Category: Distribution

Digital Distribution issues

Categories
Apple Distribution Media Consumption

Why are Google TV and Apple TV the wrong approach?

As a long term user of an Apple TV (useful when hacked) and reading recently about the Google TV and adapter boxes to come, as well as other ventures into merging “internet Video” and “The lounge room experience”. These approaches almost always have a 20′ interface: one that can be read from the comfy chair remote from the screen.

Apple’s minimalist approach certainly fits that screen factor, but there’s no real way to get Internet content there, other than where there’s a special deal, such as with the YouTube access. But here we run into the fundamental problem with this kind of interface: try searching for a video in YouTube, or heaven forbid (if you’ve hacked the Apple TV with ATV Flash to get a browser), actually typing in a URL!

Yahoo and Google want to bring a “social” presence to the big screen, as do Boxee and others, but I think they’re fundamentally going about it the wrong way.

Why do we watch TV on that big screen anyway? I think there are two fundamental reasons why we watch TV on a big screen instead of a computer screen (and one of them may indeed be bogus): a bigger image and watching socially.

In our household we have an old G4 laptop that serves as the primary media server via an Apple TV to the biggest screen in the house: in the living area. We frequently watch shows on our computer screen instead of the big screen, particularly when it’s a show I might enjoy, but my partner may not. Or I watch old TV episodes while scanning slides or processing images. But we watch some TV together and when we do that, we watch it on the big screen. Why? Because we’re watching communally.

When I’m watching TV communally I’m already involved in a little social networking with the person, or people, across the room. If I wanted to tweet my approval (or not) of a particular program, I wouldn’t want to do that on the communal screen, I’d do it on a personal screen: in my case my laptop.

The big screen argument may well be bogus: where I’m sitting right now I have a view of our main TV and my laptop screen and my laptop screen takes up approximately 4x more of my field of view than the TV. I would have a bigger screen experience watching on my laptop at 3′ than a big TV at 20′. So, for a lot of content, it’s really only the social aspect that requires the large TV.

I simply don’t want Twitter/Facebook etc. on the program screen. (That big TV.) And I don’t really ever want to explore web video on a big screen TV display without a keyboard or better input device.

And the it hit me: Apple and Google (et al.) are going about it the wrong way. The program goes on the big screen. Period. The interface is on our laptop, or iPhone, or iTouch, or (the killer one) an iPad. All have a keyboard for easy entry of urls and search; there are social applications that work just fine on those existing screens.

Trying to put the interface on a screen 20′ away without a keyboard (and wireless keyboards aren’t really an option) is just wrong: not only is it the wrong place, I don’t want to clutter my program communally (which presumably I’m watching because I enjoy it) with social media that’s personal.

The two screen approach makes much more sense. Put the program on the screen – uncluttered like  the program’s director intended – and put the control and any desired interactivity on another screen. An iPad would seem to be perfect for this, but since I don’t plan on getting one, an iPhone or iTouch or Laptop could also run the interface anywhere on the same local area network.

It turns out that an interface designed for a 20′ experience works equally well as a 2′ experience, but with touch and keyboard at hand.

Ironically a display designed for 20′ all works well at 2″ on a smaller display.

Categories
Distribution Item of Interest

What iPads did to Chuck Hollis’ Family

What iPads did to Chuck hollis’ Family http://bit.ly/c48YsP Exactly what i imagine normal people will do with iPads. I am not normal 😉

This is interesting, if you consider this anecdotal evidence with Charlie Stross’ “The Real Reason Steve Jobs Hates Flash” (don’t worry, it’s way more significant than the current battleground – read the full story, it is important)

Seems to me that Jobs is betting that the cloud-oriented (based?) life on an iPad will be the next generation of computing; and the anecdotal evidence seems to suggest that maybe it’s a fairly safe bet.

i still don’t know how I’d use it but maybe, if it could give me anywhere, anytime access to whatever “other” computer I might have – like a MacBook Pro – then I think there would be times when this would be an attractive alternative to my main computer. But still, how couldn’t I do this on my iPhone? (If I had one.)

Categories
Apple Distribution Media Consumption Video Technology

What is it with Flash?

I’ve just been reading my daily round of news, and there’s still more on the whole “Flash v HTML5” or “Flash v H.264” thing and I’m just arrogant enough to believe I can contribute something here.

Flash is an interactive player that produces a consistent result across browsers and platforms. That’s why publishers like it. But most Flash use is at a very basic level: a simple video player. That is also why early QuickTime interactive programmers liked to use Flash (yes, as a QT media type) for controls and text as QT text did not display consistently across platform.

Flash is a player and not a codec or file format. The current iteration of the Flash player plays:

  • the original “Flash video” format, which is sequential JPG files, up to 15,000 a movie
  • Sorenson Spark, the first real video codec for Flash; based on the very ancient H.263 videoconferencing codec it did not produce good video quality.
  • On2 VP6, a good, high quality codec now owned by Google with their purchase of On2. Still not a bad choice for Flash playback if you need to use an alpha channel for real-time compositing in Flash.
  • H.264 in MP4 or MOV (with limitations) format. Licensed from Main Concept (now owned by DivX).

Note that those same H.264/MP4 files can be played on Apple’s iDevices using the built-in player; or using the <video> tag supported by HTML5 in Safari or Chrome (and IE9 coming sometime).

Flash as a simple video player is probably dead in the water. Flash for complex interactivity and rich media experiences probably will continue for a while, at least until there are better authoring environments for the more complex interactivity provided in “HTML5”.

That brings me to HTML5, which is not a simple player but a revision of the whole HTML tags supported by browsers, that allow native video playback by the browser without plug-in (the <video> tag); local storage (similar to Google’s temporary Gears offering, now replaced by HTML5 support) and a whole bunch of other goodies. Add to this CSS for complex display (and I mean complex – mapping video to 3D objects in the browser, for example); Javascript for interactivity and connectivity to remote servers/databases; and SVG (Scalable Vector Graphics) for creating graphic elements in a browser (useful for interface elements in rich media).

Javascript used to be very slow and not even comparable to the speed of interactivity possible in Flash, but over the last three years all Javascript interpreters have become massively faster, making complex software possible in the browser. (Check out Apple’s implementation of iPhoto-like tools in their Gallery – online version.)

Summing up: HTLM5/CSS/Javascript is already very powerful. Check out Ajaxian for examples on what is already being done. For simple video playback, Flash is probably not the best choice. MPEG-4 H.264 video AAC audio probably is the best choice. For rich interactivity targeted at anything Apple, build it with HTML5/CSS/Javascript – it’s the only choice. It is also a powerful one: Apple’s iTunes Albums are essentially HTM5-based mini-sites; iAds are all HTM5/CSS/Javascript based and not lacking in rich interactivity or experience.

If you’re building a rich media application to connect with a web backend targeting mostly desktop computers, then Flash could still be the best choice.

For building Apps for iPhone, iPad: use the Xcode tools Apple provides free. While Adobe might be complaining to the Feds looking for “anti-trust” sympathy, they won’t get it as Apple is nowhere near dominant in any market, which has to be proven before taking up the point as to whether or not they have abused a monopoly position. Apple are not the dominant smartphone manufacturer; nor dominant MP3 player, nor dominant Tablet manufacturer. (Ok, they probably are dominant in MP3 players and Tablets but they are not, by definition, a monopoly, and Apple will work very hard to ensure they never are.)

Categories
Distribution New Media

Why is the “first audience” important?

One of the important things I learnt from Distribution U back in October last year was the importance of knowing who your “first audience” is:

“Another primary theme, from both Scott and Peter, is that the distribution for every project will be different, because the primary (or starting) audience will be different and what attracts one audience will not attract another. In modern distribution the “primary” audience for any project is one that is already engaged, in some way, by the topic or content. That helps get word-of-mouth buzz going and the audience can spread. Targeting a specific audience is easier (and cheaper) than trying to build a generic audience.”

Then I come across an IPTV Evangelist post by Levi Shapiro titled “The Only Successful Model for Indie Film,” which naturally caught my attention. While I’m not convinced that there is only one model there are some nice parallels drawn for the modern era of distribution from models of the past: what is the modern equivalent to the ‘Miramax’ model of the 1990’s. Number two on their list for modern distribution is this:

2. Nurture a built-in audience: “The film was supported by the army from the beginning. We asked for their help and advice, they read the script and said, ‘Yes, we want you to make this movie and we will help.’ So they gave us access to a base to shoot, and we had a full-time adviser on the set. So we knew that officially the army as an institution was behind the movie.”

Now I think I’m beginning to see a pattern when along comes an uncredited post on the (highly recommended) Future of Movies blog titled “A Target Audience means a Better Box Office.” This whole post is well worth reading because it really accurately sums up the issue:

Let me repeat that key phrase from the quote: ‘…you have to make the movie for someone. Movies that are for a specific audience tend to overperform.’

After a little slam on “personal movies” (I’m just making it for myself!) the post goes on to note that metaphoric Hollywood makes “movies for everyone.” But it is the answer to the question “Who is your Audience?” that cuts to the heart of the subject:

“If you say everyone, you are either kidding yourself or better have about $300 million to make the next Avatar.

If you say the audience is yourself and forget the audience, you should just stay at home and not waste your investors’ money.

However, if you can create a project that speaks to an audience – a specific, identifiable audience then your story can be focused, your casting choices should make sense, you trailer will talk to that audience, and the film will entertain them and have them sharing and Tweeting and Facebooking and Rotten Tomatoing all over the place.”

All that “tweeting and Facebooking and Rotton Tomatoing” is what independent productions need to grow their audience. This is the crux of social media marketing: give your target audience something they love and they’ll spread the word for you. From among these people will come your fans – those few who actively promote the show.

If you consider some of the more successful independent productions – documentary or not – you can see the wisdom of this approach.

For One Six Right – a documentary about “the passion of aviation” focused on LA’s Van Nuys airport – the target audience is the body of pilots. Pilots have magazines and website dedicated to them making it easy to reach out to the audience.

2004’s Napoleon Dynamite’s target audience – the first people interested in viewing – was clearly people like me: nerds! Yes, it was fortunate and crossed over to the mainstream because the movie was entertaining and the word of mouth spread. But without that first audience tweeting and telling their enjoyment of the movie, who would have been interested in one nerd helping another nerd win Class President?

When Joss Whedon needed a project to fill in time during 2008’s writer’s strike, he pulled together Dr Horrible’s Singalong Blog. While appealing to SciFi fans the “first audience” to get that all-important word-of-mouth going were Joss Whedon, Neil Patrick Harris or Felicia Day fans. OK, we can’t all get that sort of head start, but do note that it wasn’t made “for everyone.” (Joss Whedon’s work is always targeted to specific niches.)

When  Aaron Woolf was looking to promote King Corn (a documentary about how damaging subsidies on corn farming has been) he chose to find their first audience through blogs about sustainable agriculture and slow food movement.

Robert Greenwald ‘s audience came from MoveON.org where he was an in-house filmmaker.

And so it goes. By focusing on a target audience – a niche if you will – the marketing becomes clearer and more focused. By saying “no” to the rest and targeting and appealing to the target audience, how you reach the audience becomes clearer and more practical.

When we were creating the Intelligent Assistants for various post-production software programs, I had a very clear audience in mind. In fact, I could probably name the half dozen or so people that I was writing for. They never knew it, but it was easier for me to write something that really met the needs of those people than something aimed at “everyone” using Final Cut Pro or Boris RED, et al.

During the years I was programming the Digital Production BuZZ I again had a very specific group of people that I was programming for. It was clear in my mind who I was not programming for. That made it much easier to determine who would be an appropriate guest for that audience, keeping it relevant and focused for those few and contributing, I believe, to its rapid growth.

You can never make an audience for “everyone”. The market for Predator has very little overlap with Princess Bride! To some degree Hollywood has semi-targeted specific demographics. But demographics aren’t people.

When you talk with me about promoting your independent project (as I will be in New York on March 20th and Boston on March 23rd) expect to be challenged with the question “who’s your target audience?” to clarify any questions. If you can’t define your target audience – the first you’ll promote to – you should stop everything and refine the project until it perfectly meets the expectations of a single, first, starting audience.

Then you can start production.

Categories
Apple Distribution New Media

Why are 99c TV shows only a step in the right direction?

In a January article “Apple pushing TV Networks to slash prices on iTunes” and more recently “Apple to offer $1 TV shows in April” Business Insider/Silicon Alley Insider suggest Apple are pushing the price of programming through iTunes down, with the goal of selling “some shows” for 99c.

This is absolutely a step in reality’s direction but it still prices individual programs at well above the traditional income-per-viewer that networks have traditionally received, and way above what it would cost for an average viewer via a cable or satellite subscription.

At 99c, the content owner would get 65c per download as Apple take 35% and pays for the bandwidth (at about 10c a GB).

65c per viewer per show is right at the top end of what the big four networks have been able to command from advertising: per show, per viewer. (Even the Superbowl only gets 85c average per viewer per 3 hours show).  At the other end, the big four get a low of 25c per viewer per show.

But not all television is “big four” nor is it always worth the network premium. Take one of my favorite shows: The Daily Show with Jon Stewart. The best research I can find is that Comedy Central pays Stewart’s company about $5 million a year or $32,000 each for the 160 shows a year that are produced. The Daily Show has an audience of around 1.5 million viewers according to Wikipedia and other sources. Cost of production to Comedy Central is just about 2c per viewer.

Presumably Comedy Central are turning a profit between the 60c per subscriber per month they get from cable carriage and whatever advertising revenue is generated across the 5 or so showings of each episode.

And yet, through iTunes that show is currently $1.99 or 99c per episode if you buy a season pass for 20 episodes. (One of the few cases where a season pass gives significant savings). It’s still too much.

If Jon Stewart’s company sold direct through iTunes at, say, 10c an episode (because once watched it has little future rewatching value, unlike episodic drama or comedy) then gross revenue would be $150,000 per show or $97,500 after Apple’s cut. (Apple’s bandwidth cost would be around .6 of a cent in SD, or $8550 leaving Apple $43950 gross profit on the sales.)

On the other end of the equation, the content creator (Stewart) gets $97,500 or three times the income for the same show as working for Comedy Central brings.

So, while 99c TV shows are a step in the right direction there’s still a long way to go before Internet, on demand, video reaches fair price parity with traditional revenues. This is not an opportunity for the existing entrenched players to dramatically increase their margins: it will kill the nascent future.

Categories
Distribution Media Consumption Studio 2.0 The Technology of Production

What about the iPad and Media Production?

On October 31 last year Edo Segal wrote an article on TechCrunch with the title For The Future Of The Media Industry, Look In The App Store. The article is definitely worth a read but this jumped out at me:

But the entertainment industry has a vested interest in the success of this new type of convergence, as within it lies the secret to its continuing prosperity. The only way to block the incredible ease of pirating any content a media company can generate is to couple said experiences with extensions that live in the cloud and enhance that experience for consumers. Not just for some fancy DRM but for real value creation. They must begin to create a product that is not simply a static digital file that can be easily copied and distributed, but rather view media as a dynamic “application” with extensions via the web. This howl is the future evolution of the media industry.

It brings together some of the thinking I’ve been doing on how to challenge the loss of revenue from direct consumption or from advertising revenue when digital files of programming and music are so easily shared and copied. Techdirt.com like to summarize their approach as CwF + RtB = financial success: Connect with Fans and give them a Reason to Buy some scarce goods. Many musicians are already doing this and the results are summarized in the article The Future of Music Business Models (and those who are already there).

I agree that CwF + RtB is part of the future: we can’t charge for infinitely distributable digital goods but we can charge for scare goods (or services) promoted by the music.

But I’m not as sure that will work in the same way for the “television” business, which I define as being “television style programming professionally produced” even if it’s never broadcast on a network on cable. Certainly it will be possible to sell merchandising around programming, and everyone is encouraged to do that.

I’ve also written and presented – as long ago as my Nov 2006 keynote presentation for the Academy of Television Arts & Sciences – that producers and viewers have to be more connected, even to the extent of allowing fan contributions.

Well, last night I had something of an epiphany that bought together Edo Segal’s thoughts and my own as I contemplated the implications of the recently announced Apple iPad.

As a brief aside, I find the iPad to be pretty much exactly what I was expecting (although I thought maybe a webcam for video chat) and interesting. Although I don’t see where it would fit in an iPhone/Laptop world, I can see plenty of uses particularly for media consumption. (For example a family shares an iMac but each of the older children have their own iPad for general computing, only using the iMac for essays etc.)

But the iPad doesn’t really lend itself to static media consumption as it has been: where the producer sends stories fully finished and complete to viewers who passively consume. That’s when the import of Edo’s comment struck: there is more of a future in media consumption for those producers who create the whole environment.  This has definitely been done by many movies and shows but usually with more of a consumption-of-information about the show, rather than a rich interactive experience where fans of the show are as important as the producers.

The future of independent production and media consumption is an immersive environment (website, or better yet and iPad app) with:

  • Content
  • Community (forums, competitions)
  • Access to the wider story, side stories or “back story” in various media formats
  • Character blogs
  • Cast and crew blogs
  • Fan contributions and remixes.

Such an experience would be almost a cross between a typical television program and a video game environment. Sure programming is part of what can be consumed on the site; but there are competitions, games, back stories; additional visual material edited out of the program source, with additional shooting, using technologies like Assisted Editing.

Any unauthorized distribution of content will only be distribution the content, not the experience of the program in its full glory.

Now, there’s no particular reason why this couldn’t be largely done on a website, but it is as an immersive iPad app that I think it will really be fantastic. The iPad is very immersive and tactile. It presents no “border” (i.e. browser window and other computer screen elements) to distract from the programming. It begs to be interacted with because holding it in place to watch a 22 or 44 minute show doesn’t appear to be going to be all that great.

There’s one more selling point for the iPad: it allows in-app sales, so some of the “reasons to buy” can be sold very transparently without even leaving the app’s environment. Avatars, screen savers, certain games or activities might carry a small charge. Yes, even the media itself (or some of it) could carry a small transaction charge. Smooth, frictionless sales in an environment optimized to engage people in the story of the show.

Apple’s iTunesLP format is a very small start in this direction by building a micro-site for the album artwork. This is very powerful because it supports most modern web technologies in a tight package and interactive features (all, b.t.w., without Flash but looking a lot like Flash).

Edo has some further good ideas and I recommend reading the article at the top of this post.

Categories
Business & Marketing Distribution Random Thought

How do we solve the problem of media piracy?

So apparently some author comes up with a figure that online unauthorized distribution is costing the book publishing business $3 billion a year. (Once again repeating the totally bogus argument that each download is a lost sale but that’s for another post.) One has to question the independence of the study when the writer works for a company presenting a “solution” to the problem they identify, but let’s leave it for the moment.

This is only the tip of the iceberg. There’s another industry that costs the book publishing business $100 billion a year in lost sales: libraries. Using the same methodology as the study in the cited publisher’s weekly article above, this blogger calculates that libraries have cost publishers $1 Trillion dollars in the last decade.

So, if we’re going to solve the book “piracy” problem in a way that really helps publishers, we’ll have to close all the libraries. After all they’re costing publishers more than 30x more than any unauthorized distribution does: even if you calculate that unauthorized distribution with totally bogus methodologies.

In fact, photocopying also costs the print publishing industry billions of dollars a year, so we should regulate their use. In fact, if the RIAA/MPAA want a “three strikes” rule, then it should be applied to everything.

A three-strikes rule (as introduced in France) would mean that if an unsubstantiated assertion from a record-company-appointed “watchdog” is made against an IP address, the account would be cancelled and the user taken off the Internet. (Note: this is without judicial process; without any proof that the account holder did the download; with a system that has accused dead people of “piracy” or any other legal process we normally hold as being important before issuing punishment. At least there has to be a trial!)

So, if this is a good idea for music or movies (like they’re some “special” category) then it obviously should be carried through to protect print publishers as well.  According to “Freedom to Tinker” it would work like this:

The government sets up a registry of accused infringers. Anybody can send a complaint to the registry, asserting that someone is infringing their copyright in the print medium. If the government registry receives three complaints about a person, that person is banned for a year from using print.
As in the Internet case, the ban applies to both reading and writing, and to all uses of print, including informal ones. In short, a banned person may not write or read anything for a year.
A few naysayers may argue that print bans might be hard to enforce, and that banning communication based on mere accusations of wrongdoing raises some minor issues of due process and free speech. But if those issues don’t trouble us in the Internet setting, why should they trouble us here?
Yes, if banned from using print, some students will be unable to do their school work, some adults will face minor inconvenience in their daily lives, and a few troublemakers will not be allowed to participate in — or even listen to — political debate. Maybe they’ll think more carefully the next time, before allowing themselves to be accused of copyright infringement.
In short, a three-strikes system is just as good an idea for print as it is for the Internet. Which country will be the first to adopt it?

After all, if it’s fair to have people cut off the Internet (and their life) based on three unsupported, unproven assertions from anyone, it should apply to everything. Right? It should apply to the children of Record Company executives (who apparently only got a “talking to” from their father -wish I could find a link to that story).

This is, of course, after the RIAA and MPAA have totally failed to establish that they have had any loss from piracy. (The biggest grossing movies were mostly pirated before release from within the studio.) Study after study (sorry Adage login required) after study shows that those who download music are the biggest buyers of music, but facts have never gotten in the way of idiot assertions from these organizations.

So, either we apply “three strikes” under some reasonable regime that would require the record company or movie studio to actually do what the law requires and identify the person at the account and prove that they uploaded a file as “making available” is not established legal precedent in any jurisdiction; or we’ll allow a regime where anyone can be accused of “piracy” by any other person without proof or the need to follow established law.

Which are you going to support?

Categories
Distribution Random Thought Studio 2.0 The Business of Production

What if there were no established TV production “industry”

One way or the other I’ve been thinking of what a “new media studio” would be like; how will people be paid; what would drive consumer demand; and all the rest that goes with a theoretical construct of a “replacement” for what we have now. Practically speaking, it’s more likely to evolve with many ideas in parallel, than come in one sudden upheaval that creates a new greenfield.

Although, as an aside from my main theme, I look ahead two years to when the actors’, writers’ and directors’ contracts come up for renewal. My feeling is that they’ll either have negotiated a settlement before the contract runs out, or we’re in for an apocalypse.

Remember that this a purely theoretical construct so I’m forgiving myself for not having every detail covered. What set me thinking, horrible-though-it-is was Demand Media. Wired’s article The Answer Factory: Demand Media and the Fast, Disposable, and Profitable as Hell Media Model is really a nasty kick in the mouth for production skills: essentially “quality” has no place in this (highly profitable) production line, where costs have been driven down by competitive pressure. It is probably the dystopian future we were warned against when the industry became “democratized”.

Fortunately I don’t think it’s feasible for television-like content. (I’ll just call it Television, but I mean the sort of content that people watch on networks, cable channels, or off a satellite or even via Hulu.) For a thousand reasons I’ll bet at a minimum a more complex production process and higher demands for writing skills. Even relatively successful Internet Shows often have underdone production values from lack of quality writing, lighting or sound. (And some are excellent in all three because they have been made by “old school” folk.)

But let’s step back and apply some of the principles and see what might come of it.

Based on audience demand

Instead of basing program ideas on  some ‘gut feeling’ of a producer or executive we can take a lesson from the Demand Media case and design shows tailored to specific audience demands. Demand Media have algorithms that watch search terms and derive future “shows” as answers to questions people are asking ‘now’.

I’m sure there are ways of tackling similar challenges for TV shows. Monitor social media interactions for the types of comments being made about shows; use that data to derive algorithms to direct existing shows and find ideas for shows that will have an audience, and the business model for that audience would also be known. (See below, Funding it All)

Production Line

Everything becomes a production line. It’s going that way now, but the whole process needs to not be recreated anew for each show. In a greenfield model, employment is constant with people moving from show to show as they come and go; moving from one creative grouping to another.

Everything is standardized: production gear, cameras, record formats, etc. Standard workflows, controlled by the studio.

Talent

Talent would be mostly staff – from writers, production crew, actors, editors, audio post – paid decent salaries and with good benefits. Everyone would get a decent salary with a flat salary structure (instead of the enormous salaries for some) but would also share in the studio profits. Everyone is motivated to make it work.

Talent (across the board) is nurtured in their craft advancement based on merit. (Implicit in advancement is the concept that people will leave, unless the studio always grows.)

Production

Put production in inexpensive facilities, either purpose built (long term) in inexpensive locales (low cost counties) or in excess facilities from a declining (declined) old industry.

I see a lot of standing sets and green screen, and frankly a lot of synthetic sets.

Again with standardized production gear, all matching grip and common set modules for set construction. Work on the model of Southwest, JetBlue and Virgin America: one standard service, in standardized aircraft with much simplified maintenance and costs for spares.

Standardizing on common equipment, workflows, formats and outputs would save production and post huge amounts of money. Equipping with modern gear that has great quality at affordable prices taking advantage of all the cost reduction of the last decade.

Production will require talent. We need it to “look and sound like Television” because that’s where a large market is at (if we’re in a greenfield remember). It will still need to be lit well; recorded well and finished to a high standard, but I would argue that the most profitable approach would be to go to the least expensive “good enough” solution. And by “good enough” I do mean that it has to be good, but maybe for this type of content, shooting with a Viper might be “more quality than we need to pay for”. But AVC-I or direct ProRes acquisition with a KiPro makes for high quality and efficient pipelines that maintain “good enough” quality.

Apply that concept across the range of production departments: good enough, but not luxury.

Promotion and Audience Building

I think there are a lot of lessons from the independent film producers who have learned how to build audiences, and it’s something I’ve presented on before. It will be more building and nurturing fan bases and involving them in the process as much as possible.

Funding it all

Ah yes, the million dollar question. Or multi-billion dollar question if we’re talking an alternative to the current Television industry. Of course, I don’t have any definitive answer because, well frankly, there won’t be one. As was obvious at Distribution U, there are many avenues to funding a program:

  • some audiences will want to pay directly, and that’s a viable business model as I’ve demonstrated before, for even quite small audience sizes;
  • less expensive productions make it easier for one advertiser (a.k.a. brand in recent discussion here) to sponsor the whole show (Mark Pesce’s Hyperdistribution model)
  • use the show to promote merchandise, live performances, or other scarce good.

In one part of my mind I think a model like this could actually work. In fact I’m sure some variation on this is part of Jim Louderback is attempting with Revision3 and Kip McClanahan is attempting with On Networks. I suspect that no-one is going as radical as Demand Media, and I hope no-one ever does.

Kip McClanahan
CEO, On Networks

Categories
Business & Marketing Distribution

What did I learn about distribution at Distribution U?

Although I attend a number of conferences a year – often as a speaker – I mostly find that they go over ground that I either already know, or have heard the panelists/speakers go over before. In fact in 2008 there was one conference that I found extremely valuable – The Conversation organized in part by Scott Kirsner, who’s CinemaTech blog should be on everyone’s reading list.

So, naturally when Scott teamed with Peter Broderick on the Distribution U conference I signed up immediately. The conferences, held last Saturday, Nov 7, was a one day overview and summary of what people are doing to promote their independent films. While my primary interest is in the (as yet undeveloped) field of “independent television”, there were a lot of lessons from Distribution U (link is to Scott’s wrap up).

For me, the concentrated day helped me consolidate a lot of the thinking I’ve been doing on distribution over the last 3 or so years and helps me build on some of the thoughts I’ve been sharing via the (free) Supermeet 2009 magazine (How to grow an audience for your independent project) and via sessions at Digital Video Expo and other places.

Trying to summarize my eight pages of notes (a new conference record for me).

Scott Kirsner’s “scene setting” session started by pointing out how all technology innovation is immediately rejected by “the established players” – Edison hated projected film because he feared (accurately) that it would kill his profitable Kinescope business. We still see this happening today. His primary point is that “participation and engagement” with audiences is a crucial tenet of modern audience building – a term I prefer over “distribution”.

Another primary theme, from both Scott and Peter, is that the distribution for every project will be different, because the primary (or starting) audience will be different and what attracts one audience will not attract another. In modern distribution the “primary” audience for any project is one that is already engaged, in some way, by the topic or content. That helps get word-of-mouth buzz going and the audience can spread. Targeting a specific audience is easier (and cheaper) than trying to build a generic audience.

Another primary theme is that revenue comes from all sorts of places, not just “traditional” ones. A revenue mix seems to be the new normal for independent projects.

For example, the audience (and revenue) for Brian Terwilliger’s One Six Right has come from pilots, because the film is really about the romance of flying small planes and should appeal to every pilot in America. One Six Right has made money: (corrected after comment from Scott Kirsner)

  • selling DVDs directly (9,000 in the first 9 days it was available);
  • selling the soundtrack on CD (30% who buy the DVD also buy the CD of music unknown other than in the documentary);
  • selling posters signed by the 24 year old filmmaker (so far $30,000 from sale of posters)
  • listing (and selling) the DVD and merchandise through a catalog for pilots (Sporties);
  • selling through Amazon (where apparently the tip is to keep supply to Amazon low, which keeps them from deep discounts and keeps the sale price high);
  • selling a calendar (people pay to have the project’s promotion on their walls);
  • deals with local general aviation airports for local premiere’s;
  • giving the show to public television while retaining 4 x 15 second spots before and after the show to promote the DVD and merchandise;
  • creating a half hour “making of” special that builds the documentary out to a 2 hour or 90 minute package and selling that to Discovery channel. This sale apparently covered the original budget, on top of all the income from all the other revenue-generating activities, which is substantial.

I don’t know the budget for 161 right but some quick math shows that the initial DVD sales and calendar sales account for about $210,000 in revenue alone.

In fact, engagement with the audience starts at the very beginning of the project, rather than after production is complete: build an audience as you build the project and neither is more important than the other. Starting early builds an audience for the project and it builds anticipation.

Peter Broderick focused on “Hybrid Distribution” – don’t throw out all the “old” methods but adapt them and slice up the rights to the filmmaker’s best advantage. Never give anyone more rights than they need, and always retain direct sale rights for DVD and digital downloads. Although Peter gave a lot more examples at the seminar, his 10 Principles of Hybrid Distribution article provides an excellent overview.

I really appreciated the depth of examples that Scott and Peter provided, and the willingness to “talk numbers”. In most cases we got specific examples of the revenue from each type of activity surrounding the production.

Scott Kirsner will be speaking on “Building Big Audiences and Generating Revenue in the Digital Age” in San Francisco on Tuesday Dec 1 and I recommend you go if you have any interest in the subject – it’s based on his book Fans, Friends, and Followers (my copy is on the way and I’m looking forward to reading it).

I think this quote from Lisa Seward of Mod Communications summarizes the changes best:

You used to use your budget to buy an audience. Now you have to invent ideas to attract an audience.

The quote comes from an excellent presentation, referenced by myself and Larry Jordan already, The Audience is always right.

Categories
Distribution Media Consumption

Why is Television like newspapers?

I’ve had an inordinate interest in how the news industry, particularly newspapers, are faring in the Internet age. It’s only relatively recently I realized why I thought that was even relevant to the fields I study – among them what is going to replace (or grow in parallel with) the current model of “Television”. Then it struck me…

Television is to newspapers and magazines what movies are to music.

In the music and movie models we’ve been used to, there is a direct transaction – payment is made to buy music (on disc or download) or to pay to view a movie (in a theater or by buying a DVD). This is a fundamentally different model than Television, where the content is “free” in return for your “attention” to advertising. Advertising supports both Television and newspapers and magazines.

Yes, people pay a small amount for newspapers and magazines, but that is nowhere near the cost of producing the magazine. Newspapers and magazines (I’ll just say “newspapers” from here but I include magazines) are heavily subsidized by advertising or they can’t survive. (Consider how many magazines have been closed in the last year all attributed to the “loss of advertising revenue”). Given that I don’t believe advertisers are coming back, what are the implications of the music experience for movie distribution, and the newspaper experience for television distribution. Without distribution there is no production.

The music industry has found that “infinite goods” – those that can be produced for close-to-zero (a digital copy) – has changed the market. Classic economics tells us that the sale price will trend toward  incremental cost of a sale. For music that’s zero or close to it because there is no scarcity. Scarcity, again classic economics tells us, is what drives up price: no scarcity and the price drops toward the marginal cost of producing the copy. (Yes, classic economics ignores the cost of production.)

The movie industry is finding some of the same dynamics happening, except that the movie industry has an advantage: the primary product is not the movie, but the “going to the movies” experience. Clearly the movie-going experience is more important than the movie otherwise attendance would have dropped dramatically as the quality of picture has dropped. Instead movie attendance is up despite audiences being treated like criminals with bag searches and, in some theaters, full body, airport-style scanners.

The smart people in the music industry have also realized that the business model they grew up with – where Record Companies actually had a role to play – is no longer viable. (When you have to sue your customers to “keep control” of your product, you have acknowledged a total failure of business model and you should be allowed – encouraged even – to go out of business.) So they’ve been deriving new business models that use the non-scarce good (the recorded music) to promote scarce goods – like concerts, experiences and merchandise.

Music, and movies, will continue to have “direct pay” models but they won’t be the same as in the past. (Nor should anyone who has two working neurons think the models can remain the same.)

It is newspapers and television that I’m worried about. The current models for both are unsustainable. Advertising revenue has dropped dramatically partly because of the current economic conditions, but long term because advertisers have better alternatives than renting some irrelevant eyeballs for 30 seconds at a time with a message that’s irrelevant to 99% of the audience who aren’t ready to buy your product right now.

Newspapers once provided a valuable service(s) that have been replaced by better models online. Craigslist has effectively killed the cash cow of classified advertisements because it’s a better model (free, instant). No-one really needs a newspaper to learn the session times for the local movies (available online) nor really, to decide what car they’ll buy next.

People, by and large, don’t need newspapers for news either. Not that most newspapers did that much “reporting” anyway. Surveys of typical local newspapers showed that they often have as few as five or six “real” stories (researched and written by staff reporters) not sourced from elsewhere. Most “news” comes from Associated Press, Reuters, people-in-foreign-countries, press releases, etc.

Worse, most newspapers (and television news) do not really vet their stories, taking away one of the major claims that we “need” professional journalists because, unlike bloggers, they “fact check”. (Really CBS? Who “fact checked” last night’s industry-lacky piece full of major errors on 60 Minutes?) It’s hard to make the case that the majority of professional journalists actually fact check anything. (Quick quiz – in any news story that you’ve been involved with and then seen the reporting, has it ever been completely accurate? Never in my experience, never.)

So, when the impetus for “demand” drops, and the money to produce evaporates because even the advertisers have a better way to do things, newspapers will, of necessity, die. That does not mean that great journalism will die, but it will be funded differently and have very different forms.

Television, including basic cable, is facing the same challenges: advertising revenue is drying up and unlikely to come back to previous levels, meaning the whole model is probably broken. Not this week, not next year, but long term Television as we know it is being destroyed by this lack of advertising revenue; the failure of the “players” to adapt business models, and that audiences for any given show are much smaller because there are so many choices.

What we’ve known as Television will have to evolved into a model that allows for “any program, any time, any device for a fair price” (i.e. a return that is similar to the return from advertising, not an attempt to get a 4x return as the Networks currently do with iTunes et. al).

I suspect that will, like with the Record companies and Movie Studios, leave the Networks out of the picture as middle-men imposed between producer and audience.

I don’t (yet) know what that model is going to be, or indeed if there will be only a single model, but the transformation of a nearly-70 year old business model based on scarcity (broadcast licenses) has to evolve when that scarcity no longer exists. And it no longer exists.