It’s not only Disney and Fox that are becoming one. Entertainment encompasses a broader definition than ever before. The original perspective that entertainment came from your television or at a movie theater is too limited for today’s consumers. Even if the entertainment industry insists on that definition, consumers have already democratized entertainment. Entertainment is your drone, your Twitch channel, your Peloton workout. It’s the robot that teaches your kids to code, it’s Tik-Tok, and it’s YouTube. (Sorry, Hollywood).
Studios and content creators have to redefine how intellectual property (IP) goes to market. For example, no longer can the Consumer Products group be uninformed about the licenses the Distribution group is negotiating with streaming platforms and when those licenses start. That is especially true when the goal is to get the most out of your marketing spending and maximize revenue. Some studios like Disney and Sony have already recognized this fact and have reorganized into vertical alignment for better control. Communication across departments is even more critical.
Here’s how coordination across all departments that touch the same IP is a necessity:
A major subscription video-on-demand (SVOD) platform licensed an existing film IP to reboot as a series for kids – let’s call it “Franchise A.” The Franchise A series was exclusive to the streaming platform. However, Franchise A IP was also licensed for a variety of consumer products and books. As NPD tracks data for multiple industries, including viewership on streaming platforms, I’ve blended these into the chart below.
Here is the journey:
- The Franchise A film (denoted by the blue line) was on the service with steady, low-level views through the end of 2017, which appears unrelated to either Consumer Products (denoted by the orange line) or Books (denoted by the pink line) sales for Franchise A. Further, the releases of new products every month in 2017 didn’t seem to increase or affect Franchise A film viewing.
- In January 2018, Season 1 of the Franchise A series (purple line) debuted on the streaming service. Viewing activity for both the film and series jumped, with viewing skewing heavily to the new content.
- Following soon after in March 2018, Season 2 of Franchise A debuted and there was a correlated lift in both Consumer Products and Books. This would have been an ideal time for the Franchise A licensing team to release new products or books, since views are even higher than for the first season. (Note in 2018 that product releases are sparse – only happening in June and December.)
- When Season 3 debuted in August 2018, the viewing spike topped that of Season 2 but with no correlated lift in consumer products or books. This was a huge missed opportunity to capitalize on the marketing of the show on the streaming platform, by introducing new products for the back-to-school season. The ideal coordination would have been to schedule Season 3 in July, in combination with new consumer products and books releases. It would have been early enough to maximize consumers’ budgets for the back-to-school season and leverage the awareness about Franchise A from the free marketing on the streaming platform.
Because entertainment is everywhere, IP is also everywhere. Consumers have no interest in product lead times or production schedules. They expect IP ubiquity – films, series, Blu-Ray, toys, clothes, books, video games – in as tight, to simultaneous, availability as possible. The content creators who change their operational structure to prioritize communication and coordination of groups working on the same IP will be orders of magnitude more successful than those who do not.