Schmendrick's Virtual Reality Tour - Herbert J. Schmendrick - Interview

Seth M. Siegel is co-chairman of The Beanstalk Group, New York, a licensing agency whose clients include Harley-Davidson, Coca-Cola, Hummer and Stanley Tools.

Though spurned in his most recent attempt to be admitted to the licensing industry's Hall of Fame, Herbert J. Schmendrick, a licensing personality since he entered the business in 1953, is high on everyone's list of most colorful agents. Known for his provocative opinions, Schmendrick is an astute observer of societal trends, especially as they impact on pop culture and licensing. He broke into popular consciousness with The Flintsteins, a Jewish pre-historic family, but meager results ("It only sold well in Israel and parts of Brooklyn") and a huge lawsuit from a Hollywood law firm caused him to retreat. He's recently been selling rights to the SmellyTubbies, an educational pre-school property which teaches very young children to distinguish one odor from another. Licensing expert Seth M. Siegel spoke with Schmendrick last week in a parking lot across from New York's Javits Center.

Siegel: What's new in the licensing industry?

Schmendrick: Who said there has to be something new? Just because lots of people go to a trade show and walk around looking at each other doesn't mean something is new. A better question would be, "What isn't new?"

Siegel: It seems to me that there's plenty new and exciting. New properties, new products, new ways of doing business. Web sites and other virtual worlds replacing the sales call of old. Isn't that new?

Schmendrick: Actually, the industry is only just catching up to me now. I've had a virtual office for most of my career. Thank God most people would rather meet me at a restaurant for lunch than come to my office for a meeting.

Siegel: Have you considered a Web site?

Schmendrick: Oh, yeah. Schmendrick.com. I love the high-tech feel of it. The only problem is, it's impossible to deny having promised something if someone has already downloaded your sales pitch. For now, I'll stick to my form of virtual reality.

Siegel: Any promises in particular you like to keep vague?

Schmendrick: Same as usual. Movies opening on more than 3,000 screens. TV shows with more than 90% clearance, and always in the best time slots. A bidding war between McDonald's and Burger King for the promotional rights. Both Hasbro and Hallmark on board as licensees. And, of course, a style guide. Did I mention the endcaps at Toys 'R' Us and the Wal-Mart rotos?

Siegel: In fact, does any of that stuff really matter any more? If you think of the past 10 years, except for movies from major studios, everything else that's broken through and made a lot of noise came out of nowhere.

Schmendrick: It works more than you'd think because licensing is still a sophisticated form of buying and selling lottery tickets. You see these guys at the newsstand buying 10 tickets with a "formula." They never win, but they read in the papers about some yokel who made a bundle and the next week they're back on the same line buying 10 more tickets. In licensing, everyone can tell you about some multimillionaire agent who says he saw an opening in the market or some semi-retired manufacturer who supposedly understood that a certain property was going to make every one of his buyers chase him. But if those guys are so brilliant, why don't they do it every year, or even a second time? It's because no one ever knows what will succeed. They were basically just guessing or had nothing else on hand at the time.

Siegel: I'm not so sure I agree but, in any event, it's surely not true about brand extension licensing. The entertainment properties may be a giant crapshoot, but great corporate names don't fit your description.

Schmendrick: For licensed products that are really close to the core businesses of the licensor, sure. Except most corporate licensors won't let you get anywhere near the core. Their marketing folks all hate licensing so they put this wall up around the essence of the business and tell the licensing people that they can go ahead and do school supplies and so-called collectibles. And then the crapshoot isn't whether the property will still exist by the time it's brought to retail but whether the retailer will want to touch it altogether, assuming the corporate legal folks haven't sat on your approvals for 10 months.

Siegel: What keeps you in the business? You seem to hate it.

Schmendrick: To the contrary. I'm one of those guys on line buying the lottery tickets. I make a nice living, get lots of free samples, and I wake up each morning thinking this is the day I'll make a big deal that will make me rich and famous and have everyone envy me.

Siegel: What's your prediction for the future?

Schmendrick: The big will get bigger. The small will get smaller. And I'll get voted into the licensing industry Hall of Fame.

COPYRIGHT 1998 BPI Communications, Inc.
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