What AI Means for Licensing (Opportunities, Risks & Reality)

AI is moving fast — and the licensing industry can’t afford to ignore it.

In this episode of Born to License, David Born breaks down what artificial intelligence really means for licensing, brand owners, licensees, and consumer products teams — beyond the hype and headlines.

From creative development and approvals to brand protection and scalability, AI has the potential to reshape how licensing businesses operate. But it also raises serious questions around IP ownership, authenticity, quality control, and trust.

This episode explores where AI can add real value — and where human judgment, creativity, and brand guardianship remain irreplaceable.

In this episode, you’ll learn:

• How AI is already being used across licensing and consumer products
• Where AI can improve efficiency (and where it creates new risks)
• What AI means for brand protection and IP control
• Why approvals, governance, and brand standards matter more than ever
• The opportunities for licensors and licensees who adopt AI thoughtfully
• What the licensing industry needs to get right as AI continues to evolve

Whether you’re a licensor, licensee, agent, creative, or brand strategist, this episode will help you understand how AI fits into the future of licensing — and how to approach it responsibly.

🎧 Next episodes: More practical insights on licensing strategy, industry trends, and how to stay ahead in a rapidly changing landscape.

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Chapters

• 0:00 Introduction & Exciting Licensing Experiences
• 1:08 Hollywood's AI Skepticism
• 1:47 Disney's Game-Changing OpenAI
• 3:10 How Born to License Uses AI Today
• 4:52 AI Streamlining Licensing Workflows
• 7:14 AI-Generated Content & the Licensing World
• 8:35 Dynamic Royalty Structures
• 10:16 Radical AI Applications in Licensing
• 12:29 Relationships: What AI Can Never Replace
• 14:34 Challenge & Upcoming Episodes

Transcript

Welcome back to Born to License. I'm David Born, and today we're talking about something that's been on everyone's minds, but that few people in our industry are discussing openly. Artificial intelligence and licensing. But before we dive in, I wanted to share something exciting. I recently was lucky enough to visit two incredible licensing experiences. The first was the only standalone spongebob restaurant in the world. And the second, and amazing hello Kitty Cafe. If you want to see what I'm talking about, check out my Instagram and follow Born to license on YouTube. Trust me, these experiences show when licensing can be at its absolute best. Now onto AI. I'll be honest with you. AI is changing the world around us at a pace that's, frankly, a bit overwhelming. From how we search for information to how we create content, it's everywhere. 

 And if you think licensing will be immune to this shift, it's. I've got news for you, it won't be. The question isn't if AI will change our industry. It's how and when. But before we get into all of that, let's address the elephant in the room. Hollywood and licensors in general have been deeply skeptical of AI, and for good reason. We're talking about an industry built on creativity, storytelling, and intellectual property. The idea of machines creating content or replacing human talent, that terrified people. The Writers Guild went on strike partially over AI concerns. Actors worried about their likenesses being replicated, and licensors, well, they were worried about everything from AI generated knockoffs to devaluation of their IP. But something shifted in 2025. Towards the end of the year, Disney. 

 Yes, Disney, one of the most protective IP holders on the planet, signed a major deal with OpenAI. Now, let me give you the details on this because it's really important. Disney's partnership with OpenAI wasn't just about using ChatGPT for customer service or internal workflows. It was a strategic move that signaled to the entire entertainment industry that AI partnerships are not only acceptable, they're essential for staying competitive. Disney began exploring how AI could enhance storytelling, optimize content creation, and even improve how they connect with audiences across platforms. And here's the kicker. When Disney does something, everyone else pays attention. It's what I call the permission effect. Once the biggest player in the room says AI is okay, the suddenly, every other studio, every license, or every agency starts having conversations that they weren't willing to have six months earlier. 

 That deal essentially gave the entire entertainment industry permission to start negotiating their own AI partnerships. And I imagine that's what is exactly happening right now behind closed doors. So where does that leave us in licensing? Well, let me tell you how my team is already using AI because I think it'll surprise you how practical and unglamor it actually is. First of all, AI helps us develop content. And I want to be clear about this. I used AI to help me write this very episode that you're listening to right now. But, and this is an important but, I didn't just ask it to write the episode and call it a day. Most of what you're hearing is what I asked AI to help me articulate. It's a copilot, not a replacement. 

 I know the information, I know the facts, I know what I want to say. But sometimes I don't know how to express it in the clearest, most engaging way. And that's where AI comes in. It helps with the flow, it helps with the structure. The same goes for case studies, presentations, client proposals. AI supports our team when we have the expertise, but we need help with the execution. Now I also use ChatGPT as a bit of an alternative to Google. Nowadays I I'll ask it simple questions. For example, what's the release date for this film? Or who's the CEO of this company? But here's the thing. I still fact check everything because AI makes things up. Sometimes it pulls information from sources that are questionable at best. You can't just trust it blindly. 

 Outside of work, I use ChatGPT to help me track my marathon training and my other personal goals. It's like having an accountability partner that's available 24 7. I tell it my goal, it helps me plan and it checks in on my progress. It's surprisingly effective. But all of that's really just scratching the surface. Let's talk about some obvious ways AI could streamline typical licensing workflows. Because when you break down the day to day responsibilities of being a licensor or being a licensee, there are so many repetitive, time consuming tasks that AI could handle. Drafting contracts, for example, AI can pull from templates and customize terms in minutes. Product development. AI could analyze consumer trends and suggest which products are most likely to succeed. Marketing approvals. AI could flag potential brand inconsistencies or trademark issues before a human ever has to look at it. 

 Royalty management. AI could track sales data in real time and automatically calculate what's up owed. Customer Relationship management. AI can organize communications, flag important follow ups and even draft responses. Now, I want to be very clear about something. I do not believe AI will replace the lawyers, accountants and product development professionals in our industry. Not at all. What AI will do is help them do their jobs quicker and easier. It'll handle the repetitive tasks so that these professionals can focus on the strategic, creative, high value work that actually requires human expertise and judgment. And here's where I think it gets really interesting for licensees. AI could help licensees identify the best licenses for their products. Imagine an AI tool that analyzes your product category, your target demographic, your retail partners, and then suggests which IP could be the perfect fit. 

 Not only that, but it could tell you which licensors you're most likely to secure a relationship with based on your track record, your distribution channels and their current portfolio gaps. It could even help licensees navigate the steps to engage, drafting their initial outreach email, preparing a pitch deck, anticipating objections. It's like having a licensing consultant available on demand. Now again, I have to say I don't believe any AI would match the level of strategic development and support that the Born to License team provides. For example, which, you know, I have an amazing team that supports our clients, but for basic guidance and initial research, AI can definitely help bridge that gap. Now let's move on to the more bolder, more radical ways AI could change our industry. Because this is where things start to get fascinating and maybe a little uncomfortable. 

 First, let's talk about AI generated content. It's everywhere. I know you're seeing it. YouTube, TikTok, Instagram. AI created videos, characters and stories are flooding the Internet every single day. Most of it, let's be honest, is terrible AI slop. Low quality, soulless content churned out for clicks. But eventually, and I am betting within the next 24 months, one piece of AI generated content at least is going to break through and capture the licensing world. It'll probably appeal to children, maybe on YouTube, the same way Cocomelon did. It'll rack up billions of views and suddenly everyone will be scrambling to license it. Now here's my hot take. I actually think the rise of AI content will benefit traditional IP in the long run, because as more and more AI slop gets created, people will crave high quality content. With IP they love and trust even more. 

 The brands with legacy, with storytelling, with emotional connection, they'll become even more valuable because they'll stand out against the ocean of generic AI generated noise. Before I continue, let's hear from one of the previous guests on the podcast who tends to know where the puck is going. 

 There will be a structure where it will say in the contract that based on certain performance or Feedback or insight or sales, the royalty rate will grow higher. The only, the only reason that didn't happen until now is that we didn't have AI tools to track that now. 

 That was Sharon Wiseman and she's absolutely right. One of the most exciting applications of AI in licensing is dynamic royalty structures. Right now, licensing deals are pretty rigid. You negotiate a royalty rate, let's say 10, 14%, and that's it. Whether the product is a massive hit or a total flop, the rate stays the same. But what if it didn't have to be that way? AI could enable contracts where royalty rates adjust based on real time performance. Let's say a licensee takes a risk on new IP. The initial royalty rate could be lower, let's say 6%. But the contract includes a clause that if sales exceed certain benchmarks, the rate increases to say, 12% or vice versa. If a property's already proven, the rate starts high, but adjusts down if performance drops. 

 The reason this hasn't been possible until now, well, we didn't have AI tools to track performance in real time. A lot of what we do in licensing is still based on dusty CSV files and quarterly reports. But AI can change that. It can monitor sales, social sentiment, search trends and consumer engagement minute by minute. That kind of data makes dynamic structures not just possible, but practical. All right, let's push this even further. What are some radical ways AI could be incorporated into the licensing business? Think about predictive IP scouting. AI could analyze social media trends, streaming data, consumer behavior to identify which emerging IPs have licensing potential before they even blow up. Imagine knowing about K Pop Demon Hunters or the next baby Yoda six months before everyone else. That kind of foresight could completely change how licensees make their bets. 

 Then there's automated product design. AI could generate hundreds of product concepts based on an ip, consumer preferences and retail trends, then test them with virtual focus groups before a single prototype is even made. Instead of guessing what fans want, they'd have data driven insights guiding every design direction. We're already seeing real time brand protection emerge. AI is being used to scan online marketplaces for counterfeit goods by. But imagine AI that could predict where and when counterfeits are likely to appear. Based on IP popularity and market patterns, you could stop infringement before it even happens. Another fascinating possibility is virtual licensing agents. AI avatars that represent licensors initial negotiations, answer questions, provide quotes, and even draft deal memos, freeing up human agents to focus on relationship building and complex deals that require that human touch. 

 And here's One that could completely transform how we think about licensing. AI powered personalization at scale. Right now, most licensed products are mass produced and identical. But what if AI could enable mass customization? Think about licensed apparel, where every fan could customize their design while still maintaining brand guidelines or collectibles that adapt based on individual preferences. AI could manage the complexity offering thousands of variations while ensuring quality control and brand consistency. That, that's not just radical, it's a complete reimagining of what licensed products could be. But look, here's the truth that we can't ignore. Licensing is a relationship driven business and that will always be the case. There is no AI in the world that can replace the level of trust that's needed when a licensor is lending out their intellectual property to a licensee. Think about it. 

 When you're giving someone permission to use your brand, your characters, your logos, your reputation, you're not just signing a contract, you're entering into a partnership. You need to trust that they'll represent your brand with integrity. You need to trust that the quality will be there. You need to trust that they understand your audience and your values. That kind of trust doesn't come from a chatbot or an algorithm. It comes from conversations. It comes from meetings. It comes from shared meals at licensing expo, late night emails where you work through challenges together. I've been in this industry for almost 20 years and I can tell you, every major deal I've ever closed came down to relationships. The licensor had to believe in me as a person, not just as a business. And I had to believe in them too. AI can make us more efficient. 

 It can help us make better decisions and it can save us time and money. But it cannot build trust. It cannot read the room. It cannot sense when someone is hesitant or excited or unsure. It cannot share a laugh or offer encouragement when a deal falls through. The licensing industry is made up of people. Creative people, strategic people, passionate people who genuinely care about the brands they represent and the products they create. And these people cannot and should not be replaced by AI. What AI can do is free us up to be more human. To spend less time on administrative tasks and more time building these relationships. To spend less time on administrative tasks and more time building those relationships. To focus on the creative, strategic, high value work that makes this industry so rewarding. So here's my challenge to you. Don't fear AI. 

 Embrace it as a tool. Experiment with it. See where it helps you work smarter. But never lose sight of what makes licensing special. And that's the people, the partnerships, and the trust that holds it all together now. Over the coming weeks, the podcast will cover a range of topics, including my experiences at the spongebob restaurant and the hello Kitty Cafe that I mentioned at the top of the show. I'll also be talking about licensing that I've spotted in super bowl ads this year, and I'll give a preview of Melbourne Toy Fair. I'm very excited to be going to my home city, Melbourne for Toy Fair. Lots of content coming your way about that as well. Thank you so much for listening to this episode of the Born to License podcast. 

 If you found this valuable, please share it with someone in the industry who might appreciate it. Until next time, keep building those relationships, because in licensing, relationships are everything. Until next time, I'm David Born and this has been Born to License.