Recently in Ideas Category

I've though a bit about traditional media, structured content, and multi-platform distribution etc.

I think the challenge for innovation in this arena is two-fold.

a.) Stickiness can come from talent. (Stars, Authors, etc.)

b.) Stickiness might occur if a revolution took place in how that branded narrative content is packaged and sold.

c.) Stickiness from innovation in the structure of storytelling. Some structures work in a muti-platform world others do not.

Here are a few developments to storytelling and the narrative form in creative digital and interactive content.

I think Lost "lost" out on a game changing opportunity when it failed to cultivate a kind of online storyline. There was the appearance of character and leitmotif sites (fan created and official)...which could have been choice for revealing more clues and other storylines...and an opportunity to merge tv and internet storytelling in a way that I think would have been revolutionary.

Some forms and genres (like the who dun it? mystery, quest, travel log, reality,  video games storytelling form work for interactive narrative content.

Innovation in digital media  is not just about media economics its about the structure of storytelling

I believe that CS will certainly continue to evolve as the high-level umbrella strategy for efficiencies and consistency around the production and distribution of branded content along multiplatform distribution, but as the 'digital content experience' and structured content becomes more central to brand and business objectives...content strategy will have to increasingly speak to creative efficiencies for a hyper frequency cycle of creativite output.

"Abundance, Asia, and Automation turn goods and services into commodities so quickly," explains business writer Daniel Pink, "that the only way to survive is by constantly developing new innovations, inventing new categories."[17] "Every product from sneakers to software is constantly being upgraded," writes Richard Florida, "and everything from mutual funds to potato chips now comes in an ever- proliferating variety of types - because the Creative Economy is largely based on selling novelty, variety, and customization."

The endemic vagueness and lack of transparency surrounding statistics and other financial indicators for the creative industries, especially in the media and entertainment sector, are symptomatic of our archaic attitudes about the role creativity has in our local and national economies.

The trend towards solving that vagueness is vital, because our economic growth is increasingly dependent on intellectual properties and creative industries.

 

State and Federal Government

"Decades of experience, creativity, and growth have made film production and distribution one of the most economically important industries in the United States," notes the 2001 U.S. Department of Commerce Report on Runaway Production, "[u]unfortunately, our official statistics are woefully deficient."

Current available data does not offer a precise picture of employment numbers for the full rage of professions involved in motion picture production or, for that matter, consistent measures of the industry's economic impact both regionally and nationally. Data available for production days and budgets is primarily collected by local film commissions and prone to irregularities and inaccuracies by default of naturally occurring idiosyncrasies in the measures and classifications used by those organizations.

In the absence of incentives or common effective measures, figures used are often volunteered by production companies and, therefore, in-audit-able or even suspect.

According to one film commissioner I spoke with, volunteered figures do not necessarily reflect actual monies spent in one's own region, especially when a production crosses state lines. In those cases, revenues accounted for in one state may be simultaneously accounted for in another state's revenue totals. Obtaining aggregate data at the national level is even more difficult.

Outside the specificity of film production, we may have begun to rectify our overall fiscal vagueness about the creative industries with the recent adoption of the North American Industry Classification System (NAICS) that replaces the U.S. Standard Industrial Classification (SIC) system originally devised in the 1930s.

The SIC system, although periodically updated throughout the last century, structured our economy on an obsolete industrially driven model. The NAICS identifies hundreds of new, emerging, and advanced technology industries, while reorganizing industry into more meaningful sectors--especially in the service-producing segments of the economy.

 

Advertising

The growing price and waning influence of advertising expenditure on mainstream television channels is a serious issue for many advertisers today. Intolerance about wasted ad spending is mounting. ROI is the today's advertising catch phrase. The linkage gap between producers and consumers of non-subscription broadcast content amounts to failure of means for assessing consumer preference with suppliers and network television was chosen by thirty-two percent of respondents as the worst medium for proving ROI, according to a study by Advertising Age.

Advertising, long the main revenue source for much of the media industry, is rapidly moving to the Internet, and shown by the financial success of sites like Google. This is part of the trend in advertising from "mass" marketing to "measurable" marketing. The interactivity of the Internet is driving the process of fragmentation for broadcasters, but has the potential to provide advertisers with information about the taste, preferences, and habits of consuming audiences. So the Internet offers advertisers a valuable advantage that mass media cannot provide.

 

Media and Entertainment

Many commentators have noted how inefficiently Hollywood does business. A studio will spend millions of dollars marketing a particular star in lieu of having its own brand only to toss that brand away at conclusion of a project.

There is no question that media and entertainment are by nature risky.

What I am suggesting here, however, is that there is a slow evolution towards efficiency measures in the media firm and entertainment firm business models. So for example, gaming firms reuse code from failed titles instead of starting from scratch with every title. Digital technology allows for greater fluidity and quantification in distribution, for example: In d-cinema the ticketing systems are integrated into the pre-show systems and concession stands, so business can see clearly what is working and what does not.

 

Outdated Views on Creative Industries

Most Americans are oblivious to the considerable role that content industries play in job and wealth creation - not only in terms of regional economic development and growing high-tech industry, but also in terms of U.S. global economic competitiveness.

So much of the discussion about media and entertainment, in my view, is overly politicized by both the left and right: "Hollywood is destroying America!" or "Advertising is destroying art by commodifying it." What I aim to do is open up a space for discussion that looks at these matters in wider context.

 

Creativity is Mainstream

In fact, the media, entertainment, and cultural copyright sectors create new jobs at a rate three times faster than the remaining economy. In 2002, these sectors employed 5.48 million workers and accounted for six percent of U.S. gross domestic product. These sectors also generated $89.26 billion in export revenue - surpassing every other category including automotive, aviation, agricultural, as well as chemical and allied products.

Foreign sales of motion pictures alone totaled $17 billion in 2002. The motion picture industry is the only U.S. sector that boasts a surplus balance of trade with every other country in the world; and the international sale of filmed entertainment plays a significant role in our nation's overall trade surplus in services.

U.S. sales of entertainment software also totaled $8.2 billion in 2004, and U.S. game designers exported an additional $2.1 billion the same year. Deutsche Bank forecasts that global revenue for game software will grow at thirteen percent annually over the next four years, while PricewaterhouseCooper projects that the U.S. media and entertainment industries will be worth $690 billion by 2009.

This development has hastened the transformation of the U.S. economy from one based largely on information and knowledge to one driven principally by creativity. John Howkins categorizes the creative economy to include fifteen creative sectors - such as research and development, software, design, and content industries like film, music, and video games - that produce intellectual property in the form of patents, copyrights, trademarks and proprietary designs. The annual global revenue for Howkin's fifteen identified sectors was $2.24 trillion in 1999. The U.S. share represents forty percent of the market with revenue totaling $960 billion. The U.S. share also accounts for more than forty percent of research and development, forty percent of television and radio, and thirty percent of film. Howkins calculates that core copyright industries will be worth $6.1 trillion internationally in fifteen years. U.S. dominance in these segments - more than productivity improvements related to new technology and new manufacturing methods - is responsible for much of the nation's global economic competitiveness since the nineteen-eighties.

Conclusions

Creative mystique has marketing power, but it can blind to our strengths and vital interests. Fundamental to solving creative inefficiencies is dispelling myths and understanding the nature of the creative process. Only then can we develop models or solutions that make those processes profitable and capable of sustained duplication.

 

 'Creative cultural-crossover content' is media and entertainment content that not only captures international markets of indigenous and emigrant Southeast Asian, Chinese, Indian, or Middle Eastern audiences, made accessible at home and abroad by the proliferation of world-wide cable and other global media distributors; but also, international media and entertainment content that incorporates and exploits the creative narratives and styles of developing regions and repackages them to an emergent mainstream Western audience that is made up primarily of members of the game generation - i.e., age thirty-five and under.

Unlike their predecessors, these younger electronic media consumers are more likely to digest cross-cultural creative content - for example, Japanese anime - as automatically and un-selfconsciously as they would their own.  

In fact, for this demographic, international content, is viewed as more 'original' than 'foreign'; because, as authors John C. Beck and Mitchell Wade have pointed out in their study of the effects of the game generation ethos on the culture of business, this birth cohort takes both globalization and the consumption of electronic media and socialization in all its forms automatically.   In other words, they look at globalization from the viewpoint of the valley rather than the hill top, and they also view electronic media as an extension of themselves and their own culture - even if that interplay is couched in a verisimilitudinous role-play with their foreign counter-parts.

An example of such a crossover vehicle is "The 99", the fastest selling comic book in the Arab world. "Its creator, Naif al-Mutawa, is a 36-year-old from Kuwait who was educated in the United States and who, as a boy, devoured Marvel comics and the Hardy Boys mysteries."

There exists a dynamic cross-fertilization between media, entertainment and defense technology. In other words, military surveillance, targeting, and weapons systems use technology that was developed primarily for motion pictures and entertainment software or the consumer electronics market.

In fact, the U.S. government currently employs Panavision's 300x compound zoom lens for military surveillance. According to an interview I conducted with Bob Harvey, senior vice president of worldwide sales at Panavision, federal contracts with the U.S. State Department are the fastest growing segment of Panavision's business.

The more provocative phenomenon however, is how Hollywood and video games drive the development of high-speed, high-resolution digital image capture, management, transmission, and display that have implications for fields where these advanced technological applications would be economically unviable to develop on their own.

Entertainment software has led to faster introduction and deployment of processors, broadband networks, and high definition disks like HD-DVD and Blu-Ray. But, "IBM places value on chips made for entertainment software that goes beyond revenue and profits," says Dr. John Kelly, senior vice president and group executive for IBM Technology Group: "These chips help drive technology in other areas."

The Mercury Computer's CELL based blade server, for example, can handle the requirements of sonar and radar computation for military or scientific applications, because of its ability to process real time data streams. "The Cell BE processor was originally designed for the volume home entertainment market," says Craig Lund, chief technology officer of Mercury Computer Systems, "but its architecture of nine heterogeneous on-chip cores is well-suited to the type of distributed, real-time processing that will power tomorrow's digital battlefield."

The U.S. military is the primary global military power, and this hegemony is based on the ability of the U.S. Navy to dominate the world's oceans -  due partially to the superior numbers and technology of U.S. naval vessels that are augmented significantly by U.S. dominance in space-based reconnaissance technology, made possible by entertainment software consumers and movie goers world-wide.

Forgive me readers, for I have sinned. It's been over a month since my last blog entry. For penance, I promise to watch FoxFaith's new Christian thriller, Thr3e. As Jeff Shannon of the Seattle PI writes, "If 'Thr3e' is any indication of what we can expect from the emerging trend of studio-funded faith-based movies, we may find ourselves wishing "The Passion of the Christ" had been a box-office bomb." Have faith Jeff!

But the real penance would not be complete if I did not take a lesson from Fox's Murdoch on "market retention". What, pray tell, do I mean? As Joanne Ostrow put it, the same cynical Hollywood "where plastic surgery is considered a sacrament" has now found that Christianity sells.

As some of you may know, I split time between Charleston, South Carolina and New York City. Yesterday, I received a direct mail post card from the FoxFaith company, itself. Obviously, I wasn't in New York.

Fox News Corp. discovered "long tail" marketing years before the term was ever coined by Chris Anderson. Rupert Murdoch, " Me love you long tail."

Where other media firms (Pixar and Disney excluded) have relinquished their brand to stars, Fox has not. You may have a political bone to pick with Fox News, but only because you are aware of their branding. The idea of "market retention" is actually quite foreign for many media firms in an age of the disposable branding.

Reality television is a result of evolving market forces.  Certainly, the rising cost of production coupled with the increased demand for content with the worldwide proliferation of cable are two obvious drivers. 

Reality television especially of the type that is integrated with the Internet or with direct viewer response is also part of the evolving trend towards interactive media with the younger demographic.  Interactivity is part of the gaming generation's fascination with role-playing. 

According to John C. Beck and Mitchell Wade, in their study of the gaming generation's attitudes towards business, entertainment software has trained this generation to expect a heightened relationship based on immediate rewards or consequences with media and the world at large.  I believe this ethos towards role-playing and interactivity is seen in the form of reality-based shows like "American Idol" and the "Apprentice".

With advertising in turmoil on broadcast TV, reality shows - like "American Idol" or even Tommy Hilfiger's less successful "The Cut" - take product placement well beyond a can of Coke enjoyed by our favorite television show's character. "Idol was simply a marketing tool for me to sell records," says Simon Cowell on "Larry King Live.  "The show was one thing but it was actually my record label, which was the most important thing.  So, my background is I run a record label, and I still run a record label and that's really my passion.

Of course, the real winner of "American Idol" is Cingular Wireless.

Cingular has an exclusive deal with the show's producers that let customers text their votes instead of trying to call in on busy lines. In Season Four last year, 41.5-million text votes were sent in; Cingular charges between $19.99 per month for a text package with 2,500 messages included and 10 cents per message on a pay-as-you-go plan, meaning the company raked in as much as $4.15-million in text messaging fees from American Idol votes alone last year. When the Apprentice was at its peak, Ad Age writes that Yahoo's product placement was a solid success: "After the ice cream challenge during the second season, viewers were told to go search Yahoo, and within three hours of the end of the show, the term 'Apprentice Ice Cream' was the third-most-searched term on Yahoo that day. By 5 o'clock the next afternoon, the ice cream was sold out," says Yahoo VP Jim Moloshok.

And the results kept coming.  After the Levis challenge, "[f]our days after that episode ran, viewers were still searching Yahoo avidly for 'Apprentice Jeans' to get a copy of the catalog.  And "Apprentice Jeans" was still ranked No. 1 among Yahoo Web searches," AdAge reports. Using secret tracking devices, Yahoo discovered that "The core demographic for the ice cream was 21 to 34 years old. For the jeans, it was 35 to 44." Yahoo VP  Moloshok says, "If you can complete the loop, product placements like Mark Burnett is doing are one of the most effective ways to get people engaged with a product."

Rupert Murdoch once described sports and films as the 'battering rams' of pay television.  The expansion of distribution methods for television has placed scarcity in broadcasting away from distribution and onto content production. 

This gives copyright owners leverage because success as a broadcaster depends upon securing ongoing access to the the rights of distinctive and attractive programming.  So, the bargaining power of television rights owners has increased. 

The growth in pay television has lead to bidding wars for attractive content from sustainable producers and inflated the cost of programming rights.  Sports is the perfect example, and trends show that sports franchises have moved from mainstream channels to pay channels over the last few years in increasing numbers.

With direct payment, costs for outbidding terrestrial rivals are simply passed on to the viewer. Advertiser-supported  broadcasters cannot do this.  So the growth of subscription funding is inevitably shifting not only audiences but also economic power away from advertising-funded channels to pay-television operators.

This trend is clearly reiterated by Kagan Research today, Broadcast TV Networks Grab Two-Thirds Of Sports Ad Dollars Despite Cable's Gains

"Look I think we have to pay attention to the extreme drop off in box office.  It's real," says Megan Wolpert, executive VP of Spyglass Television when I interviewed: "People can say it's because of the content.  People can say it's because of the options.  People can say it's because of piracy.  Regardless, it's real."

In The Experience Economy, Joseph Pines II and James H. Gilmore spell out how experiences are the fourth economic offering as distinct from services: "Consumers don't want services, financial or otherwise - they want experiences. Consumers dine at theme restaurants such as the Hard Rock Cafe or Planet Hollywood, shop at experiential destinations such as Universal CityWalk in Los Angeles or Beursplien in Rotterdam, and vacation at a Disney theme park or other venues that stage a feast of engaging sensations and dramatic stories for them."

Pines and Gilmore continue: "Experiences have always been at the heart of entertainment, from plays and concerts to movies and T V shows. Over the past few decades, however, the number of entertainment options has exploded. Today, the universe has expanded to encompass a vast array of new kinds of experiences, as new technologies encourage whole new genres of experience, such as interactive games, World Wide Web sites, motion-based simulators, 3D movies and virtual reality."

In "Good Morning, Hollywood",Munarriz offers an interesting proposal to theater owners faced with a waning box-office and increased competition from alternative media. Munarriz' suggestion elaborates on this growing trend towards experiential marketing and the ethos of the creative economy. Munarriz writes:

"The studios can deal with the audience shift from theater to DVD. They'll get their money for delivering the content either way. It's the theater chains that are spooked, because their reach begins and ends with the theatrical run. The studios take a generous cut of the box-office take, so theaters have been relying on things like marked-up concessions... I may never understand, however, why concession menus err on the side of boring. I mean, sure, I understand the magic of high-margin wieners, salty snacks, and candy. But what I don't get is how nearsighted an industry can be by not realizing that the whole "dinner and a movie" mindset can be altered in its favor with a more meal-worthy, experience-driven approach to feeding the captive film buffs."

Digital cinema according to most industry spokesmen just might save the theatrical box office.  3D is especially promising for the younger demographic who have been raised with the hyper-realism of entertainment software.  In fact, the game generation want to be engaged with their media in a way far more intense than the boomer's relationship with television.

"I believe we are back," National Association of Theatre Owners president and CEO John Fithian said as he proclaimed the long-awaited arrival of the digital-cinema age at ShoWest this year: "We stand now at the dawn of the biggest technological revolution since the advent of sound. Digital cinema starts right now, in the year 2006, and it couldn't come at a more important time."

Bob Gibbons, Director of Marketing and Communications at Kodak Digital Cinema remarked when I interviewed him: "you have got to use digital in a way that lets you enhance the entertainment experience, or changes the entertainment experience, or ad an incremental entertainment experience, or do something that you can't do with film; because some of us are convinced that if you simply put a sign on your door that says, 'I am going to show you this movie digitally, and by the way I want you to pay more for it.'  People in essence won't pay more for it.  If you are just reinventing the wheel and calling it fire, that is a little foolish."

If theaters ever consistently draw in audiences again, they will do so by offering experiences that viewers just can't have at home.

Like dissident antipoliticians from the former Czechoslovakia, who used satire and absurdity to highlight the fact that in a postmodern consumer society the "line of complicity runs through each of us," this new American generation distrusts political grandstanding and even traditional forms of organized politics. Hence, the popularity of so-called no brow satires like South Park, The Colbert Report, and The Daily Show.

The political blackout is partly a reaction to the intoxicating polemics of the previous generations' culture war that eclipse most public discourse about the shifting boundaries of our social geography and economic life. As Vaclav Havel, former antipolitician later turned president of a democratic Czech Republic wrote, "Ideology is a specious way of relating to the world."

On the left, critics condemn the commodification of art and corporate America's co-option of the symbols from the former bohemian and newer alternative counterculture. "Hip is how business understands itself," writes Tom Frank suggesting that the emerging culture is just another aspect of capitalism. On the right, detractors echo analogous themes about the moral decay of society. David Brooks describes members of today's generation as "The Organization Kid," part of the "Future Workaholics of America, obsessively career conscious and deferent to any authority that will get them ahead." This new generation argues Brooks, "lacks defining concepts of character and virtue, for they have been reared in a country that has lost, in its frenetic seeking after happiness and success, the language of sin and character-building. "When I asked about moral questions," continues Brooks, "They often flee such talk and start discussing legislative questions...These young people are not part of an insurrection against inherited order. They are not even part of the conservative reaction against the insurrection. It's not that they reject one side of that culture war, or embrace the other. They've just moved on."

Yes, they have. Boomers are wired to view creativity as a choice between "selling out" or "sticking it to the man" and the quest for the great society as a dogmatic battle between the mediocrity of relativism and the virtue of absolutes. To use former bohemian terminology, today's generation does not have that hang up.

The result is a generational gap, largely unnoticed by boomers and their progeny alike. "They have relatively little generational consciousness," writes Brooks, "because this generation is for the most part not fighting to emancipate itself from the past." The suggestion is provocative considering that while "the baby boom included the largest U.S. birth cohort to date, the game generation will ultimately outdo the baby boom in size, in scope, and presumably in influence," notes John C. Beck and Mitchell Wade in their study of the game generation's influence on organizational values in business. "The total size of the game generation is already greater than the baby boom ever was," and the whole generation of gamers, "including X and Y and letters to be named later-simply approach the world differently than their predecessors."

The playwright Heiner Mueller once remarked that the potency of theater in his native East Germany was based on the absence of other ways of getting messages across to people. "As a result," Mueller says, "Theater here has taken over the function of other media in the West." While the never ending surface chatter of talking points and double speak on both the left and the right continue to erode the value of words, they also inflate the space between the lines.

An anonymous Hollywood executive was quoted by LA Times writer Bruce Wallace saying, "People have been waiting for China to open up since Marco Polo."  "It is wrong...to assume that just because the Communist Party is slowly relaxing its grip over its markets that China will someday become an open media market. 'People forget...It's not just a Communist Party thing. It's a Chinese cultural thing.'" 

In fact, if one looks at precedent, China will never buy from you.  They'll copy your IP and sell it to their own markets. 

In the same article Wallace goes on to say: "Rupert Murdoch, who in early 2004 gave a speech proclaiming that 'the potential for China to become a new global center for media and entertainment is slowly becoming more real.' But, by last September, one month after Beijing's decision to re-tighten regulatory controls on foreign media, Murdoch was publicly lamenting that News Corp.'s China business had hit a 'brick wall.' When it came to foreign media, he complained, China's political leadership was "quite paranoid about what gets through."

All this reminds me how television (and entertainment) is about so much more than television (and entertainment). And, re-emphasizes my point that we often undervalue and do not exploit one of America's great assets - its global economic dominance in entertainment and media.

Simon Cowell once remarked to Larry King when asked about the prohibition of "American Idol" like shows in China.  Says Cowell:

"Well, because it's a democracy, isn't it? You know, I mean, it's the public voting. So you can understand why they're getting slightly nervous about it. Because it wasn't our show in China, it was the laughing cow, so-and-so, so-and-so competition. And the public got to vote. And suddenly there were demos, and it was democracy. And I think the government went, we don't want this. So then they put out a stupid comment like that. You know? It's that we must control the public. Crazy."

There are roughly 130 million television households in Western Europe. In the United States there are roughly 99 million. Western Europe, however, is not a unified market. The United States is.

U.S. broadcasters, therefore, benefit from their economies of scale, and the United States dominates cultural copyright exports to Europe with a sizable trade surplus. In fact, the U.S. media and entertainment sectors are the only American sectors that boast a surplus balance of trade with nearly every nation in the world.

That deserves some kind of attention beyond our obvious and important polemics about these organs' social and cultural benefit.  The U.S. media and entertainment sectors are undervalued assets in the American economic consciousness.

Creative copyright industries always engender a debate as to their cultural and social effect, and they should. But these industries are also the engine of our economic growth. We need to widen our understanding of the nature of our media and entertainment sectors so that our discussions about these sectors' legitimate economic benefit are not overpowered by our outdated ideas about creativity - the engine of our economic growth.

While I do believe that distribution becomes more fluid with the continued evolution of a multi-platform digital media supply chain, I do not believe that digital technology will democratize film making.

Multinational corporations have the scope and capital to market, and thereby distinguish their product from the glut of global competitors.

Certainly the trend towards segmentation or "narrow-casting" will continue with the expansion of world-wide cable and the Internet, and that expansion will create the space for creative IP produced, say, less expensively with digital technology. 

Digital technology, however, will not disturb media firms' control over the organs of distribution. The question ALWAYS remains: Who reaps the benefits of copyright? Is it the content creator or the media firm that owns the intellectual property that the content creator sold to the distributor for a profit?

Indeed, media firms may be held captive at choking points along the distribution supply chain - a consequence of handing their brands over to stars or whomever - but media firms are more apt to forge strategic partnerships or acquire newer digital internet portals.

In an economic environment starved for content, the power does shift to the content creator or more specifically, whoever owns the copyright, but corporations are the ones most likely to benefit from this paradigm; because they can exploit their natural economies of scale. 

Remember, even with decreased production costs, media and entertainments are still R&D (high cost, high risk) business models.

The myth of democratizing film-making is techno-utopianism.