CATDOLL: Digging into the depth of the brand, China's animation derivative business needs a "breakthrough"

My 11-year-old daughter is very opinionated about rewards and is often asked to buy Balala the Fairies related products, from magic wands, energy collectors, magic phones to clothes, she wants to buy them all. This gave me the illusion that China's animation industry derivatives have been successfully developed, but after looking up information, I found that this industry has just begun to be commercialized.

Media reports show that "Big Hero 6," which recently won the Oscar for Best Animated Feature Film, was released in mainland China, and the box office was close to 100 million yuan in two days. Equally popular are the derivative products of the robot "Baymax" in the film. Why is Baymax from the United States so popular, but Chinese movie derivative products can't sell?

There is no doubt that the animation industry is one of the cultural industries that the country supports. The country has made great efforts to cultivate and develop China's animation industry! The "National Animation Industry Development Plan for the 12th Five-Year Plan" clearly states that it is necessary to promote the production and operation of animation-related clothing, toys, food, stationery, electronic games and other derivative products, extend the animation industry chain, and expand the profit space and market size of the animation industry.

Statistics show that in 2014, the total output value of China's animation industry reached 100 billion yuan, of which the scale of animation derivatives reached 31.6 billion yuan, and there is still much room for improvement.

China's animation industry is still in its infancy. Statistics show that among the nearly 6,000 animation production agencies in China, only 10 or so have the capacity to independently produce more than 10 films with a total length of 10,000 minutes. The vast majority of production agencies can only produce in the single digit, and less than 1% are profitable. If the animation industry relies solely on "support" transfusions to survive, the industry will become increasingly narrow and enter a "dead end" of development.

Let’s take stock of the more successful domestic brands in terms of derivatives:

The proud Miss Puff, with a brand revenue of over 10 million in five years

The five-year-old "Miss Puff" has actually launched a mobile phone. On April 1, "Miss Puff" and IUNI jointly released a mobile phone with the same name, IUNI iL. This is the first time that a domestic mobile phone brand has chosen a virtual cartoon character as a synonym for a mobile phone. Previously, Hello Kitty and several major long-standing brands under Disney have launched themed mobile phones.

As an online animation, it has collaborated with big brands such as Samsung, Nestle, Singapore Tourism Board, Chevrolet, etc. Now it has taken advantage of the "smartphone" craze and launched a Miss Puff mobile phone to the market. How did it do it?

On April 1, 2011, April Fools' Day, the first episode of "Miss Puff" premiered on Youku.com. Each episode consists of an independent short story and is 11 minutes long. As an urban white-collar worker who has just worked for a few years, I also followed "Miss Puff" for a while and was moved by her slightly sad narration and independent personality. Although many years later, I feel that the female image in some episodes is too "pretentious", this has not affected the success of the arrogant Miss Puff in the commercial market.

From the perspective of content, "Miss Puff" uses the production and broadcasting model of American TV series, with shooting, production, broadcasting and marketing being carried out simultaneously, and the plot is adjusted in real time based on the feedback from netizens. "Miss Puff" is positioned as a smart, uninhibited, adventurous Gemini girl, a freelance writer, who has a black cat and three girlfriends. The keywords of Miss Puff are "loneliness", "independence" and "freedom", which correspond to the three biggest characteristics of urban single young women, respectively. It is close to the urban life state, and everyone can find emotional resonance in her.

Currently, "Miss Puff" has more than 540,000 fans on Weibo, and the number of views of its micro-film, first season, second season, third season, fourth season, mini-series and fifth season on the Youku platform are approximately 10.43 million, 73.88 million, 41.51 million, 36.81 million, 38.99 million, 77.31 million and 65.84 million respectively, totaling approximately 347.7 million views.

Over the past five years, the list of Puff's business partners is long, and in June this year, the sixth season of "Miss Puff" will return, breaking the tradition of each episode being an independent story. In Pi San's plan, "Miss Puff" will not only become China's longest online animation series with 9 seasons and a total of 108 episodes, but also become a well-known animation brand with lasting vitality through full industry chain operations. At present, Puff's creative team has reached a scale of 100 people, and is truly producing a purely original work that does not rely on the outside world.

Lu Fanxi, vice president of Youku Tudou Group, said: "Youku has created a full industry chain development plan for Miss Puff, including theatrical movies, live-action TV series, book publishing, magazine columns, derivatives, dramas, stage plays, audio and video, mobile music distribution and other multi-terminal operations."

In addition to the conventional "hard advertising + product placement", "Miss Puff" has achieved a major breakthrough in commercial operation - brand licensing. According to data, "Miss Puff" currently has 6 licenses. The earliest licensee, Xishu Workshop, adopted a guaranteed minimum plus profit-sharing licensing method. The cooperation with Mofashi, Xiaoxiong Electric Appliances and Hualian Department Store is direct licensing. In the past five years, Puff's brand licensing income has reached nearly 10 million yuan.

In terms of derivatives, Miss Puff has launched more than 40 popular derivatives including picture books. Its sales in Tmall flagship store ranks among the top three domestic animation brands. When you log in, you will find a wide variety of products, including mobile chargers, raincoats, facial masks, mobile phone cases, keychain pendants, T-shirts, USB flash drives, hourglass timers, etc. In 2014, the eponymous facial mask of Miss Puff was recommended by celebrities such as Xu Zheng, Li Shaohong and Tian Yuan.

It can be said that a complete industrial chain with the "Miss Puff" brand as the core is taking shape.

Balala the Fairies has over 200 million fans

"Balala the Fairies", praised by securities firms as "the No. 1 brand for Chinese girls", is a brand focused on by Guangdong Alpha Animation and Culture Co., Ltd. It tells a fantasy story between the Magic Fairy Castle and the human world. It is a film and television work for girls aged 3-12. There are animated and live-action versions. A feature film was also released in 2013. Currently, it has formed a series of products including TV series, cartoons, book publishing, toy derivatives, stage plays, and theme parks.

Data shows that Balala the Fairies has over 200 million fans, and it is this work that seems childish in the eyes of adult investors that has brought huge profits to listed companies. In 2012, the sales of related series of toys reached about 80 million yuan. In March 2013, the big movie was released. The production cost of the movie was about 10 million yuan, the joint publicity cost was about 20 million yuan, and the box office revenue exceeded 51 million yuan. When the big movie was released, Xie Kunze, general manager of the content and image division of Alpha Animation, revealed to the media that the sales of Balala the Fairies had exceeded 400 million yuan, and continued to show geometric explosive growth.

According to data, Alpha Animation was founded in 1993 and is currently one of the largest animation and entertainment cultural industry groups in China. On September 10, 2009, Alpha Animation was publicly listed on the Shenzhen Stock Exchange (stock code: 002292). On March 31, the company released its first quarter 2015 performance forecast, and the net profit attributable to shareholders of the listed company increased by 35% - 65% over the same period last year, with a profit of 67.2917 million yuan to 82.2454 million yuan. The main reasons for the company's first quarter 2015 performance increase year-on-year are: the company's toy sales business maintained a steady growth, and the revenue of the acquired game business company was included in the scope of the consolidated financial statements.

Boonie Bears, a box office record-breaking film

In the 2015 Lunar New Year movie competition, the domestic animated film "Boonie Bears 2" once again surpassed the box office of 247 million yuan of the first "Boonie Bears" with a good result of 291 million yuan, and also broke the box office record of domestic animated films.

According to information, "Boonie Bears" is a 104-episode animation produced by Huaqiang Digital Animation Co., Ltd. The film uses exaggerated cartoon techniques to tell the hilarious confrontations between the forest protectors, the bear brothers, and Bald Qiang, who destroys forests, cuts logs, and occupies land to develop entrepreneurial experimental fields.

Shenzhen Huaqiang Digital Animation Co., Ltd. is a professional company engaged in original animation design and animation film production under Shenzhen Huaqiang Culture and Technology Group. The company takes tourism products with its own intellectual property rights as the development background, and 2D, 3D, puppet series, cartoon image design, and cartoon entertainment programs as the main development content.

It is understood that the development of the Boonie Bears series of movies has just begun. So far, the TV version of Boonie Bears has launched a total of 390 episodes, but only two movies. Huaqiang has its own cultural industry chain and its own cultural derivatives company, including special films and theme parks. The development of derivatives of Boonie Bears is also in progress. At present, Boonie Bears has its own special area in the theme park, and there are also projects specially developed into special films in operation.

Shang Linlin, vice president of Huaqiang Culture and Technology Group, said: "There is still a lot of room for development in Boonie Bears, including more characters and more scenes. Boonie Bears was only created in 2012, and it has only been three years. Many international animation characters, such as SpongeBob SquarePants and Doraemon, have a history of 20 to 30 years, but they will continue to launch many works."

According to the Beijing Evening News, the brand licensing of "Boonie Bears" currently covers more than 20 categories of products, including toys, stationery, clothing, shoes and hats, food, beverages, electronic products, books, images, etc., and even building materials that are rarely involved in the licensing industry. The licensing income of these derivatives exceeds half of all the income of "Boonie Bears".

Classic brand for making money: Pleasant Goat

"Pleasant Goat" is a typical example of how Chinese animation brands make money!

"Pleasant Goat and Big Big Wolf" is produced by Guangdong Original Power Culture Communication Co., Ltd. Since its launch in June 2005, it has been broadcast on nearly 50 TV stations across the country, including Beijing, Shanghai, Hangzhou, Nanjing, Guangzhou, Fuzhou and other cities in China. The highest ratings of "Pleasant Goat and Big Big Wolf" reached 17.3%, far exceeding the overseas cartoons broadcast at the same time. In addition to launching more than 500 episodes of TV series, the film company has launched a big movie every Spring Festival since 2009. In 2009, "Pleasant Goat and Big Big Wolf: Bullish" broke the 30 million yuan box office mark in the first weekend, which is almost comparable to "Kung Fu Panda", and finally set an amazing record of 90 million yuan in total box office revenue. Statistics show that the first six "Pleasant Goat" movies had a cumulative box office of 756 million yuan. However, by 2015, the popularity of the "Pleasant Goat" movie series had weakened. The seventh "Pleasant Goat" movie was released on January 30 this year, and ultimately earned only more than 64 million yuan at the box office, far less than "Boonie Bears."

In 2011, the Hong Kong animation giant acquired the derivative product development rights of this animation work for 1 billion Hong Kong dollars. At present, the circulation of the "Pleasant Goat" comic book has exceeded 5 million copies, and the authorized "Pleasant Goat" derivative products have exceeded 100, covering toys, food, clothing, games, stationery and other major categories. According to public data, the broadcast copyright income only accounts for 30% of the income brought by "Pleasant Goat", and the remaining 70% comes from the image licensing of derivative products. In 2012, Disney acquired its overseas distribution rights for 100 million Hong Kong dollars and became its product licensing general agent in China.

Let’s take a look at some international data:

United States (output value of animation products and derivative products): more than 5 billion US dollars;

Japan (annual animation turnover) exceeds US$9 billion;

South Korea, the "rising star" (output of animation products): accounts for 30% of the global share, and its output value is second only to the United States and Japan. The animation industry has become one of the six pillar industries of South Korea's national economy.

In the United States, Disney's animated film "The Lion King" had an initial investment of only 45 million US dollars (about 279 million RMB), and earned 780 million US dollars (about 4.8 billion RMB) at the box office, and the income from derivatives reached 2 billion US dollars (about 12.4 billion RMB). In Japan, Toei Animation invests 4.5 billion yen a year and produces 26 billion yen, of which nearly 85% comes from the development of derivatives, and the broadcast income is only 4 billion yuan.