Aardman Animation Financial Report Assignment 2

Market Trends Choose 6 AND Industry Trends Choose 3

Market Trends
Product Diversity and Services
Aardman Animations Ltd. Also known as Aardman
Studios is a British company that creates animations
and has a studio based in Bristol. When Aardman
really became a big computer animation company
was when they released Flushed Away in 2006.
Before this film, the company was based around
clay stop-motion films including the big hit
programme Wallace and Gromit. They always
created clay and plasticine animations before
computer technology improved and they created a
short film called Owzat in 1997. The now huge company was founded in 1972 by two
men named Peter Lord and David Sproxton who had the idea of producing a
worldwide known famous animation company. After becoming a success, Aardman
have made approximately 971.8 million from their films, which is on average 162
each. The two creators became friends in school when they came up with this idea
and started off by creating short animations for deaf children in partnership with the
BBC. Not only have Aardman created short clay motion films but also big hit films
and television documentaries. The name Aardman that is now what the company
is called was taken from a short film that the company made in 1972 called Vision
On. The services they offer are of short animated films whether they be clay stop
motion or computer animated shows, the majority of them being computer
generated due to advanced technology. As I stated before, the company are a
Bristol based one but due to the company being so well known not only in the UK,
they now have a studio in NYC called Aardman Nathan Love. The company
creates animations that could appeal to both adults and children but mainly
children as they have created BBC animations and CBBC ones such as Shaun the
Sheep. As the company grew and now
they are known all over, Aardman
produces Television animations for adverts
like Change 4 life, Booking.com, Sudafed,
Bloo and many more. They created their
first ever music video for the song My
baby just cares for me by Nina Simone in
1987. One of their recent big films they
produced was the Croods which came
out in 2005 by the company DreamWorks
which worked together with Aardman to

produce this. When Aardman first started out they were only known locally and
across the UK, growing in popularity they stretched their work across the world and
are known a hit sensation and is known globally for their productions.

Property Rights
Aardman are a famous company and are known well for their individuality and
creativity in animations and obviously want to protect them from copyright. Because
of the fact we live in such a digital world now and how many people use
technology, they certainly want to ensure that their work is their own and nobody
else can take it. Just because they are such a well-known company this does not
mean they dont need property rights as people could still take their work so to
ensure that they dont they need property rights. Aardman is a trademark and so is
their shows for example Shaun the Sheep which is now a trademark with
merchandise being sold. This needs to be copyright protected to be sure that they
do not start to lose income on it due to the fact other people are selling it.
Research and Development
Over the years Aardman have become more and more famous for their work,
starting out as just a small company in England to becoming a known worldwide
company with high demand. Their very first appearance on national television was
the Vision On show I mentioned earlier when they got into business with the BBC and
started to get known. They then experimented with clay stop motion by making the
short film named Greeblies in 1975. They then took inspiration from this animation
and turned it into a more well-known one called Morph. Peter Lord and David
Sproxton became a hit when they created adult animations called Down and Out
and Confessions of a Foyer Girl for the BBC. They expanded their services when they
began to create animated videos for famous songs. The first one they did was for
Peter Gabriel Sledgehammer and then My baby just cares for me by Nina Simone
in 1987. They then kept on creating short animated films mainly for the BBC before
they expanded and worked then with other companies such as Channel 4. The first
Oscar that the Aardman Company won was for Creature Comforts by the Parks
short film. It was after that Aardman created
Wallace and Gromit and this was what really
brought the company to fame because the show
because known worldwide for this show and they
continued to make more. However, when they rose
to fame Aardman continued to bring out clay stop
motion movies for many famous companies as well
as the Wallace and Gromit films which were A
grand day out 1989, The wrong trousers 1993 and
then A close shave 1995. This was just the
beginning of their career as they continued to
produce animated films. When they first started out

it was the year 1972 and then in 1976 they moved to Bristol and their professional
productions started there. Up to now, the company has had 10 Oscar nominations
and so far won 4.

Product Development Cycle

There are many steps in order to produce and
create an animation. Depending on which
company they are working with, Aardman has
to set a budget and plan how they will create it
before they go ahead with it. They must plan
what the animated movie is, what it will be
about, the name of it etc. and just general
research. They need a script and some kind of
idea on what the characters or models are
going to look like so that they can start creating
them. Aardman must look at how they will benefit from taking part in this, including if
there is chance on them losing any money or not making a profit. The company
DreamWorks and Aardman both paired up as I said before, to create flushed away
in which they lost 88 million in the making of it. When coming to create their
characters for the films they need to decide how they will be aesthetically and buy
the materials. Generally, handmade models for clay stop motion films are made
using many materials. These consist of: resein, latex, wood, metal, milliput, silicone,
foam latex and the major material Plasticine. I used a video on YouTube to help me
with the research and I found one which was behind the scenes of Shaun the
Sheep. I noticed the first step was writing the script and it does take a long time. They
have to plan every small detail within the movie/video so that nothing goes wrong.
The next step is to make the models by gathering all of the materials in which they
use. The company will have a team of staff who create the models by following the
planned models. The plasticine that the company uses have changed recently as
the one they used before was hard and difficult to mould whereas the new one isnt,
this is called Peter Pan Plaything. They then have to create the furniture and the
set. Everything they make is made to look real and they add a lot of detail into the
props. The materials they use is almost anything based on what they are making due
to the fact to make it look real. The characters are held up by metal sticks where
they are moved like a puppet. To ensure that it isnt on the actual movie they have
to edit out that and take away any shadows. The next step is animation. On this step
the producers have the set all ready with the characters in for the shots. Before they
proceed a director will come in and explain what the scene will feature and where
the characters should be looking etc. The shots are filmed with the correct lighting
and a canon camera. The step after is all about the story and the editing of the

clips. The director and editors will aim at shortening the clips down to the shortest
they can be still keeping the crucial bits of the show in it.

Profitability of product range

When Aardman animations started out they began
by creating short clay stop motion videos for the
BBC and Channel 4. They hit it off when their
animations aimed at adults became very popular.
When their audience spread and expanded the
company decided to widen their range of
animations. They teamed up with big film
companies like DreamWorks and Sony to create
films. However, despite their animated TV shows and
short stories, the films didnt become as much of a
success as they had hoped. Their reputation
dropped a lot in which they had to build it back up
as well as making more money due to losing a lot.
An example of a movie they released was Flushed
Away in 2006 when they teamed up with
DreamWorks. Although the films that they released
may not have had the reaction they wanted and
the publicity their animations are still entertaining and loved by many people. They
dont just do animated shows for children but for adults too and deaf people. The
show Morph was creating specially for children with special needs who enjoy
watching the television. In Disney and other major films companies they use CGI
technology and this was where Aardman went wrong when they took inspiration by
these and didnt succeed. On the aardman website they do have a merchandise
section which sells toys, games, stationary, homeware etc. from shows they have
created. They have a lot of Shaun the
Sheep gifts such as a Shaun clip on
keyring for 6.49. Other items vary from
DVDs of all the shows not only Shaun
the Sheep but Morph, Wallace and
Gromit, Flushed away and so on. All of
these you can purchase from the
www.aardstore.com website. An
example of one of the DVDs they sell is
Timmys Birthday from Shaun the Sheep
and it is 5.99.

Measure of Performance against Financial concerns

Aardman are clearly a very well-known
and worldwide famous animation
company for their clay stop motion films
like Shaun the sheep and various TV shows.
When Aardman decided it was time to
expand their abilities by creating a film
called Chicken Run they teamed up with
DreamWorks to produce this and made a
gross of 133 million where they invested
26 million. The success of the film gave
Aardman the confidence that their movies
would be a success but were proved to be wrong. After critics watched the
film and reviewed it they were disappointed to see that the company had
used CG technology rather than clay stop motion. The reason that they did
all of this was because they realised how rapidly popular the CG technology
was becoming and wanted to step up and join in. When Aardman are
creating any new films, shows, short stories etc. They have a lot of planning to
do beforehand about the budget and so on. Unfortunately, Aardman have
begun to create many short films but they never made it to the screens and
on a whole have lost 1.2 million due to this. SONY paired up with Aardman
and created a film called Arthur Christmas but sadly this was not a hit.
Aardman and SONY lost out on 29 million and so ended their contract just
like DreamWorks did when they lost 88 million! Due to the losses for these big
companies Aardman lost its good reputation and had to re build it by
creating clay stop motion shows that actually hit it off and appealed to
audiences. After these failures they began to realise not only just they stick to
creating short films and animations but to also go back to clay stop motion
due to the popularity of it. Aardman have been the most successful when
they created Shaun the sheep gaining the highest profit of 106 million. Here
are some figures on the profits aardman have made from shows and their
budgets on them:

Movie
Chicken Run
Wallace and
gromit
Flushed
Away
Arthur
Christmas
The Pirates
Shaun the
Sheep movie

Year
2000
2005

Budget
45 million
30 million

Gross
224.8 million
192.6 million

RT
97%
95%

2006

149 million

178.1 million

72%

2011

100 million

147.2 million

92%

2012
2015

55 million
25 million

123.1 million
106 million

87%
99%

Vision of Organisation
Peter and David the inventors of Aardman
originally had an idea on what animations
they would be creating and for which
purpose. They had the plan that they would
create animations aimed at adults such as
Angry Kid. They did do this for a short while but
once they became noticed by the BBC for
their work they partnered up with them and
began to create a television show called
Morph specially designed for deaf children.
This continued for years as well as continuing
to produce other childrens clay stop motion
shows. One big show that they hit off with and
is still going now is Shaun the Sheep, as I stated
before and in which they went on to bring a
film out of it. Although the adult comic
animations were very popular they soon
realised that childrens shows gained a larger
and wider audience. As Aardman rose to fame
they started to work with Disney where they
created some films, only soon to realise they
didnt get the reaction they hoped. They then
went back to just creating their own shows and
making more of their existing ones. Although
Aardman didnt originally want to create childrens animations, the BBC

definitely set them off and got them noticed. And despite having some
mishaps and unsuccessful animations they still got 10 Oscar nominations, won
4, got a BAFTA, Annie award and an academy award. In 1998 they decided
to expand their business and open a new base on the outskirts of Bristol in
which they completed some series that were in their final stages of
producing. Aardman also have a department which look after characters
and models for their shows.
Comparison with Industry Benchmarks
Just like any assignments or projects benchmark targets are set to ensure
work is created to a certain standard. This is so the quality of the animations
does not drop and the work is still presentable. There is not just targets and
benchmarks for the company as a whole but also all of the industries within it
from the producers, creators, directors, managers etc. It can also be
included in terms with the materials used, they must all be of the highest
quality to ensure the best shows. The purpose of these are to ensure that all
work is created with the highest level of dedication by all of the staff and not
just effortlessly done so. When Aardman teams up with bigger companies like
DreamWorks and Disney they must create films which meet their standards as
they have a reputation of producing high quality shows.

Outsourcing
Companies which produce
products as well as films, shows
etc. are looking for the highest
quality but cheapest way and
so set a budget in which they
use as a guideline. When you
buy things the majority say
Made in China because of
the reason it is cheaper and
they can create very good products. It is the same with Aardman, they are
looking to create products cheap and by sending them abroad it can be
done. This can be as simple as some of the stage props which they want
making/buying. China are less economically evolved and so is cheaper for
business which means Aardman and other companies like this can save a lot
of money. A fact I have learned is that due to all of the creating when

Aardman want to bring out a new show they have to go through the stage
of planning how it will all be done, buying all of the products, materials etc.
and it can also waste time as well as money and this is one of the major
reasons they began to create CG movies which didnt go far. They went
back to creating clay stop motion shows which they did themselves but still
invested in buying products from China. Unfortunately, soon Aardman will
have to buy from different countries such as France due to tax credits being
lowered in China. In 2011 Aardman threatened to move overseas as they say
animations created in the UK receive government help of about 15-20% tax
but UK TV animations receive nothing. They believe this is a massive downfall
to the media industry and think that if they changed their ways like overseas it
would be a tremendous help to UK animation companies.
Mergers and Acquisitions
Aardman have teamed up with companies to create shows and films with
firms like DreamWorks and SONY. Unfortunately, as I said before, the films
didnt work out and the companies didnt make any profit so they ended
contracts. As of yet they havent been acquired by large companies or
merged together fully, just temporary
contracts to create animations. I think the
reason why Aardman havent had this
opportunity yet is because of the loss in
profits by other reputable companies and
so they have lost their reputation and
companies do not want to risk taking the
chance. After having some failed films,
they decided to just continue with their
previous shows and short stories. This is
because these actually did become
famous and they didnt have any other
company to disappoint if things went
wrong so they proceeded to create shows
they were familiar with like Wallace and
Gromit, Shaun the Sheep.