Tag Archives: film

Delicious Bookmarks for September 24th through March 8th

These are my Delicious links for September 24th through March 8th:

Delicious Bookmarks for July 21st through August 31st

These are my Delicious links for July 21st through August 31st:

Delicious Bookmarks for July 20th

These are my Delicious links for July 20th:

  • Ed Ulbrich shows how Benjamin Button got his face | Video on TED.com – A look at Digital Domain's process for creating the fully CG performance of Benjamin Button's head for the first hour of the film. Using high-resolution 3D scanning and the F.A.C.S. methodology they developed a template for creating a digital library of facial components that could then be animated using the actor's actual facial expressions.

Crystal Ball for Studio Execs or WWJD?

My dad and I had a long conversation over lunch today (at In-N-Out :-) ) about my most recent blog post. He mentioned that the studios are keeping a close eye on what is happening in the music industry as a preview of their own potential future 5 years down the road, and that they are taking preventative measures based on what they see. I replied with two reasons why I don’t think that’s something to brag about. First of all, that 5 years is more like 2 years (if that) and it’s shrinking every day. The pace of technological progress has only accelerated since it first began to disrupt the music industry, and it ain’t slowing down. Secondly, the film industry’s approach to understanding the data has been merely to plot historical events and interpolate a trajectory. They have made no attempt to understand the underlying equation and thus extrapolate the end-result. In high-school trigonometry terms, they are plotting points on the left half of a parabola without understanding that they are part of the graph of y=x^2. How do I know this? Because you can see it in their actions, they are clearly trying to treat a growing number of symptoms with no clue about the nature of the underlying disease.

My dad agreed with me and then said there’s a lot of money to be made by the guy who can show them what the future really holds. Being the giving person that I am, I hereby offer it to them free of charge (and with charts, no less!):

Audience Graph
First of all, your audience is moving from conventional offline distribution channels to new online ones. You may think you have the control to slow this, but you don’t! At this point, you must consider it *axiomatic* that every genie will get out of every bottle. There are over a billion people on the Internet, and it just takes one to put your content on BitTorrent and all your anti-piracy efforts are rendered moot. Content consumption is moving from offline to online whether you like it or not. So, you have a choice: get on-board by giving consumers what they want and keep some of them as customers, or drive them away entirely by ignoring their needs. If you choose the latter, you probably won’t ever be able to win those lost customers back. And even if you choose the former, you will most likely never be able to aggregate the same size audience for a given piece of mass-market content online as you could offline. Mainstream media (or ‘head’) content is a first-class citizen offline, where there is artificial scarcity and so being first in line counts for something. But, there is an (effectively infinite) abundance of content online and what matters most is finding what is most interesting to me.

ARPU Graph
That’s the bad news. Here’s the good news, by moving online you can build deeper relationships with that smaller audience and explore variable pricing options to increase the average value of each individual fan (again I reference Josh Freese, who illustrates this point not without irony). However in order to fully engage your most passionate fans and get them to give you more money, you can’t continue to just sit back and pump out passive entertainment experiences with some snazzy marketing around it. You will need to invest in turning your content into 360° entertainment and change your mentality about selling it as a packaged good.

Cost Graph
Yes, I know that sounds expensive. It definitely won’t be cheap and will require you to build out new competencies you don’t have today. But you’ll be able to pay for it (and then some) with all the money you save by getting out of the very expensive mass-market content and offline distribution businesses.

So if you’re willing to become an online-first media company, I think I can promise you’ll return to profitability in 5-10 years depending on how quickly you move to jettison your legacy offline businesses. Now, your shareholders may not be so keen on all these restructuring costs and write-downs, not to mention all the money you’re going to be leaving on the offline distribution table by focusing on getting into the online business while you still can. But, that’s ok because they value the long-term survival of the company over short-term profits. Right? </sarcasm>

Mass-market content and offline distribution are declining businesses, but they are still quite profitable. Especially compared to niche content and online distribution, which are clearly ascendent but still a rounding error to the bottom-line of these major media companies (not to mention the corporations that own them). I believe the decline of the former is going to be a lot quicker than the entertainment industry thinks (because they believe they can control it and they don’t understand the exponential acceleration of technological progress) while the rise of the latter will be retarded by a lack of investment in developing the infrastructure to make it a profitable business. The film industry obsessively spends hundreds of millions of dollars to build the biggest anti-piracy stick they can while watering the online video carrot with an eyedropper. If they were to put meaningful time and money into figuring out how to make legal online content consumption compelling and profitable, it would be more effective than spending a hundred times that on anti-piracy efforts. But they won’t, instead they will continue to do everything they can to prop up dying (but profitable) revenue streams, including stifling the growth of the emerging revenue streams that could one day take their place. And so, the studios will some day (soon) find themselves with not enough offline money and not enough online audience from which to try to make money.

If I were the head of a studio, I would stop trying to figure out how to grow the buggy whip business by keeping down the automobile. I would also recognize that transforming my profitable if shrinking buggy whip business into a money-losing automobile business making it up in volume is probably not in the best economic interest of my shareholders. So instead of throwing good money after bad trying to keep the overall buggy whip market from shrinking, I would focus on getting as much share as possible while all my competitors spent their time futilely worrying about the cars. I would ruthlessly cut costs to maintain profitability in the face of shrinking demand. And, I would put all those profits into a dividend so my shareholders would stop pressuring me for growth that isn’t there. Finally, when it’s time to close my buggy whip factory’s doors, I would take all that dividend money I earned and put it into the best automobile company I could find (and then I would be sure to sell that ~80 years later ;-) ).

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Delicious Bookmarks for January 27th through February 1st

These are my Delicious links for January 27th through February 1st:

  • Bookmarklet Builder – Handy tool for building bookmarklets, can convert back and forth from normal Javascript to bookmarklet form.
  • TwitterFriends – Your relevant network on Twitter – The most comprehensive (and interesting) Twitter stats application I've found to date. Instead of gimmickry about how you rank against other Twitter users in meaninglessly vague and opaque terms like "authority," this exposes the hard data about yours and your network's behavior compared to average, and gives you some pretty cool visualizations. If I understood statistics and such better, I think this is the kinda tool I could totally geek out on.
  • Which HD video Web service is the best? | Webware – CNET – In depth side-by-side comparison of online video hosting services.
    "- The victor: YouTube
    This time around, we feel really comfortable giving YouTube the quality crown. Its HD encoding is really nice, and you can't beat the price (free). One thing that really separates it from the others is that you can do so many things with your clip once it's up there. You can replace the music, as well as add subtitles and annotations. Community members can also respond to it, adding in-line video replies."
  • The Bacon Explosion – Take Bacon. Add Sausage. Blog. – NYTimes.com – A (very tasty) example of the power of social media to spread content virally. According to the article, the blog post about this recipe garnered 27,000 views 2 days after being posted thanks mostly to Twitter, Digg, and StumbleUpon. In the month since being posted, it has been viewed 390,000 times and linked to from 16,000 sites. Not bad for some bacon.
  • Secrets of my success: Netflix CEO Reed Hastings – Jan. 28, 2009 – A brief profile on Reed Hastings w/ business tips:
    – Target a specific niche: When there's an ache, you want to be like aspirin, not vitamins. Aspirin solves a very particular problem someone has, whereas vitamins are a general "nice to have" market.
    – Stay flexible: We named the company Netflix (NFLX), not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet.
    – Never underestimate the competition: We erroneously concluded that Blockbuster (BBI, Fortune 500) probably wasn't going to launch a competitive effort when they hadn't by 2003.
    – There are no shortcuts: Occasionally great wealth is created in a short amount of time, but it's through a lot of luck in those situations. You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.
  • Streaming video cannibalizing DVD rentals, says Netflix – Ars Technica – Netflix results show that streaming video views are taking away from DVD-by-mail volume. Given that there is no price difference (both streaming and DVD-by-mail cost the same per month), the streaming bitrate is at DVD quality or less, and the selection of films available for streaming is worse than that of DVD-by-mail, this is further proof that *convenience* (the only real advantage of streaming vs. DVD-by-mail) is a very powerful motivator for media consumers.
  • Facebook Pages Leaderboard – A neat tool for tracking the popularity of Facebook Pages by number of fans over time. However, the data doesn't appear to be totally reliable. So, be sure to check the current stats on Facebook before hanging your hat on any of these numbers.
  • Announcing the AllFacebook Pages Tracker – Interesting facts about Facebook Page fan stats (as of January 27, 2009)
    – Barack Obama is #1 w/ 4.7M fans, Homer Simpson is #2 w/ 2.6M, and Coca-Cola is #3 w/ 2.3M (I pulled the stats for these from Facebook directly)
    – All Facebook is tracking 620,000 Pages
    – Only 50,000 Pages (~8%) have > 1,000 fans
    – Only 276 Pages (~0.04%) have > 500,000 fans
  • Deborah Schultz: Life isn’t binary, neither is the Social Web – "The social web is my web – it's PERSONAL to me. I am not creating media when I am online so much as I am connecting with people using media as my medium…The social web can actually provide much deeper and more interesting connections for customers and companies than simply being a marketing channel – it ties into the entire product lifecycle. And that is where stuff gets really interesting…and much more complex. This is where relevance and context and trust and intention all come into play."

Delicious Bookmarks for January 9th through January 23rd

These are my Delicious links for January 9th through January 23rd:

  • Tube Mogul Buys Video Analytics Firm – "TubeMogul currently has over 40,000 users, ranging from networks and studios such as CBS, to web only video producers and bloggers like 'Fred.' Illumenex current clients include Internet TV pioneer Revision3 and comedy site 'eBaum’s World.'”
  • "Don’t forget…" – a set on Flickr – Really cool street art project in Berlin (where else) that is adding Photoshop interface elements to billboards to remind passers-by that these images of beauty are artificially enhanced. (via https://addons.mozilla.org/en-US/firefox/addon/9591)
  • Facebook Developers | Facebook Developers News – Facebook is now allowing custom FBML tags, essentially code libraries produced by 3rd party application developers that can be used by other application developers to add functionality from one app to another. This opens the door to officially sanctioned mash-ups of Facebook apps, which are already mash-ups in themselves. Using the term mash-up in a non-ironic fashion makes me want to punch myself.
  • The Inauguration of President Barack Obama – The Big Picture – Boston.com – A poignant collection of photos of Barack Obama's inauguration and the reactions to it around the world. My favorite is the American soldier in Iraq crying tears of joy (#19). The fact that the routine transfer of power in our country can inspire such powerful reactions around the world is evidence of what a truly global world in which we now we live. And I believe it shows that we as American citizens are making progress towards redeeming ourselves in the eyes of the world, who hold *us* (not just our leaders) accountable for the actions of our nation.
  • Transcript – Barack Obama’s Inaugural Address – Text – NYTimes.com – Text of Obama's inaugural address.
  • Rev. Lowery Inauguration benediction. Transcript. – Lynn Sweet – "Lord, in the memory of all the saints who from their labors rest, and in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get back, when brown can stick around — (laughter) — when yellow will be mellow — (laughter) — when the red man can get ahead, man — (laughter) — and when white will embrace what is right."
  • Resources Every WordPress Theme Developer Should Know About! | Arbenting – A comprehensive list of resources for WordPress Theme development.
  • YouTube Videos Pull In Real Money – NYTimes.com – Many have long claimed that the only profitable type of online video content was repurposed TV shows/films or other "professionally produced" content. This article give several examples dispelling that myth and showing that the online video audience and business has reached a point where even so-called amateurs can make real money. For example, Michael Buckley is making >$100k/year from his homegrown entertainment news show "What the Buck?" purely through YouTube's partner program.
  • Op-Ed Contributors – The End of the Financial World as We Know It – NYTimes.com – Comprehensive (if not revelatory) overview of some of the primary drivers of the financial bubble and resulting collapse by Michael Lewis and David Einhorn. Puts things like the failures of the ratings agencies and the greed of financial services company shareholders, which have been examined more deeply on their own, into the broader context of our current hindsight.
  • YouTube Is Changing How We Think About Video | Techdirt – "The power of YouTube is that it enables something entirely new and different to emerge and to thrive. In the history of disruptive innovations, merely taking a product from one medium and moving it to another usually doesn't get very far. It's the projects that really embrace the new possibilities that are only possible via that new medium that really make an impact."

If you love something (and/or want to make money from it online), set it free.

This past Sunday, I had a long discussion about the NY Times article on Time-Warner’s new content-centric strategy with my father, who happens to be in the film business. While the article touched on some of the complexities that exist in the legacy value chains for both movies and tv, I thought it glossed over important details and ended up being somewhat contradictory. On the one hand, the author labels the move to spin off T-W Cable as “eviscerating the once-popular corporate notion peddled by business consultants and merger specialists that content and distribution should reside under one roof.” But just a few paragraphs down, he talks about T-W’s interest in NBC Universal, primarily as a distribution outlet for the tv shows T-W produces.

In theory, a pure-play content company would *just produce content* — it wouldn’t program (i.e. tv network), it wouldn’t distribute (i.e. movie studio), it wouldn’t deliver (i.e. cable/satellite provider). This type of horizontal focus (or modularization) is advocated by Clayton Christensen once a market of vertically-integrated solutions has reached a “good enough point” for consumers, because it enables the firms at each layer in the value chain to focus on what they do best and exploit best of breed solutions available in the rest of the stack to do the rest, thus maximizing overall efficiency and profit. In our terms, a company purely focused on making the best content is free to choose *whatever* distribution solutions will make it the most money from that content. In NewTeeVee’s analysis of this same NY Times article, they said “How we watch is all the same. What we choose to watch, however, is a different story.” In other words, distribution is the commodity and content is the differentiator. I couldn’t agree more if the only channel in question is online. But as long as content creators want to exploit their content beyond the Internet, there is a different set of rules, and those rules generally extend to what those creators can do with their content on the Internet as well.

Studios can no longer claim ignorance of what consumers want — Jeff Bewkes (T-W CEO) tells a story of how he was told by file-sharers “We’ll pay for movies if you give it to us the right way” — but, they are now claiming (however ironically) impotence to deliver it —  that the major stakeholders in their other (more lucrative) means of exploitation, like Walmart (DVD), theater owners (theatrical, duh), and cable/satellite operators (PPV), won’t let the studios innovate too much online for fear of cannibalizing the other channels. As much as this may be true, the studios are pretty happy to have their hands tied because they already know how to (and do) make a lot of money from those other channels and they have barely started to figure out how to make real money online. Going back to Christensen, this is a classic example of an entrenched incumbent seeing disruptive innovation coming a mile away and doing nothing, as epitomized in this quote from the NY Times article:

But until technology forces Hollywood’s hand — Mr. Bewkes suggested that it would take three to five more years before high-definition videos are delivered conveniently over the Internet — the industry will retain its grip on sequential windows of release.

This all stems from the fundamental discontinuity of extending an offline media business online. In the offline world, control is the key to success — it is what enables the winners to exploit the inherent inefficiencies in the system at the expense of the losers and, to no small degree, consumers. In the online world, attempts to retain control generally stifle growth by limiting exposure — you have to be willing to let go of your content to a certain degree and you need to build business models designed to take advantage of that approach. Not only is this counter-intuitive to a lot of conventional media executives, who have built careers (and personal fortunes) retaining the tightest controls possible, but it may also be in direct conflict with other important revenue streams, as we see with T-W above.

Unfortunately, there is no easy solution for those trying to bridge the gap. Some companies, like the NY Times itself, are leaping across this digital divide while they still can and largely abandoning efforts to artificially protect their offline business from the specter of cannibalization. And, they seem to be having some success. This past Sunday evening, there were five NY Times stories on the front-page of Techmeme (the next closest sources were TechCrunch and CNET with two stories each), which should be driving some solid traffic to nytimes.com. By making their high-quality content available for free on the web, instead of holding it back to drive paying offline subscribers, the NY Times is aggressively driving readers (and thus ad revenue) to its online business. While those online readers may not be as lucrative as the offline subscribers today, there’s lots of room to improve online monetization if you have the readers, and offline readership is only going down and fast. On the opposite end of this spectrum is the Philadelphia Inquirer and their recent moves to consciously make their online offering *less* competitive in preservation of their offline business. T-W and the rest of the film industry seem stuck somewhere in the middle — keeping abreast of what consumers are demanding and giving them just enough incremental progress to remain satisfied without actually doing anything really disruptive to the studios’ other businesses. Christensen would argue that waiting too long on the offline side will preclude one from successfully making it to the online side when it’s finally more attractive (see Recording Industry). I guess we’ll see which side Bewkes and company end up on when “technology [finally] forces [their] hand.”