TV Leading the Charge
By some accounts, it is the television networks that are leading the digital charge, for the sole reason that, to keep up with the Joneses, networks must now use the digital world to extend their "conversations" with viewers. Among notable movements in this space, CBS has launched its Innertube broadband channel, joining others such as MTV's Overdrive, Comedy Central's Motherload, and Discovery's Turbo.
A recent Forrester Research report concluded that young adults 18 to 26 are online 28% longer than Generation X's 27- to 40-year-olds and twice as long as Baby Boomers ages 51 to 61. Furthermore, young adults are more likely to tap into new online communication methods (such as instant messaging, social networking, and blogging) than to watch traditional television.
With these numbers in mind, many feel that MTV, in particular, has been an early leader in the extension of its message to multiple screens. "The majority of advertising deals I see now include not only linear TV media buys, promotions, and product placement, but also online, broadband, mobile, and VOD," says Jacques Vroom, an integrated marketing consultant who works with entertainment clients such as MTV. "If you do this right, each screen complements the other."
While the ability to reach more viewers on the smaller screens is great for advertisers, it can also be a good thing for content creators. MTV used mobile phone screens as proof of concept on its original series Sway's Hip-Hop Owner's Manual, a documentary-style show that explores rap-related lingo. "We shot a three-minute pilot and then allowed viewers with video-enabled mobile phones to view it," says Michael Scogin, senior producer of wireless for MTV Digital. "Once we saw its success, we knew we had a show worth ordering to series."
While, at best, only 3 million (out of the approximately 200 million) mobile phones in the U.S. are video-enabled, the numbers are growing. "Our immediate opportunity is to reach our audience in a different way, at a different point in their day," says MTV's Scogin, "but what may be more interesting is that other divisions within MTV have seen the show's success with a now-established fan base, and they, too, are interested in developing it for their own mediums."
Movie Studios Inching Along
In many respects, the film studios have seemingly been more interested in grabbing headlines than in doing seriously innovative digital business. Although the logistics may be very different, the studios still view the underlying notion of distributing movies digitally with the same mindset they've had since the beginning of film. It's a "create it once, sell it many times" mentality.
In addition to the obvious popularity of iTunes, studio-backed broadband outlets CinemaNow and MovieLink—both of which allow users to pay for and download a film, usually on the same day it reaches your corner video store—seem to be emerging as key product channels. Strong future competitors such as Amazon, Blockbuster, and NetFlix are also making rumblings in the wings about movie downloads. And even a few small players like BitTorrent seem to be showing up in the headlines.
But while many of these companies may turn out to be major players in digital distribution as both consumer demand and technology evolve, watching one of these downloaded films on a living room television set still currently requires nothing short of an engineering degree.
While electronic distribution of this sort must surely be part of any studio's plans, here's the longer-term problem: CinemaNow, MovieLink, iTunes, and the like simply use new technology to enable electronic sell-through or rental of the very film that you could have seen at your local theater. What the studios have yet to do is focus on these new digital mediums as, well, truly new mediums.
Eventually, one studio will figure out that a winning strategy will involve finding ways to service the rules of this new medium by creating new content— whether wholly original or derived from existing catalogs or current titles. We wouldn't put a radio show on television and expect it to draw audiences, so why are studios' digital strategies built around simply putting theatrical movies on the internet with the same expectations?
So while their control of our favorite entertainment "brands" should make studios the most prime candidates to exploit digital, the Hollywood movie conglomerates are ultimately wasting innovative opportunities of iTunes-level proportions by sitting on the sidelines and waiting for everyone else to figure out how to create original uses of the digital medium.
Whereas TV networks already have consumer brands to maintain, movie studios don't. This frees smart studios up to use their catalog content to establish entirely new consumer brands in the digital space—the kind that don't require you to reintroduce yourself to your audience every time.
Rise of the Baby Producers
The immediate winner in the battle for new screens is the kid in Kansas—far removed from Hollywood—who uploads his home video onto YouTube. For him, digital is the great equalizer—that which puts him on somewhat equal footing with the traditional content-creation behemoths.
User-generated content (UGC) is the latest buzzword that has propelled the MySpaces and YouTubes to the frontpage of every newspaper in the country. And it is perhaps the first type of content truly invented by the internet, rather than just distributed by it. But while the implications for simply sharing personal content are obvious, UGC visionaries still struggle with how to make money.
Hollywood has begun to wonder as well, resulting in recent announcements such as that of NBC's marketing deal with YouTube to promote certain programs, including The Office. Other UGC sites, such as Revver, have developed alternate business models that share advertising proceeds with individual content creators.
Russell Holliman, founder and CEO of Podcast Ready, feels that it is podcasting that may hold the key to monetizing UGC. Podcasting, which refers to a method of delivery and not the content itself, enables users to download audio and video files for playback on mobile devices, including iPods, other MP3 players, and cell phones.
"We've established a podcast directory to provide anyone with a simple way of finding, managing, and sharing audio and video podcasts," says Holliman. "Our goal is to let people choose what they want and to get it where they want."
However, the Hollywood jury is still out on UGC, primarily because it falls into a gray area that's far outside the black-and-white landscape of traditional media. This dilemma has led to some interesting questions about who exactly should be crafting the networks' and studios' strategies for UGC and other original digital content initiatives.