Transcript – LIG Audio Podcast 7
Mitch: 0:04 Welcome to Licensing in Games podcast from Layer. I’m very pleased this week to be joined by Timo Olkala. I was just saying before we started an honorary [unclear 0:16]... And Timo said don’t push it. Timo is the founder or one of the founders of Flowhaven. So, Flowhaven is a licensing software. So, really interested to talk to Timo over today and get some insights into what’s going on in the licensing space more broadly. So, thanks for joining us Timo.
Timo: 0:38 No, thank you. Lovely to be here, if anytime we’re talking about games. I’ve grew up with video games. I learned how to speak English from video games. So, there was this actual game by Lucas films or Lucas Studios, called Knights of Old Republic. And I was like... I realized that when you read those sentences that feels like an alien language to me — I was very young then — and actually, the action made differences, so I could actually learn what certain words meant. Like, save a game with, and the longer sentences also, when I was choosing my actions. So yeah, I guess I have to thank Star Wars for learning this.
Mitch: 1:28 Also, yeah... So basically, me as a recent immigrant to Portugal, I need to find some Portuguese video games and just play them all day [unclear 1:39].
Timo: 1:39 There you go. But most... Like the same go for Japanese. Their anime is a fantastic teacher. Same as I was paying [unclear1:49]. And you can put Japanese language into it. And you learn so much. So, maybe there’s a way that you can actually just change the dialogue option and audio option to Portuguese.
Mitch: 2:02 Maybe. Cool! Well, I guess before we get too far into it, it’d be great to get an overview of what Flowhaven actually is. I gave a very brief introduction in the intro, but it’d be great to hear from one of the founders. What is Flowhaven?
Timo: 2:18 So, Flowhaven is license management software. And traditionally, license management softwares have been around 20years. And I would call Flowhaven, the second generation of license softwares. And I think we started the company in 2016. And basically, what we wanted todo, we wanted to put everything into one system for licensing companies. Meaning that you can manage agreements, approvals and royalties in one system, and information is seamless between the teams, and also when it’s shared to licensing partners and from licensing partners, whether it’s related to when we’re dealing with the submission. “Okay, what is this product that is going out there? What was actually agreed? What can be done?” That information flow from the sales to the product team. Also, the same, once the royalties come in. The product team knows what products are selling, which are trending in which territories, which categories. And the whole end point of all of this is that what we see a Flowhaven is that. Our customers have more happier licensing partners, because every everything is in order. They get answers fast. Also, everybody makes more profit. The licensee makes more profit. They make more sales. Retailers are happy. And same as, of course, brand owners are happy that they’re making sales. And the best part, fans are happier, because the products that go out on the market are well thought, are based on also an analytical information, not just a gut feeling that: “Hey, this is something that we should do.” So, it’s kind of becoming a... We try to make like a licensing form— more kind of analog work to a kind of digital machine in a sense and trying not to forget to human elements and creative element that is always needed there.
Mitch: 4:14 Interesting. I think that’s a really good overview. Really good way of describing the transition from analog to digital as well.
Timo: 4:23 Yeah, I have done this few years. And I used to do the pitches based on features. I’m from Finland. So, I’m very functional. And I looking it for like, “Hey, this is the feature. This is what it does.” But then people started to snore in some of the meetings in Vegas and[unclear 04:37]. So, I kind of realized this is not working out.
Mitch: 4:42 Cool! I know you guys raised a $16 million dollar series A in 2021. So, congrats. But we’re keen to hear how things are going at Flowhaven, how many in the team now, what type of customers are you working with.
Timo: 5:01 So, we’re around, I would say, 35 persons right now. We’ve folks in... US is our main market. We’ve also big Europe presence in London, in Helsinki, where we started the company. And then we also have presence in Tokyo, Japan. And we work all around the world with customers. I think we had a joke once that... I think it was in last year’s Vegas Expo. Our marketing head joked that the only place we don’t work is Antarctica. But getting there, maybe, penguins will have the licensing program someday. But yeah... And it’s mostly brand owners. We do work with agencies, and especially like larger agencies also. But mainly, the biggest value comes when you have a team that is sitting around the world in different offices, really you’re managing a big IP portfolio, you need to understand that “Hey, what is expected from me today to do in order to support my team. But also it’s for my licensing partners. Where can I fight more licensing partner? Which license partners are actually making me the money? All these kinds of stuff.” So, usually, we’ll look at a kind of three licensing team members, and [unclear 6:18] that start using for having the biggest ones, we have our running billions of dollars in licensing today.
Mitch: 6:26 Cool. What got you into licensing? It’s an interesting space. And I’m sure you didn’t grow up as a young boy in Finland saying, “Mom, I want to be in licensing.” So how did you start Flowhaven and why did you want to get into this space?
Timo: 6:46 So, I think the typical route as everybody has, is I kind of found myself on the industry. So, I grew up as a heavy metal singer. And we used to do terrible music. But we used to have like a friends brand. And everybody was doing kind of selling merch and stuff. So, I was the one kind of handling our merch and try to make sense like, “Hey, how do you do this?” And kind of learn to know that, “Hey, this is actually the way to make money, because nobody wanted to buy the music itself.” So, actually, maybe, the merch is something that would actually sell and people love that. It makes people feel like part of community. I realized that it’s not enough to just puta logo there. You have to have either something on the back, like saying, like, “Hey, crew of this band,” or something that makes them feel that, “Hey, I was one of the early adopters. I’m one of the real fans of this band.” And that was really interesting to me. And then kind of... Growing up, I, of course, then realized that it’s massive industry was not just related to music, and me and my co-founder, Galet, we met in university and he used to be working with Rovio entertainment, doing the anger licensing program and managing kind of that from the operational side. And we started talking. And he had the idea that, Hey, why hasn’t anybody done this sort of a software that kind of has the modern appeal, has the modern way of working, that it connects or like everything under one ecosystem, rather than being in different modules or in different systems. So, that’s where we kind of starting. And yeah, just started doing it. To be honest, that it was crazy. Like, I still remember that I crashed on his couch, the first six months of the company, because I didn’t even have a place in Helsinki back then. And then we went to first Vegas Expo. I think we had like one customer there. I would knock every door and say like, “Do you want software?” Yeah, a guidebook — do not do it like this. But you gotta hustle, I guess. So, yeah, we definitely did that.
Mitch: 8:52 Well, it’s... So, if you want to start a company in licensing or software related to licensing and things. So, musician is like a fairly common starting world, because Rachit was also a musician, and the way he started Layer was licensing one of his band’s songs into a videogame and realizing like it was all through fax and paper contracts and that type of thing. I mean, Rachit was also working at a tech company. So, it wasn’t like the full-time thing. Musician licensing startup seems to be a career path.
Timo: 9:33 Yeah, it is. That’s one. Definitely, one path. I think one of the common things I see is, licensing is one of the lovely industries where legal, creative, and commercial business comes together. And that’s something I’ve never met before. And that was the most kind of eye opening for me, is that why I fell in love with this, is that I love elements of all of those, but I don’t want to be tied into one of these things, like I love creative world. But at the same time, I want the creative things to make areal impact on the world. I want them to also have a commercial impact. At the same time, I also understand that we have to have common rules on how we do things. So, legal is really important that we’ve, everybody respects their own space in a sense. And it give us a safe place for everybody to do things together, knowing that, “Hey, we have rules that we can trust.” And that was something that I have never seen before. I still remember one of my first exposfor E-3. And I went to pitch a large videogame company. And they’ve executed very nice. It was very understanding hearable pitch from ourselves, like[unclear 10:43] and... But very kind, they said like, “Hey, guys are a little early for us, really interesting what you’re doing, but you should go talk to this and this.” And I was like, “Those are your competitors. Why would you name them?” And they’re like, “Well, in a sense, they’re not actually our competitors, because they’re after different type of consumer, kind of a different age, a different persona.” And that was really interesting for me that actually people are working together in this industry, not just seeing each other as open opponents, but actually it’s more like pleasant team, pleasant industry, trying to make a kind of push for everybody. And I love that. That’s something I love about this industry.
Mitch: 11:30 Yeah, I think you’re the first creative I’ve ever spoken to who also likes contracts. So, it’s interesting.
Timo: 11:37 Oh yeah. I really love. But in order to be in a licensing software space, I think you have to love contracts. But it’s something that is like, “Oh, it’s...” Like, even when COVID started, you knowhow much discussion was between like force close major clause and all that. And that’s very interesting discussions. And thankfully, we’re in a better place right now with the world and with the situation. But it’s always interesting that what are their common rules that we agree to? And do they make sense?
Mitch: 12:09 Yep. It’s an affliction, it’s an affliction. That so this is the first time we’ve had another licensing software provider on the podcast? So, given that you’re living in this space every day, I’m curious to hear, what are some of the biggest trends that you’re seeing from license or generally, at the moment?
Timo: 12:35 Well, I think there’s a couple. I think the one, big one is everybody’s talking about is digitalization itself, that’s like a huge, has been going on for many years now. And it’s often misused word, and has become very boring, an overused word. But what I mean with that is that I think, since many of the consumers and their time are fine to use their time in digital spaces, is that has changed how brands have to be aware of their consumers behavior. So, brands have to realize that he’s not just enough that we’re in physical retail, we have to be also looking at, how do we get to ecommerce? Plus, also how do we get to these ecosystems that are IOTs’. Or we talk about even like, for myself I’m playing video games, I can go to a store, buy my game from there on my device. And it’s very simple for me. And if a brand is not there, they’re missing out revenue, they’re missing out awareness, they’re missing out new fans. And that’s one big, big part of having those relationships, having that network, having that part of your licensing strategy. The other piece, I would say, is then, through kinda two that has been that also, the main one revenue stream doesn’t work anymore. So, if you’re trying todo one thing only, as a brand owner, it will only carry you so far. Meaning that you really have to look at, honestly, what are our revenue streams? And even inside licensing, how are we... At the same time, of course, awareness isa key thing, being served into brand values, that’s really important, of course. But at the same time, you have to think of the end result that, how profitable is this licensing business? Are we bringing the money in? And also, are we doing the right things meaning that, is profit actually meeting the quality? So, even if we would be making money, it shouldn’t be short term. It should be always long term partnership, long term, great products, innovation that brings it and that’s really challenging. I think those two elements have brought a really challenging combination where you have to move really fast, by necessarily you you’re not used to being fast. And also it creates a vulnerability to your brand because you’ve when you move fast, you got to be really careful to do it the right way. Otherwise, you may take missteps.
Mitch: 15:13 Yeah, it’s really interesting. Like, how much do you think that games and interactive are a part of that kind of like digitalization? Is that one of the biggest topics that you know are being discussed amongst licensing souls? And do you feel as though it’s like everyone wants to be in that space now, and but they just don’t really know how to doit, or?
Timo: 15:40 Yeah, I think like, Yeah, everybody wants to be there. The thing, they don’t necessarily say that, but I think everybody sees value of the space of video games of all of that. And I think one of the biggest values of video games is the immersiveness. Like, even if I play a video game, I get lost into that world for hundreds of hours, sometimes, unfortunately, sometimes thousands of hours. But that’s, yeah, my family isn’t happy sometimes. But it is very different if you compare it to a movie, for example. Movies, two hours, that limits a lot of what you can tell how commitment, how much commitment you can create. As well, the reason why anime has been, I think, in a huge movement of anime, a huge growth of anime has been that they’ve been able to build those 500 episodes, 400 episodes, and that gives you a lot of room to create a fantastic story based on those among us. And I think video game is very similar that there’s so much room to do the things and to do that immersiveness.
Mitch: 16:46 Yeah. And like, do you see... What are some of the opportunities that you see in that space for license holders? And, you know, are there any opportunities in that space, maybe you think of being kind of under capitalized or not capitalized on well, they license souls?
Timo: 17:04 Yeah, I think. Well, it always comes back to the licensing program strategy, what are you after? What cut? What is the end goal of licensing program? Is it to create awareness, find new bands, new fanbase that you’re trying to attract, trying to expand the current and sort of find new categories that, you can maybe, create more revenue? That’s really important for us to understand, I think, then it’s just a question of how you want to do it, it is challenging when you start to think that you want to go after mobile games, kind of more casual, even hyper casual games that are sometimes, might not be for some gamers, but at the same time, for most of the gamers, daily gamers, that’s a huge thing, they love those games, they want to play those games. And that’s a big component. One component is also the that it’s big, if you do a video game like, an actual new kind of AAA rating, videogame. Like it is very time consuming, it takes a long strategic moment. So, it’s very hard if you have a fast moving license program to do that. Because it’s very hard to predict where you will be in three to five years. So, I think for evergreen brands, like standard video games are fantastic, then looking at kind of more character properties that are more kids entertainment, they’re like a shorter games are good things to do. I think some of the browser do a fantastic job on that front, where necessarily you’re not creating a game that lasts 200 hours, you’re creating a game that lasts 20 hours or 10 hours. But it’s real entertainment for the parent and for the kid. So, it’s like a mutual common time. The one element that I see mostly talked about right now, I think has been especially last year was the kind of gambling side of things. So lootboxes, skin purchases, all these kinds of stuff. And that for many brands is kind of a, I would say gray area right now to, how to handle that. At the same time, they want to be true to their brand values, but they want to be involved in these universes that has been created. But it’s very challenging because you know, these games their whole revenue model is based on this that, “Hey, they’re free to play.” But then for those fans that want to get more out of it, they purchase things. So fine line in those, but everything comes back to like how is your license process. I hope to see kind of more open discussion. As we are fair about this that, “Hey, what are the best practices that other brands have done?” So, the fans in the end could get the best games. There’s a huge risk for a video game entertainment that if you know, people are too afraid to make any games or take that big investment that can also really hurt the industry. So anyway, brands and video game companies can come together openly and say like, “Hey, what has worked, what has not worked and look at that.” And then kind of find best ways to work together. That’s really important.
Mitch: 20:31 Yeah. When you said, you know, the biggest topic over the last year, I thought you were actually going to say, you know, Metaverse, web three, which is also another thing that I think license holders don’t really know how to approach...
Timo: 20:45 I don’t think anybody knows how to approach those. That’s the challenge.
Mitch: 20:50 Yeah think it’s kind of tied into this, this concept of risk, right? For license holders and the unknown. Do you hear anything around loot boxes, or how games are monetizing or around these kind of more risky topics? What is concerning for license holders, when it comes to games and the interactive space and what are they saying about those things?
Timo: 21:17 Well, it’s the longevity of those spaces. It’s the same as I my personal investment, what I always do, I think, okay, 10%of my staff, my own personal savings, I can put to a little bit more riskier investments, but rest I keep in kind of a more safer place. I think that’s a very valid logic to do in licensing space to think about like that, you’re not exactly sure are these, some of these companies, some of these innovations, they’re gonna be the big trendsetters there say, said that they will be in the next five years. So it’s got to do to have a little bit riding there, but not too much. And definitely not in a way that would hurt your brand long term wise. At the same time, then, what I think why I put still 10% to that personal investment is that those can yield fantastic results. Like that’s the biggest thing that everybody looking at right now, is that even if you make one successful video game licensing program, or extend your IP there, that can be the most successful licensing product you have. And it is not only that you are creating that one video game license, you are creating, you’re extending the whole brand into a new universe. Your fans live in that universe then you can just keep extending that. And not just with sequels of the game, but also DLC’s, characters, more stories, season pass, there’s so many things you can do. And write, create content around that. And then tie that into also physical products. And that’s something that is like a massive, massive opportunity. And I think the like web three and Metaverse are then a totally different topic because that’s again still really like, on a place where nobody knows how that’s just gonna end up. I was talking Web three in sales sustainability licensing last autumn, I said, Honestly, to be honest, nobody knows where this is going, probably in the world at least I don’t. What I’ve like understood and being evolved it’s somebody has an idea. Here somebody has an idea somewhere else but in some format web three is gonna happen, there were many companies that laughed at internet, laughed at like social media. So kind of went web two developments and now like yeah, I guess some of the persons who invested into that growth are getting the last laugh but yeah, just gotta be really careful when playing around with your brand values and your IP there because losing the trust of fans, that really hurts them. Yeah, in those cases if I always sell browns, if they ask me like how should we go about, I say, ask your fans, go to your fans, like go into more committed fans, do not come to me, do not come to anybody else to ask. Your fans know kind of what they want and if your fan base is... You’d notice that they have a request that they are actually spending their time online, they’re spending their time in video games like, you should be there. Because you’re doing also a not a service to our fans by not being there.
Mitch: 24:45 Okay, and as brands license, so as a moving more towards digital spaces, games interactive. What are you seeing there in terms of share of licensing revenue like from your car customer base are you seeing that increase like, you know, any idea of what percentage that represents of total licensing revenue now?
Timo: 25:07 Well I think, like, it’s very hard to say because every license holder as a very differently created license program. You looked at corporate brand versus character entertainment brands, then you look at just like purely video game brands that started from the video games. Again, very different structure very hard to put those into line, you just have to break them down basically, by category, kind of where the brand started from. But I would say overall, the, the Sakti... Like everybody has. Like it more and more is being tried on this space, 100%. And I think the biggest change I’ve seen is how close the movie, they’re TVs have gone to video games, you know, video game companies are doing, extending their own IPs to TV and movies. Butat the same time, brands are definitely extending their stuff to video games, that’s a really powerful combination, because you often have, you already have a proven track record of having that people want to get deeper into this world, but they really want to get more out of it. So, that’s a great way, video games are a really great way to achieve that if you’re at like a movie and TV person. But overall, there has been also some cases that we are fortunate, I’ve heard a few cases where, we’ve worked on a video game, and it just didn’t work out. Like it just wasn’t there. I think one of those things that is just got to be well thought plan of all you’re going to do it. Either, it’s coming out in three to five years or whenever, depending on what type of game you do. So, you got to understand that is, our brand gonna still be the same, are we expecting that our brand is going to evolve into something else. Also, knowing that some of the characters will be locked on how they look like. Because if you have a video game coming out, years to come, you can’t really drastically change your characters overnight. You got to be really careful when doing that. So, that poses challenges you. But if you have our well thought license poker, where that one piece of it will be video game licensing. And you can time that with your partner, and they have realistic expectations or proven track record as a production company, I think that should be a vital part of the licensing program.
Mitch: 27:46 Yeah, and entertainment, like you said, it makes a ton of sense, right? Where the worlds of like film and TV and games, it’s all entertainment, right? It’s all merging. But like outside of film and TV. You mentioned corporate brands, consumer brands, these brands that are typically more merchandising? Yeah, you’re getting coffee cups and lunchboxes and whatever. Are you seeing more of them enter the space of games for the first time?
Timo: 28:17 And yes, and it is... One of the things I love is that it is not really like a traditional way we see game like, how I see games, I can’t speak for anybody else. But how I see games, I see games as kind of purely entertainment. But suddenly you might have a loyalty program that is actually gamified app, that starts to bring you more into actual like a game inside an app and you might be a loyalty user of a retailer where you go to shop and then you get your branded a little game with that corporate brownie[unclear 28:51] since you’d be buying their products. I was like, “This is amazing!” And then you can unlock like, coupons, discount coupons to buy the actual product. However, this is amazing stuff. So, stuff like that can be very powerful, reaching the consumer in a way that’s very surprising. Like corporate brands are one of the brands especially during these tough economic times that have the most potential really, because their consumers will be there. These are often like daily used or normally use products and it’s a very strong fanbase. So, any way you can kind of bridge that gap and also find them in the digital space, I think there’s a massive potential there for that. So but traditional making like sometimes you see simulator games or driving games and stuff like that, those are definitely like great possibilities sports games. But on top of that, I think there’s a lot of kind of things that are not get used that could be extended into like mentioning those apps and how you can also restore kind of casual daily gamers.
Mitch: 30:07 Yeah, I think it’s really interesting to see some of the things that I would have never considered. So, I would have never thought about going into a game before I started working in gaming, to see confectionery brands, or corporate brands kind of be integrated into an existing game. And that just kind of intuitively make sense when you say it. So I think like, that’s happening more and more, and those collaborations, they’re just like, the ones that work are the ones where you just like, that’s a good fit, I can see why someone on that licensing team wanted to do that. So, yeah, it’s really interesting to see that start to happen. And what about Flowhaven, specifically? What are you guys doing on, you know, to cater for more of licensing in games? Is there anything that you’re building specifically for that kind of use case?
Timo: 31:05 So, I will just say specifically, bills. So it’s definitely like how always see supporting our customers and their license program system, we want to be supporting them wherever they are kind of taking you to. And we want to support different types of licensing. And kind of have a... We love those programs that have kind of different agreements in very different type of where there’s not just hard lines, soft lines only but are extending into multiple different areas, like digital space. So yeah, those sort of like, what have we kind of built the whole Flowhaven software for that kind of game licensing, I think the biggest part where we’ve been helping is, just making sure that whenever those approvals hitting they’re manageable, there’s like a big project, they’re a big project. So, we have a that you can kind of have a re-edit submissions, you can link different submissions together, make it like a project management tool, in a sense that you understand that, what are we doing right now? Kind of how far we are with this process of getting our brand out there into a game and all this kind of stuff. That just makes the actual brand work and brand collaboration just so much easier. Because especially on a big project like that, if you’re using emails and nexos, or using a system that necessarily isn’t capable of handling these complex workflows. That just becomes a lot of work. And you might find yourself not actually reaching the deadline, but going far over it and going far overbudget or so. And then that unfortunately, hurts a lot both sides. So, the actual licensee and the licensor. So, nobody wishes that. So, just from the effectiveness side, we’ve been helping there. And one big part we’re doing, we just released analytics for licensing. So, what that gives is basically, very dynamic way of seeing like, how much is this product selling? Are we going to reach the person to be in time for the market for release, because you’re not going to release only the video game, you have a big program around that, release emerge, releasing any type of events that you might have, or sponsorships that might happen. So there’s tons of things happening. So, you want to make sure that it’s like a well-oiled machine when the port of it stay, digital store, everything is ready, and fans can you know, use their money to support you?
Mitch: 33:47 Yeah, I think it’s a good point. Like the analytics is, as we see the space evolve really important. Because if you’re a brand who’s like dipping their toe in the gaming space for the first time, or if you’re a well-established brand in games and interactive, and you’re just trying something new like, how do you validate that that’s working? And I think, you know, when we speak to gaming studios, they have like, really clearways of quantifying that, like we saw with this much lift in user acquisition or retention or whatever. On the brand side, it sometimes feels as though it’s like it’s harder to measure that. So I think that’s really important, right?
Timo: 34:30 Yeah. 100%. The good thing is that felt equalizing space like everybody on their security level, especially on the manager level, and who’s been working for years are very good at what they do and know this space really well. So, they know kind of, what are we actually expecting our brand? What is our brand value? Basically, what are we expected to forecast from these type of deals? So, that’s where we have value. I think one of the things that’s also that, one thing to benchmark, if you’re new to this space is, look at the other successes, talk to the industry people, what have they seen? What are the common mistakes that they’ve done? Kind of key learning points. There are a lot of great mobile game companies that have tried their own licensing program. Okay, why did that work? Why did that not maybe work, all these kind of questions. So, I would just say have an open dialogue with companies that have done that before. Also, the production companies, video game companies, they’re really good at what they do. Like it is one of the most challenging industries in the world, to create, be that creative, and create that kind of whole universe out of nothing, basically, just from code. And they are very, usually a well-oiled machine, when it comes to their business models. So, I would say also talk with them, have a really good dialogue before going, taking the deep dive into the, like, paragraphs we’re planning to do. Because sometimes I hear that some companies are like, Hey, we’re gonna do this, like, awesome game open world is gonna have everything and then he go like, “Yeah, but you know, that’s a big investment to do.” And if you’re trying to go like RPG style, so why don’t we take a step back, and let’s try the market with a smaller, for example, a mobile game that’s more like casual, has kind of basically simple logistics. And if the universe is like, let’s jump in to a bigger one, let’s start building that, towards that kind of a massive game experience.
Mitch: 36:40 Yeah, and I think walk before you run, right? I don’t even think you need to create an entirely new game first, you could just... Let’s see if we can just drop out brand into an existing game that’s like an object that people can buy. Let’s see, is that the right audience for us? And then maybe we could do something more with that game and iterating and testing it. I think it’s a good approach.
Timo: 37:04 Yeah, and one of the key things there is that if you’re afraid that you don’t want to do that with your main IP or with you know, to risk if especially on those tests to kind of, you know, scenarios. One way to do is, use a little bit lesser known IP from your portfolio, that’s something I see a lot. And everybody sees a lot of course. If you walk in, especially Battle Royale games, you see somebody’s character, you didn’t even realize that, okay, this is not that well known, but at the same time, wow, it’s yielding great results. And suddenly if that’s a win, suddenly that also character, people who have fans want to get more. So, finally goes into publishing deals, maybe you get them into merch deal. Autonomy has its own loophole. So, there can be real win-win situation in those kind of things. But again, like really love to see more and more collaboration on video games, that brands could put themselves into video games, but also that video game companies start using their own brands for licensing more. But at the same time, again, reminding you that always leaking that back to brand will be your brand lysing strategy like that. Short term gains will never win those long term gains when it comes to like your brand value.
Mitch: 38:30 Yeah, and I think this topic ties into the next question I want to ask which is, there’s more complexity and inherently more risk when it comes to games versus traditional hotlines. And these types of licensing that... I have been around for a long time and are kind of well understood now, traditional consumer products? Where do you think things get stuck the most when it comes to games? Is it licensors understanding the space in each proposal or the design approvals? And do you have any recommendations for what works best in this space versus consumer products and what you see the best brands and licensors was doing?
Timo: 39:21 That’s a loaded question. Let’s start somewhere. They’re like really loaded up. So, I would say that the one thing like, definitely there’s like some licensing experience always have life there. They wish that they know the best. It really depends on the individuals like, what are their kind of... What is their experience with the brands but that’s definitely not stopping everything. I think there’s the one thing that has been a common very, is that many people have seen that there’s been failed projects. And sometimes maybe that information released and carried over to, why that project failed. And also that it’s good to remember that, video game companies also learn from those fails. For many companies first time they’re working with a big brand, they have never... They don’t even know that, Wow, there’s a lot of control, the brand owner takes over their brand, we didn’t realize how important this brand is to them. And that sometimes, can be a surprise for, when you start to partnership for a video game company. And but I think the one thing is just finding, I call that finding two champions, meaning one from each side that have a great dialogue, understand each other, understand that we are building a creative product together. But it needs to be within our brand values, within what our fans expect. But we also understand that, some things are not possible to do, or are possible to do from a creating a video game standpoint. So, I would say it’s more like architect designing a building, and then somebody actually building it. And they’re meeting each other that like, what is actually possible? Architect might design the most beautiful building ever, then the actual builder comes to say, like, nobody can build this, there doesn’t even exist this kind of material to build this. And then you start to work together, Okay, but how can we get as close as possible? So, that’s one big piece, having those both sides open dialogue. I think, then the other front is that... Few times I’ve heard is that I’m waiting for a good time. So right now, it’s not the time, we’re looking at how the space evolves. And in my opinion, that’s a little bit of a mistake because that digital space is one of those spaces that especially young kids and generations are growing up. And if you’re not there, you’re missing out. And you might be saying, “That’s fine.” Like we’re still in other places, and you don’t necessarily have to find it, we’re not in digital. And I think that’s not the way, you should have a massive awareness, you should be trendy, and make sure that you are reachable for your audiences. And that’s something that I hear a lot that sometimes you don’t want to make risk. But yeah, big risks have big opportunities. I would say maybe that’s the best way to put it. I don’t know that there was a lot of questions. So did that Mitch, answer at all.
Mitch: 42:38 I asked them really poorly. So, I think that was a good answer. But I mean, specifically around creating a game. What do you see are some of the biggest complexities involved in that compared to creating merchandise, for example? Like, where do you think it falls down the most?
Timo: 42:59 Yeah, so it really so... Okay, two things. So one is that it’s like, especially for game during a game itself, just very complex workflow, very big project, managing that project from the approval side, that’s a very challenging task. It’s the same with goes for theme parts. If you’re building a theme park, it’s a big project to get it done and get it done correctly. And then the second piece is definitely that, how do you tie into the brand itself, and what the kind of license products look like and the game itself. So, this is really sometimes restricting for the video game company or the production company, when they have to follow exactly what the brand is, and they can’t change that. And it might be for a creative person, they look at their character and go, I actually think that this character would be much better, the store was much better if they do this. But suddenly the merch product that has been planned on the side, that actually creative person from the video game company didn’t even realize, that actually has something relevant to that. And let’s say they change a hat, or they change up face, or costume of their character, and suddenly the merch is something that was with the old costume, it fails. So, that’s why it’s really... You have to be really careful when working on those collaborations and it is restrictive for production company. But at the same time, you get to do something with a really cool brand that has an already existing audience. That’s a big value.
Mitch: 44:38 Yeah, and I think you answered it before as well with like, their relationship is really important to counteract that because it’s a creative process, you’re creating something different. It’s not like a production line where you’re creating, mugs or hats or merch or whatever. It’s there are boundaries that can be pushed. And I think, like you said, if you’ve got two parties who are communicating about that, and having that open dialogue, then it can make the process a lot easier. Cool, I answered my question. That was really, really long question, I will admit. Cool. So, I know we’re kind of coming up to time. And but before we wrap up, I just wanted to talk about what’s next for you and the Flowhaven team. What’s, what’s coming up this year? What are you doing?
Timo: 45:35 We continue as we’ve been doing. So for us, like the whole idea that is bringing those brand owners together, we create agents, agents bringing closer to licensees, as famous brand owners close to licensee, that’s our full focus. Anywhere we can do to support the industry to make the kind of operationalizing management easier. The one challenging thing, not just me, for all kinds of licensing is that, it is very heavy when it comes to tasks. Meaning that like, for one person, it’s a small team managing hundreds of partners globally. And you have to keep everything on track, you have to make sure that everything works, and that nothing kind of falls or goes wrong. And I would call this like, trying to control a falling snowball, that is becoming bigger and bigger and bigger and bigger. So, you really want to make control. And that’s something that we see that we try to help our customers as much to control. And it’s gonna be even more challenging now, with of course, with digital space, ESG, all this kind of stuff. But in the end, it’s all like, we would take a step back and realize why we’re doing this, why the whole license industry, access is that there are fans who want this, we’re in a verge of something really cool happening. That is that these fans, where first time ever we have a massive opportunity to reach these fans in multiple platforms in multiple places. And getting closer to them. And that’s a real opportunity, real value that can bring a lot of joy to people around the world. Also create, make more money from everybody in the supply chain of those products. So, I’m very hopeful when it comes to licensing and if you look at the statistics, just from analyzing industry growth, it is just staggering. Like, like how we grew up from seven days to 2000. Then 2010, you start to see this massive ramp from 180 billion to where it stands right now. And it is just massive growth that has happened, in the last kind of 10 years. I don’t expect that to change. I actually expect that to be even faster.
Mitch: 48:00 Yeah, it’s a good space to be, good space to be in. Well, yeah, appreciate the chat today. It was really interesting to get your perspective on the industry and then more specifically games. So thanks for coming up.
Timo: 48:13 Yeah, of course. Great to be here.