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Ebony's License to Grow

Source: Black Enterprise - By Philana Patterson

Johnson Publishing looks to build revenues and exposure by capitalizing on one of its household names

Sluggish advertising revenue growth in recent years has caused some African American-targeted publications to rethink their strategy. One company, Johnson Publishing Co. (No. 4 on the BE INDUSTRIAL/SERVICE 100 list with $498.2 million in sales), publisher of Ebony and Jet magazines, announced its plans to license Ebony magazine-branded merchandise to help the company diversify, build its revenue stream, and attract more readers.

The idea to extend its brand name to products that African Americans would want has been something that Linda Johnson Rice, president and chief executive officer of the company, has been considering for years. “One day I was working out on the lakefront in Chicago and I was asked, 'Where can I get that hat?'” Johnson Rice recalls. Initially she thought of just extending the Ebony brand to apparel.

However, an exclusive agreement with Santa Monica, California-based TurnerPatterson, which develops marketing and licensing programs for entertainment and consumer products, will help identify other licensing opportunities for the Ebony brand name. Home décor; financial services such as affinity credit cards, checks and mortgages; mobile entertainment such as wallpapers and ring tones for mobile phones; Internet technology; music; toys; educational products for children; and home entertainment products are all possibilities.

Even with Fashion Fair Cosmetics, a book publishing division, and the Ebony Fashion Fair traveling fashion show. TurnerPatterson President Debra Turner says Johnson Publishing still hasn't fully leveraged its long history with the African American community.

“(Licensing) is a $108 billion industry and there's no concentrated effort to target the licensing of products toward African Americans,” Turner says.

Licensing can generate revenue and reach new audience segments, says Pepper Miller, president of The Hunter-Miller Group Inc., a consumer research, trend analysis, and marketing strategy company in Chicago.

In 2004, Ebony's advertising revenue slipped 1.6% to $67.25 million from $68.32 million a year earlier, according to the Magazine Publishers of America's Publishers Information Bureau. However, advertising sales at Jet climbed 5% to $30.96 million in 2004, up from $29.48 million in 2003.

Through licensing, Ebony may be able to capitalize on what companies who resist advertising in African American magazines just don't always understand about the close relationship the readers have with the publications, Miller says.

“They ask why should we advertise in Essence when [African American women] are [also] reading Vogue and Elle,” Miller explains. “The thing they don't get is that we spend more time with [African American] magazines. We are looking for more than fashion and beauty tips. We are looking for information for our life and lifestyle.”

Licensing will also highlight the brand name as it continues reaching out to a younger audience, noted by cover subjects like Cedric the Entertainer and Gabrielle Union.

While licensing is a potentially profitable opportunity, it comes with risks. If a product with a company's name is manufactured poorly, for example, it reflects most visibly on the brand name.

TurnerPatterson has successfully handled licensing for some Paramount Pictures Television shows, and is currently developing ideas for UPNs Girlfriends. The firm has negotiated the licensing of an apparel line based on the hit show. A Girlfriends bath and body product line is also in the works.

“No matter [what, the merchandise] has to be of premium quality-it has to be best in class, says Johnson Rice who recently took over the company from her father, founder John Johnson. “I can't do anything less with a product my parents built over 60 years,” she says.

Copyright © 2005 Earl G. Graves, Ltd. All Rights Reserved.

 

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