Business Model Canvas of Entertainment Company - Case Rovio Entertainment

Entertainment Company
Business Model Canvas -
Case Rovio
Strategy Case Study
1© Jukka Ala-Mutka / jukkaam.com / @jukkaam

From games to
entertainment
company
2
Case Rovio Entertainment
© Jukka Ala-Mutka / jukkaam.com / @jukkaam

Rovio Entertainment Ltd
• Rovio is a global industry-changing entertainment media
company headquartered in Finland, and the creator of the
globally successful Angry Birds™ characters franchise.
• Angry Birds, a casual puzzle game, became an international
phenomenon within a few months of its release.
• Angry Birds has expanded rapidly into multifaceted
entertainment, publishing, and licensing to become a
beloved international brand.
• www.rovio.com
3
http://www.rovio.com/en/news/press-releases/495/rovio-entertainment-reports-2013-financial-results

Rovio did over 50 games
before they change their
strategy towards
entertainment company

Reference brands
• Hello Kitty
• http://en.wikipedia.org/wiki/Hello_Kitty
• http://www.hellokitty.com/
• SpongeBob SquarePants
• http://en.wikipedia.org/wiki/SpongeBob_SquarePants
• http://spongebob.nick.com/
• Disney’s brands e.g. Cars
• http://en.wikipedia.org/wiki/Cars_(franchise)
• http://cars.disney.com/

Typical products of
entertainment company
• Comic Books, Films & music
• Theme park rides
• Video games
• Merchandise
• T-Shirt, poster, board games, dolls & plush toys,
deal with fast food restaurants, food &
bewerages, electronics, clothing, school supplies,
jewelery, etc.

Revenue (profit)
• 2015: 142 million (-13 m€)
• 2014: 158 million (10 m€)
• 2013: 173 million (36 m€)
• 2012: 152 million (77 m€)
• 2011: 75 million (47 m€)
• 2010: 6.5 million (3 m€)
• Comparison:
• By 2008, Hello Kitty was responsible for half of Sanrio's
$1 billion revenue and there were over 50,000 different
Hello Kitty branded products in more than 60 countries.
© Jukka Ala-Mutka / jukkaam.com / @jukkaam 7
Source:
http://www.rovio.com/en/news/press-releases/495/rovio-entertainment-
reports-2013-financial-results
http://www.independent.co.uk/news/world/asia/top-cat-how-hello-kitty-
conquered-the-world-831522.html
Movie, Box
office 347
million
USD
(10/2016)

We’re creating long lasting
business, and strongly believe
our entertainment strategy will
consolidate Rovio’s position as
one of the world’s most beloved
brands”, added Mikael Hed,
Rovio’s CEO.
8
Case Rovio Entertainment

Entertainment company’s customers
• Customers are grouped into five
groups as follows:
• Four groups based on customer life
cycle and one group is a partner
network.
• Customer’s life cycle is the key
concept for products and
games.
• Brand awareness in each group is vital
and also the links between customer
groups.
• For example grandparents buys Angry
Birds toys to their grandchild.

Value Proposition & Key Products
• Key Products are targeted
according to customer’s life
cycle
• Children & school aged are
linked with parents and
grandparents
• Mobile Games are mainly
targeted to teens and adults
• Brand awareness creates an
attractive platform for sales
growth for partners

Value Proposition linked to Key
Activities, Partners and Resources

Angry Birds has exceeded
2 billion downloads so far,
making it the most
downloaded game brand
ever.
12

Rovio thinks the pirates are
helping promote its brand
— “so long as the product
is well made.”
13
https://econsultancy.com/blog/8841-angry-birds-maker-doesn-t-sweat-piracy

Must-Win Battle #1: Brand Awareness

We built the biggest
animation studio in the
Nordics for the production
of animated TV content,
bringing to market 42
Angry Birds Toons
episodes in its first year.
15

https://www.youtube.com/watch?v=hXeso-I9AFc&feature=youtu.be

Must-Win Battle #2: The Story

Rovio Entertainment is
partnering with great
companies of consumer
products business: Hasbro
(toys), Pez (candy), Natrol
(multivitamins),… with
existing base over 500
companies.
18
http://www.rovio.com/en/news/blog/316/rovio-entertainment-expands-its-consumer-products-initiatives
http://www.rovio.com/en/news/press-releases/315/hasbro-and-rovio-enter-into-expanded-angry-birds-licensing-agreement/2013

Rovio’s Consumer Products
business continued to
perform strongly,
accounting for 47% of total
revenue in 2013.
19

Must-Win Battle #3: Quality and sales
volume via partners

June 17, 2013 - Hasbro,
Inc. and Rovio
Entertainment today
announced an expanded
licensing agreement =>
new toys and games are
planned for fall 2013
21
http://www.rovio.com/en/news/press-releases/315/hasbro-and-rovio-enter-into-expanded-angry-birds-licensing-agreement/2013

Must-Win Battle #4: Growth capability
(Process)

Must-Win Battles
23
1# Global
visibility (Brand
awareness)
2# The Story
(Loyalty)
3# Quality of
Partners
(Partners)
4# Growth
(Process)

Instead of costing a dollar
or two to download, Rovio's
new game, Angry Birds Go,
will be what's dubbed "free
to play…. our future
direction, where we are
thinking more of games as
free-to-play"
24
http://www.inc.com/christine-lagorio/angry-birds-go-follow-the-money.html

Costs & Revenues
• Free-to-play games give players access to a
significant portion of content for free
• The Key revenue source should be merchandise
with partners via resellers (Costs & Revenues)
• Also high volume of regular players are targets
for advertisements

The whole BMC Model
26

Customer-driven approach to
business modeling
12
3
4
56
78
9
1. Customers
2. Value Proposition
3. Revenue Streams
4. Channels
5. Customer
Relationships
6. Activities
7. Resources
8. Partners
9. Cost Structure

Author
@jukkaam
Contact:
https://jukkaam.com/businesscard
Serial entrepreneur,
speaker, scientist and
consultant
Contact me for
assignments:
• Consulting & Training
• Keynote Speaker
• Board Member
• Co-Founder

Business Model Canvas of Entertainment Company - Case Rovio Entertainment

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Business Model Canvas of Entertainment Company - Case Rovio Entertainment