By Fredwill Hernandez
Los Angeles, CA. (Hollywood Today) 2/28/14 – The inaugural Digital Entertainment World (DEW), a joint venture between IDG World Expo and Digital Media Wire expo got under way Tues. – Feb 18, 2014, at the Hyatt Regency Century Plaza, Los Angeles, Ca. The three-day event held from Feb. 18-20, 2014, was the first-ever global event for digital executives focused on the entire ecosystem of digital content creation to monetization and everything in-between. Attendees heard and had the chance to meet and network with many of the leading executives working in movies, television, video, music, games, and publishing, who are trailblazing the industry’s future.
Among the first day panels were a View from Top: The State of the Digital Union, Keynote Conversation with David Lawenda, The State of the Video/TV/Movie Business, Keynote: A Conversation on How Illegal Pirates Sites are Harming the Creative Community and New Strategies to Take the Profit Out of Piracy, Social / Marketing: Building Engaged & Monetizable Communities on Social Media Platforms, Social / Marketing: The Future of Record Labels, Music Research Presentation: The Latest Digital Music Trends & Analysis, among others.
The theme that resonated at the conference and among DEW’s first day Keynote Conversation with David Lawenda, Head of Global Marketing Solutions, Facebook, who has been at his post for four months, was mobile and its growth. He elaborated on how companies are finally realizing that Facebook can help their brands reach and engage with new audiences, and also monetize and measure targeted content in their marketing efforts.
“That’s the beauty of mobile actually, if you think of the pixel ratio of mobile you are running a video post or a photo post, it’s taking up your entire screen, its in the linear format, so you are guarantee to see the advertisement which is what makes Facebook and mobile such an attractive advertising medium,” said Lawenda. “It’s personal, this device, it’s about as personal as you can get. The business of marketing, it’s moving towards personalization, with Facebook it’s really about personalization at scale.”
Real time conversation was also another important fact about Facebook that surfaced during Lawenda’s keynote conversation. “It may surprise you and it may surprise the people in the audience, but Facebook dominates real time conversation versus all social networks combined, I can tell you that Facebook has more than five times real time conversations around television in real time than any other social networks combined. Were in the real time space, but that’s not the holy grail, its one piece of the puzzle, at the end of the day, we are focused on driving real business outcomes for a movie studio or a television network, those business outcomes are about driving awareness and ultimately getting a consumer to actually make a decision whether to watch a television show or go buy a movie ticket. Those are the outcomes we are focused on and we believe in order to influence the methods have to be seen before the event, during the event and after the event,” added Lawenda. “What attracted me to Facebook, upon doing my homework on the company, so many marketers today see Facebook as a social media tactic, and in fairness that’s how we positioned ourselves a year ago, we were social marketing. Because of these new advanced targeting capabilities, and the mass reach that we have and our advancement on the mobile phone front, we are so much more than that. And I would argue that this is not about social marketing, but about marketing in the social world, we are in the epic center of that, we are at the nexus of this change at Facebook. I would argue that if you are just focused on that, you are not optimizing the opportunity. Fact of the matter is, I don’t care if you are a movie studio or a television network or a product, your fans are a very small piece of your potential customer base. If you are just engaging with those fans or friends of fans, your are missing a huge target audience and a potential customer of yours, and now with our new targeting capabilities you can get all of them in a no ways world.”
Why is all this important, in pg. 2 (under Chapt. 1 – The Five Forces) of their book Age of Context, authors Robert Scoble & Shel Israel, who were part of Digital Commerce Summit: Surviving the Digital Revolution: Lessons From the Age of Context panel, point out that, ”Sometime in 2012, the numbers of cellphones on Earth surpassed the number of people. By the end of the year, we had 120 million tablets computers and Gartner Group, a market analyst, predicted the number would grow to 665 million by 2016.”
Social Media was another interesting topic at DEW, Joseph Pigato, Managing Director, Sparked, who moderated the Social/Marketing: Building Engaged & Monetizable Communities on Social Media Platforms panel, wanted to know which social media sites the panelist liked?
“I really like Twich, Youtube, and Reddit a lot, as a way not just to connect to the audience, but to empower the audience to participate as well and interact with each other, plus twitter is my go to, I was just on twitter like 5 seconds ago,” said Sean Plott, Head of Games, Artillery, CEO/Host, Day9.tv. “I view any social media platform as a content platform, my tweeter is not a method for me to get you to buy a product or to do something, it’s for me to provide a service in 140 characters at a time. So in that sort of cense, these platforms provide really easy ways to glorify certain members of the community, to be able to say, someone responded to my Youtube video with a video, and then you tweet that link. If someone says something clever, I can very easily re-tweet that sort of link. As a result, in terms of our big strategy, is to drive people to our website and we see that those platforms are the biggest sources of it, to be able to bring people in and make people feel like they are central part of the community.”
“Each community outside of our own needs to be treated differently, there’s different audiences within tweeter and different audiences within Facebook,” added Pigato. “When were in these different social media communities, It’s really good and important to identify the fresh new voices and let them establish that foundation to build of off. Nobody reads anything, don’t tell them how to act in your community, find out, set precedence, set that, set the tone with the level of engagement you are looking for, moderate that, fuel that, and that is what we are really able to do with tweeter, instagram, and Facebook, which is content rich.“
Across the board people struggle in the early days acquiring fans and followers in social media, many are having problems getting people to engage and come back. What are two mistakes you see people making? Asked Pigato.
“For me 95 percent of activity on a social platform should be content, it should be something interesting and valuable,” answered Plott. “The first step should be building the audience, and respecting them and making then enjoying it, and second, only and frequently, using it as a way to drive traffic. It’s ultimately about making money, so it’s better to have 5,000 loyal followers that will purchase something, than having 50,000 where just a hundred purchase something.”
Attendees had many choices as to panels to attend and for those with an interest in video, television, and movies, DEW had a View From Top: The State of the Video/TV/Movie Business, a panel moderated by Andrew Wallenstein, Editor-in- Chief, Digital Variety, who wanted to know the challenges panelists faced in reaching their consumers (the millennials) in the digital realm?
“The challenge that we are all facing, millennials and how to reach them? It’s being driven by technology. It’s really understanding basic human behavior, we want information when, where, and how, we want it, we want it to provide us with greater value, some of us want to go deeper, some of us want to go wider in terms of the conversation and information we are getting, and it’s very much about the now. I like to sort of call it, the generation now, because they want it now, they want for free, they want more value, they want to tweet it, blog it, post it, mash it, and do everything with it. As for us with our clients, it’s very much about how we engage these individuals with an on going conversation,” said Doug Scott, President, Ogilvy Entertainment. “For too many years we also heard the term one on one marketing, it was undeliverable. Some of the infrastructure was there, some of the tools were there, but we weren’t ready for across the entire media eco system. I think that what we have now is the tools and the opportunities to come to bare with that. One of the things I find exciting about conferences out in Los Angeles is, I don’t know if the story tellers are doing enough in terms of engaging the audience with on going dialog, the advertisers are seeking it and willing to pay for it, there’s a lot of different campaigning models being discussed. There’s an enormous amount of data, to track it all, to see what the value is. For us, what’s going on with this generation, is understanding there habits, condition them to get with what they want and really creating that trigger in terms of exchange of information or time, or value and product.”
“The reason a company like Maker (Studios) can exist is because of what’s happening with technology. A product like Youtube is available pretty much on every connectable device and it works pretty well in our current environment, specially in mobile. The evolution of smart phones and tablets has started to put short form online video in the hands of people on a remote basis, not just sitting in front of your computer where is not basically the ideal place to watch video. And then when you see what’s happening with Chromecast, Apple TV, and Roku, you have great third party products that allow you to watch online video content specifically inside of a real good environment for traditionally consuming content. What were seeing also, what has happened with social media, social media has allowed the user experience to move, the discovery for young people watching online video it’s certainly easier than navigating the electronic program guide on Directv and Time Warner Cable. To find something that’s like really cool, (thinking…) I wonder if my friend’s into that, versus I can go into tweeter right now and consume a lot of great video galleries, that’s the current evolution of what would be considered electronic programming, it’s social, it’s available, it’s on demand. It has created this new eco system called consumption, and so, if anything we should built on that demand, that’s a large part of what we do,” added Courtney Holt, COO, Maker Studios.
With all the excitement and growth regarding digital media, there are still some concerns regarding security to deter so-called online pirates who hi-jack, steal, and use content without paying for it and making a lot of money with Fortune 500 companies who advertise through their sites. John Landgraf, CEO of FX Networks, gave his thoughts on the matter.
“I think any tool, even the greatest tool perhaps humankind has ever made still can be used for positive, as well as negative effects. Any vast eco system needs some form of law to protect the innocent. From my stand point there’s a lot of really dynamic and exciting things happening in the digital space including things with our own content, where I’m really excited about the transforming process of distribution and transforming process of consumption and consumers having much better flexibility and access to the content. There are some bad actors out there that are pretty relentless, in terms of stealing this content without compensation and earning money. From my stand point, I am so much concern about the bottom line of our company although that’s my job, what I am concerned about is the fact that we produce a lot of content in partnership with creative people. We hire thousands and thousands of people, who are essentially working people whose living wage and compensation benefits come from the economics of the business, and not to mention the fact that we are in partnership with a lot of writers, producers, directors, and actors. There’s this myth in Hollywood, this Hollywood accounting myth that people who sit in my chair spend their entire life trying to screw creative people out of their right to profit, that’s not true at all,” said Landgraf. “Almost every show that we produce that’s a successful show, that profitable, we sent out profit checks out to people. Ultimately, I am very concerned that for the foreseeable future people who make their living through the process of creation, of creating ideas and stories which is what I really care about have the ability to be compensated for that and obviously there are forces out there that don’t believe that, that believe they should do it for free. I saw a fascinated piece that David Byrne wrote about music piracy in which he was basically saying: he has made a good living making music and can always put together a concert if he needed money, but he was really concerned about the new person coming up. It was a very thoughtful, very respectful piece he wrote and there were hundreds of virtual posts (comments) saying that anyone who works on anything creatively should do it for free. I don’t really understand that, to me labor is labor, and labor is worthy of compensation.”
Enough information was revealed at DEW to write a book, and even though I have skimmed through what some of the panelists said, another great panel I had the opportunity to attend was the Social/Marketing: The Future of Record Labels, moderated by Jeff Pollack, Chairman/CEO, Global Media & Entertainment, Pollack Media Group.
During this very interesting panel where Robb McDaniels, CEO, INgrooves Music Group, Jay Frank, CEO, DigSin, Cathy Pellow, Owner, Sergent House, and Ken Hertz, Senior Partner, Hertz Lichtenstein & Young LLP, served as panelist, opinions differed as to the current state of the music business, artist development, and ways artist can generate revenue.
“Just recently the majors have started refocusing on artist development, in the initial turmoil and shift to digital they turned their attention away from artist development and investing in life long careers, it was more about protecting their revenue streams around CDs. It’s nice to see that they have started investing again in new acts, the fact of the matter is that the cat is already out the bag and artist don’t necessarily need to plug into that system. It’s no longer formulaic, artist have other options, other paths that they can pursue if they want to achieve a certain level of success. There’s a lot of people doing artist development these days, it’s not just the major labels or even independent labels, management companies are doing it more and more, and law firms even are helping artist develop their careers. There’ s a lot of tools artist can use to develop themselves and reach out and engage with their fans. I think it’s an exciting time for emerging artist, in finding their own path and finding the formula that works for them,” said McDaniels. “Our market share at our company (INgrooves) is twice (double) on Spotify than it is on Sound Scan, think about that for a second. We actually need to move into all streaming world as quickly as possible to get healthy as an industry. If we can get the average music consumer to spend $120 dollars a year, $10 dollars a month, versus $40 dollars a year, what they are currently paying, do the math that’s three times the amount of money. At the end of the day, one of the most exciting things for an emerging artist is that if you write a great song or perform a great song, you will be discovered and you will have the opportunity to make money.
Music was another important topic at DEW, one interesting panel that revealed the numbers was Music Research Presentation: The Latest Digital Music Trends & Analysis.
“The total trend in consumption, 2013 transaction totals overall albums down
8.4 % (dipping to 289.4 million units from nearly 316 million units in 2012), I understand this is a digital conference but you have take CDs in to context, from a revenue driving stand point, CDs are still an very (very) important piece of the business. Physical CDs are down 14.4 %, digital albums down 0.14 % (1.76 million units from the previous year’s total 117.7 million), this is the first time we’ve seen a drop in digital albums, ever (since iTunes was launched), we have always had a double-digit (growth) up trend. We saw a little bit at the end of 2012 were it started to get a little bit soft, and then we started out 2013, it kind of started a little soft, then stayed soft, and then actually dropped down as we went to the rest of the year. Digital tracks are down 5.7 % (fell from 1.34 billion units to 1.26 billion units), this is the first year also we’ve seen a downward trend on digital tracks, it started in late 2012 coming into 2013. Streaming, we got a panel, it’s generally, 90 plus percent of that is on-demand streaming, we are not tracking Pandora, were not tracking iHeart radio, were not tracking simulcast of terrestrial radio, iTunes radio, things like that, this is mostly (almost entirely) on-demand either audio or video, Spotify (is a big player in there), Youtube, Vevo, those type of things are in there. 118 billion streams that we tracked last year, for comptable providers, it’s up 32 % over last year. On demand streaming is very (very) closely tied to song buying. This is the shift we continue to see, more and more consumers consuming more and more music, but doing it through different channels than we have seen before,” said David Bakula, SVP, Analytics & Client Development, Nielsen Entertainment.
“Streaming helps fuel paid downloads. The real big challenge that the industry faces, I think, is how do you built more awareness. 60% of Spotify users also using Netflix, so are there more creative ways that we can use, not to only built awareness, but to also built monetization through the kinds of brands and services that listeners (or potential listeners) are using,” added Russ Crupnick, SVP, Industry Analysis, NPD Group, who tracks awareness of music services. “If we focus on the smartphone users, I think this is kind of the future, there’s a tremendous amount of interest, 50% of mobile phone users listened to music on their phone yesterday, 70% of them streamed, remember if you have a smart phone you can have your collection from iTunes, it doesn’t necessarily have to be Pandora or Spotify. There is tremendous activity on mobile platforms and I think that is only going to grow. Among streamers, 93% of them are using their phone (9 out of 10), one in four mobile music users have access to integrated car streaming. I think there’s a tremendous amount of interest, we must bridge the gap between the people who are doing it now, who totally get it, and all the people who aren’t aware, are willing to pay and don’t quite understand how to use it.”
At DEW, it was also announced that Big Frame, BroadbandTV, Collective Digital Studios (CDS), DECA, Discovery Digital Networks/Revision3, Fullscreen, Maker Studios, Magnet Media, and MiTu Networks, who collectively represent more than 10 billion video views, formed the Global Online Video Association (GOVA), an industry non-profit corporation established to advocate and support the advertising, licensing, production, distribution, and overall business interest of its member companies and accelerate growth in the online video industry. The founding companies are pleased to announce that Paul Kontonis, SVP, Strategy and Sales, Collective Digital Studios, has been named Executive Director of GOVA, during its inaugural year. www.gova.cc
About Digital Entertainment World
Digital Entertainment World (www.dewexpo.com ) is a unique event marketplace for global media and technology executives who want to evaluate the digital media landscape. This three-day event brings together leading industry executives from games, music, video, and publishing –the entire digital content ecosystem – who will take part in several keynotes, presentations and panel discussions tackling the industry’s key issues. At Digital Entertainment World (DEW), content creators and owners, enabling technology providers, digital distributors and device manufacturers will connect to create the infrastructure and technology partnerships necessary to monetize digital content. DEW is a joint venture between IDG World Expo and Digital Media Wire.
Photography: Fredwill Hernandez