Download 2012  The fifth ‘P’ in the marketing  plan of animation and media  business ‐ IP Management in 

 2012 The fifth ‘P’ in the marketing plan of animation and media business ‐ IP Management in MediaFreaks Fong Hoi Yan Anna Chai Kah Hin Institute for Engineering Leadership National University of Singapore 7/7/2012 The case study is a joint work between the Intellectual Property Office of Singapore, Intellectual Property Academy and Institute for Engineering Leadership, National University of Singapore as part of the larger campaign to raise awareness in IP management in Singapore companies. The case is for educational purposes and does not illustrate the effectiveness of the companies’ practices or policies.
MediaFreaks: The fifth ‘P’ in the marketing plan of animation and media business At the end of the day…if it is a game, it’s still an IP…the moment you sell, even
if it is 99 cents, you still get 99 cents…and the advantage of it is that if you sell
enough copies of it, people start knocking at your door to ask for licensing
rights.
-
Aldric Chang, Managing Director, MediaFreaks
Introduction ‘WE ARE CLOSED, SORRY
– “The Travels of Wiglington
and Wenks Virtual World” is
currently
closed
indefinitely…we have found it difficult to raise economic finance for further development and
2
marketing. Without such finance we cannot sustain operations… (we need) to keep costs down.’
This is currently showing on the website of the latest cartoon series ‘The Travels of Wiglington
and Wenks Virtual World’.
This is not the first cartoon series that MediaFreaks has put its hands on. In 2006, MediaFreaks
started their first in-house cartoon creation of a caterpillar character, Katakune. It was an early
childhood educational series targeting children from 2 to 5 years old. This cartoon series had an
encouraging start. Its DVDs have been sold to US, Thailand, Taiwan and the Middle East. This
success boosted MediaFreaks’ confidence to work on a second cartoon series, Sedo Dog,
immediately after the Katakune series. Again this cartoon series was promising, and had also
been commercialized, and can be found in various merchandise like notebooks, stickers, toy and
stationeries.
Yet, why were Aldric and Adrian, the General Manager of MediaFreaks, determined to take this
drastic move of discontinuing the game, which has a fantastic storyline and an interactive
platform, indefinitely for now? Isn’t the gaming platform a wonderful combination of a
traditional cartoon platform and a trendy online gaming platform? Haven’t they spent a lot of
money in developing this platform? Have not the first two cartoon series given them the
confidence for this game? What made MediaFreaks decide on this discontinuation?
3
Background Prior to establishing Mediafreaks, Aldric wrote and produced music professionally. Some of his
works include composing and producing songs for singers like Sun Ho, Jade Kwan, Skye Chan,
Zhou Ling, Huang Ming Hao, etc. From producing music to producing animations, it seemed to
be a huge detour. However, from a closer look at the two industries, it wasn’t difficult to realise
that both rely heavily on intellectual properties to generate income.
Building up an IP portfolio MediaFreaks started off in 2003 by doing freelance jobs on animation, graphic designs, web
design and multimedia work. A year later, MediaFreaks received their first local project of
$30,000 to produce a medical animation CD-Rom for a nutrient company. Subsequently, they
were involved more and more in other medical animations, documentary projects and TV
commercials. However, all these works were commission-based. MediaFreaks did not and still
does not own any intellectual
properties doing these projects.
Aldric and his team were fully
aware that for an animation
company to survive in the longterm, MediaFreaks had to have
their own cartoon characters, meaning their own intellectual property, so that they could earn
from the licensing.
4
In 2006, MediaFreaks started their first in-house cartoon creation of Katakune. This venture
was the first step MediaFreaks took towards a long-term, high-risk but yet potentially highreturn investment. And it was from there that MediaFreaks started to formulate their current
business model. Katakune was a prize for MediaFreaks. Following its success, the second
series Sedo Dog immediately followed. The road towards licensing cartoon characters was
being paved.
With the creation of their own cartoon characters and the help of the Singapore Media
Development Authority, MediaFreaks started to be aware of the importance and means of
protecting their very own intellectual properties right from the birth of their first cartoon series
Katakune.
Contrary to the beliefs of many, the initial cost of IP management was not high. In fact, some of
the costs involved in trademark applications were subsidized. With the help of various IP
seminars from SPRING Singapore and the Intellectual Property Office of Singapore,
MediaFreaks managed to leverage on the professional advice of recommended lawyers and
became equipped with the technical know-how of IP management.
Armed with book knowledge, Aldric and Adrian slowly began to flex their muscles in managing
their own intellectual properties. The hands-on allowed Aldric and Adrian to fine-tune and
internalize their book knowledge into a strategy of its own. They started off ‘overprotecting’
their cartoon characters by applying to many classes of trademarks and eventually realised that
they had no plans to extend their merchandise to those categories. And it was from this point
5
onwards that the fifth ‘P’ – IP, started to be assimilated
into the marketing plan, on top of the well-known ‘4P’ in
The fifth ‘P’ – IP, started to be
marketing plans1. From then on, unconsciously and yet
assimilated into the marketing
critically, the IP strategy of MediaFreaks has never been
plan, on top of the well-known
disengaged from their marketing strategy. This was a
‘4P’ in marketing plans.
lesson from their hands on experience in managing IP.
IP strategy Balancing the financial risk In an animation company, the extra ‘P’ is
inevitably intertwined with the ‘P’ of ‘Product’
in marketing, so much so that there is no way
not to think about it in the marketing plan.
Firstly, Aldric and his team are now more
strategic in applying their trademark coverage
after the over-protection in Katakune’s case.
Aldric and Adrian realized from the experience
of Katakune that many of the Trademark classes that they have applied for were not eventually
1
The four ‘P’s of marketing plan are Place, Price, Promotion and Product.
6
utilised in merchandising. Over-protection can be a common pitfall in many companies that are
new to IP management. Strategically placing the I‘P’ in the marketing plan on top of the
traditional 4‘P’s might save the company substantial amount of expenses. The Katakune
experience has aggregated to a new strategy in
Before they apply any class for
MediaFreaks. Before they apply any class for
protection in their trademarks,
protection in their trademarks, Aldric and Adrian
Aldric and Adrian would first
would first decide on the target customers of the
decide on the target customers of
cartoon characters and the potential merchandise that
the cartoon characters and the
best suited their cartoon personalities as well as the
potential merchandise that best
corresponding group of customers. “(We’ll) see what
suited their cartoon personalities
is manageable for us, in terms of where we go, where
as well as the corresponding group
we want to protect, like the territories we want to
of customers.
explore, the classes, because we simply can’t afford
everywhere, we’re not Disney…for a small company,
this is the kind of strategy and approach we have to
take”, as Aldric humbly put it.
In fact, from the experience of Katakune, Aldric and Adrian have also concluded that they need a
flexible marketing plan. In the case of a cartoon series, it may not be necessary to apply for
trademark in all the potential target countries immediately following the cartoon production.
Instead, one should assess the market response to the carton series before deciding whether to
file a trademark. After all, it would not be good use of money to file a trademark in a country
7
where the trademark is of little value. This dynamic nature in the fifth ‘P’ - IP in the marketing
plan comes from the nature of the animation product. This dynamic IP calls for timely
deployment of IP strategies.
Another financial risk related to cartoon production that calls for a good balance is the platform
that carries the product. No doubt Katakune, Sedo Dog and
In fact, developing a cartoon
other licensing did generate significant revenue for
platform for licensing is a
MediaFreaks over the years, and who knows if one of these
high-risk, slow-return
or all of them would be the next ‘Hello Kitty’ from
investment. Balancing these
Singapore. This would truly be a dream-come-true for
high-risk projects, there are,
Adrian in profiting continuously from the IP generated.
on the other side of the scale,
However, cartoon production may not be the most reliable
lower risk and faster returns
means to get the bread and butter for MediaFreaks. In fact,
options.
developing a cartoon platform for licensing is a high-risk,
slow-return investment. Balancing these high-risk projects,
there are, on the other side of the scale, lower risk and faster returns options. Extreme cases
would be the familiar commission work for developing TV commercials, architectural and
medical animations and documentaries. Although these assignments are one-off deals, these
assignments not only can be the bread and butter but they may also be the capital for the next
mega projects like cartoon series. With MediaFreaks’ industry position and experience, they can
even be more selective in these projects to optimize their manpower and revenue.
8
In between these two extreme platforms, there are online games and mobile applications. As
games do not need a massive storyline, neither do they require mass production, so they would
not be as big a bet as a cartoon series, where substantial upfront investments are needed. With
the convenience and popularity of the internet, online games also have a low-cost platform to be
sold on. Gone are the days when all games would cost more than a movie. Nowadays, games can
be bought with just the cost of a drink. This low-retail-price, large-volume business model fits
perfectly with MediaFreaks’ current low risk, fast return IP and marketing strategy.
Safe­guarding the Intellectual properties In a knowledgeTied closely to financial risk is the risk of ideas appropriation. In fact, IP
based economy,
law was set out to protect the expressions of ideas traditionally. In a
it’s all about
knowledge-based economy, it’s all about ideas. Ideas can be potentially
ideas. Ideas can
equated to money. Preventing ideas from being stolen should be a natural
be potentially
response. Aldric and Adrian would probably be closing their eyes in their
equated to money.
years of experience in the animation industry if they miss out this
important point. They are astutely keeping their ideas confidential when discussing with clients.
Of course, their industry position now would make it a breeze for them to do so and still clinch a
deal. For some companies, they may need to devise further plans to deal with this risk of idea
appropriation. That would then be their adjusted IP strategy.
9
IP Infringement and Enforcement Being in the business of media, intellectual properties are the main assets of the company. Aldric
and his team are highly aware of the potential infringers lurking out there. These infringers come
in forms ranging from pirated versions of their cartoon series to replicates of similar cartoon
characters on merchandise. In most cases, Aldric would try to settle the issues with the infringers
in a peaceful way. And Aldric is not afraid to do business in China where infringement is known
to be rampant. China is just too huge a market to miss out. With a population of 1.3 billion, even
if there are infringers out there and it is necessary to compete on prices, the number of potential
customers still makes China a lucrative market. In fact, reacting to IP infringement with a
positive attitude, Aldric actually thinks that it's a good sign when people are infringing his
products. This is because it is only when the products are famous will others infringe them.
Merchandise bearing logos like ‘Hello Kitty’ would face endless cases of infringement. He
would be happy if his companies' cartoons can reach that stage.
However, he is aware that he needs to be on alert for the
Not only is he aware that
activities out there and to be on the guard. He and his team do
he needs to be on the
set up internet alerts when similar names come up. They also
guard for potential
monitor characters available online in order to keep themselves
infringers, he is also
informed.
Not only is he aware that he needs to be on the guard for
potential infringers, he is also conscious that his company does
conscious that his company
does not end up infringing
others.
not end up infringing others. He and Adrian would perform their due diligence on all their
10
designs and if they find that their designs are very similar to others; they would change their
designs to avoid potential infringement. This has happened to the initial protocol of the Katakune
design. Through keywords searches, they checked out on major search engines to see whether
their cartoon character Katakune resembled any other silkworms already available. If so, they
would redesign to make sure that their designs are original.
In naming their cartoons and media animations,
Mediafreaks is also conscious of potentially
infringing others. One such case is a mobile game
developed by MediaFreaks. It features a lamb that
later mutates to a zombie killer.
MediaFreaks
wanted to name it L-A-M-B-O. They realised
after a due diligence check that Lambogini had already registered similar trademarks. Not
wanting the risk of being sued in the future, MediaFreaks used the name L-A-M-E-B-O instead,
“as it is still quirky... and …got through, no problem”, as Aldric jokingly revealed.
Despite all these efforts to prevent infringement, the cost is reasonable. Ultimately, it’s about
balancing the cost of IP management and its benefits. “It is essential (to factor in the manpower
to perform the due diligence in the planning stage), because without doing that, we should not
even start on the project”, as Adrian emphasized. However, Aldric and Adrian use easily
available tools such as Google to perform their searches and will not overspend in prevention.
“This is equivalent to how much manpower you have…and your ability to search for similar
products. So even if today you consult the best lawyer in the whole world, the best IP lawyer in
11
the world, they have very limited tools… when you talk about something as subjective as
image…it’s limited to the amount of time he can actually spend looking into this… We are not
doing more not because we don’t want to, but because we’ll have to hire more people to do that
and that doesn’t make economical sense anymore”, when asked about whether additional efforts
are needed to prevent infringement.
But is IP just all about protection, so much so that the ‘P’ in IP means ‘protection’ solely?
It’s all about ‘profits’ The evolved business model with a firm IP in the marketing
plan has allowed MediaFreaks to be lean and more agile in
The evolved business model
reacting to changes. Not only can MediaFreaks find
with a firm IP in the
equilibrium in managing these technological and financial
marketing plan has allowed
risks, this model also allows MediaFreaks to shift the pivot
MediaFreaks to go lean and
to react to market change. The discontinuation of ‘The
be more agile to react to
Travels of Wiglinton and Wenks Virtual World’ can be
changes.
seen as a brave decision made using this dynamic marketing
strategy. The investment on the platform had been done and the IP had been developed. It was a
choice for MediaFreaks whether they wanted to continue to plan, and in doing so use up more
financial and human resources. Yes, profiting from IP needs to be planned. With the evolved
marketing plan, Aldric and his team are very clear that this I‘P’ is clearly in their business plan;
it’s just a matter of shifting the resources for now to focus on other projects that may be closer to
12
the low-risk, fast-return side of the scale. The shift in pivot would allow MediaFreaks to find a
new equilibrium to optimize profits. This ‘P’, be it properties, or protection or profits, will not
disappear from the company. If opportunities come, Aldric and his team would spring back to it
for sure.
Business Results – ‘I Profit’ From a two-men-team in 2003 to the
current team of over twenty people,
MediaFreaks has grown to be a well-
Secrets of the Battleship Yamato shown on Discovery Channel
known and award-winning 3D animation company with its specialized and well-defined core
business. Its clients are famous local and international brands. Their works have been used in
National
Geographic
Channels,
Discovery
Channels and many more. Brands like Nippon,
Clorets and the local soya bean brand Mr. Bean
have all engaged MediaFreaks to produce their
TV commercials. MediaFreaks’ services now
range
from
providing
animations
for
TV Commercial for Mr. Bean
architectural, medical and documentary purposes to cartoon series and characters licensing. With
the current hits on mobile and web applications, MediaFreaks has also spotted this new market
13
and ventured into this area with their Lamebo vs Zombies mobile game and apps. The Travels of
Wiglington and Wenks Virtual World is also an example of such products. It has been
ascertained by the numerous awards that it received, eg. Disney Family Fun Top 10 Fun
Websites, Mom’s Choice Awards: Gold Winner, Nappa Awards: Gold Winner and Parents’
Choice Award Winner. In fact, the demand for mobile and web programming services is so huge
that MediaFreaks set up a separate arm, SwapSoft LLP, to provide one-stop solutions for
addressing this market. This spectrum of services provided by MediaFreaks is a precipitation of
carefully blending in the IP element into their marketing plan over the years.
14
Documentary on Art
Science
Clorets TV Commercials
Museum
Mobile applications
Source: http://www.media-freaks.com/
Medical animations
Moving forward From a novice to an award-winning 3D animation guru, Aldric planned his path diligently and
meticulously. Right from the beginning, Aldric did not choose to go through the traditional path
of attending a course in digital design and animation in any design school. Instead, he chose to
lay his hands on digital design through plowing on books on 3Ds Max and the downloadable trial
versions of the software. After getting some fundamentals on 3D modeling, Aldric went for a
two-month-course in animation in China. Not only has the course helped Aldric to improve his
3D animation skill dramatically, Aldric has also established useful contacts with the instructors.
15
One of them became the Creative Director of MediaFreaks' China office and the co-creator of
MediaFreaks' cartoon series Katakune when MediaFreaks ventured out into the Chinese market.
This unconventional trait allowed the 5th ‘P’ to take hold in their marketing plan. With a clear
vision and faith in what intellectual properties can do for him, Aldric and his team would
continue to charge forward towards establishing his “entertainment behemoth vehicle that will
not just provide quality animation services to broadcasters and producers around the world, but
also create multiple streams of revenue through the creation and exploitation of our (their) own
original intellectual properties”.
Sources, References and Related Links 1. Interviews with Aldric Chang, Managing Director of MediaFreaks and Adrian Chye,
General Manager of MediaFreaks
2. http://www.media-freaks.com/ as last assessed on 2nd May 2012
3. http://www.media-freaks.com/ebooks/mediafreaks.pdf as last assessed on 2nd May 2012
4. http://blog.media-freaks.com/getting-started-in-3d-animation-my-way/ as last assessed on
2nd May 2012
5. http://www.wiglingtonandwenks.com/ as last assessed on 2nd May 2012
6. http://www.swagsoft.com/ as last assessed on 8th May 2012
7. http://www.katakune.com/ as last assessed on 8th May 2012
8. http://media-freaks.com/sedodog/ as last assessed on 8th May 2012
16