Direct Response TV marketing companies are always looking to license new products. The range of products sold in the DRTV industry is broad: fitness equipment, housewares, beauty products, health care items, collectibles, lawn and garden accessories, business opportunities, and self-employment. All of these and more sell successfully on DRTV.
The direct-response television industry is larger than ever. It’s estimated the industry generates $200 to $300 billion in sales. Some famous examples of DRTV products include the ThighMaster, Snuggie, PedEgg, and the Ginsu Knife.
Research indicates that over 60% of the adult American population watches DRTV, and 1 in 4 have purchased a product from it. DRTV accounts for 14 to 15% of all TV advertising. Why is DRTV so successful? Because more people than ever are staying home and watching TV.
If your invention solves a real problem, appeals to the masses and is highly demonstrable, DRTV is a good licensing option. The challenge is convincing a DRTV company to take a shot on licensing your invention. If they are interested in your product, it will most likely be a two-part deal. The first phase is a short-term agreement to test the product and see if it will sell. If so, then the license extends to a full term agreement, and the DRTV partner moves forward in producing and selling your product on TV and pays you a royalty on every sale.
How can you decide if your invention is a good fit for “As Seen On TV”? To find out, I interviewed Gil R. Tatarsky, whose company Distinct Creations (www.yourideastolife.com), specializes in working with inventors to license their product to direct marketing companies.
Here are some highlights of what we discussed during this webinar interview:
- 5 Reasons Why You Should License to a DRTV Marketer vs. Doing it Yourself
- The Key Benefits of Licensing to a DRTV Marketer
- The 10 Key DRTV Success Factors
- 3 Things You Must do to Get a DRTV Licensing Deal
- The 2 Biggest Mistakes and How to Avoid Them
- What You Should Know About Working with DRTV Marketers
- How to Negotiate a DRTV Licensing Deal that Works for You
Here are some tips to keep in mind when looking for a DRTV licensing partner:
These companies look for products with high markups and fat profit margins. But they won’t pay much more than 5% royalty because they are investing in the media and giving your product TV exposure.
Work with a qualified licensing attorney to help you negotiate your deal and review the contract before you sign it. You’ll also need to monitor the royalty payments to make sure you are getting paid the right amount of royalties from product sales.
When pitching your product, only show them non-confidential information. They most likely will not sign an NDA until they know your product is something they are interested in it.
It’s better to have a patent on your product. If you only present an idea, they can easily copy it.
DRTV is a good option, especially if your product fits the criteria. If your product hits, it’s a great platform to expand your licensing program into other markets and distribution channels. But always keep in mind the most critical deal point is your licensing partner. Make sure they are the right one for you before signing the licensing agreement.