Animated Worlds on the Web

Rick DeMott travels to the online animated communities to find out more about the growing corner of the animation business from leaders like Neopets and Habbo, as well as newer sites, such as Urbaniacs.

Like Habbo, online worlds are becoming massive. © Sulake.

Community sites like MySpace are exploding on the Net and serve as attractive destinations for advertisers because they contain a captive teen audience. In the world of animation, immersive Web communities serve as mini-worlds online where people from all parts of the globe can talk to friends and make new ones. Places like Second Life allow users to live out fantasies in a virtual world that may be impossible in real life. Leading sites like Neopets and Habbo have millions of visitors monthly with top advertisers wanting to join the party. Newer sites like Urbaniacs and Club Penguin are popping up with fun and unique twists to online communities. The future in this entertainment sector looks limitless and I talked with some of the players to find out more about what drives their business, as well as where they think the industry is headed.

In the Habbo world, users can create their Habbo and visit the friends' rooms in the Habbo Hotel for free. A different hotel has been designed for various regions of the world. The in-game economy allows users to buy Habbo Coins to purchase virtual products like furniture for their rooms, as well as play mini-games. Most of Habbo company's profits come from the end users, however, advertising sales and sponsorship have grown in the past two years from around 5% of their total revenue to nearly 20%.

For its games and animated shorts, Habbo employs animators and game designers internally. However, with its recent deal with Lionsgate to produce a Habbo feature, the company has gone to outside animation companies to help with those productions. Teemu Huuhtanen, president of North America, for Habbo and parent company, Sulake, said that the company always knew that the unique Habbo brand would present licensing opportunities in various areas. However, Huuhtanen added that the move into offline animated content came from the users directly. Starting about three years prior, the company began noticing Habbo users creating self-produced Habbo-themed animated shorts and posting them on their fan sites, which are visited by other Habbo users.

Habbo's Teemu Huuhtanen says polling its users generates valuable data for advertisers.

Huuhtanen added, "We've known from the beginning that Habbo is owned by the user So we knew that whatever we tried to do with animation needed to be approved by the community." From this idea, Habbo commissioned different Habbo shorts to be made with various storylines and styles, allowing users to vote on what they like and don't like. "We think this approach is really a unique one, but in my mind it's the only way to build something on top of the existing online community. [The users] need to pre-approve as much as the studio head at Lionsgate," adds Huuhtanen.

When it comes to building online communities, it seems one thing is universally true. Word of mouth is king. For Habbo, 75% to 80% of new users come from existing users inviting their friends to join. As Habbo grew, the company struck deals with major advertisers to cross-promote each other's brands offline and in the Habbo world, respectively. This allows advertisers like Nike to sell digital shoes or Coke and Pepsi to sell soda to Habbo users. But in keeping true to the Habbo world, the company makes sure that advertisers are the kinds of brand that their target demographic of teens want to see.

"It's actually pretty funny. Our users keep sending us ideas on different marketing campaigns that they would like to see inside Habbo. They send us so many different layouts, whether it's an iPod promotion or what have you. That's really a powerful tool for us when we can talk to our partners."

How users play Habbo differs across gender lines and location. Boys tend to play more games than girls. The company categorizes its users into five different segments -- traditionals, achievers, creatives, rebels and loners. Traditionals come to simply connect with friends. Achievers strive to have the most decked out rooms and collect the most virtual merchandise. Creatives come up with contests and competitions for other users to engage in. Rebels come to strike up debate on current issues. Loners don't come to meet new people, but mainly come to play games or hang out in rooms with a select group of friends. In the U.S. Habbo Hotel, achievers are the most common, while in Japan, loners rule.

In keeping the world fresh, it's often the users that create community activities on their own. As for company created activities, Habbo puts together celebrity visits where users get a chance to talk to different bands or movie stars. For instance, Habbo-versions of the band Gorillaz visited the virtual world for a half-hour Q&A with the users. In conjunction, the company ran a contest giving a lucky Habbo user the chance to have the band hang out in their private room for 15 minutes, making them the coolest Habbo around.

In light of a recent lawsuit issued by parents of underage girls being seduced by older men on MySpace, Huuhtanen made a special point of stating how Habbo is dedicated to safeguarding its young users from predatory adults. Because the core audience is just under 15, Huuhtanen said, "You really need to make the environment where teens spend their time really safe You set up a site and a virtual world, but these communities take a lot of maintenance. We have hundreds of people working on the moderation and different safety issues. That's something that quite a few companies forget."

Huuhtanen went on to make the point that some newer companies jumping on the trend forget that just building the community isn't enough. New features and activities need to be added to keep users coming back and encouraging others to join. This idea is something that drives the site Urbaniacs.com, which launched on May 5, 2005. The hip-hop infused superhero community offers new games and features on a regular basis. In a sort time, Urbaniacs has cultivated 150,000 unique visitors a month. And its feverish fan base has already begun creating fan sites, some of which help new users navigate the world. Some fans even wrote a detailed history of the site for Wikipedia.

Afro-liscious Funk Daddy is only one of the characters inside the Urbaniacs world. © Urbaniacs.

Created by Josh Fisher, a veteran of TV animation production, and Barry Collier, the former lead developer of Neopets, Urbaniacs features many things that other animated communities contain like a virtual economy where users play games and earn Urbos to buy virtual merchandise and community functions like chatting and character battles. However, unlike other sites where there are vast amounts of characters for users to choose as their avatar, Urbaniacs features 12 distinct funky superheroes, which users can mix and match heads, torsos and legs to create their own personalized Urbaniac. Moreover, unlike other sites, each of the original 12 characters, in addition to three others, have distinct personalities and backgrounds and live within the Urbaniac universe with players.

When asked about how the site came to be, Fisher said, "The intention all along was to create a living, breathing community that was nonlinear entertainment where users could create and personalize their own entertainment experience. The vibe for Urbaniacs is this fun, funny and funky world where you create your own urban hero or villain. This is a living comicbook."

Fisher came up with the core idea for the characters and world, and when he presented it to his friend Collier as something to create a small online presence around, Collier said the idea could be expanded into a larger online world. Thus, Urbaniacs.com was born using Fisher's experience developing animated properties for TV and Collier's programming skills and experience from helping build Neopets.

In regards to keeping the world safe for kids, Fisher is personally watching the site on a daily basis and has developed relationships with users via his in-world alter ego I.B. DaMan, aka Mayor DaMan. As mainly a two-person organization, Collier does most of the animated games and Fisher writes the content. Helping the dynamic duo, Pete Michail, who, during the day works at Renegade Animation, spends his nights designing characters and environments while Erich Meyr takes Fisher's "silly ideas" and creates Flash-animated shorts from them.

"The big thing for me is how do you personalize your own entertainment. I think Urbaniacs represents a way for our users to do that. It's all about personalizing and customizing your own experience," said Fisher.

Another way Urbanics tries to keep the site fresh and engaging is to offer users group activities and contests like rap battles and an Urbaniacs Christmas ornament contest. "I think it's important to engage people that way. You want to feel like you're not operating alone. Communicating and competing with each other is what makes it a community."

Urbaniacs co-founder Josh Fisher is also Mayor DaMan in the online world.

Fisher added, "A great example of the community is one of the users asked, 'What's the name of the river that flows under the bridge in the header?' And I said, 'Oh, that's the Urbanville River.' And somebody else said, 'Well, what's the name of the bridge?' And I said, 'I don't know.' Then somebody said, 'Why don't we have a bridge naming contest?' So I thought it was a great idea. So for a week we took submissions and then Barry and I picked the top 10 best names. Now we have a survey going and you can vote once a day on your favorite name."

"The thing that I've learned about social communities is that at the end of the day, you're content can be spectacular, but it's all about the people that find it," Fisher adds.

Because the site has no outside funding, the revenue comes from banner ads. Once the unique visitors reach around 400,000 to 500,000 monthly, Fisher plans to expand to adver-gaming or integrated corporate messaging. "An ideal situation for us would be to partner with a corporate sponsor who would sponsor gear. Like Nike could put a virtual Nike store in our community. Because of the vibe of the site, anything you could have in a city; you could have on the site, because it lives in a city."

Like many community sites, the traffic has grown via word of mouth. Some banner ad swaps have been done, but mainly it's like Habbo, friends telling friends to join or clicking on syndicated versions of Urbaniacs games on fans' MySpace or personal website pages. However, because the site has grown to the point where it's hard for two people to handle, Fisher and Collier are in talks with partners to infuse the company with some marketing dollars and additional resources, helping the site get to critical mass faster.

When asked about whether taking the Urbaniacs brand to another medium was part of the original plan, Fisher said, "Part of the inspiration behind Urbaniacs was the fact that there has been so much cannibalization in the kids industry that it has become increasingly difficult to really create and control and sell a show and be part of the creative process on an animated series."

Unlike others sites that have dozens of characters, Urbaniacs core 15 characters "have personalities and have likes and dislikes. They have strengths and weaknesses. In building the characters, we kind of built it as if we were building a TV show and just allowed users to take our foundation and completely personalize that experience. So yes, it would be fantastic if one day there were an Urbaniacs movie or TV show. We built it so that it would be easy to translate to offline media."

Neopets is such an established brand that the company signed a coveted deal with McDonald's that brought virtual characters to Happy Meals.

Already in works on making it's jump to offline media with a feature film deal set up at Warner Bros., Neopets is the leader in the field, bringing in 11 million visitors a month. Started in 1999 as a private company, Neopets was bought by MTV Networks in 2005, solidifying the importance online communities have to major media firms as well as Neopets strength as a brand.

From the start, Neopets has been operating on an advertising business model, which recently has been supplemented by licensing deals. Like Habbo, Neopets plans to launch virtual item sales later in the year. This will be a separate economy from its free NeoPoints system, where users will be able to buy premium virtual items with cash.

Kyra E. Reppen, svp/gm of NeoPets, said that the site's games are the most popular section followed closely by social activities. Reppen added, "Different members play the site differently. You could have two different members having almost entirely different experiences playing the site. But there is something unique in Neopets in that it's one global economy. So while you might see people doing things in different countries, everybody is still part of the same community simultaneously."

Another unique fact about Neopets is its stickiness, which is the amount of time spent by each user on the site. By far one of the stickiest sites on the Web, Neopets users spend an average of four hours on the site per day. So once Neopets has a user, they stay for a while and much like many other community sites new users are coming via word of mouth. The site launched with no advertising and only recently has started marketing initiatives.

Like Fisher stated, users really make each online community. Neopets fans not only invite their friends to join, but have created hundreds of fan sites, which only help extend and grow the brand. In world, users are driving the world via contests and battles. Members have created 22 million shops within the persistent world and more than 10,000 user submissions are received per month. Neopets the company helps these activities by providing users with the tools they need to customize their experience as much as they can, such as allowing members to create their own homepages called, "user look-ups."

When asked about Neopets demographics, Reppen said, "It's fascinating actually, because it's a wide demo. I would say the core is around 10 to 14 years old, but we also have a strong and loyal teenager and actually even an adult audience that defies what you may assume looking at the site."

However, its wide demo doesn't mean Neopets doesn't have safeguards in place to protect its younger users. Reppen said Neopets' communications tools are only available to kids 13 and up or kids under 13 whose parents have given permission. In addition, the communication tools have a built in filtering system and the company does monitor.

As the former head of NickJr.com, Kyra Reppen has experience with bringing offline brands to the online world, which could be growing trend in the virtual worlds industry.

As for the construction of the site, it is created by the staff at Neopets Studio offices in Los Angeles and Singapore. Reppen said, "All of the artwork is created in Flash from sketch to character design to small animations. It's all done by our artists. Something that is really special about Neopets is that our artists actually have a lot of input into the creative. Because it's in Flash, there is a real speed to launch, so an artist could pitch, sketch and launch something within a day. Our studio approach is to be as nimble and as quick as we can while obviously maintaining a high level of quality. It's both a challenge, but also a great opportunity."

With a great deal of feedback from users about what new features they like and dislike, Neopets is able to keep the users happy by adjusting to their desires. This idea moves over to the company's deals to take the property to offline media. Reppen commented, "I think the goals and mission of the site have always been to be responsive and to service the community. First and foremost it was about making a great virtual world and a great game experience."

When asked about finding a balance between the nonlinear online world and the more story driven world of movies, Reppen said, "We have 54 species and within those species there are hundreds of variations. There isn't any one specific character or pet species that jumps out as the lead or the star of the show. On the other hand, all those species and characters on the site have backstories and have a rich lore. I think it's possible to pick components of the world and develop that out. These are all things that we are grappling with and trying to figure out." And when asked would they poll their fans to see what they want, Reppen responded, "Absolutely."

As for the future of online communities, Reppen said, "The whole virtual world community is in its infancy and has huge, huge potential for growth. I think we're just on the tip of the iceberg in terms of different technologies and different ways communities can create their own communities. New levels of gameplay and whole ranges of roleplay. It's an incredibly exciting time to be in the virtual world biz."

Habbo's Huuhtanen sees the future of online worlds making the jump to mobile phones. The company is already in talks with European cell phone providers to bring the virtual world to teens via their phones. This will allow users to bring the social network with them wherever they go.

Huuhtanen also believes that virtual worlds have the potential to help all segments of the entertainment industry whether it's taking offline brands into an online web community or providing more virtual products within existing virtual worlds such as digital band posters or movie inspired bed sheets.

About the future of online communities, Fisher said, "I just see it growing and growing in every direction. In my opinion anytime another social community is successful, it's a better situation for Urbaniacs."

And in terms of whether this new form of entertainment is going to kill older mediums, Fisher added, "TV isn't going away. Kids still want that passive experience. People still want to sit on the couch with some ice cream and just be entertained. But I think, more and more, they are seeking an entertainment experience that is also interactive. So if any social community has enough of an audience, you can begin to generate content that melds that passive experience with an interactive experience."

Rick DeMott is the managing editor of Animation World Network. In his free time, he works as an animation writer for television. His work on the new series, Growing Up Creepie, can be seen on Discovery Kids. Additionally, he publishes movie reviews at his blog, Rick's Flicks Picks. Previously, he held various production and management positions in the entertainment industry. He is a contributor to the book Animation Art as well as the humor, absurdist and surrealist short story website Unloosen.

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