Wednesday, October 15, 2008

David and Christian's Chat about Marketing Challenges in the Animation sector

christian says:

HI David

David says:

Hi christian,

David says:

I posted some challenges.

christian says:

I just had a quick read

christian says:

I think that there are some interesting points

christian says:

Give me a sec, I will go get my notes

David says:

OK

christian says:

Right

christian says:

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 seriously but 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. The buyer 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 support the 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 has really 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 incorporate a 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

christian says:

Thanks for chatting

christian says:

ciao

David says:

Ok. I will think about it some more tomorrow

David says:

goodnite

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