Aardman Animation Financial Report Assignment 2

Market Trends
Product Diversity & Services
Peter Lord and David Sproxton began their animating partnership at
school. In 1972 they registered the name Aardman Animations. In
1976, after they graduated they moved to Bristol where they
produced their first professional production Morph for the childrens
programme Take Hart where they created animations for deaf
children.
All the time Peter and David were interested in developing an adult
audience for model animation. Conversation Pieces commissioned by
Channel Four Television in 1982 enabled the pair to develop its
innovative technique of animating puppet characters to real-life
conversations. Aardman demonstrated that real people could be
characterised with insight, humour and sensitivity with films like Early
Bird, which was set in a local radio station.
Research and Development
Aardman Animations are hugely successful and are a well-known company around the world. Their
work is easily recognisable for its aesthetically distinctive style and model animation technique along
with a recognisably British humour. They have strenuously avoided the smooth, perfect and
showy style which is characterised in Disney and Dreamworks
animations. Aardman Animations have developed many series as
well as films, these series may lack Aardmans style. For example,
creating flushed away Aardman collaborated with Dreamworks.
In flushed away they used plasticine as well as incorporating CG
effects to create the stop-motion effect and also to make the
movements as smooth as possible.
Product Diversity
Aardman and Nathan Love decided to team up
and bring together two of the worlds most
exciting animation studios in 2015. The new
company, re-branded Aardman Nathan Love, is a
ground-breaking venture for the Aardman
studio. It signals the first permanent production facility outside of the UK for Aardman and
establishes the companys commitment to its advertising business. Teaming up with an existing
company gives Aardman the opportunity to have a solid base from which to grow. Its not about
sending work back to the UK, but about building a new business in New York for American agencies
where theyd be able to do this more effectively by being there. Aardmans vision is to be the most
inspirational animation company in the World, in the eyes of its talent, partners and audiences, for
generations to come. Aardman Nathan Love will allow the company to expand this vision in the US
Product Development Cycle

The product development cycle is the process of bringing a new product to market. A good
understanding of customer needs and wants, the competitive environment and the nature of the
market represent the top required factors for the success of a new product. Companies develop
continuous practices and strategies to better satisfy the customer requirements and increase their
market share by a regular development of new products.
Aardman would do this when creating adverts
etc. by finding out what the customer wants,
what the product is theyre advertising and
how to make an animation that is suitable for
that.
Profitability of Product Range
Aardman Animations boosted pre-tax profits by more than 60% to 3.3m in 2014, largely due to a
boom at its TV commercial-making division. Aardman Animations, which recently branched out into
the US with the acquisition of animation firm Nathan Love, also reported a healthy 26% surge in
turnover to 23.5m.
The 40-year-old Bristol-based firm acknowledged the performance of its commercials division which
achieved its highest level of turnover since 2010. Aardman Animations has made many campaigns in
both the US and UK for clients including Npower and the
governments Change4Life anti-obesity drive. The companys
directors, co-founders Peter Lord and David Sproxton, each
received a dividend payment of 94,956. Revenue from other
activities such as making commercials and licensing grow 26%
to 23.5m. Over 80% of the companys turnover comes from
the UK, up on 2013, with North America generating just 10%
of the work.
Customers
When creating animations for other companies, for example, when creating adverts or campaigns
Aardman needs to take into consideration what the client wants first and foremost otherwise
Aardman could end up creating something
completely different to what the client had
envisioned.
Some examples can be found on the Aardman
website. Like the Surf advert for laundry detergent
would have had to advertise the product, what it
does and why people should buy it and it should also
fit with the customers wants.
Industry Trends
Property Rights
Property rights are the rights, which are given to given to people over the creations of their minds.
They usually give the creator an exclusive right over the use of his/her creation for a certain period
of time.

These rights are customarily divided into two main areas: Copyright and rights related to copyright
and industrial property.
Copyright ad rights related to copyright means that the rights of authors of literary and artistic works
(for example, books and other writings, musical compositions, paintings, sculptures, computer
programs and films) are protected by copyright, for a minimum period of 50 years after the death if
the author. The main purpose of protection of copyright and related
rights is to encourage and reward creative work.
Industrial property means that the exclusive rights given are generally
subject to a number of limitations and exceptions, aimed at fine-tuning
the balance that has to be found between the legitimate interests of
right holders and of users.
Sequels
Aardman have done many sequels for both TV series and films. For example, there have been many
Shaun the Sheep sequels made for TV and there is a planned sequel for a movie that has yet to be
named. There are also Wallace & Gromit sequels, for example, Wallace & Gromit: The Curse of the
Were-Rabbit. Sequels are attractive to creators and to publishers because there is less risk involved
in returning to a story with known popularity rather than
developing new and untested characters and settings. Audiences
are sometimes eager for more stories about popular characters or
settings, making the production of sequels financially appealing.
Outsourcing

Mergers and Acquisitions

Aardman animations only has one acquisition which is Nathan Love. Aardman and Nathan Love
decided to team in 2015. This signals the first permanent production facility outside of the UK for
Aardman and establishes the companys
commitment to its advertising business. Teaming
up with an existing company gives Aardman the
opportunity to have a solid base from which to
grow.