1. TOTAL LICENSING
143
To begin this look at Israel, we will
start with a few facts and data about
the country.The population is now ap-
proximately 7.64 million people includ-
ing one million Arabs and one million
religious Jews.These market segments
are not included in the commercial
target market. They avoid purchasing
character products for both religious
and economic reasons.
There are 2.108 million households
and 1.75 million families and Israel has
a birth rate of 150,000 children a year,
divided almost equally between boys
and girls.
The official languages of Israel are He-
brew and Arabic although English and
Russian are also widely spoken. In
terms of economics, unemployment
stands at 6.2% (compared with 7.8%
in the UK and 9.0% in the USA).The
GDP is $203,520 million and the av-
erage Israeli’s monthly salary is 1,704
Euros.
As far as technology is concerned
74.4% of all households now have
at least one computer or more, and
broadband penetration, whilst there
are no exact figures,is estimated to be
at 80% of all households.
On the retail side, Israel has most of
the major global chains including Ikea,
Toys R Us, H&M, Zara, Gap and more.
The average Israeli family consumer
based is 2,763 Euros although online
purchasing is still only around 10%.
In terms of mobile devices,there are 7
million in Israel compared with a pop-
ulation of just over 7.5 million. Many
Israelis have more than one mobile
device.
On the broadcasting side, DDT has
entered Israel and facilitates the re-
ception of five basic channels. The
average cost of the device is 100 Eu-
ros.Whilst no data as of yet has been
collection on the number of impres-
sions and households that have been
connected to the new technology, it
is known that the penetration levels
are very low.
The new social networks have at-
tracted all ages. Facebook is the most
popular whilst Twitter has yet to pen-
etrate the local market on a high scale.
Messaging software such as MSN, ICQ
and Skype are highly used.
It comes as a surprise to many people
that the target audience in
Israel is dramatically smaller
than the rest of the world.
Try to imagine building a
merchandising plan for New
York City or London alone.
However, the differences
and dissimilarities of the
Israeli market do not end
with the basic statistics and
facts but continue on into
the media and communica-
tions market.
Multi-channel television now
has 1.5 million customers in
Israel. Of these, Hot-TV, a
cable network, has 910,000
subscribers and 110 active
channels.This is a highly-used
VOD with 10,000 hours of
content. 85% of the content is broad-
cast through the linear channels.There
are 500,000 subscribers registered to
theVOD service and over 250 million
VOD programs were viewed in 2010.
Hot-TV offers television, internet and
phone services.
Yes-TV (satellite) has 571,000 sub-
scribers and over 100 channels. They
recently addedVOD services.
In terms of multi-channel platforms,
TV subscription packages are some of
the highest in the world and the aver-
age Israeli spends 3 hours and 44 min-
utes watching.
In 2009 and into the second half of
2010 the most viewed genre was re-
ality TV (four out of ten programs).
The lead program was Big Brother
May this year saw
Israel celebrate its
63rd
year of
independence.
In comparison to the
western world, Israel
is a young country.
Yet it is extremely
advanced and
developed.
In this article, Miri
Dalizky from Saban
Brands Israel will
examine and
summarize the
difference between
the merchandising
industries in the
Israeli market
compared with
markets in the rest
of the world.
A small but dynamic marketplace
By: Miri Dalizky
VP Marketing &
Merchandising
Saban Brands Israel Ltd
+972-3-5358303
+972-52-8796890
miri@sabanbrands.co.il

2. TOTAL LICENSING
144
with an average rating of 31.5%.As at
the last quarter of 2010, 34.5% of the
Israeli public has delayed viewing and
50% of Israeli homes now have LCD
or Plasma with 20% of homes with an
HD converter. Unlike the rest of the
world, broadcast channels are con-
tinuing to strengthen in Israel.
In terms of cost, a Hot-TV package
costs around 48 Euros whilst aYes-TV
package is 42 Euros. DDT converters
were introduced into Israel in 2010.
Moving on to the structure of the
Israeli media market, there are three
free to air channels – Channel 10,
Channel 2 and Channel 1.
Channel 1 is national television. Chan-
nel 2 is held by two franchises – Kes-
het and Reshet who rotate broadcast
days every six months. Channel 10 is
privately owned.
On the children’s side the two leading
channels are The Children’s Channel
and the Disney Channel. Additional
children’s channels include Logi and
Nickelodeon whilst HOPTV!, Loli and
Baby are aimed at preschoolers. Most
programming for children is aired in
daily episodes for five days a week
with re-runs over the weekends.
Now that we have a general look and
feel for the Israeli market, let us turn to
examine the licensing and merchandising
industry in the country.
There are three or four major agen-
cies in the country with 5 or 6 mi-
nor private agencies. The number of
properties on offer in Israel is gener-
ally 25% more than is usually found in
Western countries.
On the licensee side, there are two
or three prominent licensees in each
product category. Most of these man-
ufacture in the Far East and orders are
generally placed around eight months
to a year ahead of delivery.The DTR
category is new and has only really
emerged in the last year. There are
no territory-dedicated magazines on
merchandising and licensing and no
professional trade shows.
In terms of trends, the leading com-
panies prefer to follow classic char-
acters where the series have longer
shelf lives.These are in preference to
characters that reach more than one
target audience.
It may seen that, in this area, Israel
behaves in a unique and different way
compared with most other countries
that deal with merchandising. To un-
derstand this, let us have a look licens-
es and purchasing habits.
Amongst girls and boys aged 3 and
under, purchases of merchandise with
classic characters are usually made by
grandparents and not by the parents
themselves.
In the 3 to 6 age group we see the first
signs of segregation between boys and
girls. Brand preferences are usually in-
fluenced by friends.
The segregation is complete in the 6
to 8 market where popular television
shows are the main influences.
By the 8 to 12 group there are separate
categories for boys and girls.There is
significant TV influence along with
opinion leaders and fashion icons.
This becomes more apparent in the
12 to 16 age group. Fashion brands
and icons dominate and the market
includes a small number of brand li-
censes.
By the 16 to 20 age group, there are
still a small number of brand licenses
which mainly appear in sleepwear,
underwear, stationery and pop items
(mobile phone covers, notebooks,
etc).
From the age of 20,there is little brand
orientation compared with the rest of
the world and it largely depends on
the consumer’s economic situation.
On the preschool side, the domina-
tion of Disney characters in this seg-
ment has weakened since the arrival
of Nickelodeon’s Dora. Over the past
two years, there has been growing
interest from licensees in preschool
brands. The key categories that gen-
erate the most revenue in terms of
licensing are the 3 to 6 age group and
the 6 to 8 group. Back to school prod-
ucts generated around 400 million
Shekels in 2010 (around 80 million
Euros).
In terms of properties that have been
successful in the Israeli market in the
past few years,Dora,Winnie the Pooh,
Disney and Bob the Builder have been
successes in the preschool category.
On the action adventure side, Ben
10, Bakugan and Pokemon have been
successes whilst, in terms of lifestyle,
Hello Kitty,Pucca and Snoopy have led
the way.
On the boys’ side, football teams con-
tinue to be popular whilst,on the clas-
sic side, Disney and Spongebob have
been successful.
Interestingly, there has been no par-
ticular success in terms of movie
merchandising. However, on the Tele-
novella and reality side, these are
significant sources for merchandising
across all age groups with successful
shows including RebeldeWay and Casi
Angeles.
Key sales seasons are different, of
course, in Israel as they depend on
Jewish Holidays and local consump-
tion habits.
The key time for the home textiles
market is for Rosh Hashanah (Jewish
NewYear) in July/August and the Pass-
over in March/April. Back to school
(including stationery and school bags)
is at its height in June whilst key appar-
el sales times are July and August for
Winter clothing and March or April
for summer clothing.The same applies
to underwear and sleepwear.
There are no transitional seasons as

3. TOTAL LICENSING
145
the Winter is very short and end of
season sales start a month after the
collections are launched.
In terms of footwear, flip-flops are
bought in April or May, boots in No-
vember, sandals in April or May and
winter shoes in September or Octo-
ber.
Publishing is popular in March for the
Passover, June for the summer va-
cation and November for Hanukah
whilst pop accessories are popular in
April and June.
Boxed games and arts and crafts are
popular in March for the Passover,
June for the Summer vacation and No-
vember for Hanukah whilst costumes
are bought in January and February for
Purim. Lastly, plush is bought ahead of
the winter season (these products are
less popular in summer). Mobile con-
tent is a year-round activity.
So what are the elements that make
for a successful merchandising plan in
the Israeli market.
First of all, a series that has at least
52 episodes. Broadcasting needs to be
affiliated with Yes and Hot although
other alternatives include DDT. 95%
of licensees manufacture outside Isra-
el (mainly in China) and a PR campaign
is essential. It is also essential that
merchandising agents are honest and
professional and have strong profes-
sional and personal relationships with
licensees and commercial players.
Thinking ‘outside the box’ is impor-
tant in the market, as is distribution
within the domestic market by global
licensees.
The synergy between parties involved
is vital – broadcaster, franchisees, li-
censees, multi-territory licensees etc.
The commencement of merchandis-
ing should begin a year prior to the
series airing. Due to the timeframe
needed for manufacturing, as well as
the broadcasting schedules, the atten-
tion of licensees is usually towards the
second season.
Graphic submissions should always
be approved by the local market and
there is a basic provision that fits the
local market.
International retail chain stores, such
as H&M and Zara, are important as
they will work to sell local items to-
gether with the licensee. For example,
when H&M penetrated the domestic
market, there was an increase in ex-
posure for Hello Kitty. Local licensees
are also interested in marketing their
products in territories outside Israel.
In terms of what will not work in Israel,
a series comprising only 26 episodes
and has no translation or dubbing
will not work. Another problem will
be a lack of synergy between parties
involved – broadcaster, franchisees, li-
censees and multi-territory licensees.
A short-term vision by an agent will
fail and there should never be unreal-
istic commercial conditions on the Is-
raeli market.A long and cumbersome
product approval development proc-
ess will lead to failure as will the lack
of ability to compete in terms of price
eg imported goods from Europe and
the USA where prices to not match
the Israeli market.
Movies are rarely successful.The mar-
ket is small and children only watch a
movie once. However, a movie based
on a series, such as The Smurfs, can
succeed.
Series based on American culture
(The Hulk,Avatar, Olsen Twins) rarely
do well and neither do series based on
European culture (Tintin, Babar, Harry
Potter).
On the sports side, world soccer and
other events (eg The Olympics,Wim-
bledon and the World Cup) where Is-
rael has no local representation have
very low potential for merchandising.
To summarise, the market in Israel is
dynamic, aggressive and unexpected.
The market is small compared with
other world markets. There are nu-
merous licensees, a small number of
dedicated agents and few options for
potential licensees.
Viewing habits are not in line with the
rest of the world although technologi-
cally Israel is a very advanced market.
The market is accepting of new and in-
ternational trends although the shelf-
life of trends is short.
In order to succeed in the Israeli mar-
ket, you need to be part of the local
market as well as being a professional
in your field.
Finally, on a more personal note, after
27 years of dedicating my professional
life to the merchandising and licensing
sectors in Israel, I am happy to discov-
er new challenges that head my way
every single day,despite the size of the
market.
I am sure that when a professional job
is in place that coordinates with great
synergy with property owners, you
can sit back and enjoy the results.
Established in 2010,
Saban Brands Israel is
acquiring, representing
and marketing a porfolio
of intellectual properties
and brands that include
not only Saban’s owned
brands such as Power
Rangers or Paul Frank
but also a number of
third party representa-
tions for properties
including Canimals from
the creators of Pucca,
JCB the world’s leading
equipment company and
Alifim, an original Israeli
television series.
The company is headed
by Arieh Saban as
Chairman and Gil
Saban as CEO with Miri
Dalizky asVice President
of Merchandising and
Licensing.