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Industry Report: Distribution and exhibition

Aardman Animations: A Forward Thinker


- Miles Bullough is head of Broadcast and Development at Aardman Animations and is responsible for the development, finance and production of Aardman’s television series and specials.

You produced the series “Angry Kid”, which has worked especially well on the so-called new media or digital platforms. How do you explain the huge success the series had?
"Angry Kid" is more an exception rather than a trend. Nevertheless two and half years ago we set up Aardman rights department and we still believe in digital distribution, appointing Robin Gladman as the digital content manager, whose job was to take all the IP and exploit them in as many digital platforms as possible. He set up partnerships in digital media: iPlayers and iTunes, free add supported video sites, mobile and VoD.
The iPlayer is an astonishing piece of technology, very simple to use and democratic, used by everyone and with a high quality of content on it. As a consumer I love it, but as a producer it is an enormous problem. When you sell something to the BBC they catch up rights by a 7 days, and this system is working very well for them.
With “Wallace and Gromit”, diffused on Christmas day, we registered 16 and a half million viewers on BBC1, the highest rated TV programme in the UK for 2008. It stayed then on the iPlayer for 7 days, it was repeated again on TV, before going on the iPlayer for another 7 days; although they still did not tell us how much it was streamed on the iPlayer, we believe possibly million of times.
In the past, people watched shows on TV, and in order to enjoy the details they used to buy the DVD. Now they just have to get it on the iPlayer. It is no surprise that DVD sales in 2008 are falling, becoming in fact a business in rapid decline. We must find a new business model in order to finance the shows.

(The article continues below - Commercial information)Cine Iberoamericano Int

As producer, what is your position with regards to catch up TV?
The BBC has taken 7 days catch up rights, just as many other broadcasters are trying to do. It is understandable why they want to do that, but it is not going to work on a long term basis because it is going to kill other areas of business. Again with iTunes, I have an iPod and I download films, TV programmes and music. We were an early partner for iTunes, and it actually works well for us, replacing the lost DVD revenues. In the UK “Wallace and Gromit” was available 7 days after it was shown, and because it was priced 4.99£ for an half an hour film, people felt that it was too expensive. A big challenge is also how to get the price right. We have still to learn about the digital arena and the market rules.

How do you see the future of digital platforms?
The next platforms will be hybrid. Consumers will be able to watch content for free with advertisements or they will have the choice to download shows on VOD without ads. We are an official partner of YouTube. We have a channel where we put about 2-3 videos a week. At the moment there are about 60 videos, some are clips, episodes, etc. If you do not partner with them you cannot control how your content is exploited. YouTube has a digital printing available that can hunt all the content that you do not want to have on the Internet. Through this system we managed to preserve the TV premiere in the UK, while the film was uploaded on YouTube in Australia.
We also have a partnership with Bebo social network in the UK, and we work with an outstanding digital media called Digital Outlook. We created a music based IP specifically for the Internet, a website where each musical genre is represented by a jellyfish, the key piece is a widget and you can make each character interact with you; a very creative project that did not generate any revenue.

Are advertisers ready to invest in the Internet?
Bebo gets 10 billion page impressions per month, an enormous amount of traffic, but it is about persuading advertisers to be associated with the brand. At the moment Bebo is struggling to raise the finance. Also, they never got the same sponsor back twice, so although they are trying, something must change. Traffic is not the problem, the problem is convincing the advertisers that it is worth having such traffic; in my opinion the traffic on Bebo is very young, in fact you can have a profile starting from the age of 13.

Is it possible to generate revenues with mobiles?
Mobile is still very important although it is not as lucrative as it used to be. Orange is still a fantastic partner, Playtex is an aggregator that sells our content in the US and also 3 continues to be a good partner for us. Smart phones are changing the content on mobile. We found that our revenue models have changed over time; with mobile we started granting off with license fees then we went for revenue share until we realised that the content was copied and pirated.
For the mobile TV we made a 1 hour loop of content and sold it to operators, who sell it as part of the subscription. We also give a bit of add funded content on mobile as well, that has not made a big impact. I also find that in this entire arena everything changes in 6 months, so you must try and understand the business.
What is occupying our attention at the moment is VoD and SVoD –Subscription Video on Demand. We have done some exciting deals in this area. The advertising revenue needs to sort itself out and it will by finding the content they want to advertise, with the result that it will be higher than now and more focused on less content. A new model would be to pay the content through subscription, as an important source of revenue.

Will you become distributor of your own content?
Distribution is not our job. Our main business is making feature films, TV series and commercials. We love doing digital videos, making great little shows. We imagined that we would have made money with ads against them, but this wasn’t the case so we will try to think of a way of making money. It would be possible to make money, but you would have to produce for such a low cost and it’s not really possible for our business model.

What are the brands that you like the most?
Comedy Demon, which is a new comedy channel appeared in the UK sponsored by Virgin and Pepsi.
Looking around on the Internet I found "Kirill", made by Endemol, a very active company in this area. With Microsoft they made a series of 10 short live action high quality videos. We wondered if they had made money, but I don’t think it had a great success. These shows are not the only ones struggling to make money from an original digital production.
Beyonce’s videos can be an example of what is working on the YouTube with more than 50 million views; I think that the audience on these platforms is much younger than what we think.

Do you work in games?
Yes, we have done online games, a very exciting and interesting experience. We created a game with a sister company of Atom Films. The game was conceived around a 3D 4x4 Land Rover with ten level driving games. We managed to get an advance that covered the costs of production. We worked with an advertisement agency who managed to sell adverts.
We also license to a company called Tell Tail the rights to make an episodic online game. We set up our own online group. We worked with Digital Outlook who helped us with the website. We send a monthly newsletter and we insure the presence on the main social networks. That is about managing the project, and it becomes a cost more rather than revenue because it is a full time job for at least 2 people.

How do you interact with broadcasters?
We make simple online games for Cartoon Network. The channel experience has been very interesting. Setting up an animation channel on the web is pointless unless you have a media partner with a large volume of appropriate traffic like YouTube or Bebo; you need relevant traffic. I think Channel 4 wanted to set up something that was going to help getting their archive online. The traffic never came, if not in limited amount of few thousands of people. In terms of sponsorships it was not a success.
We also do branded content with product placement, narrative content with brands inserted in them. For Skittles we did various videos that they paid for, a very low budget project.
There has been a lot of discussion about TV everywhere which I think is one of the models that is going to work. My principle task is to raise money to make television series. It is still the cheapest, quickest and most effective way of reaching a mass audience. I think that the shows we make for TV are going to be available everywhere, requesting cooperation between competitors and it will not be easy.

What is your opinion on iPhone?
The iPhone has transformed our business. I think that in terms of mobile devices everyone is going to be copying Apple, as a phenomenal success. Another success is the Skyap that allows you to program your skybox through your iPhone; the deal with slim player has not been done yet, but it will be possible to watch everything on the iPhone. One day all of these media devices will come down to one Box with one big cable doing TV, phone, Slingbox, and everything will appear on the big screen you keep at home, or the little screen that you can carry around. This is the way content will be consumed in the future.

On which basis did you decided the price for your content on iTunes?
Regarding the pricing system with iTunes, I must say that they have strict confidentiality agreements. We wanted to pitch "Wallace and Gromit" as a feature film, marketing it at feature film market prices. "Wallace and Gromit" was sold to 4.99£. Because of the premium quality of the content and the importance the project had for us, we felt that it didn’t mind for the consumers to pay a high price. On BBC1 there were 3 Christmas specials among which "Wallace and Gromit", and all appeared on iTunes seven days after Christmas day. The others two specials where sold for 1.89£. We also took the decision driven by our DVD partner with whom we share the iTunes revenue because they gave us such a big advance.

SVOD – subscription Video on Demand – how do you divide the revenues?
It is a model that just got interesting for us. We generally receive an advance or a license fee. We are partners with AT&T in US, who have a million subscribers to their VoD service. They give us a license fee and, in the limit of the rights, they can exploit our content as they want; we try to do short deals, 6 month - one year, also because as I said everything changes every 6 months.


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