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Industry Report: Digital

Exploiting Properties on New Media


Exploiting Properties on New Media

- Isabelle Denis is the Director of Mediatoon Interactive, the division of Mediatoon responsible for the creation of new business opportunities for all the Group content on different media, such as IPTV, PCs, mobile phones and many more using various distribution methods, such as VOD, SVOD, free VOD, definitive download, podcast, etc…
The Mediatoon Interactive catalogue presents a wide range of different cartoon and comic strip characters known internationally. All of this content can be adapted to different operating systems.

(The article continues below - Commercial information)

How did you build up Mediatoon Interactive?
Mediatoon Interactive is part of the group Media Participation, which is the 3rd media group in France in terms of turnover. Under the umbrella companies Dupuis, Dargault and Lombard in particular, the group publishes titles such as Lucky Luke, Spirou, Blake and Mortimer, XIII, Kid Paddle, Papyrus, …
The group grew thanks to traditional publishing and then expanded into the production of cartoons. We have a number of production companies, specialising mainly in youth programmes (Dupuis Audiovisuel, Ellipsanim, Storimages). We own a vast catalogue of cartoons (1500 hours of programmes), most of which are based on publishing-related characters.
We believe that our products can be developed on different platforms, such as on web sites, on Internet, on IPTV, on mobile phones and on game consoles. We decided to start a multimedia department because we were in contact with most of the industry players who were looking for the rights to the series. We decided to specialise so as to communicate with them and the new players.
Today, there are 313 million Internet users in Europe, 389 million in Asia and 232 million in the U.S. There are 3.3 million IPTV subscribers in Europe, of which 1.5 million are in France. By 2010, we estimate that there will be 26 million IPTV subscribers. 82% of 12-15 year-olds have a laptop. 49% of the 8-11 year-olds and 33% of the 5-9 year-olds have one. These children will start to download video content as soon as the telecom companies offer unlimited rates.
Young people watch more and more content on the computer usage is in the process of moving towards mobile phones and computers.

What type of products do you offer online?
We have developed a flash tool which allows users to read comic strips online, by zooming onto the images if need be.
We also have a games catalogue which was initially developed for marketing needs and which we now commercialise in partnership with portals.
We also have a service of Video on Demand. It is important to note that in France, 90% of sales of VOD are made on IPTV and not on Internet.
We also offer download-to-own, by which the content can be downloaded and viewed on different systems.
Just recently we have launched a free VOD service, which is financed by advertising (in this case, an advert for Disneyland Paris). The free VOD works quite well. For example, for the series «Cédric», we had 300,000 views in 2 months. It is a viral phenomenon! Children exchange the web site address to share their favourite episodes with their friends. The free VOD is an effective way to combat piracy. Obviously for a 26 x 26’ series, we will not put all 26 episodes on line. We will «sacrifice » 2 or 3 episodes, which will redirect users to the IPTV or to the pay VOD.

Do you have products for the very young?
We have developed a web site for the younger children called «Kid Studio». It is like a town for children where they have numerous activities: they can read comic strips, watch films and play. Once they sign on, the system saves their information, the pages they visited, their favourite films and the games they played.

What is the business model of the web site?
The web site is available on subscription. «Kid Studio» is accessible via the Orange and AOL portals, which created a partnership in a number of countries to develop the site. We are responsible for updating the data and introducing new elements every week (approximately 25% reloads per week). The subscription costs 5 euros per month and allows 4 children to access the web site.

How did you develop the IPTV offer?
We work with all the Belgian and French Internet operators. We supply the content, either for a unit price or for a fixed rate of 5 euros per month.

Do you work with mobile operators?
Yes, what we have developed is very interesting. We chose series that were particularly suited to the mobile world. We made animated gifs, logos and ringtones, and we developed an application that allows you to read a comic strip on your mobile phone (I-Kartoon). We are also developing games for the mobile phone.
The business model consists in choosing a telephone operator and supplying them with short format videos. We have also developed a television channel called «Cartoons» that can be accessed in France on the One Mobile TV-bundle. The content is easily exportable and adaptable to other languages. The mobile market is still in its early stages.

Who do we find in the value chain?
The consumer is at the end of the line. The operator «dialogues» with the consumer. The operator is an aggregator or, more and more, a television channel that plays the role of aggregator. Finally, we have the distributor and the assignee. Up to now, Mediatoon positioned itself as distributor: we held the rights and the content. The catalogue included videos, series and games, which were commercialised via aggregators or television channels to operators. In this case, the end consumer pays 100 euros and the assignee receives income of 21 euros.
Today, Mediatoon would like to fill two roles: distributor and aggregator, and take just one commission. We would transfer to the producer (who is part of our group) 35 euros out of the 100 euros paid by the consumer.
We decided to put this strategy in place because we have producers in our group who have received offers for their content.

What is your policy in relation to televisions? Which VOD rights do you cede?
We negotiate very carefully the transfer of rights to television channels. Over the past 5 to 6 years, the channels systematically ask for the VOD rights, but generally they do not use them. Mediatoon has set up a careful strategy. We transfer the VOD rights to the channels, but not exclusively, either for catch-up TV, or else for B to C direct and not B to B to C. We will transfer the VOD rights to the channel only if they want to promote their station. A television channel that acquires the rights must show the cartoons on their own web site. For example, we ceded our rights to TF1 Vision which offers VOD on its web site without any middleman. If TF1 Vision had wanted to produce a packaging of our products to sell its brand, we would not have given them the authorisation.

What is the trend in the VOD market?
The French market is highly representative of what could happen in other countries in the years to come. In 2006, the VOD market in France was worth 8 million euros. There were 41,700 Mediatoon programmes viewed in 2006. In 2007, the market was worth 29 million euros. 97% of this turnover was for film rentals and 6.9% was for TV series (out of which 25% were youth programmes worth 500,000 euros). There were 192,000 programmes of Mediatoon’s viewed in 2007.
Analysts estimate that in 2010, the VOD market will be worth between 320 and 600 million euros. 10 to 15% of this market will be for youth programmes. If the market reaches 500 million euros, then 3.2 million programmes from the Mediatoon catalogue will have been viewed. This is the reason why we have started to work as aggregators and have asked other companies to join us. We are looking for other catalogues that will make us even stronger.
The core business of telecom operators is to sell IPTV subscriptions. These operators want the least possible number of middlemen. We want to position ourselves as a major operator in relation to these operators. We want to offer large catalogues and obtain interesting percentages, and possibly offer lowest guaranteed prices.

Who are the major players in the market?
There are of course the telecom operators, the television channels, the distributors (such as Carrefour), the electronic manufacturers, the Internet portals, etc. The operators can intervene at different levels when creating the offer. For example, the television channels can offer B to C or B to B via a telecom operator when it comes to presenting their offer on the VOD page of Orange on IPTV.

Do you work with Youtube or Dailymotion and do you make a profit?
Yes, the sites that share videos are asking us more and more to work with them by creating specialised channels. The channel is set up and formatted by the aggregator or the producer. We are thinking about creating a Mediatoon page on Dailymotion. We would be responsible for updating the content. The idea would be to offer a few episodes in order to promote our series. Dailymotion has a control room which commercialises advertising and which would be shared with Mediatoon.

Do you pay the authors?
The authors are paid for all use of their content. Mediatoon has made provisions for the retrocession of rights; we commercialise the author’s work and then we transfer the income to the producer who pays the assignees (authors, musicians, …).

Cartoon Master Murcia, Spain, April 2008


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