Licensing allows a company to let others use its brand name, logo, patents, or technology in exchange for royalty payments. It's a low-risk way to expand into new markets.
Disney licenses its characters to toy, clothing, and school supply manufacturers, generating billions in royalty revenue. Marvel licenses superhero characters to video game developers. These deals extend brand reach without direct investment.
Licensing provides additional revenue streams, brand expansion into new categories, and increased brand visibility, all while the licensee bears most of the production and marketing risk.