Aardman Report

How do they research and develop their next product?

One of the ways that Aardman researches for developing their

next product is by looking at the current trends at the time. For
example, in 2016 Virtual Reality became extremely popular and so
Aardman developed animations that could be used for Virtual
Reality headsets. Aardman researched into how animations could
be used in Virtual Reality. They found out that animation was good
in VR because there can be a lot of control of the interactions
between the character on the screen and the viewer. A precise action can be triggered by
the user just moving their head. This has caused Aardman to develop
two major VR projects for Google and the BBC. For Google, they
created “Google Spotlight Stories ‘Special Delivery”. For the BBC, they
created “We Wait” They are currently developing other VR projects.
This was an experiment to see if immersive news and using VR can
create an emotional connection between a viewer and a subject.

Another example of Aardman researching and then developing ideas

was also in 2016 when there was a need for authentic and honest communications between
brands and consumers. Aardman believed that the hand-crafted look
of stop motion met this need. Their research had found out that
people where wanting real stop motion and not ‘mock motion’
which is CGI that looks like stop motion. This caused them to create
an advert for an Australian Department Store called Myer. They also
created an advert called “Beardimation”.
Aardman also looks at the characters and stories that have been successful in the past. For
example, Shaun the Sheep became successful after the TV series that was created. They
then created a film which was also successful which has now caused them to develop a new
Shaun the Sheep film which will be released in 2019.
Research Rights and Brand development
Rights is short for Copyright which is put onto a product or idea. It then means that that idea
or product is legally owned by you and no one can copy that idea without your permission.
However, copyright is only fixed for a certain number of years and so it has to be renewed
every so often.

Brand development is the process of creating and then strengthening a brand using a range
of different strategies. Brand development can be done by creating a brand strategy and
then aligning this with the businesses with the businesses objectives. Brand development
can also be done by changing the way in
which the brand is communicated, for
example, a business may change its logo,
tag line, or web site.
Aardman try to build characters that will be long lasting.
They try to take full advantage of their character’s
commercial potential. Aardman own the rights to all the
characters that they create and so if someone wants to use
the image of one of the characters then they will need to
ask Aardman permission to do so. This may involve paying a
small fee though.

Aardman does do licencing for its characters. Their

characters can be
used for merchandise, advertising, promotional
campaigns, live events, and exhibitions. By using a
character from an Aardman production, value can
be added to the event or product.

Aardman do brand development by organising

attractions and events. The department in
Aardman that does this is called ‘The Attractions &
Live Experiences’ department. These events are designed to
engage with the whole family. These events include characters
from their films and productions and these events sometimes
try to bring story lines to life. As part of their brand
development, they try to combine entertainment with
education. This allows them to promote the brands’ values
and increase awareness of the brand on a global scale. It also
allows them to uphold their production quality.
Explain what is a product development cycle
A product development cycle is also known as a product life cycle. The product life cycle is
split up into four sections: 1) Introduction, 2) Growth, 3) Maturity, 4) Decline.
There is also a product development cycle for new products. A new product development
life cycle is split up into six sections: 1) Idea, 2) Research, 3) Development, 4) Testing, 5)
Analysis, 6) Introduction. It is at the final ‘Introduction’ stage that the product life cycle
starts.

The first stage on the new product

development cycle is the ‘Idea’. The
‘idea’ stage is when the initial idea is
created. This idea can be fairly
simple at the start, or they can be
based off a pre-existing product, or
they can be a completely new concept that is unique. Many business will have a department
that is there to come up with the next new idea. Aardman will have in-house writers, such
as Nick Park, who will create new film ideas. They will also have people who come up with
products that they can sell that are related to the films created by Aardman.
 The second stage of the new product development cycle
is the ‘Research’. When a good idea has been created, or
picked, then the business or organisation will then have
to complete market research. By completing market
research, the business or organisation can see whether
or not any one else has come up with the same or a
similar idea. They can also see whether or not there will
be any demand for the product or service and whether
or not they need to adapt the product for the audience. Aardman may conduct market
research on previous films to see what was successful and what was not. They may also see
if anyone one be interested in watching their film idea.

The third stage of the new product development cycle is

‘Development’. This is when prototypes would be created
and then adjusted and modified. By doing this the business
can then make sure that the finished product is right for
the target audience. Aardman may create characters at this
stage and they may adapt the look of the characters. Also,
when they are creating products that will go with a film,
they can adapt it to make sure that the finished product
will be sellable.
The fourth stage of the new product development cycle is
the ‘Testing’. This is when the business will try out their
product on a small sample of their target audience. This is to
make sure that they do not spend lot of money on
producing large quantities of the product which may then
not be brought because the target audience does not want
it. This would cause them to lose a lot of money and they
would have a lot of unwanted to stock to deal with. It also
makes sure that no more changes need to be made to the
product. Aardman may create a small part of the film and then show it to a test audience to
make sure that they enjoy it or they may see whether or not people would buy a product
that is related to a previous film that they have made.
The fifth stage of the new product development cycle is
the ‘Analysis’. This is when the business will look at the
results from the testing stage and they will then make
any changes to the product if they are needed. At this
stage, they will also make a decision on how they will
launch the product onto the market. Since the data that
they are analysing is from real customers, then they will
be able to make important decisions that may affect
the successfulness of the product. For example, they may decide the price. Aardman may
change certain scenes in the film or they may adapt the product. They may also change the
price of the product so that people will be more likely to buy it.
The sixth stage of the product development cycle is the
‘Introduction’. This is when the final product will be
introduced onto the market for the first time. This is
when its product life cycle begins.

Every product and service currently on the market has a

product life cycle but the length of their product life
cycle is different for different products. For example,
Cola will have and has had a very long product life
cycle, whereas loom bands had a very short product life
cycle.

The first stage of a products life cycle is the ‘Introduction’ stage. This is when the product is
first introduced onto the market. This can be the most expensive stage for a business
because the business has to advertise the product. A
business may have a product that meets all their clients’
needs and wants, but if they don’t know about it then
they cannot buy it. If the product is in a small market
then sales will be initially small but if the market is very
competitive then more will need to be spent on
advertising. Aardman may spend a lot on advertising to
make sure that people watch the film.

The second stage of a products life cycle is the ‘Growth’ stage.

This is when the sales of the product begin to grow as there is
more awareness of the products existence. They will start to
get increasing profit margins which they can then re-invest
into more advertising to maximise the growth of the product
or they can reinvest the money into the development of a new
product. Aardman may start to create reinvest into creating
another film at this point (e.g. Shaun the Sheep was a
successful TV series, which was then a successful film, and
they are now creating a second movie), or they may start to
create add on products that go with the film.

The third stage of a products life cycle is the

‘Maturity’ stage. This is the stage where the
product is the most established and the
profit margins are the largest they will be.
The business will try to maintain their
market share at this point. But it is also the
most competitive stage for a business
because and they will need to be careful with their advertising. They may need to consider
modifying the product to make it more competitive. Aardman may bring the film out on
DVD at this point which they will advertise about, they may also bring out more products
that are related to the film.

The fourth and final stage of a products life cycle is the ‘Decline’
stage. At this stage, the market for the product will start to
decrease. This can be because the market become saturated (for
example, all the people who wanted to buy the product have
brought it). Or consumers may be switching to different
products. This stage is inevitable, but it can be extended using
extension strategies. For example, a version of the product may
be brought out in different colours (e.g. Nintendo 3DS brought
out a larger version, the 3DSXL, and then they brought out a
version with changeable cover plates). Or the business may just
reduce the price of its existing products to sell them off and the
money they receive from doing this they may then re-invest in
another new product they will soon introduce. Aardman may
reach this stage once they have brought out film on DVDs. This is because once the
customers who want the film have DVD have gotten it, then they will not need to purchase
it again.
Explain the diversity of techniques used at Aardman

Aardman are mainly known for using plasticine to create

stop motion animations (also known as Claymation). To
create the characters and props for their films they use
materials such as plasticine, silicone, rubber, resin, and
solid clay. Another material that they use is cling
film/cellophane. This material is used to create the effect
of a liquid. For example, when Wallace is pouring tea, the
tea will be cling film coloured in with marker pen. Aardman
now also use solid metal armatures underneath the
clay/plasticine which helps to make characters more
robust and in some cases easier to move. They have also
used 3D printers to create some of the props and in one
film, the mouths of the pirates.

Stop motion had been a technique that Aardman has used

for many years.
However, in 2006, they
created their first CGI
film called ‘Flushed Away’. They also created another CGI
film called ‘Arthur Christmas’ in 2011.
They also create 2D animations, 3D animations, CGI
animations. They also use other techniques such as live
action, paper craft. A lot of these techniques involve stop
motion. An example of a 2D animation that Aardman have
done is the Funky Pigeon adverts. An example of a 3D
animation that Aardman have done is Change 4 Life
adverts and the animated short call ‘Spirit of the Piano’. An
example of a CGI animation that Aardman have done is the
Frubes adverts and the Surf adverts and the National
Accident Claims Line adverts. An example of a live action
video done by Aardman is Vimtoad adverts (which also include some CGI). An example of
the paper craft videos that Aardman have done are the Toyota adverts called ‘Stories of
Better’.
Explain profitability of product range (how much do they make and how do they do it)
Aardman films have made $973.2 million (which is £696,061,836) worldwide and per film they earn
an average of $163 million (which is £116,677,845) per film created. All of the stop motion films that
Aardman produces are always amongst the highest grossing stop motion films. The animation
‘Chicken Run’ is Aardman’s top grossing film and it is the highest grossing stop motion film of all
time.

In 2016, Aardman saw a turnover of £23.6 million. This was an increase from 2015 when their
turnover was £23.6 million. In 2016, £7.1 million was generated from the feature films that they

produced (which was an increase again from 2015 when this figure was £5.1 million. But also in
2016, Aardman’s pre-tax profit was £2.7 million which is a decrease from 2015 which saw the figure
at £2.9 million.
2010:

- Cash: ---------------------------£3,150,424
- Net Worth: -------------------£9,748,316
- Total Current Assets: ------£11,046,820
- Total Liabilities: -------------£3,398,286

2011:

- Cash: ---------------------------£2,193,542
- Net Worth: -------------------£9,857,163
- Total Current Assets: ------£10,848,846
- Total Liabilities: -------------£2,860,749

2012:

- Cash: ---------------------------£4,927,098
- Net Worth: -------------------£9,556,177
- Total Current Assets: ------£10,706,828
- Total Liabilities: -------------£2,411,633

2013:

- Cash: ---------------------------£8,962,897
- Net Worth: -------------------£11,460,882
- Total Current Assets: ------£14,246,677
- Total Liabilities: -------------£3,984,996

2014:

- Cash: ---------------------------£9,061,338
- Net Worth: -------------------£13,157,805
- Total Current Assets: ------£17,034,871
- Total Liabilities: -------------£5,005,123

2015:

- Cash: ---------------------------£10,619,432
- Net Worth: -------------------£14,713,314
- Total Current Assets: ------£17,929,354
- Total Liabilities: -------------£4,623,869

2016:

- Cash: ---------------------------£13,186,236
- Net Worth: -------------------£17,046,161
- Total Current Assets: ------£20,486,676
- Total Liabilities: -------------£5,136,223

Aardman’s money comes from creating shows for TV channels and from creating films. They
also make money from creating adverts for other companies and by selling merchandise
that relates to their films and characters.
Some of their increase in profits in 2015 can from their commercial making division with in
Aardman. Also, a lot of their profit comes from their most famous characters and the
films/short films that are created about them.
Who are their major competitors?
Aardman’s four main competitors are Pixar, The Jim Henson Company Inc, Blue Sky Studios,
and Dream Works. All of these competitors are animation companies and create chows for
children.
Pixar is an American animation company that
is part of Disney. They mostly product CGI
animations and they have created many
famous films such as ‘Monster Inc’, ‘Finding
Nemo’, ‘Toy Story’, ‘Cars’, ‘Up’, and ‘Wall-E’.
One of their first films was in 1995 when they
released ‘Toy Story’. This is about 19 years
after Aardman released Morph. Pixar are also
a competitor because they create many good
and well known characters. Pixar try to create
bizarre story lines such as a house being
carried away by balloons in ‘Up’ or toys being
alive in ‘Toy Story’.
The Jim Henson Company Inc is another American company that creates films
for children using puppets. They have created famous characters such as
‘Kermit the Frog’, ‘Animal’, ‘Miss Piggy’, and ‘Elmo’. This company has
created ‘The Muppet Show’ (which also co-owned by Disney), ‘Sesame
Street’, and ‘Bear in the Big Blue House’. Their first show was in 1955 which
was about 20 years before Aardman started.
Blue Sky Studios is another America animation company.
They started in about the 1980s and since then have
cr4eated many films that have been successful. They have
also created animated shorts that
are both related and unrelated to
their other films, much like
Aardman does. Their most famous
films are the ‘Ice Age’ films.
Currently they have made five ‘Ice
Age’ films which have had several short films. Other films include
the ‘Snoopy’ film, ‘Rio’, ‘Robots’, ‘Horton Hears the Who’, and
‘Epic’. They have also created recognisable characters such as
‘Scrat’ and ‘Sid the Sloth’.
Dream Works is an American animation company. They have
worked with Aardman on ‘Chicken Run’, ‘Wallace and Gromit and
the Curse of the Were-Rabbit’, and ‘Flushed Away’. Dream Works has created many films
that have been successful such as ‘Shrek’, ‘Monsters vs Aliens’, ‘Madagascar’, ‘The Mr
Peabody and Sherman Show’, ‘The Croods’, ‘Kung Fu Panda’, and ‘How to Train Your
Dragon’. Dream Works started in around 1994.
What are the current international and national market trends in Animation
In recent years, as computer technology has increased and advanced, computer animations
have become increasingly popular. This is partly because the technology needed is more
easily accessible and more readily available to use. Animations are being increasingly shown
on TV and animations are also being produced for teenagers and adults as well as children.
For example, ‘The Simpsons’ is extremely popular in the U.S. and in the UK. It is also popular
in other counties as well such as France and Germany. Animations
are not only popular on TV, they are also popular in the Cinemas
and in the film industry. Animations are also becoming increasingly
popular on You Tube.
In the UK, the most popular animations currently are ‘Rick and
Morty’, ‘Adventure Time’, ‘The Amazing World of Gumball’,
‘SpongeBob SquarePants’, ‘We Bare
Bears’, ‘My Little Pony’, ‘Duck Tales’,
and ‘South Park’. The current
animation trends in the UK are 2D computer generated
animations. This can be seen in the most popular animations.
Stop motions animations, such as the animations that
Aardman produce, are not currently poplar in either the UK or
internationally. However, Aardman’s animations are still
successful.
Aardman has always been mostly based in England, so a lot
of their animations have been popular first in the UK. Shaun
the Sheep had become very popular in England after the TV
show was first released in the UK in 2007. They are going to
release the second Shun the Sheep movie in 2019. Shaun
the Sheep is also extremely popular in other countries. The
character, Shaun the Sheep, is either as popular or more
popular than the other two famous Aardman characters,
Wallace and Gromit.
Research “Nathan Love” subsidiary of Aardman in NYC

Nathan Love is an animation company that is based in New York City. Aardman
brought the majority of shares in the company and so became co-owners of it
(however, the own the larger part of the company and have the largest effect on
the decisions made since Aardman owns the majority of the company shares).
Nathan Love was then re-named to Aardman Nathan Love. This became
Aardman’s first production facility outside of England. It also means that
Aardman can create more income for themselves since they can create more adverts for
other companies.
Aardman partly made the decision to
buy the majority of shares in the
American company Nathan Love because
it would allow them to expand into the
U.S. better and more efficiently. This is
because Nathan Love has already been
established in America for quite a few
years and they had produced adverts for
other high profile companies. This would mean that Aardman would not have to spend time
or place much risk in setting up a new department from scratch in America. This means that
they can save money and they do not need to worry about losing that money if they are
unsuccessful. Since Nathan Love is already established and has already proven to be
successful, then there is a lot less risk and it is less
likely that they will lose money.
Nathan Love also had the same devotion to creating
good characters and story lines as Aardman has.
Also, their company values are aligned which means
that they both have similar beliefs and values about
their companies. This means that the partnership is
more likely to be successful.
Nathan Love had been set up by Joe Burrascano in
2007
Research marketing in virtual worlds and how this applies to Aardman

A virtual world is an online community that is computer based. This world is often
customised and it allows the user to interact with the environment/world around them on
the computer. These virtual worlds can have 2D and 3D graphical models. Virtual world
often has avatars that are controlled keyboards, or mice, and sometimes using other
technology. Virtual worlds are created for entertainment, education, social, and training
purposes.

Virtual worlds can also be controlled by VR (virtual reality) headsets. This

is what Aardman have developed their
virtual worlds for. In 2016, VR headsets
became one of the growing trends. Aardman
used this as an opportunity to create content
that could be used for advertising and
entertainment. They initially worked with
Google to create a project called ‘Google
Spotlight Stories, ‘Special Delivery’. This
allowed the user to have a 360 view of their environment and slight head movements could
trigger actions.
The second project that the created was for the BBC and it
was called ‘We Wait’. They made it for VR to see if you
could create a strong emotional connection between the
viewer and the subject. The story was about the Syrian
migration crisis and it showed a group of families trying to
cross the Mediterranean Sea to Europe. By using VR, the
story had a massive emotional impact.
They have recently created ‘Shaun the Sheep Movie Barn
VR’. This is a free app that is fully interactive and it allows
someone to sit in the movie barn with Shaun the Sheep and his friends whilst they watch a
collection of Shaun the Sheep clips. With this app, they also allow users to see trailers for
upcoming films/shows and they can see new animated shorts.
Explain what are property rights
Property rights give someone the legal right to own something,
such as an idea or concept (e.g. a cartoon character, or a logo). It
also gives them the right to say how that idea or product is used
and who uses it. It stops other people from copying an idea,
product, design, or image. Property rights can be shown through
trademarks, copyrights, and patents. Most types of property
rights have to be brought. However, some don’t need to be
brought but the brought ones are more protective and give the
owner more rights/protection. Once property rights have been
brought the owner can then licence their idea to other people or
they can sell the property right. The person who applies for and
then buys the property rights owns the property rights. Some property rights, such as copy
right, have to be renewed every so often since they only last for a few years.

Aardman have copyrighted all of their work to prevent other people from copying their
image. However, they do licence some of
their characters out to certain
companies and people to help them
promote their brand or event. However,
there is a fee involved. They also allow
rights distribution so that people can
show their programmes/films.
Research to see if there are any sequels in production

Aardman announced in 2016 that they would be making a sequel to the Shaun the Sheep
movie. They began production in 2017 and it will be released in 2019. The character Shaun
the Sheep, was originally introduced in 1995 in the Wallace and Gromit film, ‘A Close Shave’.
This then caused them to create a TV show for kids
where Shaun the Sheep was the central character. This
was debuted in 2007 on CBBC. The first Shaun the
Sheep movie was released in 2015 and it took in $106
million (£78,179,060) worldwide.
Very recently (2018), Aardman announced that they
would be making a sequel to the film ‘Chicken Run’
which was released in 2000. It has been about 18 years
since its initial release.
Currently the story line is
being kept secret but Aardman have said that they will be
beginning production after ‘Shaun the Sheep Movie 2’ has been
completed. So far, Peter Lord and David Sproxton are planning on
calling the film ‘Chicken Run 2’. Aardman will be working with
Studio Channel and Pathe to produce this film.
Explain the meaning of outsourcing and do Aardman do this

Outsourcing is a method used by a business that allows

them to move their production to a different place or they
give the production process to a different
company/business. This means that the business would
no longer be producing their products ‘in-house’ by their
staff any more.

Outsourcing can be very controversial, especially when

the production is moved to a different country. This is
because it can cause people in the local area/or in England
to lose their job. Also, if the production is moved to a different country, then sweat shops,
slave labour, and child labour can occur. If this does happen, then the business reputation
can be severely damaged.

Outsourcing usually happens if it becomes cheaper to

produce the product in a different company or they don’t
want to increase their capacity utilisation because if
demand suddenly decrease then their capacity utilisation
will decrease as well which cause unit costs to increase. This
means that the business is less efficient and they may have
to increase prices to cover the increase in unit costs.
However, many consumers demand cheaper products,
which forces many manufactures and businesses to find
cheaper options of production. Outsourcing to poorer countries is often the rout that
businesses take to help them bring down their production costs.
Currently Aardman does not do outsourcing. However, they do mostly own the American
animation company called ‘Nathan Love’. But, Aardman still produces most, if not all of their
animations in England and their takeover of the animation company did cause people to
lose their job.
However, in 2011, Aardman did threaten that they
would move overseas since it was becoming too
expensive in the UK to produce stop motion
animations. At the time, UK films received a 15-20%
tax credit. However, UK animations companies did not
receive this tax credit. This was causing many
animation companies at the time to either move
overseas to produce their animations or they were
being brought out. However, Aardman eventually decided not to move overseas because
they wanted to maintain their British heritage.