Global Edition: Can Holograms Save Live Entertainment?
Plus: The pillars of brand licensing, cosmetic brands tap gamers, and our TikTok Take.
Welcome to the inaugural issue of CCI’s Global Edition newsletter. Ten months ago, when CCI launched with a focus on covering the market in China, that country was still in the throes of what would soon become a global pandemic. And while China has largely returned to some semblance of normal life, the consumer experience has been transformed for many of its citizens, as the government imposed the world’s most stringent restrictions to bring the spread of the virus under control, and the digital adaptations required for survival under such conditions have become part of daily routines.
Now, as the rest of the world continues to grapple with the pandemic while awaiting the approval of vaccines and their widespread distribution, brands, platforms, and marketers have been looking to China for lessons in how to use digital tools that blend content and commerce to help weather the storm. Although the evolution of tech ecosystems in China and the West have followed very different paths (determined by culture, history, politics, economics, and so on), the Chinese model of using content to drive revenues — whether via e-commerce livestreaming, shoppable TV shows, or gaming collaborations — inspires envy and emulation from even the West’s most powerful tech firms, such as Amazon.
CCI’s international team, spanning the United States, Europe, and Asia, is uniquely positioned to cover the global growth of this multi-billion-dollar content commerce industry, and we hope you’ll enjoy, share, and offer feedback.
If this newsletter was forwarded to you and you’d like to continue receiving it along with our twice-weekly China editions, please subscribe below. And if you have thoughts, questions, or story tips, we’d love to hear from you!
Can Holograms Save Live Entertainment From Coronavirus Restrictions?
by Sadie Bargeron
As with every industry, the music business has been forced to adapt to the restrictions resulting from the coronavirus pandemic. Concerts and gigs are no longer one of its most economically reliable sectors, with PriceWaterhouseCoopers reporting a decline of 64%, worth nearly $18 billion, in 2020 revenues.
Artists worldwide are thus trying out innovative ways to perform from the comfort of their own homes, from in-game gigs such as Travis Scott’s on Fortnite and Lil Nas X’s Roblox concert to the plethora of intimate, DIY livestreams seen on YouTube, Facebook Live, Bandcamp Live and other platforms — British pop star Dua Lipa’s recent livestreamed concert, “Studio 5054,” managed to attract 5 million viewers, including more than 1.9 million from China. In terms of livestreaming, China’s technologies are especially advanced, equipped with a decade of development, and feature two-way interactions between performers and audiences, along with innovative features like tipping and other mobile payment integrations. Yet however much it strengthens fan-artist relationships, livestreaming lacks that unique adrenaline of an in-person performance, and thus consumers are unlikely to be willing to pay sky-high concert prices to see them. Enter the holograms.
Holograms are lifelike digital projections of individuals, allowing a person to be placed anywhere in the world without having to travel (and put themselves and others at risk of contracting Covid-19). One of the earliest hologram inventions was the 19th century “Pepper’s Ghost” technique, which involves placing a piece of glass at an angle, allowing light to reflect and create a 3D optical illusion.
London-based company Musion 3D, which uses technologies and imaging systems to form presentations with 3D holographic images, recently used an advanced version of “Pepper’s Ghost” to launch Fanshare in October 2020. The project involved singer Dan Olsen performing from his East London studio whilst being simultaneously projected in 3D onto a stage in Central London. This technology enables fans to watch their favorite artists in the digital flesh without having to purchase or wear equipment like a headset or glasses, and more convincingly replicates the experience of watching live music. Musion plans to get gigs onto mobile devices too and invite artists to perform live through their holograms, simultaneously reaching multiple places.
There are existing apps that create 3D performances seen only on mobile phones (and not outside of them as projections) such as the one created by the Los Angeles-based Jadu, which strives to enhance virtual touring for artists. The company is currently working with Vic Mensa, K Camp, and others, and has (unsurprisingly) reported notable success this year.
As for offline hologram projections such as Fanshare, a glance at the Chinese virtual idol industry — projected to reach a value of RMB 1.5 billion ($230 million) by 2023 — shows the extent of its mainstream potential. Popular anime vocaloid stars such as China’s Luo Tianyi and Japan’s Hatsune Miku frequently perform live to audiences paying top dollar, appearing as holograms created through a combination of sophisticated voice synthesizer software, 3D modelling, and motion capture work with actresses performing live backstage.
Hatsune Miku opened for Lady Gaga’s tour in 2014, and at her 2018 solo concert in Beijing the cheapest tickets were priced at RMB 680 ($130) each, while her two Guanghzhou shows sold out. Similarly popular, Luo Tianyi has also performed offline, including multiple times for Bilibili Macro Live (BML) at the Mercedes-Benz Arena in Shanghai alongside other virtual idols such as Hatsune Miku.
“There is a growing interest in virtual performers in recent years in China,” said Yin Li, head of PR and communications at Bilibili. “Take the BML-VR special show last year, for example. 8,000 tickets were sold within two hours.” The rising power of this trend will be on display at Bilibili’s next BML show on December 19 in Shanghai, which will consist entirely of virtual creators and hologram acts.
In a press release, Bilibili producer Pi Naya wrote, “Events like BML-VR 2020 will bring more vitality to the virtual entertainment industry by expanding the attention from virtual idols like Luo Tianyi, to a wide number of more accessible VTubers and VUps.”
Fans flock to see their virtual idols appear as though they are real people performing physically on stage. Li explained that China’s obsession with these holograms is built on the same structure as any form of fandom, “[people] watch these Vtubers’ videos and livestreaming online and the physical event like BML makes it possible to interact with their idols in the real world together with people who share their interest.”
If Chinese fans have been won over by hologram performances of their virtual idols, can the same excitement transfer to holographic human performances too?
Companies in the West have previously used holograms to resurrect late stars for concerts — from AV Concept’s Tupac Coachella performance in 2012 to Base Hologram’s Whitney Houston hologram tour, which just ended on October 25 — but there has been less interest in living artists, until now.
Touring deceased acts as if they are commodities defined by their music is problematic, although Base Hologram CEO Marty Tudor told CCI that they aim to work with authenticity and respect, communicating closely with artists’ estates.
Having living artists perform through holograms is a much less morbid use of the technology and simultaneously can resolve the challenges that live music is facing. On this topic, Tudor noted that the company is “in discussions with several living artists who are concerned with travelling/touring due to Covid.”
Hologram performances can not only solve the problem of travel restrictions for the foreseeable future, but also glamorously reinvigorate the realms of livestreaming and virtual touring, and the concept of stars singing live in our living rooms does not feel too distant. As the merging of the digital and real worlds has been sped up by the pandemic, the hologram market appears to be thriving in response with a future of possibilities.
CollaBrands: Licensing Is the Fuel That Powers Global Content and Commerce
by Steven Ekstract
As global consumers embrace digital technology, the power of branding presents unique opportunities for brands to connect diverse cultures within one global economy. This is particularly true for brands that understand the power of partnership and collaboration, especially by way of licensing. Currently valued at $300 billion annually in global retail sales, the licensing of brand equity is a major growth industry that shows no sign of slowing down.
The business of licensing and collaboration is built on five pillars:
Brand equity
Knowledge of trends in pop culture
Analysis of trends and the consumer product categories into which these trends will successfully translate
Speed to market
Connections between IP owners, manufacturers, and sellers
Taken together, consumer products, experiential licensing, and collaborations form one of the pillars of content and commerce. Brand equity is the content, and its success is based on the emotional connection consumers have with it. The products, services, and experiences that utilize that brand equity are the commerce.
Licensing is the content marketing tool that marries the brand equity (content) that consumers know and trust in order to create new products, services, and experiences (commerce) that will excite consumers and drive sales.
Licensees lease “brands” to help them sell more goods and services based on the brand’s equity. In a global marketplace, where millions of products vie for consumer attention, brand licensing is the unique ingredient that works to differentiate products by appealing to the emotional connections consumers feel towards a given brand.
For brand owners who license their IP, the rewards are new revenue streams through royalties, as well as a significant marketing boost for the brand through new products and experiences that delight consumers. When licensing is done well, it benefits the licensor, the licensee, the retailer, and the consumer equally.
Here are three classic examples of well known, global brands that effectively use licensing to extend their core IP into new product and experiential categories:
Disney is the OG of all licensors, by far the largest licensor in the world in terms of retail sales of licensed merchandise. In 2019, Disney-licensed consumer products and experiences brought in $54.7 billion in retail sales, close to the annual GDP of Costa Rica.
Disney’s IP includes all of Pixar (animation), Marvel (superheroes), Lucasfilm (“Star Wars”), the “Frozen” franchise, “Toy Story,” “The Lion King,” “Aladdin,” National Geographic, ESPN, ABC, A+E, plus the classic Disney IP—princesses, Mickey and Minnie, Winnie the Pooh, Donald Duck, Goofy, and more. Disney’s first foray into licensing came in 1933, when Walt Disney licensed Mickey Mouse for watches. Today, Disney licenses out virtually all of its IP for consumer products and experiences, creating a very successful ecosystem between the content it produces and the commerce that consumers benefit from. Royalties flow back to Disney and many of its licensees make fortunes.
Some of the largest licensors in the world only own content. Japan’s Sanrio is an example of an “IP company” — its core property, Hello Kitty, was created in 1974 and has since become a beloved global licensing phenomenon. There are more than 50,000 different Hello Kitty products and services being sold around the world, from themed airline flights to toilet paper, all of which are licensed. The total global retail sales of licensed Hello Kitty products and experiences is an astounding $4.4 billion per year.
Ferrari is one of the most desired luxury car brands in the world. To auto enthusiasts from London to Shanghai, the Ferrari brand represents passion, speed, and sex appeal. It is also uniquely Italian. While most brands create value by selling more, Ferrari’s brand value is based on the concept of luxury and scarcity. The automaker limits the number of cars sold every year in order to cultivate a global demand that outpaces supply. Ferrari is all about aspiration and desire for the brand, and that translates to opportunities in licensing to reach consumers who may want to own a piece of the Ferrari mystique without the six-figure price tag. The strategy has proven so successful that the $2.5 billion that Ferrari brings in annually from brand licensing is actually more than its car sales.
Disney, Sanrio, and Ferrari are just three classic examples of how brands utilize their “content” or brand equity to foster emotional appeal and build consumer demand for products and experiences that go beyond their core IP into many different areas of commerce.
While licensing is merely a prong on the fork of content-commerce, it is a highly effective marketing tool.
In our next piece in this series, we will explore the current popularity of brand collaborations, another form of IP licensing in which two brands join forces to develop novel products that can create buzz and boost sales.
Steven Ekstract is Managing Director of Global Licensing Advisors, a consultancy that provides companies with insight and strategic direction to succeed in the $300 billion a year licensing business. Ekstract is the founder and former Publisher of License Global magazine, the leading information source for the consumer licensing business. He can be reached at Steven@globallicensingadvisors.com.
CCI Global View: Beauty Brands Need Content-Commerce to Tap Growing Esports Market
by Avery Booker
Already vast and ripe for continued double-digit annual growth for the foreseeable future, the global esports market has become an irresistible draw for many of the world’s biggest brands. With revenues surpassing $1 billion last year and expected to grow nearly 16% year-on-year in 2020, esports is now an important marketing pillar for the likes of Nike, Levi’s, and BMW, as well as for an increasing number of fashion and luxury brands that have been taking tentative steps to tap the estimated 2.5 billion-plus global gamer demographic.
Looking at the recent growth of the esports market, it’s no surprise why major brands now see esports sponsorship as a legitimate destination for their marketing budgets. According to Strive Sponsorship’s Global Esports Market Report 2020, the gaming audience is growing at a rate of around 12% per year, with devoted enthusiasts now numbering around 223 million and rising almost 11% year-on-year. Revenue in the crucial Chinese market alone — where a powerful and lucrative ACG (Anime, Comics and Games) demographic is attracting the attention of brands across the consumer spectrum — is expected to reach $385.1 million this year, a rise of 18% year-on-year.
This means a lot of consumers with money to burn who spend a lot of time at home, connected to the internet — a compelling demographic for affordable consumer brands as well as the BMWs of the world. One segment that has enthusiastically taken to this opportunity is beauty and skincare, with L’Oréal recently partnering with Australian esports organisation Chiefs Esports Club on an effort that included providing grooming products to the organization’s players, creating content with team players, and sponsoring a Valorant tournament, the L’Oréal Men Expert Invitational.
More recently, E.l.f. Cosmetics announced that it would be working with popular Twitch streamer Kathleen Belsten (aka Loserfruit) to connect with her following of young, largely female Gen Z gamers. E.l.f. said it will collaborate with Belsten on the launch of e.l.f. U (University) in early 2021, an initiative “centered on [the brand’s] pillar of Empowering Others,” and the campaign will also be geared towards male fans “who may not have previously considered skincare and cosmetics.” Basically, new online content designed to drive Belsten’s audience to buy more E.l.f. Cosmetics products.
With consumers staying in more for much of 2020, and few signs of this changing much in the first half of 2021, esports enthusiasts will remain a somewhat ideal captive audience for beauty and skincare content. What remains to be seen is how well brands can transcend the usual sponsorship strategies to develop compelling content-commerce that leverages the right trends and smooths the path to purchase to drive actual revenues, rather than simply building brand awareness.
In advanced gaming markets such as China’s, the past year has seen a marked uptick in collaborations and content marketing efforts on platforms like Bilibili — the video powerhouse that has established itself as a hub for anime and gaming enthusiasts. Earlier this year, Japanese premium beauty brand Shiseido produced a livestreamed product launch on the platform featuring its brand ambassadors that racked up 1.34 million engagements. Chanel Beauty and Gucci have invested in ads shown on the Bilibili opening screen, while Fendi launched a promotional campaign across Bilibili’s personal and discovery feeds.
The West has no real equivalent to Bilibili, which has been aptly described as if “Youtube, Twitch, Steam, Patreon, TokyoPop, and Netflix had a Crispr-baby.” However, brands can still learn from the way marketers have been using the platform to reach gaming enthusiasts through novel formats such as livestreams and custom video content. On a global level, beauty brands have an opportunity to take a page from the Chinese playbook by focusing on content-commerce, leveraging popular gaming influencers, and sponsoring collaboratively created content like streaming shows and documentaries, along with creating special-edition products aimed squarely at gaming enthusiasts.
TikTok Take: Extended Deadline Looms, Longer Video on the Horizon
A weekly wrap of the latest news on China’s biggest contribution to global content-commerce.
The latest on the TikTok U.S. ban: Today marks the twice-extended deadline for Bytedance to establish a new, U.S.-headquartered TikTok entity owned by Oracle, Walmart and other existing U.S. investors, or face a ban on TikTok on American app stores. The proposed deal would transfer control of TikTok’s U.S. user data and content moderation, offering a sort-of solution to the Trump Administration’s attacks on the app as a threat to national security and came after previous Bytedance efforts at a workaround were rejected. The ongoing negotiations and repeated deadline extensions have been a source of optimism that the White House is more interested in seeing the sale happen than in enforcing its threatened shutdown. A federal appeals court has scheduled oral arguments for December 14 on a government appeal of a lower court’s order that would block a ban on TikTok downloads.
The three-minute test: The 15-second video might be what makes TikTok tick, but is it enough? Social media consultant Matt Navarra tweeted that the app is piloting three-minute-long videos. Despite the Twitter public’s expressions of doubt, The Verge asked, “Will this fill the space of Quibi’s demise?” The move is good news for deeper storytelling on the platform, and follows the lead of the more feature-rich Douyin — the Chinese version of TikTok already allows users to go as long as five minutes, and is reportedly testing out an “unlimited” option as well.
The TikTok Room Awards foreshadow a new awards show format: The Instagram account TikTok Room, which is devoted to news and gossip from the short video platform, hosted a virtual awards show on November 28, drawing 500,000 followers to vote for their favorite TikTokers – an impressive level of engagement from a total of 1.9 million followers. Vox news commented, “the TikTok Room awards prove how little ‘real’ awards shows matter anymore, and how much mainstream celebrity culture has to catch up on.”
Chinese tech shifts focus from India to Indonesia: Following India’s ban of multiple Chinese-owned apps, KrAsia reports that sights have been shifted to Indonesia, where TikTok has unseated Instagram as the app of choice among influencers. Bytedance has also launched Helo — originally created for the Indian market — in Indonesia, and rival Kuaishou is heavily promoting Snack Video, which recently reached the top of the country’s download charts.
Global Content Commerce News
Amazon is reportedly looking to boost its podcasting holdings with a potential acquisition of the audio platform Wondery for $300 million, just months after the e-commerce giant began offering podcasts via Amazon Music. Wall Street Journal
Balenciaga is set to debut its next collection on December 6 via a custom, branded video game set in the year 2031, the latest creative alternative to live runway shows canceled due to Covid-19. WWD
Luxury giant LVMH is consolidating its digital efforts under a new “chief omnichannel officer” after smaller rival Richemont teamed up with Farfetch, Alibaba, and Kering’s Pinault family on a new joint venture. Business of Fashion
More on the coming e-commerce luxury wars, focusing on Amazon vs. the Richemont-Farfetch-Alibaba-Pinault alliance. New York Times
And “e-commerce as entertainment” is the future of online retail, according to investor Frederic Court, an early backer of Farfetch and Goop. Fast Company
Top auction houses such as Sotheby’s and Christies are becoming more like luxury resellers as they look to build new sources of revenue to offset losses in the art market. New York Times
Travis Scott has turned into a commercial powerhouse by going beyond traditional endorsement deals to become a co-creator of new offerings from the brands he works with. Forbes