Can Data Save the Studios in the Age of Social Media?
By Nick DeMartino - Warner’s acquisition of Flixster is Hollywood’s savviest move yet to survive a wrenching transition into the age of social media.
It’s not just that Flixster is the leading social movie site on the iOS, Android and Blackberry mobile platforms with 35 million downloads to date – or that its sister site, review aggregator Rotten Tomatoes, attracts 12 million monthly visitors – or that Flixster powers Facebook’s Movies app, also the market leader.
No, this is about more than traffic and traction. It is about data. Data is the secret sauce of social media that will empower Hollywood to take control of its own business, rather than to cede it to intermediaries, e.g., the disruptors from Silicon Valley.
With this deal, Warner gains direct access to millions of movie fans, and to the data generated by their social interactions around movies – both essential ingredients to build a direct-to-consumer movie business owned and operated by Hollywood.
All this, at less than the cost of a single comic-book movie!
Social media fosters a flood of consumer interaction and generates massive streams of data, enriching companies that collect the data, and penalizing those who don’t.
This is a very different model than Hollywood (or anyone else) has ever known. It’s worth billions, because data can be tracked, measured, mined, parsed and monetized in countless inventive ways. All of which are counter to Hollywood’s old model.
To wit: Studios have been wholesalers who sell to retailers, not end-users, e.g., individual humans. Hollywood’s biggest customers have been theatre chains, TV and cable networks, and big-box stores – and now digital distributors like Netflix, iTunes, and Amazon. All of which have been very busy building a consumer ecosystem powered by data.
To reach customers directly, studios will have to build new businesses to distribute movies and leverage behavioral data. Which means Hollywood must compete with the best-in-class e-retailers like Amazon and Apple. Are they up to this daunting task? Studios have tried before, and failed. (WB’s Entertaindom and NewsCorp’s MySpace debacle come to mind.) Read more >>
An Appocalyptic Tableaux: A Tale of Too Many Tablets
115 million tablets will be sold by 2014 according to the infographic below. 66.5% growth year over year.
Fascinating to think that while just about everyone (and their child) has a cell phone these days, that we’ll all soon have “x” tablets by household.
As the steady stream of upgrade/next-generation iPads arrive, year after year, expect each family to have two then three tablets lying around the house. Think of them as “media coasters.”
We’ll go from 65 apps per device to 650 apps without sweating the micro-transactions.
A peek into the Orwellian iPad-diction of society: The hand-me-down 4G generation will quickly see kids getting the short end of the digital stick; instead of a laptop, they’ll get the tablet and learn to type book reports on touch screens.
The adults will also go tablet for home use, putting much less time on their work laptops, eventually leaving them at the office. Office IT budgets will skyrocket down.
With all email and personal media (music/movies/photos) in the cloud, bluetooth keyboards and mice will fold up into the tablets for the workhorses (voiceover INPUT will be de rigueur), while most will dialog via 140-count (and briefer) communiqués.
Shorter but more frequent individual output will be swallowed by longer and more frequent input, aka consumption. Twitter will be eclipsed by a shorter version of itself; bit.ly will become a real-time and timed-out, unique symbol.
Eventually, we’ll “share” more via links we “like” than actually sharing original ideas. Curation will become less about the “best content channels,” and more about the “opinion channels.” Colbert copycats and O’Reilly orifices.
New Medici 2011 Predictions
- Cords will be cut – cable and satellite companies will have to package internet bandwidth with channel programming to keep sub fees north of $100. Cable and other triple players will move to provide bandwidth to all devices – think Mifi for everything as an upsell with loss of cable. In 2012, all television programming will be available day and date via web/mobile.
- Netflix will double (or more) its sub base with streaming model, and become an even higher value acquisition target; it now currently needs to figure out social media to close all gaps with Amazon.
- Resurfacing of digital media IPOs (or accretive acquisitions): think Spotify with US penetration, Facebook, Zynga, Groupon, Flipboard and possibly Pandora.
- Music and media discovery will be most valuable digital utility, with people programming their lives – and transparently tracking their consumption (personal CRM or our “time clock” theory), which will be shared, of course, via social media.
- 3D will rise at home, decrease in theaters – more television programming and surplus of high quality 3DTVs with many ITV channels also moving into 3D to differentiate.
- Apple will ditch optical drives on all but highest end laptops (wireless/Bluetooth SuperDrives to follow; Apple to move into 5TB home networks servers and own cloud ecosystem) and desktops. iPad 2 with 3G/4G package will sell 1.5x original unit and knock out all touch players save Android. iPad 2 will merge video UGC with ARG successfully, e.g., users will connect via video conference to engage with branded content. Video conferences will become programming when edited right.
- Film studios will drift away from traditional sequels/remakes and renaissance with new franchises – think next Harry Potter, Dark Knight, Hangover.
- Ad agencies and major lifestyle/consumer brands will dive into social media acquisitions, create more innovation incubators and buy consumer content/video sites to roll-up audiences. Think Y Combinator owned by Adidas. Similarly, talent agencies will launch incubators to find next production/distribution efficiencies and create more and more backend strategies versus faltering pay or play.
- In the gaming world, “Angry Birds” success will be remodeled (usually badly), but will also create new initiatives to merchandise media on a 360 level, i.e., games, films, tv will finally leverage their assets fully outside of release windows. Pop-up events will be “demanded” as exclusive media and merch will be next big thing.
- Digital content will become vastly more personalized. Once discovered (see #4), smartly aggregated and tied into social (e.g., Flipboard), users will start visiting fewer and fewer niche sites, plus heavy Facebook…
The High-Paid Life or Decade of CEOs
Annual compensation for CEOs is nearly always a thorny question. Not so ironically, every CEO wants to land on Forbes’ “Billionaire List,” but mention of annual salaries for public companies brings a corporate chorus of no comments or quick stage lefts – helicopter waiting depending on the benefits package.
Via WSJ (including the graphic): Larry Ellison, founder and chief executive of software maker Oracle Corp., topped the list of best-paid executives of public companies during the past decade, receiving $1.84 billion in compensation, according to a Wall Street Journal analysis of CEO pay. Coming in No. 2 on the compensation list was Barry Diller, who received roughly $1.14 billion from IAC/InterActive and Expedia.com, the online travel site IAC spun off in 2005, where he remains chairman. Following Mr. Diller [was] Apple Inc.’s Steve Jobs with $749 million.
Over the past decade, Ellison has held strong in the face of Diller and Jobs, who’s comp is mostly in his stock and does not include Pixar/Disney transaction gains. Steve Jobs still remains the largest individual shareholder of Disney, which sums up what a superb brand strategist he is: Apple, then Pixar leading into Disney.
The Ten Spot: Apr 26, 2010
Back to the basics of the the Ten Spot – quick, relevant New Medici reads with an exact dose of interpretation.
1. For Web’s New Wave, Sharing Details Is the Point – NYT DealBook
The transparency brought about by Google search and Facebook community/beacon/(end of) privacy has created a slew of startups who cater to ripping open the social graph and letting everyone peek in, follow and link to your daily activities and habits.
From the likes of DailyBooth.com, Blippy.com and Groupon.com, the concept of “socially challenging” others to share interests in online creation and consumption is trending. The next logical step will be a return to a new and improved Facebook Beacon that extends the group mentality while providing multi-level marketing incentives to the individuals who create interest in new items, i.e., transactions (think ThisNext.com meets Groupon). This allows group rewards and either revshare or ranking points for the individual curators or arbiters of taste.
Blippy, which opened last fall, was the first site to introduce the notion of publishing credit card and other purchases. Last month it attracted around 125,000 visitors and closed an investment round of $11 million from venture capitalists. It hopes to one day to make money by, among other things, taking a commission when people are inspired to imitate their friends’ purchases posted on the site.
To Silicon Valley’s deep thinkers, this is all part of one big trend: People are becoming more relaxed about privacy, having come to recognize that publicizing little pieces of information about themselves can result in serendipitous conversations — and little jolts of ego gratification.
Steve Jobs defies the odds (recovering Apple), the gods (surviving cancer) and yet his consumer design “sculpting” and management fearlessness are really the two definitions he will be known by. In this above must-read link, an insider opens up about the mindset and fearset of the leading Designer CEO out there.
From secrecy to ordering the best-of-the-brainstorms (in terms of his managed teams), Jobs is building a line of devices that separate the chaos, the noise and the hacks of more open systems to bring its users a little hardware clarity (and style)… Read more >>
Google Checkmate on Apple and iPad Hype: Buy Adobe
With the new Apple iPad receiving an iHype or iYawn from the tech and media communities, a former colleague and Applephile, Patrick Kearney, suggested that Apple was crazy not to just acquire Adobe and own/integrate Flash. I counterpointed via the socialnet, that Adobe would be more integral to Google’s apps and offer a serious checkmate on Steve Jobs’ ability to close out his Apple hardware and software ecosystem.
The Google Value in Owning Adobe:
- Keeps Google intrinsic to Apple, especially if Bing replaces Google Search across Safari, iPhone, iPad browsers and devices.
- Adobe owns Omniture, an online marketing, data mining and analytics company, which it picked up in September 2009. Like Google’s acquisition of Urchin which became an invite-only Google Analytics and is now free for anyone. Omniture could be the premium or pro solution for big brands that need the stepabove solution, and of course crave CRM. It’s more behavioral, offers paid SEO across all search platforms, so it fits accretively.
- Launch Google lite version of Photoshop and Dreamweaver (and…?) for its Google Apps. Many people are moving over to Gimp, an open source Photoshop design app, from outdated versions of Adobe’s Photoshop. This would democratize the products, while still offering premium versions that require a monthly subscription to remove the contextual ads and continue to innovate the product features for power-users before they go mainstream and free. Think of it as R&D for the premium, paying crowd who want the full version, and then as features become common, they go to the open, Google app public. This model of lite versus full versions is working well for the Apple Apps Store, and could move to an online subscription model to avoid distribution fulfillment and other retail packaging costs.
- Ownership of Flash enhances YouTube’s dominance in online video. Pretty clear, Google labs up Flash internally and figures out ways to make it pay out more for its slowly monetizing video flagship. YouTube’s choice advertisers get premium Flash benefits; innovations trickle down to other top UGC performers.
- Google Phones benefit from mobile improvements to Flash. The Android and Nexus One become more marketable, and Google licenses Flash to the Blackberries and other mobile players.
- And, of course, the obvious: every media-savvy site uses Flash and it rolls up 75% of online video, plus marketers like flashy display banners, so Google owns more of the food chain – from media co’s to video players to brands and their agencies looking to stand out in a very noisy internet environment.
Apple Tablet as Print/Magazine Page-Turner
A potential interactive page-turner – think iTunes for magazines, books (much less multimedia sexy) and especially daily print. Time Inc. and The Wonder Factory put together a demo on a HP touchscreen, and for those with tablets, potential online subscription and micro-transactions loom.
Via The Death Of The Blog Post – Smashing Magazine, there’s a discussion of how much the design of individual posts adds value to the read – similar to strong copy, quality posts versus mass-news, pop cultural clippings (aka standard blogs).
Is it the timeliness, frequency or relative exclusivity or breaking news factor that makes certain articles into reader magnets or SEO payloads?
RSS readers are jam-packed with articles every day, and chances are, the articles that don’t get your full attention will get lost in the crowd. Keep your short musings and thoughts for Posterous and Twitter, and spend some real time hand-crafting well-thought-out articles. You’ll satisfy both yourself and your readers.
On an altruistic side, blogs and blog nets create open discussion, communication and the free sharing of news, but if you opt for more design, will the quality of the writing always be premium?
Or does more design – see the Gizmodo/Techcrunch quote after the jump – mean continued budget losses at big publishing houses, tied to high-priced writers? Yes, the design and publishing world will move to the upcoming Tablet like the music labels beat a path to iTunes.
The Ten Spot: Nov 5, 2009
Chart: U.S. Virtual Goods Revenue Ready To Explode | SAI
The virtual goods market in the U.S. is ready to take off. Right now, the U.S. only has 28% of the total market. By 2013, the U.S. will make up 41% of the market with $2.5 billion in sales, according to research from Piper Jaffray.
The Decade of Steve Jobs, CEO of Apple | Fortune
He’s a visionary, but he’s grounded in reality too, closely monitoring Apple’s various operational and market metrics. He isn’t motivated by money, says friend Larry Ellison, CEO of Oracle (ORCL, Fortune 500). The financial results have been nothing short of astounding — for Apple and for Jobs. The company was worth about $5 billion in 2000, just before Jobs unleashed Apple’s groundbreaking “digital lifestyle” strategy, understood at the time by few critics. Today, at about $170 billion, Apple is slightly more valuable than Google.
CollegeHumor May Go to Ben Silverman Venture | Advertising Age
The deal would have Connected Ventures, parent of CollegeHumor and just-launched TV-production arm Notional, folded into Electus. [...] Connected Ventures is at the core of those content efforts, but Mr. Diller is said to lack confidence that the group can effectively monetize the properties it creates. Last week, Mr. Diller said investment in original content would account for “less than 10%” of the $1.8 billion the company will have in cash over the next few years.
One of the biggest questions in the TV biz has been when, and even if, Oprah Winfrey would give up her daytime syndicated talk show to focus on OWN, her long delayed Oprah Winfrey Network in 70 million homes that was supposed to launch in place of the Discovery Health Channel as a joint venture between Winfrey and Discovery Communications. Read more >>
iPod Touch + Skype = Free Mobile Calls
Chalk this up to a little next generation (i.e., teens) or the international community who travel often, but it seems everyone under 20 and those abroad from Australia/UK/New Zealand/etc. are dropping their iPhones in favor of iPod Touches. Now with Skype and a good wi-fi connection, there’s no cost calling plans. How’s that for innovating your office, kids’ utility fees or travel abroad access…? Read more >>
Dreamworks’ Reliance on Disney
Just in case you actually might have been living in Fantasyland for a portion of last month, and missed the news of the Disney/DreamWorks (with Reliance funding) deal here’s a recap, background info and a few innovation questions good measure. Walt Disney Studios will be marketing 6 DreamWorks live-action features per year. The Wall Street Journal has reported that Disney will earn at least an 8 percent fee off the box office gross of DreamWorks films, and would lend the studio $150 million. Read more >>
The Maze of Mobile Innovation
It may be true that Nokia sells more phones in a month than Apple has sold of the iPhone 3G since its release last July. It may also be true that the iPhone is not the ultimate expression of mobile computing and communication, or that the negatives associated with its closed platform will outweigh the positives. And it is undoubtedly true that anyone who works in the mobile industry, particularly in California, is suseptible to Apple Fanaticism, the iPhone Bubble of Hype, and a distorted sense of the iPhone’s penetration across the country and around the world. Read more >>
Wii Shall Overcome
A great panel at CES today – “Wii Shall Overcome: The Triumph of Simplicity and the Lessons We Can Learn from Nintendo.” The panel were Wii believers in the clean, simple design which changed the physical gaming home environment; rough meaning, it was inclusive of all family generations. Wii was bigger than just Mii.