I got to Capcom as a spunky kid who had worked all of a few months in game testing and run his own anime convention. So how, just a short time after my 2+ year stint at Capcom, did I end up becoming Crunchyroll’s licensing guy? Hint: it involves learning all about the supporting functions of licensing!
When people think of entertainment licensing, the fast-paced world of dealmaking might come to mind. Business dinners. Cutting deals. Big presentations. These are all the “cool parts” of licensing, but what I was hired to do was less glamorous: keeping an eye on licensing contracts, royalty reports, and approvals. I would soon learn that these are just as important to licensing as the actual shaking of hands.
First, let’s level set with definitions of the three supporting functions:
- Licensing Contracts
- Royalty Reports
- Approvals
LICENSING CONTRACTS:
A party (“Licensor“) controls the rights to an intellectual property (e.g. the characters, world, etc.), so someone else (“Licensee“) needs to get permission if they want to exploit those rights. A licensing contract is what governs how long those rights last (“Term“), where they can be used (“Territory“), what they are for (“Category“), and the financial terms (“Advance,” “Minimum Guarantee,” “Royalty Rate“).
When you’re a non-legal person dealing with licensing contracts, you help bridge the parties to minimize legal’s work, such as tracking and filing, making sure products fit categories, and even getting things as prepared as possible for them (such as deal summaries or even draft agreements).
So in my first several months, I worked to learn contracts inside and out.
ROYALTY REPORTS:
Royalty reports keep track of how much money a licensee owes a licensor by looking at activity in given periods (typically quarters). If any money was paid in advance (advance payment) and/or is guaranteed during the term (minimum guarantee), the reports keep track of the over/under as well.
The job of a non-finance person dealing with royalty reports is to get everything organized and in order (such as chasing late reports and payments when they happen) to minimize finance’s time involved.
During my early time at Capcom, I learned to not just be fluent with the reports themselves (Microsoft Excel files), but with where the information from a report flows afterwards.
APPROVALS:
Approvals ensure that whatever a licensees is doing is properly representative of a brand. Typically, product designs at key stages get submitted, feedback is given, corrections (if any) are made, and production keeps going. A good approvals process is flexible enough to allow for creativity, but also sets standards for quality, so navigating it can take a bit of nuance and back and forth sometimes.
The job of an approvals person is to bridge what the licensees want to do with what the creative lead’s vision for the property is (alongside the company’s strategy), and to minimize the creative lead’s time involved (such as by getting a product “as close as possible” before even submitting it).
In those early months, I focused on learning not just the basics of approvals communication, but on the specific visions of different creative leads.
TRANSITIONING TO DEALMAKER:
There is no one specific “event” that got me from being an effective point on the supporting side to dealmaker, but if I had to pick a few, I’d say it were these kinds of things:
- Doing strong work on the supporting side as well as innovating and making things better
- Raising my hand on new ideas, and also having a path to execution on those ideas (versus just making “suggestions”)
- Being curious and learning how other functions worked so I could have fluency in the business
Starting off by learning the supporting functions of licensing (contracts, royalties, and approvals) and then being a strong performer (see above), I believe I was able to make that transition to dealmaker in a relatively quick period of time. Game franchises Street Fighter, Mega Man, and Resident Evil I still love to this day, and am glad I could have an impact on.
It seems hard to believe that I went from the “unglamorous” support side to the “flashy” dealmaking side, but to me, those functions are still just as cool.