#DMCW Digital Media Conference West/More Than Just Fun in a Box

28Oct09

Digital Media Wire was in town today at the swanky Hotel Kabuki delivering its intimate brand of confab, where content and technology is shaken not stirred, and thought leaders hunker down to vision the future of digital media.  Del Daix of the Examiner.com and Julie Robin Blaustein of Bub.blicio.us were there blogging as well.  Here is Julie’s post, and Del’s video, and here is our summary:

Jay Adelson, Digg/Revision3, @jayadelson
Recently moved from Upstate NY to Marin, tweeps helped find transport at www.shipyourreptiles.com for family gecko not allowed on plane.  Picked SF because @kevinrose was single and easy, would have worked anywhere except LA which is way too Hollywood.  Digg has two gs because Disney owned dig.com, half-joked about how catchy a one consonant, one vowel, two consonant word is like Buzz.  Digg was first coded by someone at elance who they later hired.  Love angels Marc Andreeson, Ron Conway, Reed Hoffman, for VCs looked more at who would be a great partner (Greylock, Highland Capital) than who had big pedigree (KPCB, Sequoia).  Chapter in Sarah Lacy’s (@sarahcuda) Once Lucky, Twice Good book. Pay wall will be print’s doom.  Impressed with CNN.com, likes the way Paranormal leveraged social media.  Digg is a discovery mechanism, a news aggregator catering to niche interests, lies somewhere between the Twitter firehose of unvetted breaking news and five guys in a room vetting stories based on yesterday’s news.  Google is for search, social media is for filtering.  10% of Digg users power relevance for the other 90%.  Digg’s content ads appear in-stream, pricing based on popularity, if its gets digged, price goes down, high CTRs of 2-3%, if buried priced goes up, bad content ads gets priced out, fewer buries than diggs.  (Similar to StumbleUpon’s offering)  Watch for platform redesign from uberdigg one-size-fits-all to microdiggs focus on verticals. Digg is hiring and dog-friendly!

Curt Marvis, Lionsgate
Lionsgate has direct deals with XBox, PS3, ZillionTV and is on Boxee, TiVo and Roku via CinemaNow, awaiting more information on Yahoo! Connected TV (SDK out 1Q10).  Founded CinemaNow 6/99, 9 years too early.  Heads up Lionsgate VOD, traditional (broadcast, satellite), EST digital, Xbox, liaison to FearNet, Epix (Lionsgate/Paramount/MGM venture debutting on FiOS this Friday), Break.com.  Works on new revenue models, webisodes, mobisodes, iPhone games.  There is a big difference in philosophy between Silicon Valley and Hollywood.  The technology business is based on versioning, programmers are never finished they just tweak it in the next version.  In the content business you just don’t see Mad Man 1.0, 1.2, they wait til its perfect to release.  This difference in mindset puts Hollywood at odds with Silicon Valley and worked against the early entrants of Paramount and Universal into digital, they saw it sucked and backed off paving the way for Broadcast.com, Real Networks.. In some ways CD-ROMs were the warm up act to the internet.   In 2010, two of the most disruptive businesses in Hollywood are not even digital: Netflix delivers physical DVDs via the US Postal Service and Redbox via grocery store kiosks.  Digital is only 4% of the studios revenue.  Won’t hit $1B this year.  Yet VG is huge.  Reason why Lionsgate is moving into gaming.  DECE, the digital entertainment content ecosystem, formerly the open market initiative, is a group of 50 companies working to create interoperability between devices…DVDs were released after 10 years of working on standardization..but standardization and interoperability are key to creating a broad base around digital distribution.  Keychest, TV Everywhere moving in that direction…playshifting…pay once, use anywhere.  Windows will start closing.

John Welch, Making Fun
Problem with Redbox is that right now it is not capturing the customer relationship like Netflix, will make it harder to transition to digital.  Studios spend lots of money to stop piracy, pointless.  Can’t stop piracy in a linear model.  FB has made a lot of money giving game developers a platform to make money off of VG, the developers in turn buy ads on FB to drive traffic to their games.  Free is the ultimate low, as far as I know, we’re not paying users yet, can’t teach users to pay for something new, must emerge them deeply first, free is a big funnel, tease them through the compulsion loop, play faster, want to do next thing now, embrace free, find a way.

Jon Potter, Digital Media Association
Ambassador organization for the digital media industry: webcasters, tech co, online music and video retailers, Board comprised of Apple, Best Buy/Napster, Live 365, Pandora, RealNetworks.  Sponsor of the Digital Media Conference, Billboard Film & TV Music, CTIA, MUSEXPO, Streaming Media, SFMT, MEFCON, NARM, World Copyright Summit, NXNE, ACL, Digital Music Forum, Billboard Mobile Entertainment Live, Entertainment Merchant’s Association…  Studios are not willing to experiment with business model, they wait til it’s perfect, why mess with their cash cow.  Studios would like to leapfrog MSO to go direct to customer.  Maybe that’s what Keychest is all about.

Mike Vorhaus, Magid Advisors
Hulu is DVR without skipping.  19% of US households use Netflix.  58% of 18-54y believe piracy is ok – need to make content a service, like gaming is become a service.

Scott Brown, Cisco Media Solutions Group
No longer a debate whether content or platform is king, the customer is king.  Thee is no single magic bullet, must embrace multiple revenue streams – ad, subscription, premium, upgrades..  Here is Scott’s blog post:  blogs.cisco.com

Daren Tsui, MSpot
Started 5 years ago, added video 3 years ago, now has 40mm users.

Ted Cohen, TAG Strategic
If featured in an Apple commercial, that’s your campaign.  Too many low priced crapplications crowding the market.

Tim Chang, Norwest Venture Partners, @timechange
It takes 3 months in the top 5 apps to make $10mm, no one has done that, 500,000 is a hit.  Do the math 500,000 x $.99 x 70% developer = cap on marketing budget, spend more on legal cost.  (in-app transactions on free apps important to create game as a service business, makes more sense than the $.99 one-off business model) iTunes works because of the 300mm credit cards on file.  Content may be king, but distribution is G-D almighty.   If you can’t figure out distribution, content is worth nothing.  We will see metrics shift from counting installs to daus as a measure of engagement to cross-promote and drive traffic.  US brands have always had a problem penetrating Asia, particularly Japan.  Interesting to see what happens when Apple starts selling iPhone in China, competing against 1mm jailbroken phones that already exist there.  China has 3 companies with $100mm+ from VG.

Kate Connally, AddictingGames, @kateconnally
Each generation has something that is there own, the phone is the under 20y screen, my job is to make sure that generation is entertained.  We have the best free flash games on the web, we’re the online equivalent of the teenage movie.  We’re not in this to prove something, we’re in this to make money.  Incorporating music into causal game play is one of the most exciting things happening.  Apple’s move to allow in-app transactions for free games is big.  Will be interesting to see how this new engagement will be factored in to Apple’s deck.  Every game distributed on iNetwork has cross-promotion for 5 other games. (Co-publishers can upload here) Also to ensure success work closely with Apple to identify type of apps they’re looking for.  Brands can use gadgets to weave deeply into lives of fans.  AG is a strong brand in english-speaking countries particularly the US (home page has 27mm monthly uniques), haven’t made push into Asia yet.

Allen Duan, MTV Networks
MTV is working with RealNetworks on games and apps.  It’s an iterative process, ok to make mistakes.  iTunes app store provides a great feedback loop, comments told us that South Park’s Mega-Millionaire, where the boys try to win one million yen, was missing a voice over element that was important to audience.  Now have a Colbert app with segments of The Word, has charted in the Top Ten.  China has the largest flash mobile phone user base.  Own WW rights to SpongeBob, work with local team that understands the market.

Madeline Herdrich, Paramount Pictures Digital
Apps are great for theatrical marketing.  Paramount is about to release a Star Trek Captain’s Log app where trekkies can interact on a daily basis, record voice, picture, travels, will interact with Star Trek MMO.  (Many in the audience were very excited) Recently did deal with MSpot to provide movies on Sprint, Samsung’s large screen device – doing very well.  Also make clips available to send as greeting cards.  Working on original content for web and mobile.  The economy slowed development down a bit but good days ahead.  Phones with TV out will allow you to watch movies on phone on a TV set.  As a member of DECE, Paramount backs the buy once, play anywhere business model.

Rani Cohen, TuneWiki
Picture Pandora with lyrics… Music has a $.99 problem, once the track is bought, what is the upsell.  TuneWiki uses the track as a platform and sells game and lyrics products on top.  With TuneWiki you can buy a karaoke track with the real band playing, not the copy band.  Insisted on worldwide publishing rights for the lyrics so can sell in China and Japan where TuneWiki is expected to be huge.

Jason Davis, Disney.com
Game-changers on the horizon – 1.  WiMax ubiquitous connection – providing a constant broadband connection everywhere and anywhere, 2.  computing power plateaus (netbook trend) rethinking production of content, what makes sense for that platform, what’s good enough to bring costs in line with economics without compromising experience, 3.  all consumer devices become network aware and PC disappears.  2y old son not talking yet but knows iTunes icon, how to launch it and can start and pause his favorite videos.  He’s part of a generation growing up digital.  Key media and digital trends over past 10 years:  entertainment on demand(dvr, streaming, download), broadband, mobile, games, social media, UGC.  For the younger kids the connected space is games, for the older kids it’s more about video and music sharing.  Most don’t use cell phones to make calls.  It’s about texting, photos, games, videos, music, web. Disney.com #1 mobile site in US – majority access site via iPod Touch.  Disney is about family and kids, we care about rich unique content that doesn’t push boundaries but provides a safe fun experience that’s age-appropriate, we are a content provider in a connected world across all devices from those in your palm to those in the kitchen,car and beyond.  Disney formula – (Content + Audience)/Digital Connection.  Competition years ago was Barbie, Sesame Street, Hot Wheels, Yahtzee, Monopoly, Nick, Zelda, TV, phone… now it’s YouTube, Xbox, FreeRealms, Clone Wars, JustJaredJr, Mattel, Babycenter, Twitter.  Nintendo once a competitor is now a partner – supermonetize Club Penguin on DS tie back to site, one of the top selling DS games.   Disney.com is not just a website, but an online destination, an online theme park, an entertainment experience.  Watch for Muppets holiday themed content, mom page for family travel, possibility shop, create paintings, comic books, mashups, animate…  In first 5 weeks, 175,000 pieces of artwork were uploaded to site.  Safe UGC for kids.  Now Disney.com is an iPhone app with snap a photo fun…  For the non-family fans of the Disney brand, there is @Disney023 geared toward the brand Disney, formed in 1923, this summer first D23 trekkie-like convention big hit.  FB Alice in Wonderland for Tim Burton, Johnny Depp fanboys, 50,000 fans signed on at Comic-Con competition continuing to feed fandom for IP.

Craig Newmark, Craigslist, @craignewmark
Now a Chronicle columnist, committed to customer service only as long as I live, believe you take care of your customers and you’ll succeed.  We rely on professional curators to some degree, but mostly we rely on people we trust.  Trust is the new black.  Reads Tim Goodman for TV to watch.  Like HuffPo.  Invests time in Wikipedia because it’s for the ages, where we’re putting our history now.  Agrees with Tech Crunch:  transparency is the new objectivity.  TechCrunch has an honest bias.  John Stewart gives no pretense of objectivity.  Would pay to block ads on Hulu, content creators and curators need to get paid, next year will see a change.Is there a place for record labels now?   The absurdity of CNN fact-checking SNL.  Re:  The Interenet Freedom Act (Net Neutrality) which allows ISPs to charge as much as they want for poor service.  It’s wrong that telcos are allowed to pay people to lie for them and mislead the public with sites like handsoff.org.  Telecos are using a public resource and should be acting in the public interest.  Believe most people are good and trustworthy, reason why streets are safe, still need to be careful, there are some bad people out there, but for the most part people are good.  The reason why you hear more from crazies is because moderates have stuff to do.  These days if you don’t have a social media strategy, you’re a tree falling in the woods.  Very accessible, feel free to email in the afternoons at craig@craigslist.org or on Twitter @craignewmark, or on facebook.com/craignewmark.  Blog is at www.cnewmark.com.

Richard Hart, Next Step
Al Gore was on hand at Current TV in San Francisco yesterday as pink slips were handed out.  Don’t always need polished media these days, read a lot build own pictures in head.

Adeo Rossi, Founders Institute & TheFunded.com
VCs keep a long blacklist.  CEOs are fearful to share key insights on who best to partner with for funding.  Recognized a market need for a subpeona-proof anonymous forum for CEOs to safely share unbiased information.  Use gmail because its also subpeona-proof.  Only CEOs allowed in the Club, each applicant is background checked, so far have 13,000 members.  Not looking to monetize, only 1000 hits per month.  If you see something on the public site, it’s likely not true, its a shill.  The VCs on the top of the list love TheFunded because they see a lot more deals.  Re: trends, happy to see the death of newspapers:  landfill makers, forest killers, banking OPM and the combustion engine.  Eventhough FAS 157 says Twitter is not worth $1B, rather worth $0, and in tough times failure is not an option (referencing yesterday’s FailCon) – its a great time to build!  Yes, Build!  Traction path:  idea, team, prototype, launch, adoption, revenue, profitability.  To launch TheFunded, invested $1500 for VC directory, made available to members-only as incentive to join, asked friends to populate with first 30 reviews.  btw:  Netflix marks to market salaries for all employees.

Kevin Yen, YouTube, @kevinyen
Heads up monetization for channel partners and branded entertainment.  Channel partners find YouTube additive, reaches different people.  Insight tool super-powerful analytics tells you demo of who is watching.  When someone is searching for content, they’re engaged, they’re looking to go to another page, whereas when someone is watching a video, they’re in watching mode, more likely to click on the next video.  YouTube is bullish on branded entertainment and you will start to see a lot of it.  Industry is trying to figure out how to scale it to a $100-$200mm business.  If channel partners integrate a brand, all they need to do is check a box.  YouTube stars are in high demand, like Fred and Smosh.  They are choosy about the projects they accept, know the value of they’re audience and won’t betray their fans by selling out.  There is a set than can drive 1mm+ views, and a set that can drive 100,000+ views, and both sets are getting custom promotion work.  Brands like Carl’s Jr and Jet Blue like using social media stars.  The new FTC guidelines on blogger endorsements doesn’t apply to branded entertainment.  The content is entertainment, it’s not the same as news or medical advice.

Anthony Soohoo, CBS Interactive
CBS is not on the boxes yet, not on Xbox, PS3, TiVo, Roku, Boxee, ZillionTV or Y! Measurement is a barrier .  For branded entertainment, the challenge is putting the right content in front of the right audience, have 20 types of branded entertainment shows slated.  Watch for Michael Cera’s Clark & Michael to make a comeback on TV.com.  As far as paid v free, dual revenue stream, subscription comes up every recession, it will cycle back when ad rebounds, CBS is happy with ad model, offers a hybrid, sell shows via iTunes, DVDs, offer them free on TV.com.  Some like ad-supported tv, web, others want to own.  Will start to see some interactivity, has a place in fashion shows and red carpet events, watch for Victoria’s Secret happening in coming weeks.  For brand awareness sometimes overlay works better.  Metrics tracking viewership across all screens will be huge next year.  Experimenting with 360 UGC tie-ins, did I Kissed a Girl singalong contest for the Grammy’s, winners won tickets and appeared on the CBS Morning Show.

Joy Marcus, Dailymotion
60mm monthly uniques, 10mm in US.  We’re a distributor, and syndicator, but don’t produce original content.  DM, like YouTube, provide an audience that is additive to our MotionMakers, demo:  high income, urban, techie.  Re Hulu’s rumored paywall, Hulu is a DM partner, we love Hulu with its gorgeous interface, but the inventory is spotty, can’t always find all the episodes, might be worth it to some to pay for it.  I remember when paid + music = ridiculous til iTunes provided a must have product. DM hosts contests all day long.  For the MTV Awards, did a movie spoof UGC contest, very large submission numbers.  Branded entertainment is here to stay, wouldn’t have said this 5 years ago, but the demand from advertisers is very strong, works well for marketers or they wouldn’t be asking for more.  Demand is so strong, we’re doing a road show looking for a production partner.  DM Motionmakers have been hired to produce commercials for brands, Coke, etc.  DM takes pride is fostering talent.  In the next month will be announcing a partnership for DM MotionMakers with a TV network.

Mitch Galbraith, Funny or Die
In the beginning made a decision to focus on making FOD a destination site to serve our celebrity principal partnerships, foster an environment for celebrity talent, frugal in-house production that never lets spending get ahead of web economics, in-house ad team.  Would send out widgets to recruit in the wild and bring back to the site, would see traffic bumps of 15-70% depending on the virality of the video.  Make $10mm a year, half of ad business is related to campaigns built around brands like McD, Norelco, Paramount…  We did a wildly popular spot for EA Sports with Charlize Theron…another one for MoveOn.org got 2.5mm views, entertaining, funny with brand message.  Make it good enough to mix into content pool, not in a sneaky way, its not misleading the public, they watch what they want to watch.  Right now there are no standards for branded entertainment but there isa group of publishers and advertisers working on it.  The Lindsay Lohan eHarmony spoof was not branded entertainment.  Now that FOD is well-established as a premiere comedy video brand and distribution has matured, we’re starting to syndicate our low-cost high-quality comedy content across web, tv, film.  11/09 FOD is launching a YouTube channel.  1/10 FOD is debuting a  half-hour show on HBO, and FOD’s first feature is in development.   TV is a huge opportunity, excited that Boxee and Macrovision are forging a path but its all pretty nascent, not where we invest.  Platform to discover talent, do look to develop talent and have sent producers on to SNL and Sony Pictures.

Stephen Condon, ATT Digital Media
On paywall, subscription is the flavor of the day, past experience says there is little money to be made from pay model apart from exclusive events not available elsewhere and those for niche audiences.  That said, having a pay option sets a perceived value for the content, user might be feel better sitting through ads if the alternative is to pay $10.  Looking forward to Macrovision’s (now Rovi’s) net guide on tv where you can search for program by name instead of just by day and time, and integrating personal video library.  Technology right now is a huge problem, no one wants 4 remotes, want seamless connection to TV.  Clickable video is tremendously impactful, lack of standards holding it up.

Tom DeLuca, Warner Home Video
Some budget are 100% online, some zero but mostly tv/web go hand in hand to be successful.  Trying to get more efficient with spending, go beyond the banner, love the engagement on Meebo, saw it and said we’re in.  Fan of mobile, LBS bluetooth marketing, couponing is untapped in US, looking to Asia.  Innovation drives decision.  Still an internal sell.  Marketers feel more comfortable with TV buy.  So pricing is key, budgets are very specific.  Want to know if we pay this, then these will be our brand evangelists.  There is a finite qualified audience and we know how much to pay for them.  Expect pricing to stay consistent.

Jim Louderback, Revision3, @jlouderb
At the point where long and short form content is going over the top, web video on tv is here, will take off with Roku’s new offering focused on indies: Revision3, TWiT.tv, etc.  Focused on emotional branding, where trusted host talks about sponsor, better reach to core group of millennial men, we get $80 CPMs for that.  It’s not an impression unless it makes an impression.  CPMs hold up when you deliver audience in a trusted way.  Premium content is whatever the audience wants, J&J bought Babycenter because they wanted new baby moms.  That’s premium content. Glam is half-premium, not specific enough within the women’s category.

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One Response to “#DMCW Digital Media Conference West/More Than Just Fun in a Box”


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