5 OCT 2023

Why is Disney the undisputed leader in licensed merchandise?

Whether it is Mickey Mouse t-shirts, Star Wars Lego sets or plush dolls based on the latest Pixar hit, licensed merchandise is a billion-dollar business, and The Walt Disney Company is the undisputed leader in this category, Statista said in its latest report.

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Whether it is Mickey Mouse t-shirts, Star Wars Lego sets or plush dolls based on the latest Pixar hit, licensed merchandise is a billion-dollar business, and The Walt Disney Company is the undisputed leader in this category, Statista said in its latest report.

With its vast universe of intellectual property, the media and entertainment giant owns the rights to many of the world’s most beloved fictional characters, including Mickey Mouse and friends, Spider-Man, the Avengers or Elsa and Anna, just to name a few. According to Statista, these characters are not merely entertainment icons: they are powerful assets that drive consumer engagement, loyalty and, ultimately, sales.

Last year, Disney reported US$5.3 billion in revenue from Consumer Products – for example, licensing its IP to various manufacturers, game developers, retailers etc. and from selling its own branded merchandise. While that amounts to no more than 6% of the company’s total revenue, the segment accounted for 23% of its operating income in 2022, thanks to an impressive operating margin of 53%. The licensing business in particular is practically free money for Disney, as it provides the company with a steady stream of income at little to no costs.

“Leveraging its intellectual property in almost any conceivable way – through toys, apparel, games, accessories and so on and so forth – provides Disney with a very steady and reliable stream of revenue. Even in 2020 and 2021, when Covid-19 disrupted many of the company’s core businesses, particularly theatrical entertainment, parks, resorts and cruises, its consumer products business barely budged, despite widespread closures of the company’s own retail stores,”  said Felix Richter, from Statista.

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