Posts Tagged ‘TV 2.0’

Hollywood and Web Video Follow Up

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Soon after blogging about Hollyood’s potential to have a strong, profitable relationship with web video, I came across Beet TV, a video blog by Andy Plesser. Plesser posts interviews with media executives and clips from various conferences, focusing on the “rapid emergence of online video and its impact on industry and society.” As I browsed through the site, I found many videos which related to my previous arguments.

In the post “Creative Producers will Grab Advertisers with Original Sponsored Videos“, Saul Berman, strategy partner of IBM, discusses a few of the issues surrounding web video monetization. At one point he mentions IBM’s global CEO study, which found that outperforming CEOs have a knack for “disrupting the market before someone else disrupts it for them.” Now, a growing trend in the digital age is that consumers are expecting higher quality content on the web, in terms of production value and level of engagement. That is exactly why I argue Hollywood needs to be more aggressive in the web video marketplace. While the studios have begun experimenting with digital media creatively and economically, in general, they have yet to effectively distinguish their content as superior online entertainment. Here’s the interview:

Berman also talks about a product placement business model, which has become increasingly viable. I’m going to take a look at this in more detail as Gemini Division unfolds, but it seems like a popular approach for producers, advertisers, and consumers, as long as the brand is subtly integrated within the story as a realistic element, not a distraction. Jigar Thakarar of CBS Interactive sees this brand integration as a much more profitable business strategy than offering pre and post roll ads. Here’s his interview from “CBS Sees Sponsored Web Video Programming as Viable Model“:

Because viral videos don’t carry advertisements as they travel through YouTube and other video hosting sites, I can see why product integration would be a practical solution. But it will be interesting to monitor exactly how producers handle a brand’s identity within the context of a story. Will the narrative, mise en scene, and characters always be faithful to the integrity of the show, or will they be heavily adjusted and obscured to land sponsorship? Ultimately, it comes down to finding a balance, but I still wonder if both parties will always be open enough to compromise.

As far as the consumers go, on the one hand nobody wants to feel as though a studio’s production is an excuse to advertise. That perception ruins all credibility. But on the other hand, young adults (ages 18-34) have become trained to avoid and ignore brand messages. So often the best way to reach them is through highly innovative, seamless product placements, allowing a brand to be more easily absorbed. It’s just another example of convergence – branded content and unbranded content merging together. And hopefully, when done correctly, everyone involved will win.

Another interview comes from the Dmitry Shapiro, co-founder of the Internet TV site, veoh.com. Shapiro argues that the future of television is in fact Internet TV. Using veoh as a “virtual digital video recorder,” viewers can consume Internet TV as they do broadcast TV, sitting back on the couch eating potato chips. Take a look:

Shapiro contends that users can get the same experience from Internet TV as they do with broadcast TV. However, unlike TV programs, web shows typically do not enable viewers to sit back, relax, and watch. They are designed to be seen on the fly, as a daily installment. But what if they were both? If there is one complaint I had with Afterworld, it’s that I was not able to plow through the episodes quickly and easily, since every 3 minutes I had to select the next video. Given the show’s twists and turns, I wanted the option of getting comfortable and sinking into the story. It may sound ridiculously lazy, but returning to my computer so often detracted from my suspension of disbelief and the overall immersive experience. (Not to mention the annoyance of hearing, “My name is Russel Shoemaker, I sold technology to the world..” for 130 episodes.)

Web shows do need to be short in length, no doubt about that. For many people, after about four minutes, streaming quality diminishes and their attention dwindles. But I’m a viewer who wants to watch the story as a “couch potato.” That’s why I think it’d be useful to fuse 10 episodes or so together in a half an hour format so that I can have more options: watch it on the go or on the couch. In this way, web shows could function as a medium independent of TV (in terms of style, format, and distribution) but also function, courtesy of Shapiro’s veoh application, as an extension of TV, as Internet TV.

To date, there has not been a breakout mega hit in original web programming. Web content still only appeals to fragmented audiences and studio executives still worry web content will cannibalize their audiences and revenue. Perhaps those problems will be mitigated when more consumers watch Internet video on their 42 inch flat screen TV in addition to their iPods. The bottom line is this though: Hollywood should not be complacent and wait for the future – they must disrupt it before someone else disrupts it for them.

Hollywood’s Web Shows: The Future of Television?

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I have argued before that the television industry would benefit from transforming its business model to enhance consumer engagement and adapt to new technologies. That is not to say that broadcast TV is in danger of disappearing (in fact a May 2008 Nielsen Report pdf found Americans are watching more traditional TV than ever) but DVRs, digital cable, and online video all make it increasingly difficult for networks to secure consistent viewers and advertisers. As a result, pilots, even beloved shows, either produce immediate results or face extinction. The system has become so reliant on statistics that a show whose viewership falls below 93% of its networks’ average viewers will be flat out NEXTed. (source: tvbythenumbers.com)

Wait a second. What about the people watching the show on DVD, on the Internet, or on mobile devices? How are they accounted for? And, if you’re like me, you don’t want to invest in a show when you know it’s likely to be abandoned without warning. But it is the nature of the business that a series won’t survive without the initial ratings. It’s a vicious cycle and breaking it would mean one of two things. Either audiences gain enough trust in the networks to risk their time and energy to invest in a new series, or the networks trust the audiences to improve the ratings of a show even after a poor start.

What we have here is what smart people call a Hegelian dialectic, the idea that the tension between two opposing forces is resolved through a synthesis. In this case, the tension between the networks’ old consumption expectations and the viewers’ new consumption habits has resulted in a new Hollywood experiment: web shows.

(more…)

Chapter 1: Harnessing the technology and the consumer

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Undoubtedly, all of the entertainment industries—dance, theatre, gaming, comic books etc—have had to adjust to technological and cultural convergence. The music industry’s decline exemplifies the power of such phenomena. But the television and film industries, though primed to fully transition into the digital age, have neglected to make the quantum leap for two reasons. First, media executives have viewed the development of new technologies as threats to the industry, rather than gateways for new possibilities. And second, the television and film business traditionally expects the consumption of their content to be passive and non participatory, an assumption which sharply contrasts the socially connected, collectively intelligent, and increasingly empowered audience of today. In this chapter, I apply these criticisms to both the television and film industry.

Within the last ten years, the shift towards digital video, compounded with the proliferation of personal computers, iPods, and mobile phones, has allowed viewers greater autonomy in deciding when, where, and how they want to view their favorite TV shows and movies. A scary thought for television executives. No longer can advertisers be assured that consumers are up-holding their end of a long standing transaction. As Ivan Askwith describes in his MIT Master’s thesis Television 2.0: Reconceptualizing TV as an Engagement Medium:

At its core, the television business has always served as broker in an unspoken, but well understood, transaction between viewers and advertisers, wherein the advertiser provides free television programming, and the viewer agrees to watch commercials. Over time, the models have become more sophisticated, of course (leading to the development of Nielsen ratings, audience shares, viewer demographics, and so on) but this implicit contract has remained at the heart of the television business…Executives, advertisers, and audiences alike are beginning to realize that the conditions that once made this contract possible have all but collapsed. (Askwith, 14)

Askwith re-examines the term television itself ; as shows flow through a range of channels and devices, one must wonder whether we can still categorize an episode of The Office on an iPod as a ‘TV show’ in the traditional sense. With many network executives calling themselves not television producers, but content producers, it seems the television industry is adjusting and even embracing multiplatform technology. Well, partly.

The accessibility of the internet and its high speed, wireless connection has enabled consumers to stream and download content illegally at their leisure. Pirating and illegal DVD burning continues to be a huge concern. And of course, the television industry must contend with the dreaded digital video recorders (DVR). Not only can consumers easily acquire free content, but they can also store TV shows and films for subsequent viewings while dodging advertisements completely. Sounds like the apocalypse for the entertainment industry, doesn’t it? But just as television survived the VCR, so too has it endured DVRs. Jason Mittell discusses the effect of such new technology in his essay, “Narrative Complexity in Contemporary American Television:”

Using the new technologies of home recording, DVDs, and online participation, viewers have taken an active role in consuming narratively complex television…audiences tend to embrace complex programs in much more passionate and committed terms than most conventional television. (32)

To adapt to television as an active medium, franchises like Heroes and Lost encourage fans to seek, collect, and aggregate character and plot information through multiple media platforms. No longer do TV shows have to rely on re-runs and DVD sales for newcomers to catch up. Instead, time shifting technologies allow fans to fill in narrative gaps at their leisure. Beyond that, hard core fans make full use of their DVR or high speed Internet connection by scrutinizing shots lasting only seconds and re-watching crucial scenes. Nothing goes unnoticed. So while new technologies make it easier to tell serialized stories, the need to maintain a consistent narrative becomes all the more important.

To say the television industry has not adjusted to the digital age would be inaccurate: television companies have given consumers access to content via network homepages or iTunes, where they can download shows and movies legally. But rather than competing against DVRs and online downloads to persuade viewers to watch their TV programming in ‘real time’, why not embrace these technologies, utilize them as tools for consumers to explore more complex narratives and share their discoveries with fan communities? Henry Jenkins writes in Convergence Culture:

Right now, people are learning how to participate in such knowledge cultures outsides of any formal educational setting…the emergence of these knowledge courses partially reflects the demands these texts place on consumers (the complexity of transmedia entertainment, for example), but they also reflect the demands consumers place on media (the hunger for complexity, the need for community, the desire to re-write core stories).

Thus, while the framework exists for the television industry to escape their restrictive business model, the industry must experiment further by producing and distributing content which facilitates consumer ‘hunting and gathering.”

Another part of the problem is that networks rely so heavily on quantifying engagement and commoditizing it through one dimensional measurements (i.e. Nielsen ratings), that they fail to recognize the need for a new conceptual model, one more suitable for the multiplatform media environment. As Askwith writes,

The problem is that the industry is attempting to understand, define and express a new concept (viewer engagement) primarily – and in many cases, exclusively – in terms of its ability to preserve an old end (the advertiser-supported model of television). Engagement is not a process that happens in front of a television set. Nor is it a simple description of how a viewer watches television, or feels when watching television. Instead, engagement describes the larger system of material, emotional, intellectual, social and psychological investments a viewer forms through their interactions with the expanded television text. (153-154)

But with the traditional advertiser supported business model, the television industry fails to understand and take into account all of Askwith’s five logics of engagement: entertainment, social connection, mastery, immersion, and identification. Instead, it utilizes misleading definitions for engagement, such as the oversimplified Nielsen Ratings and the inconsistent Ad*VIZR New Media Audit, to determine whether a show is popular or not. Askwith concludes, and I agree, that the industry has largely viewed extensions of television as a means to promote a program’s scheduled broadcast, thus preserving the “old” business model, rather than regarding expanded content as an opportunity to generate new forms of engagement.

The Film Industry

While not as conspicuously in need of a new business model, the film industry certainly has room for improvement. Upon glancing at the MPAA 2007 Entertainment Industry Statistics, it may appear that 2007 was a historic year. After all, the domestic box office grossed a record 9.63 billion dollars. Twenty eight movies made 100 million dollars or over and four posted over 300 million. Yet when the report is examined more closely, other statistics jump out. Ticket prices increased 5% and there was no change in the amount of tickets sold from last year (1.4 billion). Thus, the record setting figures at the box office were not a product of more movie goers, but more expensive tickets. Not only that, it now costs an average of 107 million dollars for a major studio to produce and promote a movie in theaters, a record high. While I understand theater exhibitions are just one line of revenue for a studio, that is a lot of money to pay for a movie no one wants to dish out ten dollars to see.

Certainly I am not proposing that the film industry needs to lower its ticket prices, minimize production costs, or even make better movies. The studios are money bloodhounds. They know how to generate profit off their blockbusters at every level of traditional distribution (theatrical, home video, TV) and at every possible stream of revenue (including merchandise, videogames, book). In this digital age however, the industry has yet to maximize the power of the web community. Many, if not all, blockbusters today are an extension of a franchise with an existing, passionate fan base. (superheroes and children’s books.) I contend that movie studios can do more to produce online content which would generate excitement from die hard fans as well as provide entry points to those who may not be familiar with the story. Thus, just like television, the film industry must adapt to consumers who engage with content in very complex, different ways.

The MPAA Entertainment Report in 2007 revealed the enormous influence of the Internet on movie going:

A forthcoming study conducted by the MPAA and Yahoo! found that 73% of U.S. moviegoers use the Internet to conduct research before going to the theater. Also, moviegoers who research online are more likely to see a movie on opening weekend, go to the theater more often, and see some movies more than once in the theater. (9)

The report provides compelling evidence that the Internet is the primary source for determining whether or not to see a movie. Yet studios have responded half-heartedly, allocating only 4.4% of the ad dollars to Internet marketing. That is too small of a percentage considering that the average person spends more time on the Internet than any other medium, with the exception of TV. (24) This is especially true for people under 30, who are the movie industry’s target audience.

Of course, it would be easy if the film industry just had to pour more money into online advertising. The real problem is that they are funding marketing campaigns which are overly dependent on traditional advertising tactics. Studios toss movie posters and banners on popular websites while sometimes forcing users to watch a trailer before an online video. These display and pre-roll advertisements are too similar to offline forms of advertising (print, TV), which consumers already find annoying. The difference on the web however, is that users have more choices than any other medium and they exhibit little patience for anything that takes away from their desired content. An article from BBC in May, 2008 reported web users to be exceptionally task driven:

Now, when people go online they know what they want and how to do it, [Jakob Nielsen] said.

This makes them very resistant to highlighted promotions or other editorial choices that try to distract them.

“Web users have always been ruthless and now are even more so,” said Dr. Nielsen.

“People want sites to get to the point, they have very little patience.”

As with any marketing campaign, a studio’s goal is to generate word of mouth so that people voluntarily spread awareness of their brand. But unlike the one way street of the old business model, which relied on studios bombarding consumers with advertisements in traditional media, today, a successful viral marketing campaign can best be initialized and sustained via online social communities. Through online social networks, blogs, email, video hosting sites, virtual worlds and many other web related technologies, connecting to an online community is not only incredibly easy, it’s practically unavoidable. These social media make it possible for word of mouth to extend across a local and global platform, where fans can voice their excitement about a brand in public arenas and formulate discussions with total strangers.

Accordingly, to spark ‘word of mouse’, studios have recently realized that their web presence must consist of more than a simple poster, trailer, and website. Such advertisements do not take advantage of today’s active, technologically savvy, information-hungry consumer. Similar to Askwith’s criticism of the television industry, the film industry must improve their understanding of our convergence culture and the new ways in which consumers engage with media.

It is not enough for a studio to produce new media content. Branded content that fails to be compelling will quickly be written off as a contrived marketing ploy. I will tackle what makes a transmedia campaign a success or a failure later, but in general, it is safe to say that there needs to be a sense of discovery for the consumer, either to expand the movie’s fictional world or to reveal a hidden part of it. The content must leave people wanting more so that they search for other branded content, rather than the other way around. Effective viral marketing can only occur when a studio trusts their fanbase to do the marketing for them and generate hype themselves. If studios can provide intriguing content, then fans will gladly discuss, theorize, and report their findings with their online communities, thus forming a word of mouth tidal wave.

Chris Thilk, on his blog Movie Marketing Madness, comments on the remarks of David Kosse, President of Universal Pictures Interntion. While he commends the executive’s instinct to embrace audiences with online tools, he asserts that Kosse is going about it in the wrong way:

Kosse mentions the MySpace site for Knocked Up and a YouTube clip of Rowan Atkinson for Mr. Bean’s Holiday as two ways the studio engaged in a “two-way dialogue” with the audience.

Except that those aren’t really conversational executions. You can tell because while the visitor and viewer can leave comments and “friend” the page or add the clip as a favorite, there’s no reciprocal communication. The studio talks to the audience, the audience has a mechanism to respond and the conversation ends.

That’s not an engaging conversation, that’s call-and-response.

Thilk’s remarks highlight the way marketing has changed in the digital age. The power has shifted from the studios telling consumers what movies they should see to audiences deciding on their own. Imagine if you could communicate with a character of a movie on AIM or Facebook? Or if studios encouraged user generated content and contests for best trailer remix or fan video instead of sending ‘cease and desist’ orders for such work? Studios must engage in an online dialogue to give fans a reason to blog, email, and chat. They must become part of the community.

Perhaps I have gone too far. Communicating directly with fans may be too big a step for movie studios…but upholding their end of the conversation by providing valuable story information is not. To accomplish this, many movies entice fans by blurring the real world and the fictional world. Take for instance, Christopher Nolan’s upcoming Dark Knight. Transmedial content includes the WhySoSerious alternate reality game, The Gotham Times, and the Gotham Cable News. These marketing devices are completely consistent with the film’s realistic and dark tone. The content not only includes the real actors from the movie and sets up the core themes, but it also invites potential movie goers to discover background story information leading directly up to the film’s explosive beginning. In this way, consumers become immersed in Batman’s world; they experience his adventures as a citizen of Gotham City, rather than as passive observers of a fictional place.

Thus, to adapt to the digital age, studios must find a way to reciprocate their side of conversation and provide content which tells the consumer that their efforts to enter a fictional world will be rewarded with valuable background story information or character development. When studios do launch online campaigns, they either become too dependent on old marketing strategies or their new media content is unoriginal and tonally inconsistent, limiting consumer enthusiasm.

Chapter 2: “The Economic Advantages of Transmedia” coming soon…