The tech news feeds for the last few days have been full of reports on ‘Candy Crush’ maker King’s IPO plans and Facebook’s $19 billion acquisition of Whatsapp.
What is interesting in both of these cases is the premium that is placed on audience reach, while audience retention is (IMHO) currently not guaranteed. Both companies can boast great user figures, but then what? For King it will be important to keep players coming back to Candy Crush, and redirect any churn to its other titles. Whatsapp will have to make sure its users do not defect to other apps, as switching costs are pretty low.
Creating a strong relationship with their huge user bases will be the key to success in either case. Whether you do it by building characters (like Disney), a corporate mythology (like Apple) or a personal brand (like Virgin), you need to provide the fans with an anchor. Only then will the big numbers pay off.
In motivational theory, there is a concept called ‘hygiene factors‘. These are elements of a job that do not create satisfaction, but their absence will cause dissatisfaction. Examples would be safety precautions, proper tools needed for the job etc.
After writing yesterday that content is a necessity, I started to think about it through this perspective: That the mere presence of content on a platform (your usual TV channel, your Facebook feed, your Spotify app) is not something that makes you inherently happy. It is a prerequisite for purchasing access (a TV set, a broadband subscription, a smartphone) in the first place, but only by having your favourite content available can the platform hope to really delight you.
Saying that content is king derides the meaning of deeper fan engagement, offered by content brands. Generic ‘content’ is a hygiene factor. Engaging content brands are motivators.
It has been a while since my last post, and I have no idea of the direction this blog will take. If you’re up for surprises (hopefully pleasant ones), stay tuned!
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I was recently asked about my industry outlook into the next 12 months, and it sent me off thinking about huge scale trends affecting animation and digital content. For now, my list looks like this:
Continued growth of mobile leads to further shifts in viewing habits. This will have a huge effect on the types and amount of content produced as ‘mobile first’. Just as TV did not kill cinema, mobile (or any digital) distribution will not kill TV. But it will no longer be enough to just edit and reposition your content from the small screen to the tiny screen.
The growing playing fields of digital distribution will open up still more space for new players. The proliferation of channels means that these need to differentiate themselves. Thus premiums will be paid for brands, second rate content will have to settle for free platforms like Youtube. Smaller producers can survive by building their brands and, most importantly, building their online fan base.
All of the above means that competition gets ever tighter, which shifts more and more power to the viewers and fans. Content is a necessity, brands are king, but fans are the emperors, if you will.
First off, apologies about the long hiatus of this blog. Some of you might have heard that I started as animation producer at Rovio Entertainment Ltd. (aka ‘the Angry Birds guys’) in the beginning of July. I’ve been swamped with my old consulting gigs and new assignments, so the blog had to take a back seat. This entry is also quite short but I hope to write more soon. Thank you for reading!
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Every now and then I get an email asking me about the Finnish animation sector. I thought I’d just share my most recent reply here for everyone to read. The question was about “getting an idea about how Finnish studios are doing, how’s the financial environment, how’s the role of government/agencies, how to collaborate with some Finnish studios.”
Here’s my answer:
The studios are doing well, the Finnish animation sector in general is growing at a good pace. Animation contributes 32% of the Finnish audiovisual exports (survey 2011 by FAVEX). A good list of studios and production companies can be found on the Finnanimation website.
The financial environment is that of a small European country. This means that there is a limited national audience (5 million inhabitants), forcing producers to seek out coproduction options. Like elsewhere in the Nordic countries, programmes are subtitled, not dubbed, which makes for easy intertanional transactions.
The Finnish Film Foundation supports short and feature films reasonably well, but takes a much more reserved role with TV projects (usually only helping to finance development and a trailer or pilot). The Centre for Audiovisual Arts (AVEK) supports small scale demo projects tailored to the new media / transmedia niche. TEKES, “The Finnish Funding Agency for Technology and Innovation” also supports some projects, especially with a more technological focus.
The film investment business in Finland is quite unevolved. However there have been some recent developments and one interesting player to look at is Mediatonic.
In order to start collaborations with a Finnish producer or studio you can just approach them via phone and email. Finns are very straight forward and down to earth, so it will be easy to get an answer to your proposal. There’s not much red-tape involved in coproductions, other than certain requirements from the Film Foundation or other funding body.
This is the second part in a series of film financing blog posts. Like I wrote in the first part, I want to outline the more or less obvious sources outside of the traditional broadcaster/filmfund/distributor triangle, that a film or TV producer could tap into.
This week’s film financing source: Sponsorship
The idea: The sponsor gives you cash or in-kind products or services, in exchange for the right to display his brand in association with your project. The goal is for your film to give a positive image to the sponsor’s products, and for the sponsor’s message to reach a wider audience.
What’s in it for you: As with product placement it can be cash, depending on your audience profile and size. Often some kind of bartering is involved, where for example a media sponsor gives your production free advertising time in exchange for the benefits, or your production gets to borrow items or locations for free.
The catch: Similar to product placement, you need a defined audience that matches the sponsor’s goals and targets. Sponsoring is not as intrusive towards an audience, as the sponsor’s message is not embedded in the story itself.
How do you do it: There are lots of companies that specialise in building sponsorship relations between brands and sponsorable entities. But as they do a middleman’s job they will also charge a fee for their services. The other way is to pitch the same CMO’s and advertising agencies that you keep in regular contact with regarding your product placement opportunities.
Examples: Many television programmes are “brought to you by” a certain brand. Lot’s of films are also marketed “in co-operation with” a media company. These vary a lot from one territory to another, even for the exact same film.
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It has been said that a producer’s only job is to raise financing for his projects. When everyone competes for the same traditional sources (film fund, broadcaster & distributor), it makes sense to try and diversify your financing sources. In this series I want to outline the more or less obvious sources that a film or TV producer could tap into.
This week’s film financing source: Product placement
The idea: You prominently display a product, service or brand in your film or TV show in a way that is natural to the story and world of the film. The display can be visual, embedded in dialogue, or both.
What’s in it for you: At best cold hard cash, depending on your audience profile and size. At the least you can get the displayed items on loan for the duration of your shoot (compare with sponsoring).
The catch: You need a sizable audience (through secured distribution), you need to be able to profile it (see here regarding target audience thinking) and you need to make sure that the placed product fits well into your script so that it doesn’t irritate your audience.
How do you do it: Establish and sustain contacts with account managers at advertising agencies and CMO’s at large companies who represent relevant brands. Pitch projects to them regularly, but always make sure that you demonstrate what their client gets out of the deal.
Examples: Lucky Strike cigarettes in ‘Mad Men’, FedEx logos all over ‘Castaway’, the Dom Perignon in James Bond’s hand or all kinds of every day items in the supermarket scenes in any daily soap.
Tidbit: Many people dismiss the possibility for product placement in animated films. The number of product placements in animated family films has gone down in recent years, and there are good reasons for this. But the anarchistic ‘Terkel in Trouble‘ is a good example where the blatant advertising actually works for the premise of the film.
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When you develop an animation project you will be faced with lots of challenges. You might be tempted to quit at various stages. But how do you know when you should quit and dump the project?
Seth Godin has written a book called “The Dip” on knowing when to quit. He says that a free market rewards the extraordinary, the “best in the world” (or “best in your niche”). If you are number one in the market you reap 10 to 100 times the benefits than number two. This means that if you are only doing your best, and you can see that you will not succeed at being THE best, you should quit.
Godin’s idea translates very well into animation development. Every year the film markets at Berlin or Cannes are flooded with projects that try their best. But only a handful of them really shine as the best in their categories. Godin suggests that you ask yourself three questions when you consider quitting. They can be applied to animation development as well:
1. Are you panicking? If you quit when you are panicked, the results can be costly. You should aim to quit in the planning phase, and not when you’re in the midst of the problems. This means that you need to do your homework BEFORE you invest time and money in scripts, character visuals, bibles and trips to film markets.
2. Who or what are you trying to influence? If you are trying to influence a single person, you’ve got limits on what you can do. This is very often the case with film projects, and can mean that a few key people turning down your idea is enough for it to be scrapped.
3. Are you making measurable progress? Look for milestones that can be set in advance and measured. If you are not making headway in the time you’ve set for the project, or if you are indeed falling back, you should seriously consider killing the project.
When you reach the decision of killing a project, kill it fast. Do not spend any more resources on it. A rule of successful poker players is to never throw good money after bad.
But also remember: The way to success is paved with discarded projects. So don’t mourn the past but concentrate on making your next production the best in the world!
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1.) The world wide animation business was estimated to be worth 158 billion USD in 2008 and is expected to reach 249 billion USD in 2012. This figure includes industrial simulations and b-2-b applications of animation (ca. 20% of the total), as well as gaming, video, television and film.
2.) The animation business is a quite small family, especially in Europe. There are only a few markets and events that are mandatory to attend. Though if you want to become a player you’d better show up at most of them, so the other attendees know that you are serious about your commitment.
3.) Animation crosses cultural boundaries like no other kind of audiovisual entertainment. Animated worlds and characters cite very little cultural references. They are created out of thin air and are easily relatable to audiences everywhere. Also, animation is always dubbed, which makes for less awkwardness in localized versions.
4.) A project needs a good reason to be animated. When I read a new script, the first question I ask is: “Is it justified that this is an animated project?” Animation is more labour intensive and expensive than live-action, so there better be very compelling reasons for a film to be produced with animation technology. Animation is not a gimmick or genre, it is a storytelling device.
5.) A project’s visuals are immensely important at all stages of development and financing. When you present a project to a potential financier or coproducer, your story will carry a lot of weight. But as animation is a very visual art form everyone will want to know about the look and feel of your particular project. The financing of your production will depend on a well executed look that suits your story and characters.
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The answer to this question is the most important decision that you will make when developing and financing an animated feature film, TV-series or any other project. Actually this applies to any other product in any other business as well. The question is:
“Who is our target audience?”
Why is this so important? Because if you are not aiming at a specified audience you will not reach anyone at all. And if your target is too wide you will choke on your goal. Only studios like Pixar have the deep pockets required to target ‘everyone’ and even their films have core and secondary audiences.
It is of course scary to choose a target. You have to cut out a part of your potential audience. Except that they never were your potential audience to begin with. No project can be equally appealing to everybody. If you are bowing to one part of the market, you are showing your back-side to another. You need to make decisions.
The target question will be asked of you over and over again during development and financing all the way to the marketing stages of the finished production. If your target is not clearly defined, or if it does not correspond with the project’s other features like its visuals, you will not be able to finance your production.
It’s that simple.
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I have just finished work on my first ebook, called “Coproducing with Germany – how to plan a film project with German involvement”. You can download it for free here.
It is designed to help filmmakers in their quest to secure film financing for their productions. The ebook is filled with practical advice, expert interviews and current trends regarding coproducing in general and the German financing landscape in particular.
Go and download the ebook, read it and use it in your next production!
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