The worlds of finance, technology and showbiz are working to find a common language because the quickly-evolving digital world is creating multiple opportunities, but few clear business solutions.
That was one of the conclusions at Variety’s Venture Capital & New Media Summit, held Friday at the BevHilton, which explored an array of innovations and challenges facing Hollywood, Silicon Valley and Tech City.
Tech City, the booming hub of tech companies in East London, was a focus of the Duke and Duchess of Cambridge, whose capped the daylong event (see separate story).
At a series of panels and addresses at the confab, many agreed that the investment community is driving tech innovations affecting the entertainment industry. While the various panelists from the digital and showbiz arenas made it clear that the two worlds have very different outlooks on business plans, there were a few points of agreement. Those include the notion that it will become increasingly important to tailor product on a personal basis rather than wide-targeted fare; that Hollywood is just beginning to tap into the potential of social media; and that the dizzying changes may be daunting but the only guarantee of failure is to cling to old business models.
The day featured a lineup with diverse points of view, including Mark Cuban, Shari Redstone andFacebook’s Matt Jacobson.
Event kicked off with an overview of media-consumption trends from David Cortese, senior VP of digital studio services at Rentrak. Focusing on the increasing number of screens even as live TV reigns supreme, Cortese pointed to the emergence of everything from DVR viewing, which has 17% market share, to less mature windows including rental, electronic sellthrough, VOD, Internet and mobile, all of which have low single-digit shares that are bound to grow in the coming years.
Suranga Chandratillake, founder-CEO of video-search firm Blinkx, gave a presentation on Silicon Valley’s culture of innovation. Using data from a survey his company conducted on entrepreneurship, Chandratillake dispelled the notion that available talent, dealmaking, money, buzz and sellable companies are any more important than one easily overlooked element: passion.
In that respect, Chandratillake believes Los Angeles has what it takes to continue growing as a hub for innovation. “I can’t think of a city more driven by slightly irrational passion than Hollywood,” he said.
Many speakers throughout the day echoed the sentiment that passion is key for any startup.
“Taking a risk (in Hollywood) is more of an anomaly than (it is) up north (in Silicon Valley),” said David Maisel, the former Marvel Studios chairman-turned-special advisor to “Angry Birds” creator Rovio. “You really have to believe in and be passionate about what you’re doing.”
Maisel recently made the move to Rovio, in part, after seeing how even his 80-year-old mother was playing “Angry Birds.”
“There’s more potential for success here than what I’ve seen with any other intellectual property in the last 10 years,” he said.
Richard Wong, a partner at Accel Partners, which has invested in Legendary Entertainment, Facebook and Groupon as well as Rovio, compares “Angry Birds” to Nintendo’s “Super Mario Bros.” franchise, which has lived on through sequels, spinoffs and putting its characters in the vidgame company’s other games.
“There’s always the risk of overexposure,” Wong said, but Rovio’s management is making sure “they don’t screw up the brand.”
“Angry Birds” recently spun off into a successful line of plush toys, apparel and other merchandise, and game levels tied to Fox’s toon “Rio.”
“We don’t know how big this can grow, but in the last 30 days it’s grown faster than ever,” Wong said.
Other panelists had more advice for innovators and entrepreneurs throughout the event’s discussions.
“It’s being able to offer the big guy something they haven’t done yet,” said Jay Samit, CEO of SocialVibe. “Every large organization is so busy trying to do their day job.”
Samit spoke as part of a panel titled “Next Generation of Technology All-Stars,” moderated by UTA head of digital marketing Brent Weinstein. Speakers, who included Samit, Tongol’s James DeJulio Tongal, GameDesk’s Lucien Vattel, kiip’s Brian Wong, MediaMorph’s Shahid Khan, tango.me’s Dan Scheinman, heyzap’s Jude Gomila and BeachMint’s Ara Katz, also emphasized the importance of fitting content for the platforms available, not just trying to figure out new ways to distribute product.
“The real billion-dollar opportunity is how you take these new tools that are out there and how do you create new content types for these tools?” Scheinman said.
Keynote Q&A speaker, National Amusements prexy Shari Redstone, also decried favoring new platforms over making good use of what’s available. She suggested it’s shortsighted to give viewers access to movies in earlier windows at the expense of what she sees as the most important link in the distribution chain. “Ultimately, the value of a movie is determined by how well it plays in a movie theater,” she said. “And if we don’t continue to promote that, this industry is going to continue to go down.”
The vice chairman of Viacom and CBS Corp. also didn’t mince words on another issue plaguing the exhibition business in the U.S.: too many theaters. “It would be really nice to see a lot of theaters close,” she said. “Fewer theaters would mean a better experience for patrons.”
She also spoke out against MoviePass, the startup venture that tried to impose a Netflix-like subscription service on the theater business last month. She called on the exhib biz to continue talks to create its own such service, but warned that simply giving moviegoers carte blanche for a monthly fee wasn’t wise. Instead, she suggested more targeted promotions, such as creating subscriptions that could help boost weeknight screenings, as opposed to weekends.
Targeted promotional strategy took up a large part of a discussion titled “Hollywood’s Hunt for the Next Big Thing: How Start-Up Innovation Is Transforming the Entertainment Business,” moderated by Variety’s Andrew Wallenstein, which emphasized that “precision marketing” — the ability to use social media and other new platforms to tailor campaigns at the individual-consumer level — is already upending studios’ traditional marketing strategies.
“It’s about personalization,” said Mitch Singer, CTO at Sony. “When you know that someone enjoys your brand, it’s about getting to them in a way that’s more meaningful.” Singer said one example would be selling a movie ticket through the UltraViolet service so that studios could stream 20 or 30 minutes of extra film content to that viewer when they got home.
“Those are the kinds of things you can do when you start to personalize the experience of consumers,” he said.
Speakers weren’t along in seeing Twitter as an invaluable tool for direct marketing. Cuban sees it as a means of conveying information about his businesses without needing a middleman.
“If you want to get something out to the media in your own voice and in your own terms, Twitter is a great place to do that,” the entrepreneur said during the summit’s Social Media panel, moderated by UTA social media agent Eric Kuhn.
Cinedigm’s Michelle Martell pointed to “Day in the Life,” the National Geographic-acquired film that started as a YouTube video compiled from user-submitted video, as an example that consumers can — and often will — shape the type of content they want to see.
“Really what we’re seeing is the democratization of content … so even on the theatrical level, audiences being able to raise their hands and say ‘I want this content to come to a theater to me,'” said Martell, who said social media helped with something she called “precision marketing network(s),” a more direct way of targeting individual consumers.
“I think a lot of the traditional marketing strategies of the studios are getting turned on their head,” echoed Cox.
That the lines are blurring when it comes to who is creating entertainment these days can also be a scary thing.
Patrick Chung, a partner at New Enterprise Associates (NEA), which helped incubate TiVo, pointed out that while technology firms used to create new platforms that Hollywood would then program with entertainment, times have changed.
“Now you’re seeing content created not by companies but by individuals,” he said. “Has Hollywood created most of the (2.6 billion hours of) content on YouTube? No. That’s a big threat for Southern California and Hollywood.”
Chung spoke during the panel on the “State of the Venture Capital and New Media Industry” moderated by CAA’s Michael Yanover.
“A lot is based on the individual entrepreneur,” Wong told the audience. When investing in startups “we look for tough problems that need to be solved and the individuals with a strong understanding of the problem, but not ones who say they have all the answers, because by the time the product gets built the market has changed.”
Venture capitalists also aren’t high on established entertainment brands.
“Hulu is only there by virtue of its current ownership,” IBM Global’s Martin Kay said. He also called Netflix’s streaming business “unsupportable unless the content companies roll over” and provide them with the films and TV shows they’re looking for. “Content is still king and has leverage because you still have to give people something to watch and listen to,” no matter what the platform is.
But Hollywood needs to find better ways to innovate, and panelists echoed Samit’s view from the “Next Generation” panel that filling a gap in the marketplace is key. “Growth only comes from innovation and challenging the status quo,” Shapiro said.
Growth and innovation were key themes in the day’s final panel, “Case Study on Tech City,” which attracted two of the summit’s most anticipated guests in the Duke and Duchess of Cambridge.
Other panels included “Masters of Social Media” and “Mega-Trends — Finding Opportunity in Today’s Major Societal Movements.”
Panelists also included Brett Ratner, director Paul Feig, actresses Dana Delany and Chelsea Kane, Montgomery and Company’s James Min, Roguelife, Relativity Media’s Randall Cox, Intel Capital’s Marc Yi, Consumer Electronics prexy Gary Shapiro, Veritas’ Chad Troutwine, Zaaz’s Jon McVey, Gravitas’ Nolan A. Gallagher, Rocket Fuel’s George John, Saatchi and Saatchi’s Judah Schiller, Freakonomics’ Stephen Dubner, OpenX’s Tim Cadogan, Techlightenment’s Ankur Shah, SocialGo’s Dominic Wheatley and M&A, Demand Media’s Shawn Colo.
(Andrew Wallenstein and Marc Graser contributed to this report.)