' the 'Korean War,' the 'Kennedy Assassination,' the 'Vietnam War,' the 1970's oil crisis, and the struggles of recent years culminating with 9/11.

If I’ve learned one thing, it's this: 'You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a “Call to Action" for people who, like me, believe in America’. It's not too late, but it's getting pretty close. So let's shake off the crap and go to work. Let's tell ‘em all we've had 'enough.'

Make your own contribution by sending this to everyone you know and care about. It's our country, folks, and it's our future. Our future is at stake!!"

Tuesday, February 3, 2009

Compelling Copyright Issues No. 1 - Art and Celebrity

Compelling Copyright Issues No. 1


**Disclaimer - unlike most of my past and future blogs, this writing was drafted by Jodi Chall, Esq of the Law Office of Terri Mandel, P.C. (www.mandellawoffice.com) for informative purposes only. Unless you have a valid attorney-client relationship with the firm this shall not be construed as, or deemed, binding legal advice.


ART AND CELEBRITY

Many artists utilize the images of celebrities in their art that they then seek to license. Often artists presume because the celebrity is in the public eye, the artist is entitled to exploit their image. That presumption is wrong – particularly in states like California that protect celebrities’ rights to exploit their own images – in life and in death. In determining whether an artist can use the likeness of a famous figure, without that famous figure’s permission, in the subsequent commercial exploitation of an original work, there are a number of competing rights and claims that must be analyzed and balanced. And in the end, as is often the case with issues that lie at the intersection of the law and the arts, there is no clear cut answer.


Rights of Publicity

Rights of Publicity give celebrities the right to exploit themselves. In general, Rights of Publicity in California are governed by both common law and code. On its face, the Rights of Publicity laws in California would not allow an artist to paint any image of a celebrity and exploit it for profit.


But, Courts in California and a few other jurisdictions who have reviewed this issue have concluded that this protection (codified or common law) must be balanced against the First Amendment rights of the artist. And hence the California courts (and the couple of other jurisdictions who have considered this issue) have adopted a test to determine whether the First Amendment is a defense to a claim that a celebrity’s (or their heirs’) Right of Publicity has been infringed. That test itself is rather amorphous.


A. The First Amendment as a Defense.


Works of art and fiction are considered forms of expression and are akin to speech. Thus, they enjoy first amendment protection. Hurley v. Irish-American Gay Lesbian and Bisexual Group of Boston, Inc., (1995) 515 U.S. 557, 569 (“…narrow, succinctly articulable message is not a condition of constitutional protection, which if confined to expressions conveying a ‘particularized message,’ would never reach the unquestionably shielded painting of Jackson Pollock, music of Arnold Schoenberg or Jabberwocky verse of Lewis Carroll”). Thus, when an artist is faced with a right of publicity challenge to his or her work, he or she may raise as affirmative defense that the work is protected by the First Amendment to the extent that it contains significant transformative elements or that the value of the work does not derive primarily from the celebrity’s fame. Comedy III Productions Inc. v. Gary Saderup, (2001) 25 Cal.4th 387. The pertinent inquiry iswhether the work in question adds a significant creative element so as to be transformed into something more than a mere celebrity likeness or imitation.”


The Court articulates this test as asking whether the marketability and economic value of the work comes primarily from the celebrity image or from the creativity, skill and reputation of the artist? In other words, an artist depicting a celebrity must create something recognizably his or her own in order to qualify for legal protection. The transformative elements or creative contributions that require protection are not confined to caricature, parody or satire and can take many forms. The court asks whether a product containing a celebrity's likeness is so transformed that it has become primarily the artist’s own expression rather than the celebrity's likeness. The inquiry is more quantitative than qualitative: do the literal and imitative or the creative elements predominate in the work? Id, citing Guglielmi v. Spelling-Goldberg Productions (1979) 25 Cal.3d 860, 868 (conc. opn. of Bird, C. J.)

Gary Saderup was a sketch artist who produced many drawings of famous people, including a black and white sketch of the Three Stooges and licensed the Stooges sketch for use on t-shirts. Comedy III Productions was the licensing agent for Three Stooges’ names and likenesses, as granted by the Stooges’ next of kin. They brought a lawsuit against Saderup alleging violations of, among other things, the California Right of Publicity. The Court first concluded that artwork was protected by the First Amendment and that the creation of artwork solely for the purpose of commercial sales and/or licensing was also protected by the First Amendment.


However, the Court ultimately concluded that Saderup was in violation of California law and ordered all the profits from his t-shirt sales disgorged and precluded him from further commercializing or use of his Three Stooges sketch. The Court ultimately came to that conclusion because it believed the sketch was an exact replica of the Three Stooges and its intent was solely to capitalize on the fame of the Stooges in order to generate revenue. And because the Stooges’ image in the sketch was not adequately unique or “transformed” in the words of the Court, it was not entitled to First Amendment protection but rather was simply a straight forward replica of the Stooges. There was no significant transformative or creative contribution in Saderup’s work. The Court concluded that the artist's skill had been manifestly subordinated to the overall goal of creating literal, conventional depictions of the deceased personalities so as to exploit their fame. And since the Stooges (and their heirs) were entitled, under California law, to the commercial exploitation of their own image, Saderup was in violation of the law.


The transformative element test comes from the test that the United States Supreme Court applies to guide the analysis as to whether the fair use defense under the first amendment applies. The Supreme Court looks at: “whether the new work merely 'supersede[s] the objects' of the original creation,…, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message…; it asks, in other words, whether and to what extent the new work is 'transformative.' Although such transformative use is not absolutely necessary for a finding of fair use,…, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works.” (Campbell v. Acuff-Rose Music, Inc. (1994) 510 U.S. 569. The transformative elements or creative contributions that require First Amendment protection are not confined to parody and can take many forms, from factual reporting, to fictionalized portrayal (see Parks v. Laface Records (E.D.Mich. 1999) 76 F.Supp.2d 775, 779-782 [use of civil rights figure Rosa Parks in song title is protected expression]), from heavy-handed lampooning (see Hustler Magazine v. Falwell (1988) 485 U.S. 46) to subtle social criticism (see Coplans et al., Andy Warhol (1970) pp. 50-52 [explaining Warhol's celebrity portraits as a critique of the celebrity phenomenon]).

Another way of stating the inquiry is whether the celebrity likeness is one of the “raw materials” from which an original work is synthesized, or whether the depiction or imitation of the celebrity is the very sum and substance of the work in question. Courts ask whether a product containing a celebrity's likeness is so transformed that it has become primarily the defendant's own expression rather than the celebrity's likeness. And when they use the word “expression,” they mean expression of something other than the likeness of the celebrity. For example, in the Saderup case, the Court cited Andy Warhol’s portraits of celebrities like Elizabeth Taylor and Elvis Presley as likely protected by the First Amendment defense (“Through distortion and the careful manipulation of context, Warhol was able to convey a message that went beyond the commercial exploitation of celebrity images…)” Saderup, at 811.


In sum, when an artist is faced with a right of publicity challenge to his or her work, he or she may raise as affirmative defense that the work is protected by the First Amendment inasmuch as it contains significant transformative elements or that the value of the work does not derive primarily from the celebrity's fame.

Wednesday, January 28, 2009

THE ART OF THE SELL

This particular musing is directed mostly towards Licensors, but I believe the contents will prove to be useful advice for all our Members. As a licensed artist – that is, a designer/creator who generates revenue from licensing your property for income, selling your work is the most crucial aspect of your career, perhaps even more so than designing – though it is close. Without sales, you have only a collection of beautiful artwork, but no residual income being derived therefrom. I do realize that, for some of you, painting is more of a hobby, and the fact you generate spending money is a welcome bonus; however, for many Members, the income generated from licensing is vital to your success. Those of you in the latter category must, of course, continue to sell in order to generate more and more revenue. There is a caveat; many of you Members are actively licensing and count on the revenue stream as your source of regular income, but have Licensing Agents representing you and handling all of your sales. You may not currently need the suggested musings below, but it can’t hurt to keep reading … you never know when these thoughts may prove useful.

I do want to add one small caveat before moving on: please understand that I am not an expert in sales, nor am I professing to be such. These are just some points and ideas I have garnered from my years of work in the licensing business. As with all of our writings, please take them for what they are, our ideas and perhaps some new ways of thinking about your participation in the world of licensing. Some may apply directly to you, others may not. Hopefully we are providing you with suggestions for moving forward and being the great licensing successes we know you can be.

Most people in sales live and die by the mantra “A-B-C”, or Always Be Closing. This holds true for any aspect of sales. Closing a deal is the single most important element in the sell; that is, getting your target to agree to purchase that which you are selling. To stop closing is to stop working. Okay, so if the close is the end game, how do you get there? What steps must be taken in order to get to the point when you are ready to close the sale, and what pratfalls happen to even the best of us during this process?

Sales is much like any other aspect of your daily work life, you must be mentally prepared to accept the challenge and take it on with gusto. It’s one thing to understand conceptually that increasing sales leads to increasing revenue, but it’s altogether different translating that into your work ethic and daily/weekly habits. One important question, thus, is how do you go about preparing yourself and what do you do when you just can’t muster the will to get “aggressive”?

Let’s face it, no one likes to feel as though they’re not wanted; and this is precisely how salespeople feel, at times, and this feeling can be a monumental stumbling block. I’m reminded of a particular Seinfeld episode where a telemarketer calls Jerry to see if he is interested in switching long-distance service. Jerry asks the man if he can get his number so he can call him back later. The telemarketer responds with something to the effect that they are not allowed to do that. So Jerry states, “Oh, I guess you don’t want people calling you at home.” The telemarketer replies, “no”, and Jerry responds, “Oh, well then, you know how I feel”, and hangs up. Now, this is an extreme example, because we aren’t talking about calling people in their homes and interrupting them over dinner; however, you have to admit that it can feel as though you’re just an unimportant interruption, even though you’re calling someone at work. And even though executing licensing deals is a major part of their job, they can still make you feel like a bother or a burden. Don’t get me wrong, I do commiserate, for I have to admit that, when someone calls me at the office to see if I’m interested in a new color copier or switching to a T-1 line, I probably sound a bit off-putting, because to me, at the moment, I’m focused on something else. Even if what they are selling is important and could save me money, I fail to see it that way at that very moment. My first instinct is to think that they are trying to take advantage of me and they are taking me away from something more important.

If I feel this way, others must as well. So how do I reconcile my feelings when I am called by a salesman with how I act when I have to turn the tables and try to sell to someone else? Because I was always taught to live by the motto “do unto others as you would have done unto you”, I try very hard to make sure I don’t come across as a bother when I sell. I find that the people who sound genuine to me in their sales approach, who inquire whether or not I am too busy to speak at that moment and accept my protestations without pushing back too hard, are the ones who receive the best response from me in return. I may not buy what they are selling, but at least I listen to what they have to sell. If that approach works on me, why would it not work on others?

There is no denying that making sales calls can be intimidating, and this intimidation factor can lead us to decide that it’s easier to just not make the call. The problem is, unless you receive regular calls from Licensees and exceed your projected income by leaps and bounds every quarter, sales are essential to your business survival. Too many decisions not to call can eventually lead to the demise of your business.

So how does one go about combating the paralyzing feelings of intimidation? Well, one answer may have been best paraphrased by Nike, as in, “just do it.” Sounds overly straightforward, but it’s true. Just pick up the phone and make the call – it works. I know many people in sales, and the one trait I see in all of them is the unrelenting need for a sale, at all cost, with no obstacle too great. It is the essence of their very being to continually push for one sale after another. It’s as if they were put on this Earth to do but one thing; convince people to do something they had not intended to do when they woke up that day. And for these ‘expert’ sellers, securing one sale is never enough; there is no limit to the potential number of sales, in their eyes, only a limit in the number of hours in a day. Every call they make could be a sale which leads to an exponential increase in their income. And when it comes to income, it’s never enough. This is why salespeople are paid on commission. Companies know that, to harness that drive, you must dangle the proverbial carrot in front of the horse. That carrot is the commission on each sale. You have to think of your business that way; that selling someone a license is only the tip of the iceberg, that for every one company that signs a license agreement with you, there should be a hundred more waiting in line; that for every call you make a potential new licensing partner (which typically means 2 – 5 years of steady income) could emerge.

Now I do realize that you, as artists, were not put on this Earth to sell; you were put on this Earth to create beautiful works of art and to design new products for everyone to enjoy. And the instincts, guile, and quick-thinking of a salesperson do not instantly materialize in people not born with such attributes. However, just think of it this way, salespeople (who are, on average, Type-A personalities) usually have to open up their creative side when working a deal. They may have to design presentations; they may have to think creatively to work through impediments to a deal; etc. Just as they were not born with the inherent ability to create, but have to figure out ways to compensate, you too have to figure out ways to create a salesperson’s mentality from a place it may not exist.

Now for the advice part, beyond following the Nike credo to “Just Do It”, what else can be done as motivation to push ourselves forward in sales? When I prepare myself to reach out to a new prospect, the first thing I do is as much research about the Company as I possibly can. You don’t want to embarrass yourself by trying to sell something to someone who doesn’t have any need for what you are selling. We all want to believe that what we have to sell works for everyone, but let’s face it, this isn’t true. Even in licensing; with respect to every design ever created; there are some product categories that are just not right for the art. It may seem to us that Hannah Montana is everywhere right now, but I guarantee there are some Licensees that have absolutely no need for anything with Hannah on it and it would be absolutely fruitless for Disney to try and sell them on licensing Hannah. So don’t target the wrong products: it’s just a waste of time to even try and only serves to take you away from the more meaningful calls that could actually generate positive results.

Once I have completed researching my prey, I mean “target “, the next step is to convince myself that, without a doubt, what I have to sell is the most important item this company needs. This is a very important point and is the essence of sales. If even a smidgen of doubt that your art is not perfect for this particular Licensee creeps into your head, it will come out in your presentation and will be picked up by the Licensee. There are verbal and non-verbal cues bounced around throughout any conversation, and any one of them can subconsciously lead to the target’s making a decision before you’ve ever had a chance to convince them otherwise. This is a competitive enough market (even without the terrible downturn) and you do not want to give Licensees another reason to say no. Having an unyielding belief in your property’s potential for success, and truly believing that by using your art, the target will have the most successful product ever manufactured, will come through on the other end of the line and, at the very least, get you an extended conversation.

On a related topic, I once read an interesting article regarding job searches. It was written by an expert recruiter speaking about how to motivate oneself every day when looking for a new job. Because finding a job is sales, the advice translates. This recruiter advised its readers that, whenever they felt like they just didn’t have it in them to make that next call; they needed to stand in front of the mirror with a big smile on their face for a few minutes. Seeing someone smiling back at you (even if it’s just your own reflection) has a profound effect on your attitude. It’s not such a daunting task and easy enough to test, so why not try?

Another technique is to be sure to have as many potential questions answered (at least in your head – if not in front of you on paper) before you make the call. You need to anticipate all potential questions so that your answers not only flow quickly, but are also made convincingly. Hesitation suggests uncertainty which raises questions on the part of the Licensee and, you guessed it, provides another reason for he or she to say no.

Also, and this is perhaps the salesperson’s greatest weapon, you must be prepared to deflect all declinations that may be thrown at you. There is an art to responding to reasons why a Licensee won’t license your work without antagonizing the target. If you can get them explore possibilities with you, they may reconsider their initial rejection. You must find that balance between convincing someone that your art is perfect for their product and simply trying to impose your will upon the person on the other end. Burning bridges because you pushed too hard can ensure you will never again have the opportunity to work with that Company, which is not something you want, I am sure. But that’s not to say that you should just accept what they say and move on to the next call. In a friendly manner, when the Licensee says they just don’t use geometric shapes, ask them if you can prepare some new designs based more on what they are looking for. If they tell you that they only review design submissions in July and it’s December, ask if you can send them color copies in the mail to be put in the “to be reviewed” pile. Again, don’t be pushy and don’t come across as needy, but be prepared to creatively try to deflect negative responses.

Finally, and perhaps most importantly, do not forget the most vital component. It is amazing how many people do not understand this one, simple, yet oh-so-important point. You must ASK FOR WHAT YOU WANT. This is the essence of the close, for there is no sale without it. Your target may have an inclination why you called and what you want, but you will not get it until you ask. It’s as simple as that.

Again, these are just some ideas for you to choose to apply as you see fit. Every situation is unique and may be best served with a different action (or inaction for that matter). We can only offer you the opportunity to think about what we have written and apply it as you see fit. Until next time, happy selling and best of luck in all that you do.

WHAT YOU CAN DO DURING AN ECONOMIC DOWNTURN

This is a topic that’s been rolling around in my head for some time now; well, let’s just say it was right about the time home values, yes that value that had been rising for who-knows-how-many straight quarters, began a slow decent in a southerly direction. At first I wasn’t overly fazed by the news – after all, I live in the Bay Area, home to the most over-inflated home values in the World. In my mind, it appeared to be more of a “correction” after so many years of unsustainable growth. However, as you know, many of the other important indices were also beginning to change negatively. The stock market was heading down while gas prices, taxes, the costs for necessary goods and services and interest rates were all on the rise. I do have an MBA, but my business training wasn’t required to deduce that this was not healthy for our economic vitality and personal well-being. I know there will always be swings in our economy, and historically what goes down does come up, but something about this one just didn’t feel right. It was enough of a concern that it got me thinking about the long-term ramifications of this economic slowdown and how we, as non-governmental entities, can work to turn it around; and how we, as mere mortals, can work together to reverse this downward spiral? And more importantly, how in the heck does this relate to art licensing?

When I dug deeper in my research, it occurred to me that the economy isn’t really in the awful shape our media, financial gurus and governmental figureheads actually project. I realize this is a bold statement – especially in light of our personal, daily struggles, but it has merit … bear with me. I don’t want to waste time and energy spewing facts and filling your heads with numbers that only confuse, for I want these articles to be general topics of discussion; so-called musings (or ramblings if you will) from the mind of a fairly regular guy (or gal, depending on which one of us at Simply Licensed is doing the drafting). However, what my research did uncover (and you will see as you continue to read how this applies to all of us) was that, in reality, the U.S. economy has grown in comparison to last year, albeit at a slower pace than in the past. There it is, the cold hard facts. We are still growing, just not as rapidly as we have in the past. This fact may pale in comparison to the all-time high numbers of home foreclosures; rising inflation; decreasing home sales; etc, but I believe it impacts all areas and it is the easiest to curtail.

The problem is that we have all grown accustomed to a certain level of continued, systematic and sustainable growth (and why not, we have benefited nicely over the last 10 years). Even if that growth was artificially over-inflated, wholly unsustainable and fated to subside, it still became the “way it should be.” After all, such economic prosperity granted us seemingly unlimited spending power, it was padding our bank accounts, over-inflating our homes’ equity and allowing us to buy the kinds of houses, cars, clothing and jewelry that we shouldn’t have been able to buy, because we were all living on overextended credit. Interestingly, it was because of our wild spending that this growth persisted. Like kids in a candy store, we believed in our hearts (though probably not in our heads, but our hearts won) that it would never end – that there were no ramifications to our actions

And once the extravagant growth subsided, naturally, so too did our spending. But when faced with the rising costs in items such as the price of gas, adjustable mortgage rates and cost of goods sold, led to a much bigger drop then what should have been. Suddenly it not only looked like we didn’t have any more credit (unless you count debt – for we had lots of that), but also every day it seemed another major employer released another 10,000 employees. Suddenly, not only was our money not worth as much but now our jobs, our very livelihood, appeared to be in danger. The continued drop in the markets led to more negativity which led to even bleaker outlooks, which led to more negativity and even greater decreases in spending and tighter grips on our wallets and thus, our growth. Yet even with all of this, after all that we have been through; we still see growth … just not as rapidly as in the past.

The other day the Federal Reserve Chairman found that failing indices in housing, slowing business and consumer spending, and a softening job market were evidence that economic activity is shaky. So what happened, as an indirect result of this article, the Dow Jones dropped 800 points in one day. However, notably, he also said that inflation was holding steady or had eased, import prices were moderating and commodity prices had fallen. That sounded to me like both negative and a bit of positive news. This, coupled with the discussion points above, confirms my belief that our economy is wholly reactionary. I realize that I am not going to win a Pulitzer for this little nugget of a revelation, as it’s something we all learned in High School Economics, but it is pertinent to this story and important to repeat.

In licensing, the point of discussion is obviously the sale of goods and, for our Licensor members, the licensing of designs in the creation of those goods. In the United States alone, over the last seven years, approximately $180 billion dollars of licensed product is sold annually at the retail level. This, on average, equates to $90 billion dollars of licensed product sold at the wholesale level and, with a typical royalty rate of 6%; that means that each year approximately $5 billion is paid to property owners in royalties. With numbers this high, I would definitely say that licensed artists both have a fairly significant effect on our economy and are affected by it as well.

So what can you, as someone whose job was not earned through the expenditure of egregious amounts of money to secure the most votes from the public, do about it?

Well, as I see it, it’s obvious. Now is the time for you, as licensed property owners, to aggressively sell your properties, to design until you can’t create any more, to show your work to more manufacturers then ever before, and to push manufacturers to create new product. For manufacturers, now is when you should be vigorously adding new product and designs to your lines and pushing your retailer customers to increase inventory. So why, you must ask, would I advocate spending money during such tough times? Well, as we discussed, the power of positive actions on our economy is stronger than any other single factor, and is something that each of us has the ability to control. Not until everyone (yes, that means you too – I can see your grimace through the monitor) loosens their proverbial purse strings, realizes the power they hold, and accepts that greater growth will come, will our economy show stronger growth which will result in even more expansion because of the individual changes in attitudes for the better. Moreover, some positive news from the media will also fuel even more positive news which will only continue to feed the growth machine.

Even more importantly, this sort of positivism is healthy for our personal psyches. Many of you are artists, and designing and creating new work is the very essence of your being; it is a drug; it is the rush of adrenaline a race car driver feels; without exaggeration (okay, maybe just a little), it is nearly as important as the very air you breathe. Taking it away is just not an option. More importantly, considering the power it bequeaths, soaking in as much as possible serves only to increase a positive mentality. I know you, and I know that when you are creating, the face in the mirror has a huge smile.

With respect to manufacturers, I truly believe that each and every one of you realizes that this “recession” has a finite life span; that it will get better – after all, it always does. We also know that when there is a Presidential change, the economy grows. Giving the Country some leeway in terms of how long it takes to accept my devious, master plan, I predict a turnaround next spring. Thus, considering a normal business cycle, seeking and licensing new designs for product development must happen now. I realize it requires a financial outlay, and I don’t mean to minimize that; things are tough right now and I know your warehouses are filled with inventory, but if you follow this plan, you will have more than enough great new product ready to capitalize right about the time retailers realize the need to increase their purchases. Moreover, continuing aggressive production ensures jobs which leads to more potential customers for your retailers.

And of course I have not forgotten about the retailers. With all of the above in mind, and considering the ease with which you are able to influence the buying trends of us consumers (like Geppetto to Pinocchio), now is when you should be flooding your stores with all the hot new trends. So spend money now, you will see sales, we are just that easy. For, by purchasing product, you ensure the continued salaries of many people, which means money in their pockets to spend on your goods.

I realize this all sounds much easier than it really is, and many of you will scoff at the idea of spending your hard earned money in a time like this. But, in my opinion, all of the facts laid out above make perfect sense. Thus, this weekend, I think I’ll just go out and spend some of that hard earned … well, earned money that is.