With a worldwide box office in excess of $1.2 billion, Frozen is the second highest grossing animated movie of all time. It also won two Oscars and made a generation of children go crazy for talking snowmen. As a result, there was little surprise when a series of spinoffs and an eventual sequel followed on from the movie’s initial success. The nascent franchise sees a global return on 22 November 2019, when the second chapter is released in cinemas. Predictably, the success of this series also generated a rush of fake Frozen merchandise, and the second movie will likely provoke the same.
Far from being specific to one property, however, increased counterfeiting activity around franchises, animations, and features for younger audiences has become commonplace. This article looks at some of the reasons why this section of Hollywood has become so attractive for producers of fake products.
While we do not know exactly how much revenue is lost to counterfeit products bearing the IP of movie studios globally, the products are so wide ranging (from clothing to electronics and beyond) that they appear to make up a sizeable amount of the estimated $509 billion lost to the black market each year. The pertinent seizure data we have separates products by industry, several of which do fall under the merchandising umbrella. We have suggested previously that for the world of film-related merchandise it’s reasonable to assume approximately 1.7% of products could constitute an IP infringement.
The merchandising rights attached to movie franchises such as the How to Train Your Dragon series now generate revenues that can enter billions of dollars. The extensive range of counterfeit products available online for this series give a good visual perspective on how a potential 1.7% of counterfeits diverting official sales may also translate into a huge amount of lost profits.
Modern ecommerce platforms make it easy for IP infringers to take a registered trademark and apply it instantly to a wide range of products without having to develop their own lines or to hold stocks. Websites such as Redbubble, for example, are a real problem for brands as their users are free to offer countless products which are then produced physically by the website itself, meaning that they can abuse the IP of a brand without ever even paying for any production.
Why are movie franchises, animated films, and properties for children so popular with counterfeiters?
The appeal of these particular forms of entertainment is multiple yet much of it seems to center on exactly who the audiences are. In the example of superhero franchises, it’s long been observed that the creation of separate universes has led to the establishment of fan subcultures who consume more examples of related merchandise than for other movie genres. While it’s easy to find endless listings for products branded with Batman IP, finding similar examples of Rom-Com merchandise is much harder.
This seems to be because those superhero worlds have a deliberate and recognizable iconography which is easily reproduced by counterfeiters, but also because the audiences consuming those products have a pre-established desire to seek out branded merchandise which may or may not become valuable over time. Ever since the release of Star Wars in 1977, the accumulation of movie-related collectables that gain in value has become a market in which many people are willing to invest. The very rarest of the original Star Wars toys, which may have been sold for a few dollars upon release, can now be worth a five-figure sum. This kind of desire to purchase a very wide range of branded products helped to set up and perpetuate merchandising campaigns which have accompanied successful (and less so) franchises ever since.
As a result, movie franchises and certain genres give rise to many more branded products across a wider spread of categories. This may include very disposable products aimed at children, the inexpensive nature of which are perfect fodder for counterfeiters to copy because the price difference online looks less obvious as a marker of what is genuine and what isn’t. This is also true when there is a much higher number of physical products in the market. When a brand only produces a very small number of products it is much easier for consumers and businesses to discern what is genuine and to take action, but when the product range is very wide then it can become confusing, which gives counterfeiters more space to list their own fake goods.
Additionally, the highly visual nature of animated films in particular means that counterfeiters have become more attracted to them as they can add designs and copyrighted images based on characters rather than relying solely on trademarks. This may be useful for them if they believe that it will be easier to sell copyright-infringing goods that are harder to enforce against. However, the use of visual properties also establishes a wider international market for them without having to rely on translated words for each territory. An animated character looks the same in any country and so counterfeiters can spread their sales even wider without having to alter the products.
Finally, it can be hard to foretell in advance which characters will prove to be resonant with audiences, but once they do there may be a ready-made set of consumers for a number of subsequent years. As the lead characters in these films often don’t change drastically, it is possible for infringers to keep producing the same products over several years and the only difference they have to make is to relist their fakes with an updated title which reflects the newest edition of a movie.
If a company or brand finds itself with a runaway hit that may be generating income (and counterfeits) for years to come, how can it protect itself? Taking preventative measures by registering trademarks and establishing copyright is crucial. So is strategizing on what products will be sold, and in which markets. This is also key as it will allow everyone across the supply chain to know exactly what is and isn’t permissible. Having this level of transparency is important as it means you can plan your international trademark registrations better and that if you choose to work with an online enforcement partner the process for monitoring and enforcing against fakes will be even easier and yield greater results.
For more detail on how Pointer can help you defend your brand and your business, contact us today by sending an email to firstname.lastname@example.org and start the conversation.