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Executive Summary
 
Pili International Multimedia Inc., a production group incorporated in 1991 that revitalizes the traditional palmardrama and popularizes it in Taiwan, is seeking to expand its business globally not just for profit, but for preserving and disseminating it.
 
In 2000, the company makes its first big screen movie “Legend of the Sacred Stone” in order to publishing globally; the box sale seems not having a good number in the western world. After six year’s effort, one of its series was finally aired on the U.S. Cartoon Network; however, just for two episodes, the show was cancelled for its poor rating.
 
I conclude the major problem of the U.S. launch is because the missing of the original Experiential DNA - “An animated eastern TV puppet drama with real puppet and high aesthetic value for ACGN fans/artists to experience”.   In which I found three critical issues that plays an important role in it:
 
- Issue 1: The show was totally reformatted
- Issue 2: Insufficient pre-launch marketing effort
- Issue 3: Wrong plot selection
 
The popularization of the Japanese ACGN (Anime, Comic, Game, and Light Novel) shows the potential of North America and even the global market. If Pili wants to take part in the global market, they will need to market their products strategically, matching the marketing mix with its experiential DNA, or even allowing the unethical method of downloading as a contingency plan.
 
Once being successful in the U.S. market, I am expecting a fast growing of its market share in the global market. On the other hand, we are also expecting the successfulness of the palmardrama with its richness in content could make the ideal eastern form Disneyland come true in the near future, which will also be helpful for the economy of Taiwan from the tourism and cultural industry.

Mission Statement
Pili International Multimedia[viii] is the largest production group that revitalize the traditional Taiwanese palmardrama and devoted to entertain the ACGN[ix] fans who wants to experience the eastern fantasy world and culture by providing a new age digital puppet TV movie series. Unlike the Japanese’s ACGNs such as Naruto[x], Bleach[xi] or Final Fantasy[xii] that are purely animated, Pili’s series having real puppet performing on the stage with real equipments and scenes, is believed to provide a higher interface value to catch audiences’ eyes and hearts.
Our objectives is to achieve 1 % of global media market share by the end of 2009, setting up or licensing/franchise at least 5 specialty stores in the States by the end of 2010, and increasing our global market share to 4% by the end of 2015. (Appendix A)  In 2020, we expect to setting up an eastern form theme park in Taiwan and attracting 5 million tourists with 8% CAGR. Our ultimate objective as a cultural organization is to preserve and disseminate the specific art of Taiwan, help people understand Taiwan, and eventually support Taiwan’s return to the United Nations.
Why U.S.?
After receiving the Best Director Award in the Golden Bell Award[xiii], and being voted by people of Taiwan as the image that will represent Taiwan to the world (Chuang, 2006), palmardrama has returned its golden age in Taiwan. However, when launching the 2001’s TV series in the U.S. Cartoon Network on February 2006, the show was cut for poor rating after two episodes. [xiv]  The result shows that there are still some difficulties in either cultural difference, or unsuccessful entertainment marketing strategy.
“Art functions as a cultural metaphor, mirroring a culture's ideas and values. Technology, colonization, exploitation, revolution, among other factors, have all contributed to affect changes in how humans live and interact with one another individually, and collectively.” (John D. Miles)
Why U.S.? Since one of our major objectives is to attract people who live in the western society to get in touch with the world of eastern fantasy, countries like China and Japan is already excluded from the targeting list. On the other hand, based on the research conducted by Datamonitor (Appendix B), the U.S represents almost 40% of the global market share in this media industry. In terms of value, the U.S. movies and entertainment sector accounts for 44.3 % of the global sector.[xv]  On the other hands, considering the derivative products such as the puppet itself or other accessories are quite costly, it is reasonable to target countries with higher GDP (PPP) per capita and huge market like the States.[xvi]
Company Analysis – Pili International Multimedia Inc.(See Appendix C for sample video links)
-        Goal: To preserve and disseminate Taiwanese palmardrama by achieving 4% of global market share in 2015 and setting up an eastern theme park by 2020 in Taiwan while attracting 5 million foreign tourists with 8% compound annual growth rate.
-        Focus: Superior and unique brand; improving puppeteer skills in both product and people side; expanding global market; ethic education, language and skills; customer oriented.
-        Production Content: Action and literature in the Chinese context, fighting among good and evil or holy and devil, some series also included Ninja, Samurai, Vampire or alien!
-        Culture: Innovative while maintaining artistic value, conservative in HR(Family Business) 
-        Strength: Market leader in Taiwan; high customer loyalty when people understand it; Irreplaceable and entertaining; uniqueness in dubbing and performing.[xvii]
-        Weakness: New comer to the U.S. market; few foreign language masters in the industry; bad first launch image; culture difference.
-        Competitors: Major competitors are the Japanese ACGNs, such as Bleach, Naruto, Final Fantasy, or Kingdom Heart. The American animation/comics are not considered as major competitor due to the different taste of consumers in the target market.
-        Content: The content is usually about Ninja and Samurai, fighting between evil/devil and justice, or science fiction like the Final Fantasy. Some of them were more cultural focus to introduce the Japanese cuisines, sports, etc.
-        Channels: Cartoon Network, Viz Media, Square Enix, etc.! Usually through direct market like comic book specialty stores, or the mass market such as bookstores and newsstands, some are on a subscription sales basis.
-        Pricing: US$ 8~9 for graphic comics;US$20~25 for DVD of 66~100 mins, US$50 for DVD　of 325 mins; Price for other products like games for toys varies.[xviii]
-        Market Size: Shonen Jump magazine is expected to sell 1 million (Wong, 2007); The anime market for the United States alone is "worth approximately $4.35 billion” while Annual manga sales in North America have more than doubled since 2002, totaling $200 million in 2006 according to research firm ICv2.[xix]  The volume is growing fast. ( Appendix D)
-        Type: ACGN fans are usually teenagers and young adults (not just male predominate) from 13~30s, they seem to be more open minded, and well-educated; like spending time on web.
-        Value Drivers: They value the togetherness with the same subculture group; enjoy the experience provided in the Japanese ACGNs and the style of graphic animated.
-        Special Behavior: Fanaticized ACGN fans will dress up (Cosplay) characters he/she like, it provide them a strong interface value with the character and the imaginary world.
(Above observations based on my Coolhunt/Ethnography project at Anime North and life long experience/observation, partially available at http://www.pixnet.net/photo/sandarac/55006199)
        According to the Situation and SWOT analysis (Appendix E), I have identified the Key Success Factors for Pili International Multimedia’s America launch are:
1.     The strong interface value of derivative products to the show.
2.     Growing community with fans overlap among products.
3.     Delivering the same image/content to consumers. (Translation, plot, music, etc.)
4.     Richness in content and the eastern experience (Including the Japan experience)
After carefully review the content of the U.S. version compare to the Taiwanese version as well as consumers reaction toward different version (Appendix F), I conclude that the major problem is the missing of the Experiential DNA (Appendix G) - “An animated eastern TV puppet drama with real puppet and high aesthetic value for ACGN fans/artists to experience”.  Based on it, I find three critical issues that resulted to the failure:
        The first launch of “Wulin Warriors” developed by Animation Collective[xx] did a very bad practice, in which the plot, background music, dubbing and characters’ personality are totally reformatted. For example, one of the main characters “Scar (Yeah, Xiao-Te)”, who was originally a mute and very cool swordsman in the series, became a noisy clown. This is because the U.S. editor did not understand the personality of a character should be consistent with its action in the play, and it requires mutual cooperation between the two corporations.
Being a new comer to the U.S. market, Pili should not depend on the Cartoon Network only. The Cartoon Network did nothing but only the TV commercial. Therefore, once the Cartoon Network does a poor marketing job, it also affect Pili’s brand image. What Pili needs to do is to actively participate in the marketing campaign, get direct connection with its target audience.
Choosing the right starting point for the more than 1,300 episodes series will be a key to success. The 2006 “Wulin Warriors” is re-formatted based on a series produced in 2001, in which the plot is too easternized, the controlling of puppetry skill and the supporting of technology & scenes are also not mature compare with today. Although we are targeting audience who are interested in the eastern culture, we still need a good starting point that audiences could resonate for their previous western experience.
        According to Ansoff’s Strategic Opportunity Matrix, Pili is like introducing its existing product to a new market (forget about the short 1st launch); therefore, Pili should focus on market development while maintaining its Experiential DNA, this is to differentiate from the other existing products in the marketplace like the Japanese and U.S. Animation. The puppet animation entering the U.S. market is like a brand new thing, it could be very profitable for there is no real competitor. In order to connect to the audiences, Pili needs to create high interface value by providing derivative products that resonate. (Ex. Puppets and Equipments, Sound Tracks, Comics, Games) 
Target Market Strategy (See Perceptual Map in Appendix H)          
Primary Target Market: Teenagers to young adult from 13 ~ 30s, especially ACGN fans[xxi]
- Size and Sales Potential: More than 1M as a whole (ACGN), create value of more than $4.35 B
- Characteristic: Spend time in front of PC, or hang out with friends with similar interests.
Secondary Target Market: Artists in the puppetry related performing art industry[xxii]
- Size and Sales Potential: Relatively small.  The main purpose is not for profit but for potential future recognition and a state of mind level up to differentiate from competitors.
- Characters: Enthusiastic in works of art, self-motivate and creative.
        In order to create a high interface value, our marketing mix needs to resonate with the Experiential DNA - “An animated eastern TV puppet drama with real puppet and high aesthetic value for ACGN fans/artists to experience”:
Product – Except for the TV palmardrama itself, which is the core; Pili will need to introduce its rich product line to the market in order to let the audiences/artists sense and feel it, which is the most important thing to create a strong interface value.[xxiii]
Place– The distribution channel will be like Cartoon Network, Viz Media, Blockbusters, or even the Internet for the video. For physical products, channels like anime conventions or toy specialty stores will be a good idea; on-line shop is also important and convenient. Besides, a Tea Group – TenRen, which is originate in Taiwan, is also a good place for distribution tangible products to target our audience who are Asian and eastern life enthusiasts.[xxiv]
Price – Price for DVDs should not be lower than the Japanese anime, this is to stress the high aesthetic value and to react the actual production costs.  The current price for renting a 140 mins DVD (2 episode) is about US$5~US$7; considering the nominal GDP per capita between US and Taiwan and the pricing of DVDs sold by Viz Media, US$25+ will be an ideal price.[xxv]  Other products pricing will be following similar strategy. The puppet itself, which is purely handmade and wooden carved, will be targeting to the high-end and fanatic consumers that could afford US$2,000+ for a work of art, usually young adults with good occupation.
Promotion – Promotion should be on specific dates and locations. Ex.: At the anime conventions or during the Chinese New Year, mid-autumn festival, and so on. Moreover, a free preview for few episodes is quite important when palmardrama first comes to the market.
        First of all, Pili needs to re-negotiate with its agent - Animation Collective for the licensing of its series. It must insure that most of the Experiential DNA – The plot, content, background music, characters name, and voice should not be hugely changed. There is an increasing demand of anime in its original form. “This "light touch" approach to localization has favored viewers formerly unfamiliar with anime. The use of such methods is evident by the success of “Naruto”, and Cartoon Network's “Adult Swim” programming block, both of which employ minor edits.” (Appendix I)      An alternative is to produce both forms in order to please everyone since the technology already allows viewers to watch a program in either its original form or dubbed form; however, the cost-effectiveness of the dubbed version is questionable.  If Animation Collective is not capable of doing the translation and editing due to the richness in literature is hard to be understood by U.S. translator, Pili should consider do it by giving over its series to a group of people majored in Chinese/English translation and find other brokers or even try to negotiate with the Cartoon Network directly. Moreover, when negotiating with its Agent, Pili should insist on its show not being aired on KOL of AOL because the show is not intended for kids but for teenager and young adult.[xxvi] The licensing fee will be ideally 50% of operating profit generated from the show.
        Second, before the launch on TV, Pili should send a group of cosplayers, puppeteers, and related people with related products such as sample DVDs and puppets to all the major anime conventions of North America. (Refer to Appendix D) This is to give our major target audience a first experience/shake of the Taiwanese Palmardrama and to show the similarity/difference of it to the Japanese Anime. Never underestimate the effect of word-of-mouth in the subculture to share information on the Internet, and believe in the uniqueness of the entertainment cultural products.
        Third, choosing the right starting point! In my opinion, a good starting point will be the 2003 series (Nine King) which is about aliens attacking the mainland, followed by the two 2004 series (Bloody Imprint and Doom), which is about vampires doom the world; or even the latest two series (Siege of the Dragon and The Expedition) which is about the relationship between Japan and mainland. This kind of plot will be more resonate to its target audiences in the western world but also maintaining the eastern environment.[xxvii]
        Fourth, if the re-launch is successful, other derivative products should start to land the U.S. within one year either through licensing to the original channels or franchise to open specialty stores; if necessary capital investment in setting up own store will be required. This is to create the interface value for its audiences.  Regarding the tangible products, it can be distributed both on-line and off-line. In order to persuade the Cartoon Network to adopt the light touch form, Pili should give the right of monopoly for its derivative products to be sold on-line if the show is successful. However, physical store is still necessary to strengthen the interface value toward consumers if they could actually see the product before buying it. Thus, TenRen Tea group is a great channel for tangible products to be sold off-line which will benefit both parties for brand recognition. The royalty fee Pili should ask will be ideally its cost plus 15% wholesale value of products sold. As for the series DVD after each season, channels like Blockbuster or Viz Media or even the Cartoon Network itself could be take into consideration as long as they feel it to be profitable. Pili can set up a one-time buy-out fee for each DVD series in the short run before the show is well-recognized; in the long run, they will need to re-sign the contract for either revenue participation or profit participation for the DVD sold.
        Fifth, currently Pili is working on its 2nd big screen movie (3 episode) and wish it to go worldwide in early 2009, 2010 and 2011(The first one is launched on 2000)[xxviii]. I have a feeling that it will fail again for the movie is a brand new stuff (Plot is about Greece God and Taoism God fall foul of each other) without TV series back-up like Spiderman, Superman or Japanese Anime suck as One Piece or Conan and thus hard to create the Long Tail effect! What I will suggest to minimize impact and maximize box office sale is to launch it after the TV series’ success in the North America market. Otherwise, before people getting familiar with the palmardrama, it will be likely to fail again. A puppet movie is just too rush to be accepted by people in the west. Moreover, movie director David Weaver once mentioned that never subtitle a movie unless you are Ang Lee, it will be helpful if Ang Lee can endorse the upcoming new movie since he was born and bred in Taiwan, which will also increase the attention of talents in the movie industry – our secondary target market.
        Finally, if everything goes well and the market keeps growing, the dream of an eastern Disney will not be far away; however, the cost of building up a theme park could be enormous.  For example, Hong Kong Disney phase I cost around US$ 2 Billion (Ho, 2000). Therefore, either seeking for joining venture opportunity with Taiwanese government or other entertainment groups, or capitalize by IPO will be necessary for Pili’s future growing. 
The successfulness of palmardrama re-launch will be based on the following criteria
Audience Rating: Audiences’ reaction for the first few shows, to determine continuing or not.
Goal Congruence: To see if Pili could achieve its objectives, or at least close to the objectives.
Capital Gain: Business is usually for profit, capital gain is always important.
Foreign Apprentices: The number of foreign apprentices shows how audiences are affected.
Basically speaking, a huge capital investment is not required for Pili’s licensing of its existing products. Even not expanding to the U.S. market, they still producing the palmardrama and sell it in Taiwan and part of Japan. The major capital investment will be like the pre-launch marketing campaign for its people and products to show up in the major anime conventions for the first few years, translation of its series if necessary, and the buying of land in U.S. if necessary to set up its own store, finally will be the theme park.
However, it is possible that the existing network still make changes to the original content, which might leads to failure again due to the change in Experiential DNA. Therefore, my contingency plan for Pili’s U.S. re-launch, should provide a solution for the needs of original and latest content.
It will be downloading based! Like the music download, most of the Japanese anime is also available on the internet with English or other languages’ subtitles. This kind of form always comes from different fansubs.[i]  Fansub groups usually do not profit from it, they do it by their enthusiastic of providing good content to share with people of the same interest. Although some of them have resulted in lawsuit against the media industry, Kadokawa Pictures USA and Bandai Co., Ltd[ii] specifically thanked fansubbers for their role in helping to make The Melancholy of Haruhi Suzumiya popular in the English speaking world.[iii]
In my opinion, it’s a clever action of Kadokawa and Bandai. Lawsuit against your audience is like stabbing your girlfriend.  Companies should think of this in other angles - Fans are actually doing the marketing for its products. Although company may not be able to gain too much from selling DVDs; nevertheless, they might sale more derivative products from it, which is the real cash cow
Therefore, it will be a viable plan for Pili to admit and accept, but not necessarily support the well-intended piracy among fans. This is expected to speed up the popularity of palmardrama in the U.S. and global market.

Appendix A– Global Movie and Entertainment Market
In 2009, the global movies and entertainment sector is forecast to have a value of $173 billion, an increase of 33.9% since 2004. The compound annual growth rate of the sector in the period 2004-2009 is predicted to be 6%.
 
Appendix B– Market Share for Movies and Entertainment in U.S.
In 2011, the United States media industry is forecast to have a value of $428.3 billion, an increase of 22.4% since 2006. The compound annual growth rate of the industry in the period 2006-2011 is predicted to be 4.1%.
Appendix C – Sample Palmardrama Videos
Latest Puppet Control skill: http://www.youtube.com/watch?v=hEWsYUbrZfk
Latest Series (Check watcher’s comment) http://www.youtube.com/watch?v=n0V1zXYXLVo
2007 MV (Female characters movement) http://www.youtube.com/watch?v=CyHykEVj7ZM
2007 Special New Year show for children http://www.youtube.com/watch?v=1rk02v61gb0
Palmardrama Show to China (Also Cosplay) http://www.youtube.com/watch?v=6q4Lz3m1AK4
Japanese Translation (2000’s Movie): http://www.youtube.com/watch?v=jRp3DCeUgQ4
Yi-Wen-Zen introducing Canadian Missionary Dr. George Leslie Mackay in traditional way (Indoor performance) http://www.youtube.com/watch?v=nwCIL_16ILU

Appendix D – Growing Attendees in the North America and Europe Anime Conventions
Anime Expo has an average annual growth of around 25%; Anime North in Toronto grew from 600 attendees in 1997 to 12,500 in 2006.
 
Appendix E – SWOT of Pili International Multimedia
Strengths
Weaknesses
*High artistic value with similar and interesting content
*Irreplaceable in the industry, training puppeteer and carver takes time and effort
*Real performance with technology support
* A family with more than 100 years performing history, strong skill support!
*New comer and price taker           *Strategy follower                                          *Language Barrier
*Distribution Network
*Conservative in promoting employees
Opportunity
Threats
*Fan loyalty
*Most fans usually watch more than one anime/comics, overlap between products
*Growing market
*Partnership with existing channels
*Government Support
* The main vocal artists and general manager Vincent Huang is in his early 50s
*North American’s unwillingness of watching subtitle[iv]
* Lots of Japanese ACGNs exist in the marketplace
Appendix F – Consumers’ Reaction toward Different Version of Palmardrama
Wulin Warriors (2001 TV series reformatted and broadcasted in the U.S. on February, 2006)
 
 
 
 
 
 
 
 
 
 
 
 
Appendix G – Experiential DNA of Palmardrama
Appendix I – Survey – What form of anime is your favourite?
Appendix K – Making the Puppet

Bibliography
 
Susan, Allen. (1998).  Nonprofit and commercial music: three musicians’ experience. (The Arts and the Public Purpose) (Interview) Journal of Arts Management, Law, and Society. Vol. 28, Issue 2.
 
Miles, John. “Politics and the Art of Cultural Control: Aspects of 20th Century Art Movements”
 
Chuang, Jimmy. “Hand-puppet voted best Taiwan image”. The Taipei Times, Feb. 18, 2006
 
Wendy, Wong. “The Presence of Manga in Europe and North America”, York University
 
Mary, Ho. 2000. “Hong Kong Disneyland (A): The Walt Disney Perspective”. Centre for Asian Business Cases, pp. 5

[iii] “The Melancholy of Haruhi Suzumiya” provided by fansubs,http://www.asosbrigade.com/cms/index.php
 
[iv] According to the interview with movie director David Weaver in the Art and Media class, David suggested that “Never subtitle a movie a movie unless you are Ang Lee.”
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