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A study on current business performance of Chinese animation industry - page 13 / 21





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    Develop product of high quality by investing high-end software and providing training to upgrade employ knowlege and skills

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    Establise IP protection structures containing both hardware (isolation of project teams) and software (IP protecting database, control of emails). This is one of the base for trust from western partners

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    Enhance company competitve advantage from developing 3D anmiation to CG and concept design. Based on existing collaborated project, it can further expand the project range with high value added activities.

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    Attending global conference to form network

So far it has long-term relationship with 10 world top game developers including Sony, E.A. The quality

management, IP protection system, and technique expertise are its core competence to securie the relationship and establish good reputation.

4.3 Licensing

Licensing is a high value-added practice in animaiton industry supply chain. Licensing business begins in the western world like Disney, and followed by Japan and South Korea, among which animation related profit constittute 44% (Figure 12). Children stationary products, foods, beverage, cloths are the most popular lisencing sectors. It is only recently that most Chinese anmiation companies realise that more than 2/3 profit of animation comes from licensing. However how to manage the brand and how to license effectively are the challenges companies face right now.

Figure 12: Liensing business sector

Case Three: a character busniess and licensing company

Since estabished in 1999, this company aimed to develop anmiation and expand its brand across diverse sectors. It is among the earliest Chinese companies that realised the potiental value of licensing and enter the market early. While producing its original animation TVs series and broadcast it on TVs, it made every effort to expand

the brand. From 2002 it began to collaborate with manufacturers, and gradually developed more than 600

product types including drinks, stantionery and toys. However the company was too eager to expand the business to cover the big amount of money of making anmiation TV series. By collaborating with as many manufacturers as possible, there was lack of the design style, price standardisation and quality management. In


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