An entertaining mess


This is the first of a series, analyzing the rapidly evolving Entertainment industry

One of the most fascinating (at least, to me) shifting and moving around that’s happening in the entertainment industry. The old model (writer, content creator, distribution / network all being separate – and being subsidized by traditional “push” advertising messages – is clearly dying, yet the old establishment is stubbornly clinging to the way they’ve been doing things since time immemorial instead of innovating. Sure there is a ton of money involved, but they are going to lose out in the end so why not embrace it?

Perhaps there are just too many contracts involved. But when you can watch the same program in multiple ways (broadcast, on demand/tv, on-demand/streaming via internet – on television, computer, tablet, game system, OR telephone – and excluding any near future new devices) – and with all parties all trying to be the gatekeepers and control the process (content creators, networks via television broadcast, networks content distributed through owned websites, network content distributed through third party entertainment portals, Neflix, Hulu, cable, satellite, phone companies (Verizon, ATT), Apple, Google etc etc etc – Phew! getting tired even trying to type it all!) – well, it is obvious that a shakeout is happening.

The problem, among other things, is that each party is desperately trying to protect and control their traditional little chunk of the business. And focusing on the impossible quest of trying to force the world to conform to their business model, instead of adjusting their business model to suit the way the world actually is.

But they can’t because serious disintermediation is happening in the form of the infrastructure that lets you stream entertainment on demand, where, when and how you want it. Attempts to control distribution by enforcing hard hitting copyright laws (like SOPA) – in the digital era of sharing and on-demand – aren’t going to do it; and giving the consumer only an ever increasing set of hoops to jump through (like the severely limited amount of pre-bundled “options” that the cable companies for you to choose from, when consumers have an ever increasing set of flexible options to see their entertainment; why can’t I just pick the networks I want to subscribe to on a one-by-one basis?) isn’t a solution either.

On a side note, bazillionaire Barry Diller (among other) is trying to change the bundle model by recently launching Aereo (if you’re curious to hear an explanation about it, click here.)…so is Mexico’s Carlos Slim with Ora TV. So many new players…so many ways to distribute (the same) content. But I digress…

So I watched with interest when Netflix – a newcomer to the scene, and a “mere” distributor of content owned by the big boy networks etc, launched it’s own (co-produced – more on that later) series Lillyhammer. All at once, as it turns out; instead of following the decades old tradition of keeping the audience strung along at the *distributors* enforced “once a week” rate, they put out all 8 episodes at once – realizing, no doubt from looking at their own data, that people aren’t interested in waiting a week between episodes – and hoping they remember to return – but I digress…I was curious to see what the quality of the story, production, and acting was; after all, HBO and others have made a good deal of money by producing high quality shows, as a reason for people to pay the extra subscription price. But now all of a sudden, here’s a mere digital tv channel as it were, creating thier own content; and you know what? It was really good!

Yeah for them to being brave, as well as practical; as the number of places/ways to watch entertainment proliferates, they need to create their own brand; without it they become a generic pipeline. With original content, they’re creating a reason to subscribe to Netflix…maybe not because of one 8 episode show, but it’s a tentative toe dip in the water to see how the market reacts. And it reacted well, garnering better popular ratings than The Tudors (actually, I’m a bit miffed about that lol, I find The Tudors rivetting…).

This is a brave also, since Netflix is creating competition for the content they license from the “big boys” – who could very well get angry (scared?), and pull their content. Because there are other generic “digital pipelines” to distribute content through – or, as some are attempting to do, building their own “digital deliver system” (aka, online network)”.

There have been, of course, other attempts to create entertainment outside the traditional “studio / network” model – Web Therapy with Liz Kudrow’s involvement, among others, on the theory that of course anyone can create something and post it. While technically true, the hurdle of drawing viewers, to a www.VISITME.com url without an established audience, or brand, being a large one (Lisa’s involvement of course ensuring a draw – so you need at least one brand name involved); the second issue of how to pay for it being another one, since advertising online is as much based on traffic – and without the established traffic it is difficult to attract advertisers.

As is the not to be dismissed issue of the cost and experience needed to product good content – story, production values, etc. Sure, maybe every film major in college thinks they can produce something extraordinary, the truth is that experience (and a good team) counts for almost everything, and that my friends, is not cheap. Lillyhammer is promoted as independent Netflix content, but was still commissioned by the Norwegian Broadcasting Network, “in association with Netflix“. And starring a name (Steven Van Zandt) which has at least some name recognition from his days in Bruce Springsteen’s band. So it’s not exactly a kid in a garage. And it’s also not exactly Netflix creating an entirely new show on their own; they just went outside the US system (no doubt to avoid offending one US network/studio over the other, and step on the proverbial toes of the networks whose content they distribute). But they know they don’t have the experience/DNA to create and produce something completely original on their own.

But if each is indeed trying to create their *own* digital destination entertainment portal (HBO.com, NBC.com, Google.com, etc) – which is what they all seem to be doing – the result will be a completely fragmented entertainment universe. Throw in everyone else (indie productions) trying to produce their own entertainment, and make money on it and you have a complete fragmented mess. Not good, or easy for the consumers to navigate…this defeats the purpose from the consumer’s point of view; they don’t want to have to skip to 20 various online destinations (include stand alone players) to see what they want to see – they want one stop shopping.

How do you get people to come to you if everything they watch is on demand, and they have to go to 20 different places to watch what they want? Because – in that situation – to find the entertainment you *like*, you have to search across multiple “walled gardens”. The operative word being, “search”. Which is a fine (if inelegant) solution if you *know* what you want to watch. But what if it’s a new series? And you don’t have Netflix’s established name, and 23.6 million subscribers (as of 4/2011) distribution?

So where’s it going to end up? We have:

  1. Content creators with an evolving distribution model they don’t understand (but who have the experience to produce things people want to watch);
  2. Traditional distribution (cable) that is a generic pipeline with new distribution models emerging (which it can’t seem to figure out how to take advantage of) who are trying to defend their position by shoving pre-formatted (expensive) subscription options down consumers’ throats – at the behest of the content creators / networks who insist on charging huge license fees to the cable companies; meanwhile, other than locking people into long term contracts, they are generic;
  3. A new, fragment breed of distributors who don’t have the rights to legacy content, and who are forced to pay the same exorbitant fees to license – to deliver the same content hosted by many others (non differentiated), forcing a huge upfront investment – with a high potential for failure;
  4. Consumers increasingly pissed off, and confused – who increasingly won’t stand for content they have no control over (time, place, mode)
  5. Many, many different ways to watch: can’t forget the phone (telecom) companies who are fighting the increasing bandwidth being used by consumers who stream the content (with whichever methodology – web, app, etc) to their phones.

Both the cable and phone companies are fighting with consumers and their inevitable demands to watch what they want, when they want it, how they want it. But for different reasons.

To start tackling this issue, I’m next going to do my best to explore the role of brand in the entertainment space (aside from being complex, it’s also nebulous – so I’m sure I’ll end up leaving *something out lol), and how it’s a shifting concept – ironically more important than ever, yet more difficult to define. And leverage. And new opportunities….that aren’t (to my knowledge) yet being done, yet will change the industry beyond recognition. And then explore some of my own ideas, because hey, it’s my blog! Not sure exactly where this will go, but am enjoying the mental wrangling and detangling.

Ho hum: Where’s the innovation?

Article out today on Fast Company, titled “The Smartphone Revolution is Over.” And I agree. In terms of form they’ve pretty much reached the limit of the current form factor. They got small, now they’re getting bigger, flatter, bigger screens, etc. Sure they might develop a model with a folding screen (to make it bigger again), or smaller (to fit on a wristwatch – oh joy!), or curvier, or in purple.

But personally, I think if products lead with “now available in a color” in their advertising (as Motorola’s Razr is doing) the category has jumped the shark a bit, so to speak.

The question is, what happens next? Since being able to communicate in any way you want, wherever and whenever you want – well, that’s not going away.

Coincidentally Google announced today that they will sell “Heads-Up Display Glasses” by the end of 2012, a pair of glasses that will be able to “stream information to the wearer’s eyeballs in real time.” Given advancements in voice interaction and jawbone-type microphones, why wouldn’t this be a form for a future “phone”? I’m actually of the opinion that the form factors are going to fragment, and potentially become modular a la Transformers…add or subtract whichever module you want or need.

And I’ve already talked about how there should/will be devices that are the “node points” for all communication and content, then send the right content to the right place – and how that will disintermediate the entertainment industry.

But so far, everyone’s still playing it boringly safe. I’m looking forward to seeing the impact Google’s glasses will have. Until then, it’s all been a little ho-hum.

Asgard awaits: Analyzing the entertainment model

Gratuitous shot of Chris Hemsworth as Thor

So. Movies. Specifically, action ones (but any, really). I just indulged in 3D Imax Thor, good enough entertainment – shot a little too much with “angles” for gratuitous 3D impact, but overall beautiful and surprisingly sweet.

I’m just sorry the actual screen resolution is still so low….and that the 3D is a bit wonky. Don’t get me wrong, I think it’s an improvement in the “embedding” yourself aspect of being entertained, but why am I still faking 3D with cheap plastic glasses, and too low resolution on 2D screens?

Why am I not being surrounded with at the very least, a curved screen, and optimally – sitting in the middle of the action with a visor that put me into the movie? Whatever happened to the promise of virtual reality? The gaming industry is going there. I understand that it would require a tech revolution in filming technique (360° vision required), but as so much of the environment on screen is currently created with Cad-like programs anyway, it shouldn’t be too much of a stretch.

I realize those owners of huge real estate housing large screens have a good reason to *not* go there, but entice viewers to shell out $15 (!) for the “big screen” experience, but to be honest the small visor / virtual reality version would look better.

And the established film creation industry has similar interests in keeping the status quo.

So while I understand the legacy industry players have a vested interest in keeping the seats filled, I wonder if there isn’t any room for other players to innovate the space? Particularly since other players in the entertainment industry are starting to create original content.

Instead of the current model (entertainment companies make a movie, which is turned into a game), how hard would it be for the game companies to create their own original movies / entertainment with a game-like interface? Or other players who don’t have a vested interest in the existing interface?

I’m not underestimating the amount of effort it would take to launch a completely new entertainment model, but I don’t think there’s a lot the established industry could do if a well financed, concerted effort was made – in partnership with the visor / hardware companies. It sure would be a really interesting space to innovate.

I’ve consciously kept this post reasonably attainable, because where I think really interesting development is, is in true interactive virtual reality so you’re not just watching from the vantage point of the producer but are free to interact with your surroundings in any way you want.

This would open a whole new world of commercial applications – from eliminating the need to travel (you can do that trip of a lifetime, without the food poisoning or uncomfortable beds) to simulations for any activity the requires any physical training (fire, police, pilot, race car driver, etc). You could actually walk through Asgard, sit on the throne, walk through the halls.

Reminds me of a “living theater” experience in Manhattan recently told me about: the entire building is made up of rooms, each of which has a part of a story line being acted out. You choose to sit, engage, walk from room to room, create the experience you want while being transported to a crime scene a la Agatha Christie.

It makes sense that people who are – by the time the technology arrives – spoiled for personalized experiences they dictate themselves, instead of ones foisted upon them – would prefer this type of entertainment. So: a merging of the gaming industry and movie / entertainment is inevitable.

Throw in augmented reality so that interactions in your daily life can be enhanced with game-like features, and the convergence is 360°. I have to admit, the idea of actually interacting the Chris Hemsworth – albeit, virtually – an enticing one! 

Not just a pretty face in the crowd: The future of Visual Search

I’m fascinated with the potential for visual search a la Google Goggles. It’s one of the newest ways to search and at the forefront of the next generation: it allows you to search from your cell phone by snapping a picture, and returns information about the building, object, business, etc. (true augmented reality). I first used it when passing a historic building, and was curious about it. My friend pulled out his phone, snapped a picture, and voila! – information about what it was, the architect, date and style, etc. So neat that I think I actually squealed.

I’ve since used it again, with various success. It’s definitely still an emerging technology, but over time the database of images and capabilities will improve. Want more info on a product? Take a picture. Need info about a business? Photograph the storefront. Put simply, this thing packs some serious power, and its capabilities stretch far.

I personally think when it does improve (along with voice interactive software) it will become as indispensable to everyday life as cell phones, texting, and search engines have become.

But then I started thinking about eventual convergences, and the inevitable trajectory it will take: integration with facial recognition software and other data points.

Facial recognition software has had a huge influx of cash and interest since 9/11 for security reasons. It’s here, it’s improving, and pretty soon anonymity will be completely obsolete, if it’s not already – at least to the companies who use it to scan airport passengers, law enforcement, and others who have made it a goal.

We live in an era where an overwhelming amount of data exists on each of us, from our social networking connections and comments, to our shopping habits at the supermarket. Cell phone usage, online searches, cookies on sites visited, credit card purchases – all of these create data which builds a picture of who we are.

But currently, these are still siloed. The grocery store isn’t matching your checkout purchases with your Pandora list and identifying friends of yours on Twitter who are most likely to share your taste, then using the data to target them with advertising.

One of these days, though, facial recognition software will be one of the links connecting the dots between who you are with other data points such as your FB profile, and your Pandora list. At that point, if someone wants to know who that cute guy sitting at the next table is all they will have to do is take his picture – and know who he is, what music he likes, his address (courtesy of whitepages.com), books he’s bought (thanks to amazon.com), his house value (zillow.com), online subscriptions, health risks based on his grocery purchases, etc etc. Spokeo.com and a few others are baby steps towards data aggregation – crude, often incorrect, and using identifiers which are imprecise, but it is the next logical step in data mining: analysis crossing across collection points, as opposed to little ponds.

This scenario – inevitable as it is – obviously has many potential pitfalls. It’s great for companies (I’d advise anyone with a talent for numbers to consider a career in data modeling!), but is a mixed bag for consumers. The privacy issues are obvious, but those aside, the personalization that the market increasingly is demanding is impossible without data mining and developing good predictive capabilities. On the one hand people are uncomfortable with their data being gathered (not like this wasn’t always happening — it’s just more extensive now), and on the other, good data mining will ensure that people are targeted with offers and services that are interesting and relevant to them.

It’s a teetering tightrope walk. As a business strategist / consultant, I work with clients to develop strategies to take advantage of all that is legal, effective, and (personally) always try to do so with integrity. As consumers we should be trying to influence privacy legislation, to ensure that this future is one that not only makes our lives easier, but does so safely. The challenge is that data knows no national boundaries, so what effect will legislation be able to have? I don’t have the answer, only want to add to the discussion.

Disruptive cataclysms? The impact of rapidly changing technology

Speed Racer didn't mind a fast pace

Technology – and the “rapid changes” everyone is talking about – is being hailed as a disruptive force. Most recently Mark Zuckerberg used the term to describe the future business landscape, and how Facebook (or rather, erm, “social networking”) was at the forefront of the next generation of businesses.

But there are two levels of where “disruption” is happening: not only at the business level, but also at the consumer. I’m going to stick to consumers in this discussion, snce I’m constantly hearing about people adapting to the “rate of change”, or rather, the (perceived) difficulties this is bringing.

To the average person technology has brought neat things to their lives at a dizzying rate, such as the ability to chat 24 hours a day with “friends”, communicate instantly in a few different ways, and rendered getting lost obsolete.

It’s brought geographically disperse people with niche interests together (You knit clothes for your pet goat?? Me too!), brought us exotic food all year long, extended our lives, and for the most part – kept us healthy. The world has become infinitely smaller.  We can walk and talk and bank and read and chat and pat our heads while rubbing our tummies and drinking our coffee to go…

But it’s also (among other things) made us work around the clock (well, in the US anyway), and created whole new areas of interaction etiquete that is as of yet, still being defined. And don’t get me started on online dating.

I suppose to many people it does indeed feel like it is moving too rapidly (with the resulting frankensteinish stories on the news, today it’s “PASTOR SAYS FACEBOOK IS THE GATEWAY TO SIN!!! – crikey), but I keep returning to my core assertion, though, which is less flamboyantly sexy than many other who are predicting all sorts of new societies and seismic level cultural shifts as a result: technology only enables and enhances what we already do. So while I don’t subscribe to the dystopian future where our computer overlords rule us through our dependency on them, I also don’t believe that some huge shift in basic humanity is going to happen as a result.

I see one of two potential paths. Either:

  1. The impact of perceived rapid changes in culture will create a pendulum swing back to the uber conservative, as people retreat to comfort zones; I mean a serious Luddite movement, complete with agricultural faith-based communities and prairie dresses (god help, and excuse that pun). Rejection of modern life in full flower.      …or…
  2. People will embrace technological changes as they become an increasingly invisible driver of their every day experiences, not forcing any cataclysmic reaction whatsoever. And in a generation or so, the “fast pace” (ubiquitous, instant connectivity) will be all they’ve ever known – eliminating the desire to “return to a simpler life”

My guess is some will go one way, some others. There’s never one recipe for all personalities. Those who crave routine, tradition, and fear change will retreat. The others will continues to embrace the double edged benefits of our brave new world.

You can’t force people to accept new technology though, or the changes to their lives that will be associated with it, unless they want it. I’m a true believer in you can lead the horse to water, so to speak, but you can’t make it drink….if the technology that’s introduced is not adopted, it will fail,  regulating the “speed” of change naturally. It can’t be forced on the unwilling. People are flocking to smart phones because it speaks to a basic human need to communicate, and increasingly, instantly.

While I’m on a roll, though, I’m actually going to challenge the entire assumption: that change is happening “so rapidly”.

I think the major shifts have already emerged:

  • Social networks becoming the personal authorities (requiring brands to figure out how to communicate and relate, vs message “to”)
  • Ubiquitous/instant communication (which will require cross- and trans platform technologies / infrastructure)
  • Personalized information (requiring good data and effective predictive algorythms) on demand

Businesses are incrementally improving on all of these (it’s still in infancy), and figuring out how to seamlessly integrate all these things, how to gather, track and correlate data properly to best “serve” the customer (maximize profit), but I don’t believe there will be any great “leaps” above and beyond these; no major paradigm shifts that leave these concepts in the dust…and that’s because these are speaking to – at a DNA level – the most basic human needs: affiliation with a group <love>, and the powerful human ego.

So disruptive? For the business forced to figure out how to compete, and survive in an era of decreasing product life cycles, definitely.  

But to the consumer, who is ultimately holding the reigns, it only currently feels so because it’s still all so disjointed – and visible – and confusing. As it all starts to work better and becomes more invisible and seamless, not so much. So the future money will be earned by the companies that can help  make the experience as close to “breathing” as possible – ideally consumers won’t even notice it’s there,  they’ll just have the experience they want.

So that great human revolution won’t be necessary; we’ll all be too busy catering to our egos: chatting, opining,  connecting, and – *sigh* – blogging.