🇺🇸United States

Poor portfolio and pricing decisions from lack of licensing visibility

3 verified sources

Definition

Executives make sub‑optimal decisions about which categories, territories, and partners to prioritize or exit because they lack consolidated data on rights, performance, and compliance, leading to overexposure in low‑value segments and underinvestment in higher‑margin licensing opportunities.

Key Findings

  • Financial Impact: Research on contract and revenue leakage highlights that lack of internal awareness and misinterpretation of pricing and contractual changes is a key driver of leakage affecting 42% of companies, implying multi‑percentage revenue impact from misaligned pricing, missed renewals, and under‑optimized contract terms.
  • Frequency: Quarterly
  • Root Cause: Licensing data is fragmented across PDFs, emails, spreadsheets, and legacy trackers, preventing accurate, portfolio‑level analysis of royalty performance, term structures, and rights coverage, so strategic decisions are based on partial or outdated information.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Marketing Services.

Affected Stakeholders

Chief marketing officer, Head of brand/licensing, Finance leadership, Strategy and corporate development, Product and category managers

Deep Analysis (Premium)

Financial Impact

$100K-$1.5M annually from continued vendor/category relationships despite poor performance hidden by licensing complexity • $100K-$1M annually from continued investment in low-margin or restricted-availability product categories • $100K-$1M annually from in-store compliance violations, vendor chargebacks, reprints, and delayed seasonal campaigns

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Current Workarounds

Account Director pulls licensing data manually from multiple systems; Analytics Manager creates custom spreadsheet; incomplete visibility into partner profitability by category/territory • Asking via Slack/WhatsApp if specific branded content can be used; guessing based on past approvals; reusing assets without re-checking expiration • Asks Slack/WhatsApp if character or brand assets can be used for post; guesses based on past posts; reuses content without checking expiration

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Royalty under‑collection and missed renewals in brand licensing

McKinsey cites poor contracting practices (including licensing) driving 10–20% higher total costs; industry contract‑heavy businesses report ~$200,000 per year lost from missed renewals alone, with additional millions in missed or delayed royalties across portfolios.

Excess manual administration and rework in licensing operations

McKinsey research attributes 10–20% higher total contracting costs to poor contracting practices, including manual, fragmented licensing processes; in contract-heavy environments, this translates into significant six‑ and seven‑figure annual labor and overhead overruns relative to optimized operations.

Cost of poor quality from misapplied rights and brand misuse

Industry analyses of contract and revenue leakage show that misinterpretation of pricing and terms, including rights-related clauses, drives systemic errors that affect 42% of companies; for licensors this manifests as product and campaign rework and write‑offs that can easily reach six‑figure annual totals in large portfolios.

Delayed royalty collections due to manual reporting and disputes

Research on revenue leakage in recurring and contract-based billing shows widespread billing errors and unresolved disputes that delay or forfeit revenue, with 42% of companies affected and recurring billing inaccuracies accumulating into substantial revenue and cash flow losses over time.

Lost licensing and campaign capacity from rights bottlenecks

McKinsey’s finding of 10–20% higher contracting costs from poor practices implies a material portion of staff time lost to low‑value rights clarification and document chasing; across large licensing and marketing departments this equates to hundreds of thousands in annual opportunity cost and constrained throughput.

Regulatory and contractual non‑compliance exposure in licensing

Analyses of brand licensing operations highlight non‑compliance and disputes as recurrent, expensive outcomes of fragmented rights and royalty management, with McKinsey’s 10–20% excess contracting cost band incorporating the impact of disputes, remediation, and associated advisory and legal spend.

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