August 16, 2009

Sunday Question: How do you feel license branding will work?

Baseball goes to Topps. Basketball has Panini. Upper Deck has the colleges, and so on.

The different card companies are buying exclusive licenses to the different sports.

While we won't know the effect of this for probably two to three years down the line, what's your initial reaction to the licenses being bought up by the card companies?

Sooz: Initially, I have a hard time feeling as though this is going to be good. However, the more I think about it, perhaps this is the type of thing that the card companies need to wake up. If the sports are willing to show that they don't like what the card companies are doing, tired and lazy designs could go away.

If MLB gave Topps the rights and doesn't like what it did, perhaps MLB will open it again to other companies, which could be said for NBA. NHL and the like.

Or it could blow up in everyone's face. It will be interesting to watch.

10 comments:

  1. I think it's a necessary step, given the decline of the trading card market.

    The companies will still have to produce a good product - if they don't keep their customers happy, they won't have any. Trading cards are not a necessity, after all. If they don't keep the licensors happy, they'll lose their exclusive to somebody else.

    I'd rather see this happen than lose out entirely because everybody keeps grabbing for a piece of a shrinking pie.

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  2. why do we need college cards for they won't be worth anything if they don't make it to the pro's. Will that be there real rookie card

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  3. The big difference between now and back when Topps had a monopoly, is that there are other possible choices now. If the 1976 Topps set was blah, so what? They'd still make a set the next year. If the 2010 set is blah, they could be replaced. It makes Topps try to keep the license. I can't see that as a bad thing.

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  4. I think the people you need to ask are hockey fans. Upper Deck's had the exclusive license with hockey for a little while now. How is it treating the collectors? From what I've heard, hockey collectors mostly like the UD cards. But not all the reaction's been positive.

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  5. The exclusive has been OK in hockey. ITG is still pumping out products as well. If anything, I think the Exclusive will have less of an impact in baseball, because baseball collectors are not so attached to the 'RC' definition.

    That being said - I would be surprised if Topps didn't slack off a bit. I break UD baseball, and haven't received a single redemption, photos are matched with jersey swatches and proofreading seems like a requirement. These all suck with UD's hockey products.

    Basically - the hobby will be OK. Topps might slack off a bit though. If companies are still willing to sign players and put out sets without logos, and people are willing to buy them - the hobby will be fine.

    Its definitely different, though.

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  6. I'm mostly a vintage collector, so I don't know a lot about the whole licensing thing. As long as Topps keeps making sets, I'm happy. I'd like to see at least some competition though. Even without competition, Topps still did lots of interesting test sets during its time as the "only game in town."

    Mr. Jeter just broke the all-time hit mark for shortstops and will be the Yankees' all-time hit king by the end of the season. I hadn't realized that he put up such good career numbers. Just kinda took him for granted I guess. When I saw the story on ESPN's web site, I thought of this blog.

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  7. It's less than ideal, but probably beneficial for now.

    If I was made dictator of the sports card market I'd introduce a sort of "cap and trade" system across all four major sports.

    In a nutshell: I'd give Topps, UD, and Panini, licenses to produce 5-7 sets per major league plus 1-2 cross-sport products. I would also make the licenses tradeable, so that if one company wanted to make more products in a given sport they would have to trade away licenses in other sports to one or more competitors.

    That being said, I think just giving one company renewable licenses in each sport to a certain extent solves the problem of market glut, but does increase the probability of a certain degree of slacking.

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  8. I've blogged about the contractual monopoly on Tribecards, but since then I have given more thought on the subject. In the 70's and prior, there were the oddball things you'd find now and then, but for the most part, you were limited to what you found in your region. Nowadays, people have a ton of choices as to what to collect, and baseball cards are not at the top of the list for many young collectors. I don't think cutting out competition is a good thing. The lack of innovation in card companies, I thinnk, is also part of the reason for the fall. To me, the whole 'retro' thing simply means the card designers have run out of ideas. I, for one, hope this trend is the end of 'mock vintage.'

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  9. It is interesting to consider a comparison of sports licenses between trading cards and video games. Of the big four pro leagues, only the NFL maintains multiple card licenses. Oddly in comparison, in a much bigger video game market, the NFL went with EA to produce the exclusive NFL Madden license.

    For scale, one year's release of Madden is equal in revenue to EA as nearly half of the *entire* sports card market (if you assume that Madden makes at least $120m in a given year, and recent estimates of the card market are about $250m).

    So how has exclusivity for EA, initiated in 2004, and renewed in '08 through to 2012, fared?

    Initially, EA was criticized more often for seemingly slacking off on innovation. Generally speaking, the game engine gets an overhaul every three years, so for example, Madden 10 is the initial release of a revamped engine, and '07, '08, and '09 were feature improvements on the previous engine.

    Shortly after the exclusive was awarded, feature improvements seemed lean in '05 and '06, and were criticized for it. EA eventually picked up their efforts, and are sensitive to losing the license if the game doesn't appear to advance or innovate enough. We hope that Topps can see that object lesson, and avoid a slacking off period.

    What about Madden competitors? It was sad in '04--the NFL 2K series was giving Madden a serious challenge at a lower price point. In the short term, the exclusive was bad for consumer choice.

    However, the new limitations of the market spurred creativity, and games like Blitz: The League, All-Pro Football, and Backyard sports titles tried to work around the NFL license problem, and challenge Madden in different ways, some good (innovative game play and humor) and some bad (crap storylines).

    Unfettered competition does not always provide the best set of consumer options. Much talk is made about artistic freedom, but for product development, having as many resources as you need, or a lack of innovative effort may result in creative indulgence and laziness, like Star Wars Ep 1.

    Card companies started to take their licenses for granted, as if they would always be there, and competing as if the market were the same size as ten years ago. As a result, collectors received a glut of uncreative, error-riddled, and stale cards.

    Topps is now under the hobby microscope to avoid slacking off, and other card makers are spurred to be more creative if they want to stay in the market. In the short term, that seems to be a reasonable strategy for the market until we see how it develops--grows, shrinks, stays the same, and what percentages of product makeup: high, mid, or low end.

    On a side note, I've been a collector of eTopps for a number of years now, and I am hopeful that the exclusive license will give that program a little more breathing room to reinvent itself.

    If Tornante investors are pushing online, electronically-accessible versions of collecting, then what has been a side gig for Topps could expand to be more interesting and compelling as a central effort.

    Right now eTopps just screams Web 1.0 in execution and design. If they could incorporate more contemporary social web technologies, they might really have something there.

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  10. The card market is continuing to decline in sales. As in other markets, the number of competitors has declined.

    Baseball cards has to be the largest market by far. Does anyone know what percentage of the cards sold are baseball cards? I would love to know. (they are about 85% of our sales.)

    I can not see how Upper Deck can survive this hit. Even if they manage to stay in business, they will probably be bought out by Topps in a few years.

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