Zinkia or the story of how Pocoyo hypnotized millions of children

Zinkia focuses its activity on the world of animation as well as interactive content such as console games and online communities. Zinkia, founded in 2001, with headquarters in Madrid and a commercial office in Beijing (China), is present in more than 100 countries and has a solid international track record disseminating audiovisual content and brands based on it. Among them are the award-winning Pocoyo and the successful Shuriken School.

Los inicios de Zinkia se remontan al año 2000 cuando David Cantolla y Colman López fundan una sociedad denominada Junk & Beliavsky a la que posteriormente se incorpora la sociedad Jomaca, propiedad en un 80,14% de José María Castillejo Oriol, actual accionista mayoritario de Zinkia. Posteriormente Junk&Beliavsky se transforma en Zinkia Sitement y ya en 2002 se convierte en Zinkia Entertaiment, primero como sociedad limitada y posteriormente como sociedad anónima con la mayoría del capital en manos de Jomaca-José María Castillejo, quien ‘rompió’ con los auténticos cerebros de la marca David Cantolla y Víctor López (actualmente trabajan en nuevos proyectos en su nueva productora Vodka Capital).

Currently, Zinkia is headed by Castillejo as president, and Fernando de Miguel as CEO. Francesca Nicoli is in charge of the executive production; Bruno Muniesa, from audiovisual production; and Ángel Rascón, from technology. As for brand development, María Dolan is the professional in charge of it, while the company's international expansion is supervised by Eric Belloso.

Zinkia's structure is divided into three main areas: production, commercial and general services. The production department is further subdivided into three: executive production (launches and monitors new projects), audiovisual production (responsible for animation content in which three teams participate, one per project and one for post-production) and interactive content in which video games and online communities are integrated.

In sales, professionals are divided into two working groups. One of them is in charge of brand development, exploitation, agents and licensees, product and channel strategy, while the other is responsible for expanding the brands internationally according to what the first group marks. Zinkia also has a product approvals team, which oversees all items that are released to the market, and which in turn has a team of designers dedicated to this task.

As for the general services area, it integrates the marketing and communication department, the financial-administrative, the legal department and the technology and systems department.

The strategy

But how does a Spanish company manage to open up a market in countries with such different cultures and thousands of kilometres away? The trigger for the start of the commercial exploitation of the brand in practically all countries is the broadcast on open television. Zinkia always tries to have the best possible television partner in each market, even at the cost of providing the content at a low price or even free of charge (common practice in the children's entertainment sector), and offering a percentage of the income obtained in the country by licensees. After the broadcast on open television began, the objective is to close agreements with the main engines for the brand: toys, DVDs and books. From these agreements come the other licensees, smaller in size, and which can exceed 50 in the main markets.

To keep the brand always in force, it is important to continue producing content around the brand, diversifying the type of
content to be able to reach the target audience through different channels: television, cinema, internet, mobiles, consoles, radio.
In line with this strategy, Zinkia has a detailed production plan scheduled for its star Pocoyo until 2013 that includes short and feature films, console games, music discs, television specials, online community, and the production of new seasons for television.

The keys to success

How is it possible that a company that started with minimal resources is listed on the stock exchange eight years later and its products are located in markets around the world?

One of the reasons is the commitment that its founding partners made from the outset to the pre-school section, a segment reviled by all television and production companies with a total lack of content in markets such as Spain. Zinkia was very clear from the first moment that her target audience would not exceed 14 years old. Starting from a purely family premise, the production company began to develop entertainment ideas masterfully combined with educational elements and with the transmission of what has come to be called "universal values". Another key to its success should be sought in its international projection and in its effort to integrate audiovisual content with interactive content that would walk hand in hand with a powerful brand development producing only its own content.

So, where does the income come from? Mainly from the production, distribution and sale of audiovisual and interactive content on any platform (games for consoles, mobiles, PC and web) and to a large extent also from the royalties generated by licensees who exploit the brands through licensing agreements. Interestingly, a large part of the company's income today comes from the exploitation of brands through licensing, merchandising and promotions. As for the income generated by audiovisual production, this comes mostly from the international sale of productions to television and other platforms (video on demand, Internet, among others).

Before undertaking a project, Zinkia proposes a pre-financing percentage of around 60% of the total production cost through the pre-sale of distribution/broadcasting rights of the content and/or exploitation rights of the brand. In this way, the risk of covering production costs is reduced, and the visibility of the content (pre-sales to televisions) and its commercial viability (pre-sale of rights) is ensured.

Production

In terms of audiovisual production, Zinkia focuses on children's animation through series and feature films for both film and television. To carry it out, they have four teams: development, pre-production, production and post-production. On an ongoing basis, there is a basic equipment that covers these needs, and when production begins, the equipment is resized as required by each project.

As far as interactive content is concerned, this line of business has two teams for the development of new projects and three production teams. We can currently distinguish two sub-lines of business within this activity: the production and marketing of video games, and the production and marketing of online communities. Revenue from content for console video games is obtained through the international sale of the final product in physical format or by digital download, using the intermediation of a Publisher or a distributor. The financing of the production is obtained in whole or in part from the Publisher itself or by the distributors, who in return participate in the profits from the sale of the product. ZINKIA is accredited as a Publisher by Nintendo, so it has the ability to go to market through another Publisher or directly through distributors.

The other leg of the business that Zinkia is looking at with a vision of the future are online communities for which they are starting to develop games, graphic adventures or a mixture of both concepts, in which the user meets or competes with other users. Currently, they are finalizing the development of their first online community, based in Pocoyo. The implementation of this community (Pocoyo World) from 5 October is backed by the successes of its web, from his blog, from his channel at YouTube, the i-Google portal, and various microsites of the main television partners. The revenue model is mainly based on subscriptions that allow unrestricted access to all the content of the community (only a small percentage is free access content), the use of the Pocoyo World brand and the exploitation of content and brands.

A fundamental objective of this area, beyond the sale of content, is the positioning of the company's brands and achieving maximum profitability over time. To achieve these objectives, product development, marketing and brand communication strategies are designed.

Pocoyo on the floor

On July 15, 2009, it became the first company to be listed on the Alternative Stock Market for Expanding Companies (MAB) and the first company to be listed in Spain during the last 12 months. But is Zinkia-Pocoyo's IPO profitable? According to a private analyst in an exhaustive analysis published by Hispanidad.com it seems that growth expectations have been inflated since Pocoyo, despite the project of the two feature films underway (even in 3D), could find itself in a phase of stagnation and maturation of format as can be seen from the sales and EBITDA of recent years.

For his part, José María Castillejo, president of Zinkia, said "with the launch of Zinkia, Zinkia is gaining in solidity and transparency, something very important in our current moment of international expansion. In my opinion, the investors who have entered the IPO will make a great business. Behind Zinkia is a team of more than 70 top-level professionals, a set of properties and contracts signed in territories around the world: that is our greatest guarantee of success."

Pocoyo, the great brand

The Pocoyo series is made up of two seasons of 52 episodes of 7 minutes each. Likewise, Pocoyo also has its own 25-minute short film, Pocoyo and The Space Circus. Both contents made with Autodesk Softimage XSI technology and rendered with Arnold.

Pocoyo, which was originally born as a television series, today represents much more than that: an entertainment brand with a multiplatform concept of a global nature. Pocoyo has become one of the most successful Spanish animation productions, amassing prestigious awards such as the Annecy Crystal and the BAFTA award granted by the British Academy, both for Best Animated Series. Also noteworthy are the three Pulcinella awards given at the Italian Cartoons on The Bay Festival, the Promax BDA Award for Best Animation Promo, the Parent's Choice obtained in the USA, and the Parent's Choice Award obtained in the USA. The two awards won in China: CICDAF Award, China International Festival of Animation and Digital Arts (Official Award organized by the Ministry of Culture of the Chinese Central Government) and the Silver Award for Best Foreign Animation Series at the Shanghai Television Festival. Pocoyo is an animation content with a didactic and fun essence, where the curiosity of its young character, accompanied by his inseparable friends, Elly, Pato, Loula and Pajaroto, Pulpo, Pajarito, and Valentina among others generate a multitude of stories in a world created for him, where all kinds of situations develop in a world of colors, shapes and music with striking visual language. The series shows the discovery that a young child makes of the world around him.

Pocoyó se emite o se ha emitido en las televisiones de: Australia (ABC), Bélgica (VRT), Canadá (Tree House y Tele Québec), Chipre (CYBC), Finlandia (YLE), Francia (Nick Junior/M6), Grecia (Alter Channel), Alemania (KIKA), Islandia (ICB), Italia (RAISAT YOYO), Irlanda (RTE), Israel (Baby TV), Japón (Wow Wow), Corea (EBS), Latino América (Discovery), México (Televisa), Oriente Medio (Gula & MBC), Nueva Zelanda (TVNZ), Pan-Asia (Disney Channel), Portugal (RTP y Panda), España (TVE y Boomerang), Sudáfrica (M-Net), Escandinavia (Disney), Eslvovenia (RTE), Reino Unido (Channel y c-ITV), Estados Unidos (Discovery y PBS), Ecuador (Telecuador), China (BTV), America2 (Argentina), Televicento (Honduras) y RTVC Señal (Colombia).

Pocoyo's DVD has been distributed worldwide in: Australia and New Zealand, Benelux, Canada, France, Middle East, Greece, Japan, South Korea, United Kingdom, Portugal, Spain, United States, Germany, Mexico, Central American countries, Brazil and Argentina.

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