What’s the life cycle of CP in an SVOD world?

The NPD Group examines why IP owners need to get with the new streaming timelines, or risk missing big licensing opportunities.
June 17, 2019

By: Kathi Chandler-Payatt and Kristen McLean

Back in the day, planning and scheduling the release of a major media property with its corresponding merchandise was pretty straightforward. Line up the movie or TV release with the product rollout at a strategic point in the year—back to school, the holiday season, start of summer—and watch the numbers fly in.

Not so anymore.

From where a license or property gets its start (be it podcasts, video games or YouTube) to the platform it rolls out on, and from how quickly or slowly successive series follow to where consumers look for related products to express their brand affinity—it’s an entirely new content and merchandising landscape. Streaming services have changed the cadence of how content can be released, and—if they’re smart about it—are creating opportunities for IP owners to extend licensing and product rollout.

But to take advantage, studios and content creators need to redefine how intellectual property goes to market. For example, a consumer products group can no longer be uninformed about the licenses the distribution group is negotiating with streaming platforms, and when those licenses begin. This is especially true when the goal is to get the most out of marketing spend and maximize revenue. Some studios, like Disney and Sony, have already recognized this and reorganized to create more cohesion and communication between departments.

Content creators also need to redefine their best practices and re-think their views on “incremental rollouts.” While there are still benefits to tying CP releases to tentpole schedules, SVODs have flipped the game. Today, key moments may be smaller, but they’re far more frequent.

Here’s a recent case study that shows both the potential and the pitfalls when it comes to extending a property in today’s complex media landscape.

A major subscription video-on-demand platform licensed an existing film IP to reboot as a series for kids—let’s call it Cute & Cuddly (name, obviously changed)—to live exclusively on the streaming service.

At the same time, the Cute & Cuddly property was also licensed for a variety of consumer products and books as part of an ongoing program. Because NPD tracks data for multiple entertainment industries, as well as license performance across different platforms, we were able to line up the SVOD viewing with the product launches and ongoing sales of books and toys to see if the merchandise was pushing viewing numbers, or vice versa.

KidInsight_SVOD_CP_NPDHere’s what we found:

June 2017
The original Cute & Cuddly film joins the SVOD and has steady views through the end of 2017. There were already Cute & Cuddly books and toys in stores from the 2016 movie, with new products still rolling out throughout the following year. But when the new product releases and views from streaming are lined up, the new products don’t seem to affect the film’s viewership numbers on the streamer one way or another.

January 2018
The new series drops its first six-episode season on the SVOD. Subsequently, viewing activity for both the film and series jump, with views skewed heavily to the new content. But the original film did get refreshed attention from the new series launch.

March 2018
Just three months later, season two (seven episodes) of Cute & Cuddly debuts, and both consumer products and books experience a lift. The franchise has renewed momentum, and this would have been an ideal time for the Cute & Cuddly licensing team to release new products since views are even higher than they were for the January debut. Unfortunately,
the IP’s product releases are sparse in 2018—only happening in June and December—which turns out to be a missed opportunity for the franchise.

August 2018
The six-episode third season premieres, and its viewership spike tops that of season two. But there is no correlated lift in consumer products or books because there is no new merchandise for viewers to buy. Sell-through is on whatever remained from previous assortments. This is yet another missed opportunity to capitalize on the streamer’s big marketing push for the latest season, as well as a missed opportunity to tap into the lucrative back-to-school season.

November 2018
The last seven episodes of season four land with excellent viewing figures, but still with no corresponding merchandise introductions until a single toy release in December. Sales of existing Cute & Cuddly merchandise remain flat in Q3 and Q4.

Ideally, Cute & Cuddly‘s third season should have been scheduled in July, in combination with new consumer products and book releases. It would have been early enough to maximize consumers’ budgets for the back-to-school season and leverage the awareness of Cute & Cuddly from the related high-profile marketing on the streaming platform. The brand could also have benefited from a push of holiday merchandise around the season four release in November.

Today, it’s important to understand that because entertainment is everywhere, IPs are also everywhere. The notion that entertainment comes from just television or movies is too limited for today’s consumers. Even if the entertainment industry insists on the status quo, audiences have already democratized content.

Entertainment is your drone, your Twitch channel, your Peloton workout. It’s the robot that teaches your kids to code, it’s TikTok and it’s YouTube. (Sorry, Hollywood.) Consumers, and especially kids, expect IP ubiquity—films, series, Blu-ray, toys, clothes, books, video games—rolled out in as tight to simultaneous availability as possible. Kids can stumble over a
previously released piece of IP and fall in love just as passionately as with something that has just hit the theaters. In the SVOD world, there is a sense of content timelessness where “new” doesn’t just mean “recently released”—it means “new to you.”

This is partly why Gen Z is enamored by the Friends TV series. They missed it during its original run from 1994 to 2004 and are coming brand-new to the show 20 years later.

If we extrapolate this behavior to kids—who don’t understand how old a piece of content is and why that matters—then catalogue content and new releases are the same, and we need to think differently about our potential for marketing to introduce it as “new to you” in the kids context.

In the end, the content creators who change their operations to prioritize communication and coordination of people working on the same IPs will be significantly more successful than those who do not. And those who are successful in creating more incremental rollouts to support appropriate SVOD projects will be rewarded with higher returns on their hard-won series investments.

Kathi Chandler-Payatt is executive director and entertainment industry analyst for market research firm The NPD Group. Chandler-Payatt previously served as executive director of worldwide research and analytics at 20th Century Fox Television Distribution, where she developed the studio’s SVOD analytics strategy.

Kristen McLean is executive director of business development for the NPD Books group and works with content companies including Disney, Scholastic, Penguin Random House and DC Comics. She led the rollout of NPD’s “BookScan License Reporting Service,” which tracks licensed sales on 3,000-plus brands and more than 87 million units annually in the US book market.

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