Lee
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Post by Lee on Feb 29, 2004 3:17:25 GMT 1
Athearn obtained the licensing from Coca Cola, but in doing so sent licensing agreements to each of their (Athearn) distributors. The distributor had to sign this multi page agreement in order to carry that part of the Athearn line.
I too salute Sulvan for their efforts in both producing fine models and trying to find a way around the licensing problem. Sulvan has be broadsided with orders and has put most of their efforts into the vehicles. I heard today that the next thing in the works is different bodies for their trucks.
SMCC was aware from the start of the licensing problems and tried to figure out ways around it without much success.
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BillC
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Post by BillC on Feb 29, 2004 3:41:23 GMT 1
WARNING: You folks aren't going to like this. But you need to hear it, anyway.
A trademark is more than just investment, it is property. Unlicensed use of a trademark is theft, pure and simple.
There is not a car company in the world that I know of that would trouble you for making a model of their car or truck for your own enjoyment. In fact, in the U.S., your right to do this is quite likely protected under what is called "fair use."
On the other hand, making a model of a car with the idea of selling it, based on the brand or model of the prototype, means you are using someone else's property to make money; property it may have cost the owner as much as a hundred million dollars (or more) to create. Why in the world is it wrong for the owner of the property to want a piece of the action?
Christian is right about the car companies not wanting their trademarks associated with poor-quality models. They also don't want their trademarks associated with hazardous products (i.e., painted with lead-based paints) or those that are improperly packaged without consumer warnings, or anything else that could leave them with collateral liability in case of a lawsuit.
How licensing is handled is left up to the trademark owner. For example, International truck has a standard licensing agreement for models of its current trucks. However, if you want to make a commercial model of an older truck, all that's required is a reasonable donation to the International Harvester Museum. PACCAR asks for 5% of sales. GM may want a dollar a model, or more. But every one of these is a cost that can be rolled into the selling price of the final model.
On the other hand, some manufacturers (though none in the auto industry) allow the free use of their trademarks. Incidentally, they don't think of it as advertising; they think of it as public relations. Advertising is where you control the message and the medium. That's why calling a Chevy on the layout in your basement "advertising" doesn't carry any weight with anyone.
One of the big problems is that we recall the "good 'ol days" when there were no licenses and the car companies were eager to help modelmakers with technical assistance, etc. The problem with this rose-colored memory is that it's not quite accurate.
The auto companies worked out deals with certain manufacturers to produce promotional scale models and then allowed the model company to produce more models for general sales as kits, etc. Many of the promotional models were given away as advertising. Others were sold through the dealer parts network (this sound familiar to anyone in Europe? Same practice-different scale).
No one ever mentions this practice cost Chrysler, Ford and GM millions of dollars a year. As the fortunes of the big automakers changed, and demand for scale models declined, it was one of the things that had to go. Remember, the auto companies had recouped part of their costs through model sales to their dealers. As this revenue stream dried up, and companies looked for ways to trim expenses, these programs were cut and replaced by licensing programs that brought in revenue without the investment of so much time and money.
In short, it wasn't the attorneys; it was the accountants.
The attorneys' contribution to the current mess is that the licensing process as it exists right now is too difficult and that it's set up for mass-produced toys. It's one thing for a company like Mattel or Hongwell, with their in-house attorneys, to negotiate a license for a million Hot Wheels; quite another for Christian to get a license for a comparatively short run of Ford models. By the time Christian even got through finding out who to talk to about licensing, he would have invested more time and effort than his project could possibly recover. This is where some progress could, and should, be made.
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Lee
Senior Member
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Post by Lee on Feb 29, 2004 4:39:32 GMT 1
Very well put Bill. Knitting is looking more and more like my kind of hobby nowadays. ;D China is one of the big problems reguarding coping and licensing. I have read that a company there can get a hold of an exsisting product and have it copied complete with label in three days. Our courts can not touch them which is making a whole lot of manufactures edgy and very touchy. As to adding the cost of licensing to the price of a product, you can price the product so high that it does not sell. A good example is the Athearn vehicle line. While good models, they are out of the reach of the average modelers pocketbook.
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BillC
87thScale addict
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Post by BillC on Feb 29, 2004 8:04:27 GMT 1
While there are still plenty of bandits, you'd be surprised at the number of Chinese companies who do have licenses. It's true a Chinese toymaker can produce a knockoff almost instantly, it's also true that a lot of those toys can't be sold in the U.S. except as generic "U.S. Fun Car" or something, reducing their potential sales.
A lot of the majors, like Toys 'R Us and Wal-Mart won't touch unlicensed reproductions because they don't want U.S. Customs to come into their stores, seize merchandise and cart the manager off to the hoosegow.
Besides, most of these generic imposters are in larger scales, if they are in scale at all.
As to cost, the Athearn models are not all that expensive, considering what you get. Injection molding is an expensive process, as I am sure everyone on this list is aware. For comparison, let's go back forty-two years to the Revell Chrysler car set produced in 1961. The set at that time was $5.00 and the later individual models were a buck apiece. Just counting inflation, those prices would be $30.97 and about $6.19, respectively. And we're talking models that are relatively crude by today's standards. When you consider the Athearn Ford C has far more pieces than the Revell Dodge, and comes painted, thirteen dollars isn't bad at all.
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Hans
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Post by Hans on Feb 29, 2004 12:55:51 GMT 1
It´s very sad, but even in Germany, where the 87 scale is quite popular, we will have more problems to get new passenger cars (with trucks it doesn´t seem such a problem). Opel and Ford have no interest in promotion cars in the moment, the position of Porsche isn´t clear. A thing ,I don´t know, is,how expensive it would be per model to pay the licences (Bill wrote of one dollar at GM for example). The only case I know is the Opel Vectra of Rietze: First they stopped the project, because the licence-fee was to high, but they continued to negotiate with Opel, at last with success. Now you have to pay here in Germany 8 Euros on average. I think, it´s o.k. Unfortunately, the model doesn´t sell so well, but -if you ask to dealers- it´s more a marketing-problem by Rietze. A model-company, which is better represented in the shops like Wiking or Herpa (or even Brekina and Busch), probably wouldn´t have this problem. For example the well decorated Brekina models cost nearly 10 Euros and are sold very well , so the information of some dealers in my region. If you think at this situation, I could not understand, why Wiking or Herpa don´t seem to try to produce the one or another popular passenger car without order of the industry (normally an Opel for example was a success for Wiking or Herpa) and to sell it an Euro more expensive for example. If they don´t try, I fear we will become a 1/87-hobby with many trucks and some Mercedes and BMW´s -concerning actual cars.(I know , I exaggerate, but I fear the direction is true.) Another thing, that is difficult to understand, is the program of Schuco. They make efforts to build better 1/87 cars (simple, but not to bad) and I´m sure, they have to pay licences to BMW,Mercedes,Porsche and VW. Nearly all their cars are also produced by other manufacturers (of course their models are build mostly for other customers than Herpa-models for instance), but it should be also an ecomical success to produce for example a Jaguar (the S-Type exists in 1/72 !) ?! Perhaps my thoughts are to much the thoughts of a collector and to less economical, but I think, it´s really the major problem of our hobby in the moment and so we are reflecting on it.
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Post by superba on Feb 29, 2004 13:32:36 GMT 1
BillC:
Your posts are well taken, and let me make it clear. The property you discuss in not only an asset on the corporate books, but it also creates share holder value.
Anyone who owns stock or invests in a pension fund will be interested in shareholder value.
I don't have any problems regarding the concepts of licensing, but more the point in your first post in terms of making it easy to work through the various legal departments of the major corporate players.
I am currently working at Global World Wide Headquarters for GM in Detroit.....I would not know who to go to, in terms of securing licensing agreements. I currently trying to find out by migrating thorugh GM's employee intranet.
Joe
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BillC
87thScale addict
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Post by BillC on Feb 29, 2004 15:04:33 GMT 1
Joe:
Good luck! I had to practically pull teeth to get the licensing manager's name at Freightliner and then all he would tell me is they were in the midst of outsourcing licensing to a third-party company, which usually means some advertising specialties firm that is even more difficult to work with as they have no concept of a model as anything but a premium or a toy.
To other comments: It is my understanding that Opel and Ford went through the same licensing transformation due to corporate cost-cutting. I respect Lothar Rietze's determination and am happy to say, I do have one of the Rietze Opels. I hope the model is ultimately successful enough to warrant another go.
Porsche is another matter. Ideally, we should have models of the Lamborghini, which is ultimately owned by Volkswagen. The same is true of Bentley. We should also have models of the Rolls-Royce Phantom, as it is a BMW product. But we don't. When asked about this at the last IAA, the reply was that promotional models were either unnecessary or felt to be beneath the marque. This may also be Porsche's reasoning; they are a premium-only brand. The only exception to this rule seems to have been the Cayenne, which was a brand-new model in a new market segment for Porsche.
Schuco produces its 1/87 scale models through Hongwell in China. Hongwell, which also produces the Boley models, is the actual license holder. We are beginning to see the Schuco/Hongwell models in the U.S., I believe they are marketed under a different label however, and I have not been able to obtain one to compare to my Schucos.
Why don't other companies go out on a limb and invest in new models? In Herpa's case, as I have said before, they have become a promotional specialty house. I don't know if we will ever see a non-subsidized car model from them again. Busch? From what I hear, they are so busy with the projects they have now, they can't even deliver the products they promise at Spielwarenmesse.
Wiking may be another issue. Over the past two years, they have had a significant number of commissions from Volkswagen. Polo, Phaeton, Golf, Caddy, Touareg, Multivan, T5, New Beetle Cabrio and the VW-powered Performance 807 boat. I am not sure how many more new models are planned by Wolfsburg in the near future. Busch has the Audi A6 and Herpa got the rest of the new Audi models. So, unless Volkswagen is going to make 1/87 scale Bentleys or some Murcielagos and Gallardos, it looks like Wiking may have to go hunting for another commission.
Ideally, Wiking would start to beef up their Classic model collection. There have been 12 new additions over the past five years, but 17 models have been dropped. We are now into our second year of waiting for their classic Opel model with no assurance it will be produced before 2005.
Licensing is an issue that will have to be faced at some point. Otherwise, our choices in high-quality ready-to-run models is going to be limited to a handful of brands and the hobby will be severely hurt. While I would like to see more American cars, I have to admit there is much that could be done for the European market, as well. There need to be new models of Volvos and Saabs (before GM destroys the brand altogether) and Fiats. More Fords and Opels. Something to keep the collector and hobby fan coming back to the shop again and again.
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Post by Christian on Feb 29, 2004 16:02:36 GMT 1
So, why is Brekina's Opel Rekord Coupe a (probable) success while Rietze's Opel isn't? This doesn't have much to do with licensing, but it makes me wonder. Does Brekina have to pay Opel in order to release a model of the Rekord? I don't think so.
And another thing. I have yet to hear about a small series model maker with a VW, GM, whatever license. For reasons explained by Bill it is not feasible for a resin caster to get in touch with the auto industry. What are the consequences? Illegality? Constant fear of lawsuits?
I really don't know ... I'll continue producing kits as hundreds have done before me, but not with the same ingenuous attitude.
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stanhas87
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1978 Dodge Monaco CHP
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Post by stanhas87 on Feb 29, 2004 16:24:54 GMT 1
Dear Sirs: That was the issue I read on Model Auto Review-the Opel from Rietze.As I stated,it was an anxiety for all involved in order to figure how that would end;now I know the results,and frankly I do not like it. Is very true that the bean counters run companies but at times I do not understand the demise of Oldsmobile because it was selling more cars than Saab.They also are noticing something-on the model battleground-that the collectors from models cars are diminishing in number and these are folks from two generations ago.Also,add the fact that real cars were not selling so well;models were-when all this licecing issue became so drastic-so the auto manufacturers decided to profit from this fact.I remember that when the Caprice was curtailed,Busch and Auto Art (1/18) models were selling thru the roof;around 1996 or so. I agree with BillC and Joe at this issue and just added the two facts from above.Thing is,Rod Ward,Model Auto Review editor predicted that fewer (new) vehicles may came in this decade due to thinning of the collector number and licesing craze.But hey,all in all,they are business and have to protect their copyrights and at least some models are being done. The problem with the chinese was/is rampant.I have in the collection copies from Lledo 1/87 Leyland buses and larger ones from ERTL and Lledo.And,as Christian mentioned,some companies do not want be related to cheap toys.Well,it happened and I also have some of these vehicles.
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Hans
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Post by Hans on Feb 29, 2004 17:32:33 GMT 1
A thing I´m not sure about is the following: Would it be necessary for a model-manufacturer, who has a contract with an automobile-producer to pay licence-fees for another brand of this producer? (For example Herpa-BMW-RollsRoyce or it´s the same with Mercedes and Chrysler and so on). If not, it´s difficult for me to understand, why a firm like Herpa or Wiking doesn´t dare to produce a model of such a make. Well, it could be -like written in this thread- that there are less people interested in 1/87 cars compared with ten years ago, then probably it makes no sense to produce such models.But I´m not sure, I think firms like Brekina, Busch and Wiking are economically successful. It would be quite interesting to hear something about this theme from a traditional manufacturer like Wiking, it could be a theme for the modelling-press.
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Post by Eric on Feb 29, 2004 18:15:13 GMT 1
It would be quite interesting to hear something about this theme from a traditional manufacturer like Wiking, it could be a theme for the modelling-press. I for one would like to know how the manufacturers look at this issue, but I also think that we should not wait for the modelling-press to pick-up it up. If the modelling-press started asking questions the manufacturers would almost be obliged to respond ofcourse, but until that is the case why not take this on ourselves instead of waiting for the press ? I know there are several people on this board that have contacts at the major manufacturers, I can not think of a better place to start... Whatever the response of the manufacturers may be, at least we would have made it known to them that licensing is indeed an issue that worries us, and that we would be prepared to accept higher priced models if that would increase the chance of getting a model that would not have been available otherwise.
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skunk
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Post by skunk on Mar 1, 2004 3:20:29 GMT 1
Regarding low sales of the Rietze Vectra: I myself am not really interested in brand-new cars anymore. It is largely because it has become impossible to get a well-rounded, representative set of new cars: Only MB, BMW, Audi and VW. Not even in Germany are cars in the streets that limited. So the Vactra, to me, represents "too little too late", as I have no other cars to go with it. After reading of Rietze's woe however, I feel quite bad and I am going to have to go get a couple of them. It'll be the only clearly post-2000 car in my 400+ collection (besides a New Mini)! If at least companies would let modellers build their older cars. A "bad" representation of a Jaguar XJ-S would tarnish the company's image much less than the countless old, tatty, rusty ones leaking oil all over the streets. You don't see Chrysler lawyers firing off angry missives to owners of banged up K-cars, accusing them of "devaluing the Chrysler brand"...
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BillC
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Post by BillC on Mar 1, 2004 10:01:03 GMT 1
Is very true that the bean counters run companies but at times I do not understand the demise of Oldsmobile because it was selling more cars than Saab. Saab's sales are not a useful benchmark; it's a small niche brand. Oldsmobile was being measured against where it once had been (the Olds Cutlass was the best-selling car in America in the early 1980s). Olds was a major mass-market brand with huge resources allocated to it that just wasn't providing enough return to keep it going. At the time Olds was cut, CEO Rick Wagener said GM was prepared to cut another division, and rumors were rampant about whether it would be Buick or Saturn. Right now, the betting is on Saturn. The new Ion isn't meeting projections and production of the L-Series will probably be cancelled. A hobby fan making an unlicensed model on a small scale, especially one that is not distributed through traditional retail channels, is fairly low-risk. You're flying below the radar, so to speak. As to the declining number of people participating in our hobby, the sales of plastic kits and model r******ding products has been declining for the past few years. Ironically, sales of diecast models have been fairly robust. Some of the problems experienced by Franklin and Danbury Mint are probably more due to the prices they charge and the entry of more manufacturers into the field. These swings come in cycles. Six years ago, model r******ding was enjoying a boom that had begun in the early 1990s. This does not mean there doesn't need to be some change. As we have discussed on this thread, Herpa's business model is under fire from cheaper Chinese models which have taken over much of the promotional model market. The same is true in North America. The pool of auto manufacturers wanting 1/87 scale promotional models is shrinking in Germany and never existed in North America. The declining variety in new models will not only discourage current collectors, it will slow the influx of new fans. As Skunk mentioned, it is hard to get models of a representative sample of the cars and light trucks one sees on the road each day. With the new programs in place at Ford and Opel, among Europe's leading manufacturers, the problem grows. In America, it is almost impossible to create a typical city scene in 1/87 scale. The CMW models help for the early to mid-1950s, but after that, the choices are very limited. The field is wide open for a company that can come to grips with licensing and has the deep pockets needed to venture-produce a few models. There are some strategies that can be used, such as making a common chassis, interior and exterior trim pieces and producing two body styles, say a hardtop and a convertible, as Busch has done with the 1964 Mustang, or a four-door sedan and station wagon. The question is whether the model r******ders would provide enough sales to roll the investment into a new model within a reasonable time. This last is one of the problems with Atlas' model vehicle program. They don't begin a new model until the previous one has recouped its investment. And anything at all can preempt new model development, because Atlas makes the majority of their money from model r******d products. Incidentally, an Atlas official once told me their license with Ford allows them to produce models of a variety of Ford vehicles, but each requires approval. I don't know whether this is true of GM and Chrysler. Incidentally, licensing for Mercedes and Chrysler products are completely different. It's a shame Herr Schrempp didn't centralize this function in Stuttgart after the merger, but you still have to deal with Auburn Hills, Michigan, if you want to make a model of a PT Cruiser or Dodge Ram pickup. The truth is that the manufacturer licensing programs are unlikely to change, so modelmakers will have to learn to adapt.
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stanhas87
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1978 Dodge Monaco CHP
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Post by stanhas87 on Mar 1, 2004 12:33:57 GMT 1
Dear Sirs: I do not know exactly why but Franklin Mint is gone (Model Auto Review,February 2004 issue).Probably was due to licensing wars. The diecast business is a billion dollar business right now.To my view,if someone is prepared to survive the effects from this problem.they are the ones because even if is a chep toy from Maisto,current technology is allowing them to produce very detailed toys/models (current Maisto miniatures are interiorless but very detailed). In all,a very detailded 1/87 model has to recoupe all of its casting costs,the fact that the market may not be there a few years from now and all of taxes and other costs that are forced upon it.Also,as this board has proven it,the ownership of real cars are becoming so expensive that people either keep their older vehicles longer and/or do not have one at all and the same get their dreams cars in miniature (car companies been facing this prospect at the most of the 1990's;further,their money-oriented decision were not always the wisest ones-as the final Impala SS has proven it).And,as Eric stated,these are the same people that would accept to pay more for a model that do not exist at all.I considered Franklin Mint a 'niche' collecting;some of their vehicles were oustandlingly well done and if they have graduated to 1/87 I am very sure that they would be competing with CMW. So many things to ponder what the future may hold.
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Lee
Senior Member
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Post by Lee on Mar 1, 2004 19:39:20 GMT 1
Franklin Mint ran a survey two or three years ago among its customers to see if they were interested in a set of pickup trucks in 1/87th scale. There must not have been enough response because the pickups were never made, to my knowledge.
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