Published by Wanda Rich
Posted on May 9, 2025
Brand licensing has moved far beyond its traditional roots of logos on lunchboxes or cartoon characters on school supplies. Today, it's a sophisticated strategy that allows companies to expand into new markets, product categories, and demographics—often without assuming the full risk or overhead of launching something alone. Licensing is a flexible growth tool, enabling rapid innovation, cultural relevance, and customer trust through collaborative brand partnerships. From Netflix-branded merchandise to Dunkin’-inspired cereals, the scope of licensing has shifted into a more integrated and revenue-driven model.
What Is Brand Licensing Today?
Brand licensing is the practice of one company (the licensor) granting another (the licensee) the rights to use its intellectual property—such as brand names, characters, logos, or trademarks—on products or services. Licensing goes far beyond logo placement. It includes brand extensions, co-branded products, and broader intellectual property (IP) monetization strategies that turn intangible assets into long-term revenue streams.
Modern licensing is not a passive exercise but a proactive brand-building strategy. For instance, the LEGO x Adidas collaboration was not just a novelty sneaker but a cross-industry partnership that blended brand identities and created storytelling opportunities across fashion and play. Similarly, Netflix’s expansion into licensed merchandise—including toys, apparel, and collectibles for “Stranger Things”—demonstrates how content platforms are evolving into lifestyle brands.
According to the 2024 Global Licensing Industry Study by Licensing International, global sales revenue from licensed merchandise and services reached $356.5 billion in 2023, reflecting a 4.6% increase over the previous year. This steady growth highlights the increasing role of brand licensing as both a commercial engine and a cultural strategy as companies look for lower-risk, faster-to-market ways to expand their reach.
The Business Case: Why More Brands Are Licensing
As competition intensifies and consumer attention becomes harder to capture, brands are seeking smarter ways to expand their presence without overextending resources. In this environment, licensing has emerged as more than a marketing play—it’s a strategic lever for growth. By forming partnerships with complementary companies, brands can expand into new categories, reach fresh audiences, and generate additional revenue streams. The following are three key reasons why licensing is accelerating—and how successful brands are turning it into a competitive advantage.
Cost Efficiency
Licensing enables brands to enter new markets or product categories without the upfront costs of developing, manufacturing, or distributing products. The licensee assumes those responsibilities, while the licensor contributes brand equity and recognition. A standout example is the e.l.f. x Dunkin’ collaboration, where Dunkin’ extended its coffee-and-donuts identity into beauty through a limited-edition makeup collection. e.l.f. handled product development, packaging, and retail rollout, allowing Dunkin’ to expand its lifestyle appeal with minimal operational risk.
Speed to Market
Licensing allows brands to move quickly—launching new products in sync with consumer trends or cultural moments. The e.l.f. x Dunkin’ collection was timed for a spring release with playful packaging and coordinated promotions, capturing seasonal excitement and social media buzz. Similarly, the Balmain x Barbie collaboration launched a high-fashion capsule collection alongside Barbie-branded NFTs, enabling both brands to tap into nostalgia and emerging digital retail trends at just the right moment.
Trust Transfer
Consumers are more likely to try a new product when it carries the name of a brand they already trust. This concept, known as 'trust transfer,' is a key aspect of successful brand licensing. The e.l.f. x Dunkin’ and Balmain x Barbie collaborations worked because each paired a bold, unexpected idea with well-known, credible brands. That familiarity helps lower the barrier to trying something new—whether it’s donut-themed eyeshadow or fashion-forward doll-inspired couture.
These collaborations demonstrate how licensing allows brands to act agilely while maintaining brand integrity. By aligning with trusted partners, companies can enter new spaces, delight consumers with unexpected offerings, and, importantly, reduce the risks associated with in-house innovation—all while amplifying reach and relevance.
Who’s Licensing Whom? Sectors Leading the Trend
High-profile collaborations like e.l.f. x Dunkin’ and Balmain x Barbie have captured headlines for their bold creativity—but they’re far from alone. These partnerships are part of a broader movement as companies across industries embrace licensing to generate buzz and build new business models.
Fashion & Footwear
From the launch of the Nike x Tiffany & Co. Air Force 1 1837—a premium black suede sneaker accented with Tiffany Blue® and sterling silver—to Crocs’ unexpected run of pop culture tie-ins with franchises like Shrek and Pokémon, brands are tapping into nostalgia and fan loyalty to sell through limited editions at scale.
Food & Beverage
The food sector is licensing beyond the plate. Kellogg’s has licensed brands like Pop-Tarts and Froot Loops into cosmetics, apparel, and novelty goods. CPG crossovers—like Heinz x Absolut’s tomato vodka pasta sauce—show how licensing can connect heritage brands in entirely new categories, generating PR value and shelf appeal.
In a more youth-focused example, General Mills partnered with K-pop group TOMORROW X TOGETHER (TXT) to release limited-edition cereal boxes featuring collectible cutout standees of each band member. Each box paired a TXT member with an iconic cereal mascot, such as Lucky the Leprechaun from Lucky Charms or the Silly Rabbit from Trix. The collaboration brought fresh cultural relevance to General Mills’ brands while tapping into the global popularity of K-pop fandoms.
Gaming & Entertainment
Video game IPs are proving especially ripe for licensing. Minecraft, Pokémon, and League of Legends have all evolved into multiplatform licensing powerhouses, with merchandise spanning toys, apparel, publishing, and even theme parks. Meanwhile, Netflix’s licensing push continues with a range of show-based products, from Squid Game to Wednesday.
Technology & Home Goods
Tech companies are increasingly leveraging licensing to humanize their products. Motorola’s licensing deal with Pantone helped create color-driven product differentiation, while licensed smart appliances, like Star Wars-themed Instant Pots or Hello Kitty mini-fridges, turn functional items into collectibles.
Across these sectors, licensing is helping brands stay culturally relevant, expand product portfolios, and reach consumers in unexpected moments—from retail shelves to digital storefronts. It’s no longer about one-off merchandise—it’s about building an emotional connection through creative brand extension.
Best Practices for Brand Partnerships
Effective licensing isn’t just about putting two logos together. Strong partnerships are built on clear brand alignment, product fit, and attention to execution. The most successful deals follow a few key principles:
A good licensing match starts with brands that appeal to the same customers and hold similar values. When there's a natural connection, the final product feels more authentic to both audiences.
Most licensors provide style guides and require approvals to keep messaging, colors, and tone aligned across licensed products. This ensures that the brand is recognizable and well-represented, even in a new category.
Licensed goods still reflect the original brand. That’s why quality control—and ensuring the product makes sense for the brand—is essential. A mismatch can quickly erode trust.
Many successful licensors have worked with the same partners for several years. That consistency builds better collaboration, stronger products, and a loyal customer base.
Peanuts: A Case Study in Licensing Discipline
Peanuts Worldwide is a clear example of long-term licensing done right. Now in its 75th year, the brand has built a global licensing program by staying true to its character-driven storytelling and carefully choosing partners who respect its tone and identity. It has expanded into everything from apparel to home goods without losing the spirit of the original comic strip—a model of consistency and smart licensing strategy.
The Future of Licensing: Platform-Driven and Data-Backed
Brand licensing is undergoing a digital transformation driven by advancements in technology and data analytics. Modern platforms streamline operations, provide deeper insights, and enable more strategic decision-making.
Streamlining Operations with Licensing Platforms
Platforms like Flowhaven and Brainbase are changing how brands manage licensing programs. Flowhaven offers tools for design approvals, royalty tracking, and agreement oversight. Brainbase provides solutions for contract workflows, product approvals, and revenue tracking—giving licensors and licensees a more organized way to scale.
Leveraging Data for Strategic Insights
According to BrandTrends, more brands are using consumer data and trend forecasting to inform their licensing decisions. This approach helps licensors understand where their brand fits next and how to optimize product-market fit in new territories or categories.
Integrating AI into Licensing Strategies
Licensing International reports that AI is already being used to automate licensing tasks, track compliance, analyze deal performance, and support creative development. The integration of AI promises faster deal cycles, more accurate reporting, and smarter forecasting.
Brand licensing is no longer a sideline activity—it’s a powerful engine for growth, relevance, and consumer engagement. As platforms, partnerships, and predictive tools continue to evolve, the most successful brands will treat licensing not just as a marketing tactic but as a core strategy. The future of licensing belongs to those who can balance creativity with consistency, data with instinct, and collaboration with control.
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