Licensing Revenue

AAA

DEFINITION of 'Licensing Revenue'

Income earned by a company for allowing its copyrighted or patented material to be used by another company. Some examples of things that may be licensed include songs, sports team logos and technology. For example, a major source of income for the publicly traded company Dolby Laboratories is the licensing of its technology to consumer electronics manufacturers such as DVD player manufacturers.

INVESTOPEDIA EXPLAINS 'Licensing Revenue'

Licensing revenues are a significant source of revenue for the National Basketball Association, National Football League, National Hockey League and Major League Baseball. These organizations grant permission to third parties, such as apparel vendors, to use teams' logos in video games, on clothing and on other merchandise. The vendor keeps part of the profit for its role in producing and selling the apparel, but the sports association also earns money in exchange for granting the vendors the right to use the teams' logos. In 2010, the MLB sold licensed merchandise worth approximately $2.75 billion.



RELATED TERMS
  1. Revenue Per User - RPU

    A ratio used to express the profitability of a company on a per-user ...
  2. Revenue

    The amount of money that a company actually receives during a ...
  3. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  4. Gross Margin

    A company's total sales revenue minus its cost of goods sold, ...
  5. Income Statement

    A financial statement that measures a company's financial performance ...
  6. Profit Margin

    A ratio of profitability calculated as net income divided by ...
RELATED FAQS
  1. How do you find the break-even point using a payback period?

    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>
  2. How do investors interpret the same store sales ratio when analyzing food and beverage ...

    When an investor interprets the same-store sales ratio in analyzing food and beverage stocks, he looks at the monthly same-store ... Read Full Answer >>
  3. How does a long tail become profitable?

    A long tail becomes profitable because the costs to produce, market and distribute a product or service in a niche are low, ... Read Full Answer >>
  4. How do you calculate free cash flow?

    Free cash flow (FCF) is one of many possible estimates of cash flow for a business. The idea is to find out how much money ... Read Full Answer >>
  5. What are some examples of items that count as comprehensive income?

    In business accounting, other comprehensive income, or OCI, includes those revenues, expenses, gains and losses that have ... Read Full Answer >>
  6. What key conditions might explain a company's declining net sales in spite of increasing ...

    Net sales are the amount of sales generated by a company after the deduction of returns, allowances for damaged or missing ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Investing

    Earnings: Quality Means Everything

    It's quantity that generates all the hype, but there are more meaningful factors that gauge true performance.
  3. Forex Education

    Understanding The Income Statement

    Learn how to use revenue and expenses, among other factors, to break down and analyze a company.
  4. Retirement

    The Essentials Of Corporate Cash Flow

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
  5. Entrepreneurship

    Getting To Know Business Models

    Learning how to assess business models helps investors identify companies that are the best investments.
  6. Investing

    The Importance Of Office To Microsoft

    The mobile and cloud revolution were expected to sound the death knell for the Office suite of products, but a new era is beginning for Microsoft Office.
  7. Economics

    Understanding Management by Objectives

    Management by objectives is a process in which a manager and an employee agree on specific performance goals and then develop a plan to reach those goals.
  8. Economics

    What Does Going Concern Mean?

    Going concern is a concept used in business and accounting to describe the fiscal health of a company.
  9. Fundamental Analysis

    Calculating the Capacity Utilization Rate

    Capacity utilization rate is a ratio used to compare a current usage level against a maximum potential level.
  10. Fundamental Analysis

    How Patent Trolls Hurt Competition

    Patent trolls are known to have a negative impact on the overall business ecosystem. Investopedia explores how.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!