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Branded content market sky rockets from ?5 to ?22 in one yr

MUMBAI: Major US entertainment companies such as Disney, Electronic Arts and Viacom have identified branded-content as a potentially valuable revenue stream. The figures say it all. In 2003 the market size of the branded content programme market size was approximate ?5 million while the figure sky rocketed in 2004 to an estimated of ?22 million.

 

 

A study on Branded Content Market Overview done by the Branded Content Marketing Association in the UK revealed that the total number of branded content programmes commissioned in 2003 were more than 36 (not including sports programmes) and the same were also actually aired in 2003. Around 20 projects of branded content programmes have been commissioned and/or are in development today. The study said that the average budget of the commissioned branded content programmes was approximately ?100-150,000 per project, which means that the budget is the same as the average budget of regular commissioned programmes. But at the same time, the budget does differ for different genres of programmes like factual, sports, music, entertainment etc.

A few examples of branded content that have been developed spanning all genres and/or all channels like music, TV spanning programmes, film, events, sport are: Heineken - Thirst Tour (Music Matrix/CC Lab), Nike - Run London, Scorpion Football, Freestyle, Carling - live music spanning official buskers on the tube through to Homecoming series (incl. TV coverage).

Another area of focus of the study was on branded content gaming. The advergaming (Branded entertainment games) market size is $1 billion per year industry by 2005 according to what Forrester said in December 2002.

According to information available, 60 per cent of Americans regularly play computer games and in 2002, the global computer game hardware and software sales were $26.5 billion (more than the global movie box office). The Entertainment Software Association found in 2003 that the average age of a gamer is 19 and 17 per cent gamers are 50+ years old. Whereas 41.9 per cent of gamers are female and 41.6 per cent are 35+ years old.

A few brands that have used advergames are Nike, Joe Boxer, Pepsi, Nabisco, Kraft, Nestle, Heinz, BMW, Toyota, Daimler Chrysler, BA, Thomas Cook, Orbitz, HSBC, Tesco Personal Finance, Sony, Panasonic, GSK, MTV, The Sun, Fox Sports, Microsoft and Albion Computers.

A couple of case studies have been highlighted in the study which reveals that branded programming and gaming was highly effective. For example: Mitsubishi launched the Lancer in the US only after it grew in popularity through its placement in the Gran Turismo series of racing games. "There's no doubt that Gran Turismo played a huge role in our decision to launch the Lancer Evolution in the United States," said Takashi Kiuchi, a product relations official at Mitsubishi in the Gaming Age in December 2002.

Another example is that of Nabisco which created an online arcade of games to feature their range of sweets. The site attracts half a million visitors a month. "The jump in attitudes and brand awareness were tremendous," said Global e-Business Nabisco- Skyworks (former) president Sharon Fordham.

A few examples of branded content music projects that the stodu has cited are:

Carling - Carling Live concerts, Festivals - Reading and Leeds, Carling Live.com content and community, Carling Homecoming concerts aired on Channel 4

Smirnoff experience: events, Joy of Decks TV programme, online content

Pop Idol: TV programme, magazine, record label, online, etc.

mycokemusic.com

Pepsi chart show

Orange: bright weekend music events

Virgin: V-festival

Guinness: Witness Festival

Heineken: Heineken Green Energy Festival, TV programme Hotel Babylon

Budweiser: Bud House Party clubbing events

MTV: Awards, Winterjam, Isle of MTV

Red Stripe: official sponsors of Notting Hill Carnival

Absolut: www.threetracks.com exclusive music tracks commissioned by Absolut vodka

Nokia: Snowboarding and Music Events

Princes Trust: T in the Park

Innocent Smoothies: Fruitstock Festival

Diesel: U-Music awards

NME: NME Awards (also broadcast)

However there a few differences between the US and UK branded entertainment market. Firstly, the US market is significantly larger (even accounting for their larger economy and population) and secondly the US advertisers are more amenable to branded entertainment initiatives than that of the UK. The reasons for this are that the regulatory environment in the US has historically been more open to this type of marketing communication than that of the UK. Also the US is home to the worlds leading entertainment producers and distributors and the larger population of the US increases the potential return made on an entertainment investment. Another reason is that the US has had a larger number of high profile success BE projects.

The above mentioned factors have significantly altered the US market in many ways.

1. The US has been a leader in product placement through Hollywood and now television. This has led to US advertisers being more open to entertainment-based marketing (witness The LA Office Roadshow which is entering its seventh year of bringing together brands and entertainment properties). In contrast the UK regulators have long taken a negative view of advertisers receiving undue prominence in programming. Programme sponsorship was only legalised in 1991 whilst product placement is still effectively banned (though it does occur it was estimated to be a 20 million per year industry in the UK by the Sunday Times in 1999).

2. Major US entertainment companies such as Disney, Electronic Arts and Viacom have identified branded-content as a potentially valuable revenue stream. These organisations have brought a high profile to the market that has sped its development, but the creative talent that these organisations possess has also aided the market by creating great concepts.

3. Entertainment productions can be expensive; balancing those costs against a potential market of 250m people is significantly easier than against a population of 60 million.

4. The US has had a large number of high profile successes in branded entertainment: Ford/24, Nokia/Alias, BMW films, Nabiscos Candystand and numerous Hollywood films. Inevitably these successes lead other brands to follow the lead.

The study also presents a selection of recent production examples. The first one being that of the American Express which launched a Seinfeld-meets-Superman program for internet distribution. Another one was also of the American Express funding a film to be produced with Vanity Fair editor Graydon Carter and directed by Wes Anderson. It features a look at American culture through the eyes of humorist and author Fran Lebowitz. A 2005 release is planned. South West Airlines has prepared a reality show for broadcast whereas Radioshack and Shockwave have Zip Zap online racing games. Quicksilver and Forever Films launching Riding Giants feature film to be the opener for the 2004sundance, Sony TV and General Mills Cereal distributing TV on DVD on cereal boxes and Sears Roebuck's Extreme Makeover are a few other examples.

The study also throws light on the fading of the broadcast audience in the US because the television programming is more frequently becoming available via new distribution channels such as: TV on DVD - more than 500 TV titles were released in 2003 (up nearly 100 per cent from the previous year); TV on DVD sales in 2003 were $1.5 billion up from $610 million in 2002; IPTV and Movie downloading - The MPAA conservatively estimates that there are 400,000 illegal movie downloads occurring every day, a relatively small number compared to music, but the technology is only getting faster and this is a real new distribution channel and problem for both broadcast and movies; Penetration of Broadband is much higher in the US than UK (June 2003 eight per cent USA v/s four per cent UK source DATE); TV on Promotional Packaging (General Mills Cereals releasing TV favourites on CDs attached to Cereal boxes).

Another reason is that the audiences are consuming differently, tomorrow's content is niche, independent selections rather than mainstream broadcasting.

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