Companies within the Animation industry exist within a complex system of channel relationships and there are significant challenges to get access to segments of the animation entertainment market that will yield bottom line results for the organizations involved.
Animation entertainment is such that a property or content is often distributed through multiple channels simultaneously with pre-emptive and corresponding marketing activity which utilizes elements of the animation property itself in campaigns. Animation properties are also released differently across different platforms and ‘Each type of animation medium – film, television, internet, interactive gaming, home video/DVD – is characterised by a unique distribution structure.’ (Raugust)
Animation properties are often exploited further through ‘off screen’ product branding and licensing of ancillary merchandise which expands the channel management complexity substantially.An example of this is the strategic two year partnership from 2007 between DreamWorks Animation and McDonald's, which gives McDonald's worldwide promotional rights to new DreamWorks animated properties 2005 (movie marketing update)
This provides a significant challenge that faces the animation marketeer is the managing a range of complex channel relationships that provide access to the market.
Channel structures in the animation industry are complex because access to the market depends on the strategic relationship of the branded content, with the needs of the television entertainment exhibition industry and its relationship to the consumer, its advertising partners and market regulations.
Further complexity in the channels occurs because often animation properties have more than one owner, often from different geographical regions. Complex international ownership models are not preferred but often necessary to gain sufficient funding through co – production arrangements, reduce risk through cost savings in labour and or tax benefits, provide market access and gain market intelligence, particularly surrounding the issue of market regulation.
It requires the strategic management of the Relationship between the BRAND offering, (or portfolio of brands,) theuse of complex and numerous CHANNELs to the targeted SEGMENT of the market.
The brand equity that is realized in a successful branded animation product, i.e. Sponge Bob square pants is transferred upwards into Nickelodeon’s brand equity/value. This equity is further moved upwards contributing to the brand equity of the parent conglomerate, Viacom.Once an animation property has a strategic brand value within the structure of such a conglomerate it can then be leveraged synergistically across the widest possible range of opportunities
Animation can be seen to primarily use vertically integrated channel marketing systems. This is reflected in the fact that most animation is distributed by its parent company or affiliates. Companies that do not fall under the direct ownership of the major conglomerates often have strategic relationships as value added partners with them to some extent, and utilize there channels and market access to deliver there content. This relationship model can be seen in the relationship between Pixar and Disney
PIXAR and DISNEY
Pixar is currently one of the most successful animation brands in the world. As an animation production company it has mastered the medium, in terms of creativity, technology and channel management. This can be seen its slate of international blockbuster feature films, Toy Story, A bugs life, Toy story 2, Cars, and Ratatouille. Its success as company is cemented by its recent acquisition January 24 2006 by Animation media giant the Walt Disney Company for US$7.4 billion in stock.
Pixar was founded by Steve Jobs in 1986 as an independent high end 3D animation company. In 1991 Pixar entered into a 5 year strategic channel relationship agreement with the Walt Disney Company that covered co – production financing, co – branding, co- ownership of rights. In the agreement Pixar would produce five films which the Walt Disney Company would market and distribute through its channels networks. In this original agreement “Disney was to get 87% of the distribution proceeds” (Kumar), although this seems to be a premium price to pay it can be seen to reflect Pixar a channels management strategy whereby complexity and consequently risk is reduced substantially by giving “Pixar an expert partner in the film business with great marketing capabilities” (Kumar).
In this way one solution to the challenge of complex channel relationships is to reduce risk by partnering with experienced players in this area.
How can such low average profitability be reconciled with the tremendous popularity of movies, animations and other copyright-based entertainments? To answer this question requires an assessment of the dynamics of copyright markets, noting in particular: The long chain of intermediaries linking creation with consumption, each deducting their costs and profits before the remainder is passed on. The copyright market resembles a bunch of champagne glasses that are stacked in a pyramid and champagne is poured into the topmost glass, corresponding to the retailer, which must be filled before any champagne bubbles over to the next level, corresponding to the distributor, which in turn must fill, and so on down the pyramid, until the remainder trickles down to the bottom tier, corresponding to the creator. The zero-pricing of entertainment products in the main, free-to-air television markets, which are fully funded by third-party advertisers, so that consumers 'pay' only by their attention to the advertising messages buried inside the content stream. The equation here is a trade-off, whereby consumers accept their second, third or n-th preferences in return for free entertainment. This system has no other basis than the historical incapacity of broadcast media to collect payments directly from consumers. Global Animation Industry Page 5 1 The market power of the ruling intermediaries, the handful of brand name broadcasters and distributors who dominate the world market for content by their control of the broadcast spectrum and retail 'shelfspace'. Globally, there are perhaps five or six corporations which between them command 70-80 per cent of the main media markets; locally, their power is further concentrated by the regulated scarcity of 'bandwidth', so that a matrix of international media power would show a cross-linked and vertically-integrated network of interests.
Animators face a long and daunting obstacle race to bring their works to market. First they must find a producer prepared to speculatively develop and package the work to an offerable stage. This typically involves the creation of a 'pilot' episode or sequence, plus extensive artwork, scripts and the gathering of commitments from key production facilities and personnel. Next the producer must secure an international consortium of broadcasters, distributors and sales agents prepared to commit to the production - international because no single, local market outside the US offers prices sufficient to underwrite a major animated work. The buying consortium in turn must be supported by a panel of investors or lenders prepared to cashflow production against the consortium's 'presale' and distribution commitments, which are normally contingent on delivery of the finished work. Even at this stage, there is typically a shortfall or 'gap' between the production cost and the presale commitments, which must be met by a third-party investor or else absorbed by the production team in the form of wage deferrals or the foregoing of profits. Only then, often after many years of effort, can the work attempt the final hurdle, of consumer acceptance. From an economic perspective, the creation of copyright works is a tenuous enterprise, characterised by high levels of risk and low average rates of return. This is not merely a local perspective: it is the same for copyright creators the world over. Even the Hollywood studios earn only a break-even Global Animation Industry Page 4 1 return on their copyright investments, and rely on the 'upstream' profits of distribution for their corporate viability.
Michael Eisner and Steve Jobs were once a model pairing of old and new media, but these days they aren't the best of friends.
In an ironic twist worthy of a Hollywood screenplay, the source of their recent conflict is the precise reason for the success behind their original collaboration: digital technology.
"At least one high-tech executive has described illegal pirate content as a 'killer application' that will drive consumer demand for broadband," Eisner, chief executive of Walt Disney, said in testimony before a Senate hearing on copyright violations earlier this year. "Unfortunately, other high-tech companies have simply lectured us that they have no obligation to help solve what they describe as 'our problem.'"
Eisner didn't name Jobs or his companies--Apple Computer and Pixar Animation--but he didn't need to. Disney's recent actions to protect digital content, joined by other major studios on Capitol Hill and elsewhere, are tantamount to a broadside against much of the computing industry in general. The issue will begin a key test Thursday when the Federal Communications Commission meets to discuss digital broadcast copy protection.
Hollywood's love-hate relationship with technology illustrates the resolve of movie studios to avoid being "Napsterized," as some call it--shorthand for the impact that digital file-sharing has had on the music industry, which has attributed steep declines in sales to the phenomenon. As high-tech companies increasingly stake their futures on digital entertainment, the movie business is mustering all its strength to control the use and distribution of its work.
At the same time, the studios recognize the lucrative possibilities of interactive programming and other enhanced video services. They must be careful not to cut themselves out of any new business resulting from the next generation of TV set-top boxes, high-definition programming, digital cable systems and wireless networking systems being developed as television, computing and entertainment increasingly converge in the home.
Although piracy has existed for years, studio executives have viewed it with rising alarm as the development of such convergence products has gained momentum. As a result, they have embarked on a precarious balancing act that could define the future of all three industries, multibillion-dollar markets and anyone who owns a TV set or a computer.
"There are studio executives who would like to license to us but are not allowed to by their corporate parents," said Jonathan Taplin, CEO of Intertainer, an Internet video-on-demand service that has content-licensing agreements with some Hollywood studios. "It's a very dicey era we're in. The five studios plan to do their own business, and they don't necessarily treat me the same way they treat themselves."
Until recently, the entertainment industry has essentially favored a two-pronged approach to the digital revolution: backing technologies that prevent piracy and litigating against software and hardware developers it considers uncooperative in that effort. Today, Hollywood is putting more weight behind a third option--legislation--which is taking the issue to a new level.
The most controversial proposal is a bill authored by Sen. Ernest "Fritz" Hollings, D-S.C., and heavily endorsed by media companies such as Disney, which would require hardware makers to include technology that blocks the illegal copying of copyrighted works. The legislation puts the onus on all parties, from consumer groups to record labels, to create the solutions.
"It is a legitimate fear by content holders that what they're licensing either doesn't compensate them correctly or is a type of technology where they don't anticipate the ramifications," said Sean Ryan, chief executive of Listen.com, which is the first start-up to strike licensing deals with all five major record labels.
High-tech companies argue vociferously against the bill, maintaining that the government should not dictate product innovation. Many executives in the industry believe that once a program is recorded, consumers should be able to view it anywhere in his or her domain, whether on a DVD player, a PC or any other device.
"This is the same thinking I heard from the Warner Bros. Records folks about Napster and digital downloading in the '90s. Fighting future advances to preserve the past's business models is futile," said Jim Moloshok, senior vice president at Yahoo and himself a former Warner Bros. executive. "It's like folks in 1940s radio saying to the public, 'If TV catches on, some day the public will have to pay $250 a month to hear their dramas and comedies on the radio!'"
Andy Wolfe is already feeling Hollywood's wrath. He is chief technology officer of Sonicblue, the producer of Replay TV, which is being sued by major film studios and television networks alleging that the company's set-top recorders allow consumers to make illegal copies and share them on broadband connections.
"The appropriate step is not to take technology wholesale away from customers, but to create new businesses around content with digital rights management and to use legal measures against large-scale copyright violators," Wolfe said. "Hollywood has not chosen the tactic of trying to understand this technology but maybe delay it for a decade while they change the relationships to allow existing distributors of content to profit from digital distribution."
If that's true, the studios may be running out of time. As they convert their services to digital transmissions, cable and satellite companies are opening the door for TV networks to deliver video on demand and interactive programs through more powerful set-top boxes. Many companies are installing Replay-like features in these devices that allow viewers to skip commercials while getting more information through the Internet.
So far, the studios have managed to keep illegal use of these technologies largely under control, in no small part because of limitations in technologies now in use. But all that could change with widely anticipated high-definition television broadcasts, which the Federal Communications Commission is pushing all sides to adopt for the mass market.
Studios and other media companies worry that people will figure out a way to record digital programming on a wide scale and post popular shows on peer-to-peer networks where they can be shared for free. Their fears are warranted.
In May, bootlegged versions of "Star Wars: Attack of the Clones" began appearing on the Internet within hours of its premiere at theaters. Though the copies were of poor quality and required hours to download, high-definition technology offers pristine images and realistic sound that could take far less time to transfer on the Net if compressed in smaller files.
"If you want to make a library of movies on HBO and write them onto a DVD, the studios agreed that's a legitimate thing to do and technology should allow you to do that," said Chris Cookson, the chief technology officer at Warner Bros. "But that doesn't allow you to take it and re-transmit it outside the household."
Pixar, which co-produces all of the films it releases with Disney, might be expected to show concern over piracy as well. But the creator of such movies as "Toy Story" and "Monsters, Inc." considers digital technology its bedrock. While Jobs hasn't publicly denounced anti-piracy bills, he hasn't wholeheartedly joined Disney's fight, either.
On the contrary, earlier this year Apple ran a "Rip. Mix. Burn." campaign to help boost anemic computer sales, and its new iPod digital-audio players, which support any MP3 file, come with limited piracy protections and a 20GB hard drive, large enough to store a small library of movies.
"There are so many interests and so many competing rights," said Lawrence Blanford, CEO of Philips Consumer Electronics Company, which produces DVD players and recorders. "There's no perfect answer."
The studios have joined with some high-tech companies to form the Broadcast Protection Discussion Group, which has proposed guidelines that would force digital television manufacturers to include technology that encrypts their transmissions as soon as a "broadcast flag" signal is received by a DTV set. This encrypted signal would allow programs to be recorded but prevent them from being distributed on the Internet.
Influential members of the House and Senate have written letters urging FCC chairman Michael Powell to draft regulations requiring these broadcast flags. But the proposal has been angrily denounced by major computing and consumer electronics companies, which contend that the Broadcast Protection Discussion Group is controlled by the entertainment industry.
"It's not our job to convince Hollywood that it's not a threat," Sonicblue's Wolfe said of digital recording and distribution. "It's our job to convince them it's not illegal. What we've done is try to convince Hollywood it's a new channel for commerce and to profit from it rather than be afraid of it."
Even if encryption technologies are required by law, their endurance remains an open question. History has shown repeatedly that the more the industry tries to develop ways to thwart piracy, the faster people develop ways around the barriers. That has certainly been the experience of the music industry.
Nevertheless, the technology companies are fully aware that Hollywood has the upper hand in the debate, as they have with all others. Veterans of both the PC and the TV industries note that their products are only as valuable as the shows they can bring to the home.
"We have to start with the premise that consumer electronics is dependent on content," said Jeff Joseph, a spokesman for the Consumer Electronics Association, a lobbying group. "DVDs or CDs or HDTVs are far more compelling with quality content to view. That dynamic immediately creates an imbalance in its relationships.
NEXT WEEK'S G8 SUMMIT will be slipping through some scary developments that are aimed to stop piracy.
While most of the headline grabbing parts of the G8 conference will come from agreements on climate change and African development, a little agreement - which will see international piracy laws, border controls and cooperation from ISPs to identify pirates - is also likely to get the nod.
On the official G8 web site the agreement is mentioned as ‘protection of intellectual property rights’, but it could, potentially, completely change the way in which the law deals with pirates.
New Scientist claims that the talks will be based around the Anti-Counterfeiting Trade Agreement (ACTA) which is an international strategy for cracking down on piracy.
The agreement calls for border measures to control international piracy, including the authority for customs authorities to halt suspected intellectual property rights-infringing goods.
Liability for copyrighted material being posted on websites will be taken away from ISPs and placed on the user instead. The big idea is that it is hoped that this will encourage ISPs in the removal of infringing material.
In addition, ISPs will be expected to hand over any personal details about suspected copyright infringers at the request of the music or movie industry.
It seems that it will be a good way for the music and film industries to get their tame politicians to give them what they want by using International Agreements for draconian measures that it cannot impose to get at home.
The Global Animation Entertainment Industry • The animation industry is one of the fastest growing industries; it was estimated at USD 59 billion in 2006 and is expected to reach USD 80 billion by 2010, the entertainment segment will continue to remain the major contributor, accounting for nearly three-fourth of the total market • Animation for entertainment is a diverse global market, The major geographical markets include the United States, Canada, Japan, France, Britain and Germany • Animated series compete with many other sources of entertainment: books, magazines, radio, games, computers, internet, mobile phones, sports and other hobbies • Incumbent competitors are generally part of larger entertainment conglomerates • Key competitors in the sector are companies such as Disney, Nickelodeon, DreamWorks SKG and the cartoon Network. They are dominant organizations both in terms of production, and channel distribution through there affiliated networks
1. Disruptive Technologies There are a numerous disruptive technology issues in the current animation industry market at the moment. These range from the availability of previously unattainable High powered production tools (hardware and software) to the general consumer market, some applications for free!, To New and different distribution technologies such as YouTube which compete with traditional distribution channels for audience and advertisers revenue. 2. Piracy (Copying content – Appropriating characters) Copying and sharing of copyright, trademarked or other IP material is a serious challenge across the entire digital entertainment industry. It results in lost revenue (potential) to organizations and can be seen to dilute the premium value of their brand. One marketing challenge in this area is to get people to participate in legitimate commercial interactions with animated properties as illegitimate interactions with pirated content inadvertently yet significantly competes in the for the market for the audience. A Challenge is to change people’s perceptions that everything on the internet is free and get them paying for it. 3. Fragmented & Diffused Market The Animation entertainment market is very fragmented and diffused globally. Consumer tastes and styles vary dramatically and animation offerings are produced for a vast range of indicators. Some challenges for organizations are to consolidate strong market segments, grow and expand existing markets, tap into new market segments. Above all this is the need to develop brand equity across a portfolio of differentiated market offerings 4. New Landscapes, Different Rules Although animation is considered more adaptable than other entertainment formats to transverse into new and culturally different markets there are significant marketing challenges. These are to ensure that commercial outcomes including developing brand equity are realized while navigating demographic, psychographic and behavioural differences such as religious and societal sensitivities to characterization. Furthermore All of these markets are regulated by national broadcasting frameworks that reflect and enforce the cultural standards of the country. mature markets in the West are also experiencing regulatory changes relating to obesity and the advertising of junk food to children, this will have a direct impact on animation production. 5. Complex Channel Relationships Animation production companies Rely on a complex system of channel relationships to get there product to market, they are in essence pitching a market segment to a buyer (distributor) who is seeking an entertainment property to fill a market segment. Effectively the animation company is selling the audience to the channel distributor who then in turn sells the time and space around the program to advertisers or like, who want to access that particular market segment. There is a challenge to build equity in a company brand and or a portfolio of entertainment products (brands) that can adequately meet the needs of the buyer. The strategic relationship between Pixar and Disney is one example of a successful solution to these challenges.
Please see the post below, I have bashed out some points, Please review them and give me your feedback. Currently they are too long but I will knock it down tomorrow. I have at work an introduction, positioning our company in the animation industry. I also have some of the solutions suggestions (marketing concepts)in the master draft.
I changed the point about loss of 'revenue' to 'Piracy' as I think this will be easier to research and we can bring the loss of revenue into it.
Disruptive technologies are an innovation led change that impacts current and new product (content) development across the industry as a whole and requires that organizations must respond or be left behind.
The current animation industry is intrinsically tied to advances in digital visual technology and currently coming to terms with a number of disruptive technology issues in the market. Some examples of the disruptive technologies include;
High powered animation production tools (hardware and software) are now available at the consumer level,
New high level production technologies in the market can give competitors a significant technological advantage
New and different distribution technologies such as Youtube compete with traditional distribution channels for audience and advertisers revenue which requires new revenue models.
These new distribution channels are used to exhibit consumer generated content which and often comprises either cheap amateur or pirated content.
Mobile devices can also be seen as a disruptive technology as new strategies need to be developed to create or transition content form traditional media to mobile devices
Copying and Sharing of copyright, trademarked or other IP material is a serious marketing challenge across the entire digital entertainment industry as it results lost revenue to the organization and can be seen to dilute the premium value of the brand
Animation Companies face a marketing challenge to get people to participate in legitimate commercial interactions with animated properties and reject illegitimate interactions. The availability of pirated content can be seen as inadvertent yet significant competition for the market / audience. There is a Challenge to change peoples perceptions that everything on the internet is free
3. Fragmented & Diffused Market
The Animation entertainment market is very fragmented and diffused globally. Consumer tastes and styles vary dramatically and animation offerings are produced for a vast range of indicators
4. New Landscapes, Different Rules
Animation entertainment is increasingly considered a global commodity and animation companies strategically look to extend their geographical reach into a variety of existing and new international markets. This can be seen to be a competitive necessity to both reduce the risk and to maximise returns on investment
Although animation is considered more adaptable than other entertainment formats to transverse into new and culturally different markets there are significant marketing challenges. These are to ensure that commercial outcomes including developing brand equity are realized while navigating demographic, psychographic and behavioural differences such as religious and societal sensitivities to characterization.
All of these markets are regulated by national broadcasting frameworks that reflect and enforce the cultural standards of the country. An example of this is the ‘Commercial Television Industry Code of Practice’ which in conjunction with ‘The Australian Communications and Media Authority (ACMA)’ regulates the content classification system that all media in Australia must carry.
In mature markets the rules of the game can also change, currently there is a societal movement to stop the advertising of junk food during Children’s programming as a response to rising Obesity levels in children in the western world. Legislation to this 6effect would negatively impact the purchasing power of Channel distributors.
5. Complex Channel Relationships
How to get content to potential consumer; push-pull from animator/production houses/media channels
Animation production companies are in essence pitching a market segment to a buyer (distributor). The buyer is actually buying an entertainment property to fill a market segment. Effectively the animation company is selling the audience to the channel distributor who then in turn sells the time and space around the program to advertisers who want to access that particular market segment. There is a challenge to build equity in a company brand and or a portfolio of entertainment products/brands that can meet the needs of the buyer
Tuesday, October 21, 2008
After discussing with a friend who work with Connex, identified the following as top challenges with Public Trans in Vic: + Relationship management with ticket agents. Ticket agents include newsagents, tourism outlets, posst office, and connex station staff + Engagement with local community, and undertaking initiatives that support local communities + Effective use of communication channels with customers regarding service delays, timetable changes, etc + Compliance with government policy, in particular the implementation and compliance to defined fares and conditions
Abstract The rapid advancement of technology has made computer animation available to the masses and the animation industry is one of the fastest growing industries. The demand for animated entertainment has expanded with the increase in broadcasting hours by cable and satellite TV along with the growing popularity of the Internet. In the past, animation series were aimed at children aged nine and below. In recent years however, TV stations have been producing animation series for teenagers, adults and the whole family. Animation series like The Simpsons and King of the Hill have been successfully aired on primetime TV. The major markets include the United States, Canada, Japan, France, Britain and Germany. Licensing operations for T-shirts, caps and other items have also been a major source of revenue for animation companies. In Japan, several successful computer games have crossed over and have become animated series like Pokemon, Monster Farm, Power Stone and Detective Conan. More broadly speaking, animation is increasingly used in video games, and movies are also increasingly reliant on animation and computer graphic special effects. Another key trend we are witnessing is the outsourcing of animation content to Asia. This market is increasingly being tapped by North American film and television program producers. The major factor behind this shift of computer animation production to the Asia/Pacific region continues to be the availability of low cost, powerful computer animation platforms and much lower labour rates in the Asian and Pacific Rim countries compared to North America and Europe. The bulk of the outsourcing happens for 2D animation content with some amount of 3D content.
2. Global Entertainment and Media Outlook: 2008-2012
Abstract A leading entertainment and media industry forecast. Covering the US, Europe, Middle East, Africa, Asia Pacific, Latin America, and Canada. In-depth global analyses and five-year growth projections for 15 industry segments. Outlook covers these industry segments: Internet access spending: wired and mobile Internet advertising: wired and mobile TV subscriptions and license fees Television advertising Recorded music Filmed entertainment Video games Consumer magazine publishing Newspaper publishing Radio and out-of-home advertising Theme parks and amusement parks Casino and other regulated gaming Consumer and educational book publishing Business-to-business publishing Sports
Territory-specific editions: Australia Germany India Middle East Netherlands
1. Introduction of Disruptive Technologies into the market - You Tube, file sharing, cheap animation production tools, new animation technologies that offer a production advantage
2. Fragmented, and diffused audience / Market - A highly diffused market that expects a consistent offering of differentiated novelty entertainment products. With a massive range of available content competing across multiple platforms (TV, Internet, mobile devices, and cinema)
3. Government Regulated environment - changing regulatory landscape - The screen industry is governed by a rating system imposed through government mechanisms. There is a challenge to manage projects within the boundaries of these ratings ,as these to a large extent effect the audience that can get access to your content
Also Kids animation (the backbone of the animation industry) is funded largely from the advertising revenue of 'Junk Food' - With the current focus on childhood obesity there is pressure to ban these ads from timeslots that are designated for children. This means that as revenue models are shifting there is a challenge for companies look to alternate funding and revenue models. Identifying and Managing change in the market
4. Brand perception - Animation is not just for kids ( How do you change perceptions/ behaviours to grow / expand market share of animation in the overall screen market
5. Complex Channel relationships- Animation production companies are in essence pitching a market segment to a buyer (distributor). Thebuyer is actually buying an entertainment property to fill a market segment. Effectively the animation company is selling the audience to the channel distributor who then in turn sells the time and space around the program to advertisers who want to access that particular market segment. There is a challenge to build equity in a company brand and or a portfolio of entertainment products/brands that can meet the needs of the buyer 6. How do you differentiate in a highly differentiated market?
Trawling around the net, I found a great piece on the sponge! There is an interesting history at the end - It give a bit of insight into the industry, it especially talkes about merchandising.
I have been thinking about a few things that also could be challenges for the market
David says:
can brainstorm some more and get the most relevant ones
christian says:
Firstly I am thinking about new technologies such as you tube disturbing the market
David says:
Competition. Good point
christian says:
Mate I am going to have to dash my daughter need a bit of assistance to get to sleep
christian says:
I will be back shortly
David says:
Got to it. can speak later if you are around
christian says:
OK
christian says:
OK, Little darling is having a hard time getting to sleep, I have passed her back to Natalie
David says:
I guess I'll come to find out about these things
christian says:
Yes you will
christian says:
So disruptive technologies
David says:
Yes, absolutely
christian says:
you tube , piracy, increased competition
David says:
I guess Porter's forces come into play in that respect
David says:
Everything on web is free......
christian says:
fragmentation of overall market offering and deterioration of traditional revenue models due to file sharing and piracy
christian says:
Yeah the last is funny! but could be a good argument
David says:
yep, related to discovering where in ,long tail u can find value
David says:
Come to think of it - YouTube is also a potential marketing/sales channel
christian says:
Yes , segmenting the long tail and then how do you target and position your offering to that segment
christian says:
Direct competition for eyeballs
christian says:
How can you charge a premium to cover your production costs when there is 100 clips of funny cats produced at cost nothing
David says:
Mmmm, pricing models..
christian says:
Secondly (secondly )there is a diffusion of platforms PC, handheld devices, TV
David says:
Clips have value if there is a story behind it, e.g. Family Guy, XBOX halo, world of Warcraft
christian says:
Government regulation is another
christian says:
they manage the rating system
David says:
I'm not aware of that one
christian says:
thereby determining audience access
David says:
Doesn't having R rating produce "buzz"
christian says:
children's television is produced with the money for advertising junk food, regulation change about junk food advertising s can seriously impact the budgets available for productions
David says:
I see. That is a challenge
christian says:
Yes R rating can produce a buzz but it also significantly excludes a huge sector of the market
David says:
As long as there is value to be captured that exceeds the loss..
David says:
profit vs. share simplistically
christian says:
yep, i think it all has to do with being very clear about the target market as I have heard anecdotal evidence that if a show gets pushed into a rating thety weren't expecting it can have serious consequences
David says:
I agree, any rating should be planned not accidental. otherwise it wouldn't be a good marketing plan
christian says:
http://www.animationmagazine.net/
christian says:
This is the industry magazine, I have been meaning to get some of the paper copies to you
David says:
had perverse thought - what happens if the producers of a risque clip (Pamela Anderson as an exmaple) didn't get an R rating. audience would think it's too tame...
christian says:
Kids would be delighted
christian says:
Just recently an episode of the family guy slipped into the R rating and could not be shown on Australian TV (I think) Basically it was an episode where Death has sex in the back of a car with a dead girl! They argued that it was so unreal that it couldn't be taken seriouslybut they lost
David says:
The hype would have put family Guy back on radar given it's late time slot
christian says:
One angle could be the rating system and the fact that things are only rated after the fact of production, in this way we could suggest that this is a problem that could be addressed by doing very good sense making of the ratings criteria and steering into the middle of these
David says:
Yes.
christian says:
I'm just going to duck out for a quick cuppa with my Love who I haven't seen today
David says:
Sensemaking in this case would be the market research/intelligence.
christian says:
Be back in 5, she will be going to bed soon
David says:
Coool. My wife is home soon as well
christian says:
Yep, back in 5
christian says:
maybe 10
David says:
Back in harness?
christian says:
Yeah me too
David says:
You going to summarize our session on the blog - add ur points to the list?
christian says:
I was going to cut and paste the whole thing
David says:
excellent
christian says:
I''ll do it now
David says:
From a marketing perspective I think animation is the way to wow our audience. To make a good go of it we'll need the research material.
christian says:
I am really looking at what reaserch I have available, I have a stack of magazine that really shed some light on some of the issues
christian says:
Ther are alot of intersting Ads really specifical targeting a particular segment
christian says:
what is interesting is that they are pitching the market segment to the buyer. Thebuyer is actually buying a property to fill a segment
David says:
Do you have access to industry statisitcs such as sizes of companies, proftiability, revenues by segment, size of segments, etc. Need pies charts and such to outline the value of the industry
christian says:
In other words you aare selling the audience to the channel distributor who then in turn sells the time around and space around the program to advertisers who want to access that particular market segment.
David says:
That's clever
christian says:
It's actually taken me a while to work that one out!
David says:
The advertiser is a complementor in the process. They can add value to your product.
christian says:
I think that The advertiser is (in a commercial framework) the financial driver of the show and that our companies products essentially supportthe advertiser
David says:
This would be related to the point about how an animation company positions itself with respect to copperating with other comapnies
christian says:
funnily eniough the first animated series in Australia was 'Freddo Frog' basically a long ad for chocolate directed at kids
David says:
Like old school McDonalds cartoons - same target
christian says:
Yes
christian says:
Just to recap I think one strong challenge for the sector is disruptive technologies - This is a deffinant challege that hasreally changed the market landscape both in production and delivery.
David says:
agreed
christian says:
Disruptive technologies would include cheaper and more easily accessable production tools at the consumer levellevel
David says:
And pushes the perception that content is free
christian says:
This has meant more product on the market at a lwer quality and at a cheaper price which has driven the price of animation down
christian says:
New delivery technology such as you tube has dispersed the market and fragmented it incredibly
David says:
agreed, capturing value in a fragemnted market is huge challenge
christian says:
Highly competitive fragmented market
David says:
You mentioned the imapct of governement regulation (including international governments if ur content is heading overseas)
christian says:
Huge incumbants dominating the top end. Diney Pixar Nickelodeon ect.
David says:
the compettion angle
christian says:
Yes I think that is another strong challenge. government regulation
David says:
Just thinking - ur competitors might cooperate if u have something to offer them thru licencing. All those cable & satellite stations need hours of content to fill the void
christian says:
1. Disruptive Technology 2. Government regulations and the implications of ratings / and time slots
christian says:
Yes- competitor cooperation, this could relate to the hig cost of production and trying to leverage other companiesstrengths
christian says:
3. Diffusion and fragmentation of then market
David says:
More a solution but I think it's relevant
David says:
Yes to 3
christian says:
Here's a good one
christian says:
No it's gone!!!
David says:
lose train of thought?
christian says:
Got it
christian says:
Perception in the market that animation is for kids
christian says:
How do we grow across markets
David says:
yep & yep
christian says:
How do we expand up or down?
David says:
though if anybody is familiar with manga comics - they are very adult
christian says:
Yes I never knew octopusses did that!!!
David says:
growing across markets relates to getting market intelligence on where the audience is and how much they're willing to pay to get product
David says:
Another thought - more a solution - but understanding segment behaviours
christian says:
The other angle I was thinking about was if there is very little budget to get animation made one solution would be to incorporatea secondary brand or brands into the product in that way creating branded content
David says:
shortage of funding would be the challenge. Ur point would be a potential solution
christian says:
I think understanding segment behaviours is an important aspect relating to the fragmentation issue
christian says:
Could shortage of funding be a marketing challenge
David says:
Yes, but hold the thought.
christian says:
Also Differentiation, how do you differentiate in a market that is so seemingly flooded with differentiation of product
christian says:
Maybe create a brand that has a element of smeness and stability - DIisney for example!!!
David says:
Differentiation of UR company's offerings as opposed to hundreds of other offerings. I think tthat perception of what's so different about ur company would be a challenge to overcome
christian says:
smemness = sameness
christian says:
Good point
David says:
Pixar has created a reputation/brand that stands alone. Any product coming out of its doors is assumed to be good.
christian says:
Yes that are the top shelf brand
David says:
We could research as to how they achieved that. it would have to be a benchmark strategy in itself - worthy of a case study!
christian says:
I have been doing a bit of research and interestingly what I have discovered is that alot of the big animato companies are owned by larger entertainment consortiums
christian says:
Absolutely
christian says:
There is a book recently about the rise of Pixar
David says:
That could be intresting to get a copy
christian says:
Long before it defined CG-animation excellence with films like Toy Story and The Incredibles, Pixar was a scrappy graphics-software and computer-hardware company, constantly in danger of extinction. Its saviors include cofounder Ed Catmull, who dreamed of being an animator but couldn't draw; driven writer-director John Lasseter, a would-be innovator pushed out of Disney; and deep-pocketed patron S
christian says:
That was acut and paste - not my writing
David says:
funding and creative vision
christian says:
That was a review of "The Pixar Touch'
christian says:
There is another one called 'To infinity and beyond - The story of Pixar animation studios'
David says:
I'll need to wind up shortly. I'm a bit brain-strained from ManEc mid-term today and i should chat to my wife briefly before she retires for the evening.
christian says:
No probs, I am pretty ready to crash also
christian says:
I will get thsi up, I think we covered a good amount and although I am still not 100% clear I will think more about it and get that to you all so we can make a decision next week
At the same time, the studios recognize the lucrative possibilities of interactive programming and other enhanced video services. They must be careful not to cut themselves out of any new business resulting from the next generation of TV set-top boxes, high-definition programming, digital cable systems and wireless networking systems being developed as television, computing and entertainment increasingly converge in the home. 
Pixar, which co-produces all of the films it releases with Disney, might be expected to show concern over piracy as well. But the creator of such movies as "Toy Story" and "Monsters, Inc." considers digital technology its bedrock. While Jobs hasn't publicly denounced anti-piracy bills, he hasn't wholeheartedly joined Disney's fight, either. 
Posts
