Being Innovative is the Only Way to Survive

VR

During my recent trip to US, I have met with an executive producer of a major studio. He is an old friend whom I have worked with in the past. We were sharing with each other how we have been doing.

At the meeting, he told me that currently in the US, more and more TV shows are produced in 2D. He suggested that I should change my business model since I am running a 3D animation studio.  I can become a middleman / broker and take the 2D animation work from US. Then re outsource it to the 3rd world country. (Its  more challenging for us to produce animated series in 2D due to cost effectiveness and also we have limited 2D Animation talents available here in Singapore.)

If I were to turn our studio to become a 2D animation studio now, my entire 3D crew will lose their job. I am very close to our crew. They are like my family. The priority is my crew. But at the same time, I was lost and stuck thinking what should I do next.  In addition, if we start re-outsourcing the 2D Animation work to 3rd world country. What is stopping the client in future to go straight to the studios in the 3rd world country. We will probably ended up competing on lower price in order to stay alive.

Later in that week, I have scheduled to meet some major studios in Santa Monica. I was there to present our studio’s new initiative in using VR to tell story. We have been doing some internal development in interactive VR for the last few months. At the meeting, we presented this new initiative to the studio executives. When the studio’s executives saw it, they were surprised and impressed how fast we have moved ahead in this area. They said to us “This is the future. I am impressed with your new ideas and strategies for the proposal.” I am glad that we have stood by our principles. This initiative has now open a whole new opportunity for us. Nowadays, toys and computer games companies are investing in series. They seems to have more money these days than broadcasters. I will probably be going back to LA to discuss this further.  After these few meetings, I felt more encouraged and hopeful again when I saw their reaction.

A valuable lesson I have learnt here. If we want to compete globally, being innovative is the only way to survive. We must always find that new business model to stay competitive. Making ourselves cheaper and going backwards is not a long-term solution. It might even kill us eventually. If we can only do what others have already done before, then why should others pay us a premium or give us work. Over the years we have always strive to stay ahead of others by exploring new grounds. (From Stereoscopic 3d to auto stereoscopic 3d to augmented reality to virtual reality) I am glad that we are on the right path.

Changing Trends

(View Master from Past to Present – Changing the way we see the world in 3d. With the latest introduction of AR and VR technology. View Master is not going to be the same.)

1) NEW WAYS TO ENGAGE THE AUDIENCE AND NEW MONETIZATION MODEL
There was a time when Saturday morning show was really popular among the kids. When the 24 hrs kids cable channel came along, this new business model totally kills the Saturday morning show. The 24/7 kids cable channel promotes its series by airing it all day.  And eventually making money from selling its merchandise.

With the introduction of OTT (Over The Top – like Netflix and Hulu), it seems that the industry is going through another round of change (Just like the time when Cables kill Saturday Morning Show). Cables and IPTV that are unable to transmit their content to the mobile devices like tablets and smart phone are facing real challenges ahead.

As the mobile devices (tablets and smartphones) are getting more and more sophisticated, the audience is now slowly moving away from traditional TV. This affects both the advertising dollar as well as the TV licensing fee.

OTT seems to catch some of these Cable Channel Companies by surprise. It must be a difficult decision for these Cable Channel Companies to decide whether they should set up their own OTT facilities. If they do, it will kill their Cable Channel. If they don’t, they will lose out to their competitors. So many ended up temporary parking their content on others OTT platform like Hulu and observe how market changes.

OTT seems to be just the beginning for this change. The next trend I am seeing is the integration of film, TV with Games. A full interactive experience. The audience in the future is not going to be satisfied with just being a couch potato. Imagine that you can interact within a scene and be part of the story. This is going to be the future.

Our Prime Minister Lee was trying out the Oculus Toybox Demo in the US.

Singapore Prime Minister Lee was trying out the Oculus Toybox Demo in the US.

Signs of Growth:

Goldman Sachs: VR and AR “Will Be the Next Generation Computing Platform”Prestigious investment bank predicts an $80 billion market by 2025
(Click link to read article)

China Alibaba has invested $793.5M into Magic Leap. (Click link to read article)

Microsoft Hololens:

Mix Reality Gaming with Hololens : Game Code name Project X Ray

Hololens Holoportation: Virtual 3D Teleportation in Real-time

With all these growth, this is going to change the way audience consume content and also our business and monetizing model. Instead of money coming from the broadcasters, we will probably see more investment coming from Toy Companies, Computer Games Companies and Online Streaming Portal.

Moving forward if we want to excel and survive as an independent producer, we need to rethink of our strategy.  It’s not just about technology. But an integration of Arts and Technology (Could be 3d Stereoscopic/ Auto-stereoscopic + Augmented Reality + Virtual Reality etc) to meet our business goal.

2) COUNTRIES THAT STILL PROVIDES FINANCES TO SUPPORT CONTENT CREATION
As an independent producer, it is important to know where you can find the right partner who has their government or its broadcaster’s support to help finance the animated series production.

In the past, most producers go to the West. With the arising economical problem in the west, finding the financial support is no longer that easy.

Currently in the West, there are still financial support coming from Canada and some support from UK and Ireland. In Europe, it is mainly from France. As for the rest of the European countries, it is not going to be easy given the drop in Euros as well as the arising problems in their economy.

As for the East, Korea, Malaysia and China are the key countries with strong financial support. Korea support comes mainly from private investors, broadcasters as well as strategic investors like CJ E&M (CJ Entertainment and Media) and SK Broadband. What I have gathered so far is the money raised in Korea normally covers 50% of the production cost. Hence many Korean companies are still seeking co financing in China and Malaysia.

Besides money from the government and broadcasters,  there seems to be more investment interest coming from Computer Games and Toys manufacturing companies in both the East and the West.

3) 2D or 3D (CGI) dominates the animated TV series market?
In North America, it seems that most of the animated TV series are in the 2d format. For 3d (CGI) format, it is mainly the preschool series, direct to DVD or TV special (Telefeature). The Toys Companies and Computer Games Companies are the ones who has the budget to produce higher quality 3d (CGI) shows.

In Asia, countries like Singapore, Malaysia, India, China, Korea, Thailand produces many animated series in 3d (CGI). Korea produces the most 3d (CGI) preschool series.

Producing an animated feature based on a Pre School Concept in North America

In North America, the parents are the ones who decide which film to watch. Hence it is very important for the film to be for family entertainment. (Not just for the kids or adults. And it also cannot be too childish or too violent.) If the animated series is already on TV, chances are parents would just let their kids watch it on TV. This is especially true for preschool content that becomes an animated film eventually. It seems that those content that started from an animated TV series and later becomes an animated film, most of them do badly or average at the box office only.
With reference to one of my previous post.
(https://entrepreneurshipinanimation.wordpress.com/2015/05/30/in-china-should-i-launch-the-animated-tv-series-or-feature-film-first/)

Case Study:
” Aardman latest film Shaun the Sheep Movie had a disastrous U.S. launch, debuting in eleventh place with an estimated $4 million.”

Read More:
(http://www.cartoonbrew.com/box-office-report/shaun-the-sheep-movie-opening-is-baaaaa-d-117382.html)

Further Reference: Feature Animated Films based on existing TV Series.
(http://www.boxofficemojo.com/genres/chart/?id=basedonanimatedtv.htm)

Like the Flushaway, (one of the earlier Aardman film with Dreamworks) it also didn’t do as well. Which lead to Aardman breaks away from Dreamworks. I am not too sure if British humour is well appreciated among US kids. This could be another possible reason.

Raising serious money through crowdfunding platform like Kickstarter.

In the past, we are very dependent on government funds to produce animation. Times has changed. Do look at the kind of projects and some serious money being raised through crowdfunding.

I am not saying it is easy. (Getting government funds is not easy too.) You need to have a strong campaign and fans to support you. But this helps you to build your IP and brand for a long-term. Its worth thinking.

For art related projects, I suggest Kickstarter as it has the largest community and capital so far to support artist related projects as compared to other crowdfunding platform.

Here are some interesting animation projects

Money Raised $878,028 (pledged of $580,000 goal)

Money Raised $625,518 (pledged of $150,000 goal)

Money Raised $441,900 (pledged of $400,000 goal)

Money Raised $483,524 (pledged of $80,000 goal)

You can find more successful projects here as well as to have a better understanding on their campaign behind.

https://www.kickstarter.com/discover/categories/film%20&%20video/animation?sort=most_funded

How do you manage your risk during the process of developing an animated TV series?


“Do we pitch the concept first or make the series first?”

Animated Series is an expensive business. For new beginners, my advise is to be careful. Do it step by step to minimise risk.

So here is the summary of steps.

1) First, make sure you have a strong pitch bible and strong 2d concept design. When I said strong concept design, I mean design that is merchandise friendly.
Some examples: Link

2) Go to major market like Kidscreen, MIPTV or MIPCOM to get distributors or broadcasters’ feedback. After you have gotten the feedback, go back to refine your bible and designs.

3) If you have some cash, work on some scenes mockup in 3d if it is a 3d series. The mockup will just be 3d renders touched up in photoshop. If it is a 2d show, do some 2d renders. This is just to give buyer a feel of how the series will look like. Again get feedback at the market.

Example: This is what we did.
http://www.zzzforce.com/Concept.jpg
http://www.zzzforce.com/Zzz01.jpg
http://www.zzzforce.com/Zzz02.jpg
http://www.zzzforce.com/Zzz03.jpg
http://www.zzzforce.com/Zzz04.jpg
http://www.zzzforce.com/Zzz05.jpg

4) Next create a teaser. Not a trailer. A trailer is too expensive to make. Young Asian Studios always like to make trailer. Too risky in my opinion. Do it only after the whole series is completed. Bring your teaser to the market to get feedback.

Example of a teaser

Example of a trailer
(DON’T DO THIS. TOO EXPENSIVE AND RISKY IF SERIES IS NOT COMPLETED.)

5) If you do no have the money to produce a pilot episode. Try to get interested broadcasters or distributors to give you a “Letter of Intent.” With this prove of interest, talk to your government (if they have some form of support) or investors to seek investment for 1 episode. Again get feedback at the market after the episode is done.

6) Sometimes with 1 episode and 2 good scripts, you can secure pre sales. Sometimes, broadcasters needs 3 episodes. From here, it will get you started step by step ensuring you are on the right track before moving to the next step.

However if you go ahead and complete the entire series without getting any feedback only to realise you cannot sell it globally later, it will lose money and time altogether.

VHX – New Trends

New Trends
You will see more and more such platform coming up. It is like your own online streaming channel. Almost like your own VOD (video on demand) platform. Others will watch and pay online for your programs. Hence indie producers are not longer facing blockage from big boys (Gatekeepers)

I will introduce new trends from time to time to keep you updated. Hope it helps.

https://www.vhx.tv/

CTN and Comic Con

Your fans is your greatest assets. The more fans you have, the bigger bargaining power you have with investors or licensing agent. One way of getting yourself known (besides the major trade events) is comic con and also CTN. I hope to find time to go there next year. So many people are talking about it. Something you can try out too. CTN seems to be getting more and more important. Comic Con is definitely an amazing place to go. I was there during the Ben 10 launch that we have worked on. Its absolutely awesome.

http://www.ctnanimationexpo.com/

Protecting Your Content

The first thing you need to protect is your concept (bible) and scripts if any. Then designs. Protect it with the copyright office in US (http://www.copyright.gov/) and the WGA (http://www.wga.org/) This is done before production starts. And you should protect your work progressively as you go.

As you can see, most of the protection is done in the US as it is our major market. There is no way I can afford to protect it worldwide until a major player or distributor take over. Its very expensive.

And also protection is for countries that respect the law. For country that doesn’t, its just waste of time and money. (You know what I mean. ha ha)

Once your IP reach a certain stage, then you will need to seek lawyer for advise to trade mark it. Again. Its expensive to do it for all countries. Only for selective countries which is your major market.

Its hard to have 100% protection. The more exposure it gets (meaning more people know that you are the creator) the better the protection.

Hope it helps.