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
• 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.
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.
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