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New Distribution Models 1

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- Dupuis Audiovisuel, is a renowned French production company for its successful adaptation of famous comics. During Cartoon Master (Finance) 2007, Leon Perahia, audiovisual director, showed business models in Animation industry, by presenting multiple platform strategies applied by the company.

Léon Perahia is audiovisual Director of Dupuis audiovisuel, President of Dargaud Distribution, and Managing Director of ancillary rights Media Group.

What is the global approach of Dupuis Audiovisuel?
Today Dupuis manages the rights of the comic-strip, linear rights, rights held by the publishers, the rights to audiovisual productions and rights acquired externally (notably Japanese mangas). We gathered all these rights within a structure we have called Mediatoon, divided into 4 departments: Mediatoon International Distribution, the entity taking care of TV and video rights both internationally and on our domestic territories; Mediatoon Interactive, which entirely manages the catalogues on the new platforms; Mediatoon Consumer Product, the branch managing licenses, merchandizing and the image promotion of our various characters; Mediatoon Foreign rights, with the role of selling rights from our edition catalogues to foreign editors.

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What is the significance of the term multi platform?
Multi platform encompasses four concepts: Online; IPTV; mobile telephony and consoles. Online is probably the exploitation mode that will generate the greatest volume. In the context of programmes for children, the PC is incontestably the second screen in the home, and children sometimes prefer to view it in lesser comfort, but in their own room. Secondly, it will become very simple to connect the PC to the TV. Globally the PC will be the central unit managing the whole of the cultural consumption of the home. In Asia there are 389 million connected people, in Europe there are 313 million, and in the United states 232 million. IPTV is growing strongly. In Europe 3 .3 million homes have subscriptions; there will be 26 million in 2010. The mobile telephone has very strong potentials. The portable will be a device enabling an enormous number of activities: make payments, buy, watch television, talk. The rate of penetration among young people is impressive: 82% of the age group 12-15, 49% among 8-11 year-olds, and 33% among 5-9 year-olds. Consoles, which the large manufacturers are transforming into multimedia products.

Who are your products aimed at?
Our products address young people. It is interesting to see how consumption evolves on the various supports. Television is viewed on average 25,34 hours per week, across all age groups taken together. The 16-24 age group watches television only 18,21 hours. This is an appreciable difference.
Young people listen to radio less than the average (18,18 against 20,06). On the other hand, the age bracket 16-24 spends much more time on the mobile telephone and makes much greater use of SMS (respectively 27 calls against 20 and 70 SMS against 28). The 16-24 age group spends more time on the Internet than the overall population average (2,50 hours against 2,29).
There is a slide from television to other sources of consumption. It is necessary for producers to act, with a view to bringing the sum of the two to a higher level than previously.

What consumption is available on your sites?
Surfers can consume virtual comic strips and mangas adapted for web reading. To read the comic strip we have developed a specific tool, the Kanabox. The big question one asks today is to know if we should promote this platform and risk cannibalizing the classic comic strip. Our idea is that there exists a whole series of the ends of catalogues now impossible to find in bookshops.
Dupuis has been a comic strip editor for a hundred years; there are series with more than 50 titles. It is clear that no sales-point proposes all 50 titles of a series. There is a large quantity of titles no longer offered for sale and which is too expensive to print. This brings in the theory of the «long tail», many micro-changes which add up to create a large amount.
Our internauts can also play games involving animation characters, and download animation series and documentaries. We seek to create web platforms, which are complete, offering the whole content on a single interface.

What are your recent trials in VOD?
We envisaged an offer of video on demand created on the initiative of a dozen French producers of animation, Zooloo Kids. By mutualising the programmes we were able to negotiate with the various operators from a position of strength. The platform recorded average results, until the day we signed an agreement with Allociné, a site dedicated to cinematic information and having strong success. We carried out a test beginning on 23 May, until 30 June 2007. We offered only an episode selection. The success of this offer surprised us, in one week there were 37 .000 downloads. We finalized an agreement for a division of the net receipts, which will be fixed before each episode. As this is a free VOD, attention must be paid to the episodes put online, to avoid cannibalization of the pay VOD and to avoid putting ourselves on the wrong foot with the distributors.
The second axis we are testing is definitive sales via VOD. We have reached an agreement with Imineo, which is a definitive sales site. There are two ways to buy a film: it can be downloaded and owned, which permits download and storage of the film on the hard disk; or download to burn, which allows its engraving on DVD once only. Each episode is sold at an average of 1 €.
It is interesting to note that Zooloo Kids was launched on Orange two years ago; at first the offer consisted of a traditional VOD: 1 € per episode of 30 minutes. From November 2006 Orange began to offer SVOD. The parents have the option to subscribe for 4.99 € per month to a SVOD offer of Zooloo Kids. The children can watch as often as they like. There was a strong increase in subscriptions. By month, there are some 100.000 consumers (June 2007). The pre-school programmes consumed form a much higher proportion than the proportion consumed when the programme is single-view VOD.

What other experiments in content sharing have you associated with?
We inserted our content in the peer-to-peer platform Joost. The Joost concept is quite brilliant. The site offers a catalogue of channels that the various rights holders can develop. Joost provides no servers (the contents are located with private individuals via peer-to-peer technology) but offers a tool enabling the networks to be viewed freely. The Internet surfer may watch on demand a certain number of episodes, which have been put online by the various rights holders. For instance Aardman has added an Aardman channel to Joost.
Mediatoon will not insert new programmes, but ends of catalogues. the system is financed by the advertising. Prior to each viewing there is a dozen seconds of publicity; if this has originated with the Joost management the rights holder gains 30% of the revenue. If the publicity is provided by the rights holder, he receives 70%. The advertising is based on a profiling algorithm. When a viewer registers with Joost he enters a certain quantity of information permitting the targeting of publicity based on the spectator’s centres of interest and the successive viewings the spectator has made.

Do you work with mobile operators?
We work with the mobile operators in a rather traditional manner. We propose ring tones, characters from our series, and comic strip screen backgrounds, games, and even mini videos of 4 minutes specially created for the mobile.
An experiment we are very attentive to is the possibility of reading comic strips on a portable. Trials developed successfully in Japan where it generated 100 million $ in 1 year. To retain the public in Europe, an operator’s offer of unlimited subscription is necessary.

What economic models are attached to all the forms of exploitation?
We function on the basis of 50/50 on net revenues. It is very rare to be able to agree a minimum guarantee. It must be said that for the moment, the revenues generated by the new medias are still modest. We have not yet recovered what we have lost with the DVD.
Cartoon Master Freising, Germany, June 2007

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