Magazine publishing is a 90 billion dollar worldwide business. Magazine publishers of all sizes recognize the value of expanding internationally, especially as their advertisers continue to globalize.
Licensing is low risk strategy for magazine publishers looking to expand internationally, both in print and digital format. It’s an especially good strategy for small-to-medium-sized publishers with limited financial resources.
Licensing limits your investment risk by partnering with companies in local markets who have the publishing expertise, active advertiser base and established magazine distribution channels. It’s also a strategy for getting into markets where direct ownership is not an option.
A good example of a hot magazine licensing opportunity is China. Because local laws prohibit 100% ownership by foreign publishers, licensing is an ideal strategy for this territory. It’s a rapidly expanding consumer market, with 300 million middle-class consumer spending on everything from branded apparel to cars, computers and more. Chinese publishers, both consumer and B2B, are actively licensing top US magazine brands and content. Some examples include Fortune, Harper’s Bazaar, Esquire, Good Housekeeping and Popular Mechanics.
How long the agreement runs will depend on the licensee and the market. If a licensee is making a substantial investment in launching your magazine in their market, they’ll most likely want exclusive rights for multiple years. Be careful with licensees who want rights to multiple territories or regions. A qualified licensee in Germany is not necessarily an effective partner in other parts of Western Europe.
Royalties can average between 5% and 15% of a licensee’s total revenue, which are generated from paid advertising and subscribers. Other revenue sources to consider include conferences and expos, reprints, digital rights and ancillary products (i.e. merchandise)…basically any revenue generated using your magazine IP. Tie royalties to performance benchmarks such as revenue targets and a minimum amount of royalties (minimum guarantee) that the licensee pays regardless of whether they make the revenue goals.
Be sure to include specific quality control guidance requiring your approval of the editorial, look and feel of the finished magazine product. You’ll also want to define what percentage of your editorial content must be translated and used in each of their issues. Most important, make sure to register your trademarks and copyrights in each territory
In addition to royalty revenues, you can use licensing to increase your direct revenues from international advertisers. For example, the agreement can include cross-sales and cross-marketing rights, giving you the option to sell advertising into the licensees publication. If you’ve got licensees in many countries, you can now offer global ad packages.
If you are a magazine publisher, licensing must be part of your expansion strategy. Licensing is a low risk and faster way to expand your magazine into new markets. You can generate new revenues from your licensees, global advertisers and from a variety of media platforms including online, mobile, e-readers and others.