slides for ABC Malaysia which is held on Nov 2015

1. A case study of
Korean character
Licensing business
Nov 18 2015
Sam Lee / Ocon

2. Sam Lee
[Currently]
2012 – Present
Managing Director / Ocon Inc
( Job) Licensing and merchandising business
Animation production, co-production
International business
2012- Present
Jury of Government support program for Animation and Character license part
/ KOCCA, a Gov’t org
Jury of Government support program for content business / RAPA , a Gov’t org
Consultant of Content business / KOCCA
[Formerly]
2010 -2011
Managing Director / Isis contents co
( Job) Licensing and merchandising business
International business
(Company ) Master licensee of Sanrio including Hello Kitty
2006 -2010
Chief Manager / Doolynara co
( Job) Licensing and merchandising business
Animation production , co-production
International business
(Company) Licensor of Dooly, the little Dino

3. OCON
18 years history
CGI Animation and Character related business
Co-owner of Pororo IP ( * IP : Intellectual properties )
Emmy awards ( 2014) and many awards by Pororo and Dibo
Master Licensee of “Kakao friends “
Master Licensee of “ Ani-Pang “

4. Today
Character Licensing and merchandising Market status of Korea
Case study : Kakao friends
Case study : Korean Children animation : PORORO and DIBO

5. L&M business in Korea

7. Character usage
Character recognition
Local foreign
Recognition route
Character goods Animation friends Smartphone internet

8. What characters ?
Toddler Children Adult

9. Different ?
90 % Korean licensees are not importers but
Manufacturers
70% Licensees are SME 30% Chebul
Licensees are not only buyers but life time partners
They should invest money to launch the new character products
CEO is the PIC , fast decision making

10. Different ?
Strong Local brands >Global Brand
More chance to watch local programs due to animation quota
= More watch , More consume
Typical National Traits
Local Market chain >> Walmart, Carrefour
Local search engine ( Naver) >>> Google
Local instant messenger ( Kakao talk ) >> whatsapp , Line

11. Production
sell $50
Buy $25
Production
Factory Wholesaler Retailer Consumer
sell $75 sell $100
Royalties are imposed to Retail or Wholesale ?

12. Royalties ?
Most of the licensing agreement are made on
Wholesale price not retail price ( global standard )
-General merchandise : 8 % of wholesale price
- Foods and beverages : 0.5 – 1.5 %
- Minimum guarantee ( MG ) : USD5,000
Very cheap price _ Let licensee decide easily
No.1 Brand PORORO and KAKAO as well
“ NO ENTRY BARRIERS “

13. Case study : Kakao friends

14. Kakao friends
- Launced licensing biz only 2 yrs
- 10 offline shops
- USD 2Mil / Month Offline Sales
- USD 1Mil / Month Online Sales
- USD 400,000 / Month royalties
- 500 of merchandises
- OCON successfully launched L&M Model
Most Hot characters in L&M Market within 2 years

15. 2 main types character goods production
Licensing OEM
Let licensees make
merchandise
productions
“Lend IP”
Licensor make their
own productions
All products are from
licensees
All are OEM
* IP : Intellectual properties

16. Mixed Model
Licensing (Out) OEM
Well selling
productions _ toys ,
stationeries
Uncertain productions _
fashion , appeals
; Do OEM first
-> make market
-> go to licensing
Current Cash cow Future Cash cow
DISTRIBUTION – Shops , Wholesales

17. Future licensing ? collaboration
Classic licensing Collaboration
1 year agreement Short terms
1 – 3 months
SME mainly Big and Giant
Relatively week brand Strong brand
No sign of own brand
Only can see character
granted
- e.g Pororo pencil
Granted character and own
brand both alive
LG X Kakao

18. Distribution by Licensor
- Meaning doing wholesales, Retail shops
- Buying licensing goods from licensees to help keep production
-Guarantee licensee’s rigid sales volume
HELP LICENSEES TO MAKE MONEY is HELP YOURSELF

19. New distribution model _ Popup store
-Limited time shop : 2 weeks – 1 months
- Strong advertisement by SNS , Internet (Aiming young generation)
- Limited goods
- young generation friendly place : Near collage
- Interior Design Oriented

20. Case study : Korean Children animation
PORORO and DIBO

21. Pororo
-Produced by 2 companies co-work : Ocon , Iconix
- Season 6 under production now
- Annual Licensing income : USD20 Mil
- Licensing goods sales : USD500 Mil a year
- Partner companies : 600
- Licensing goods : 1,000

22. Make money with animation
-You can only recoup 20% of invested money by TV Sales
- Rest of 80% or over should come from OSMU
Animation
Broadcasting
TV , IPTV ,
cable, …
Exhibition
/
performan
ces
Video /
Music
Video
games
General
Licensing /
Franchise
Movie

23. OSMU ( One-source multi-use )
- Children’s Musical performance
** The slogan of korean animation

24. Dibo Musical in Philippines

25. -Indoor theme park (Pororo park)
Korea, China now Singapore ( Marina Square)

26. - Indoor theme park ( Dibo village )

27. -Movie
Pororo, Ice racing adventure
(2013 .12 )
Pororo2 , Snow fairy
Adventure
(2014.12)
Pororo 3, Cyber space
Adventure ( 2015.12)
Millions of visitors

28. Success factors of PORORO
- Cooperation of two companies
Iconix : comes from advertising company
Ocon : Korea’s leading animation studio
-Right business partner : EBS Not 3 Major TV
EBS : specialized for children contents
- Strict pre-marketing research
English name , penguin and etc
-Strict licensing policies : Only for Children goods
- Gov’t support

29. Thank you
Sam Lee samlee@ocon.kr
https://linkedin.com/in/samleekorea