Digital Entertainment -An Online Strategy

INTRODUCTION

The penetration of broadband and the sophistication of the end-user means that the Internet is no longer seen merely as an information gathering point and purchase space.
Today it is as much an entertainment hub and is part of the digital revolution changing the face of entertainment. This document outlines trends in digital entertainment and current initiatives; how the lounge room/online entertainment space of tomorrow will look and impact on the future of digital entertainment. It further examines the culture of consumer behavior and how we can deliver an online strategy in line with what the consumer wants now and in the future.


1/THE DIGITAL REVOLUTION & CONVERGENCE CULTURE

Henry Jenkins, Professor of Media Studies at M IT in his book ‘Convergence Culture’ talks of the new ways our media and culture works, we live in a world where every brand, every message, every sound and every image is spread across every media channel either legally or illegally.

On the one hand this spread is shaped by boardroom decisions as companies try to maximize the spread of their brand messages by ensuring every franchise plays across the overall vision of the company, while media companies try to maximize ownership of multi media channels.

It is also spread by the consumers who want the media they want; how they want it, when they want it and in the forms they want it. If companies don’t make it available to them legally, they will take it illegally.

In tandem with this culture convergence has been the birth of web 2.0, a second generation of internet-based services such as social networking sites, wikis and social communication tools — that have led people collaborate and share information online in ways previously unavailable.

2/THE ALL POWERFUL CONSUMER - A WORLD OF COLLECTIVE INTELLIGENCE

We now live in a world where the consumer is constantly scanning the media environment looking for media properties they care about and companies have lost control.

The consumer can do anything they want with your brand, your advertisement your entertainment content. They can mix it, mash it up, mod it, remix it, spread it through the internet, put it on You tube and download it through bit torrent and there is very little you as a company can do about it.

What is exciting is the degree to which companies are beginning to realize the power these participatory audience exert through what Jenkins’s calls “a world of collective intelligence’.

Henry Jenkins talks in terms of companies shifting away from an old prohibitionist model which says don’t touch my intellectual property its mine to control to a more collaborationist model which actively seeks to engage the consumer by giving up this control and allowing consumers to generate their own content on the platform provided and it is this thinking that is at the heart of the transformation that is taking place in our media today.

The consumer in this context has a very powerful role to play so if a blogger finds out some information damaging to a company they can spread this very quickly and what was a brand community one minute can turn out to be your harshest critic the next.

3/THE GROWTH OF USER GENERATED CONTENT

It is the notion of consumer behavior coupled with the changes in technology that has led to the new area of user-generated digital entertainment being born. The growth of digital video over the last 12 months has been nothing short of phenomenal, culminating with acquisition of My Space and You Tube by News Corp and Google respectively.

Inevitably the flood of creativity on line from sites like You Tube, My Space, Google video, Revver.com, Breaker.com, Lulu, TV, Blip TV has led to the interest of Hollywood, TV Producers and advertisers.

For example, NBC has ordered web and TV scripts of two You Tube’s video hits that attract over one million views each: ‘Nobody's Watching’ and the weekly wranglings of video pod cast ‘Ask a Ninja’ starring two ski mask sporting actors.

‘The Diet Coke and Mento’s Experiment‘, combustibly combined in the fashion of a synchronized fountain which has earned its creators over US $30,000 with over 5 million hits on US website Revver.com (which incidentally pays creators for its content) is also receiving an NBC show case on ‘Late Night with Letterman’.

A recent survey by the Pew Internet and American Life Project found that 40% of Internet users have posted content online and that user-generated content is mostly driven by the under 30’s, within this age group it was noted that 62 % viewed content generated by someone they knew.

It is argued that online platforms hosting user-generated content have already amassed audiences exceeding those for some traditional media platforms. Clearly a new critical mass has been born.

4/THE SCRAMBLE TO MAKE MEDIA CONTENT AVAILABLE -CURRENT INITIATIVES

This transformation has led to media companies scrambling to make their media content available across a variety of platform devices, anxious to avoid what happened to the music industry happening to them and is seen as the key to modernizing many media companies and how they make their content available against the growth of user-generated content.

This year in the US the Disney ABC television group made its first foray into making it content available online in a groundbreaking deal with I-Tunes and the development of it’s own on-line media player.
Disney also made its hit TV series ‘Desperate Housewives’ and ‘Lost’ available online and its Kid’s Channel available online. In the experiment the Kid’s Channel had 3.7 million to 5.7 million streams to that of the TV series which speaks volumes about childrens’ rapid adaption to the power of technology.

Click Star www.cstar.com, a joint venture between Intel and Morgan Freeman’s Revelation Entertainment is being positioned as the show case for internet video and Intel’s new ‘Viiv’ Platform. As well as a Danny Devito’s documentary channel there will be a movie channel hosted by film director Peter Bogdanovich which will provide old and new movies shortly after release.



5/TECHNOLOGY DEVELOPMENTS/ISSUES-THE BATTLE FOR THE LIVING ROOM

At the moment it is still too difficult and complex for the average person to take content from their PC and transfer it around the various devices in the home but all that is set to change as we see advances in home networking.

Currently standing in the way are compatibility issues highlighted in the battle for dominance taking place around file formats for digital video and how it will be protected. On the one side we have Apple’s rights protected ‘Fairplay’ system and on the other Microsoft’s windows media DRM. While I-Tunes has become the Walmart of legal music and video downloads, many media and executives prefer Windows DRM and Windows will be supported by a wide variety of platform manufacturers.

January 2007 sees the battle to make the PC the entertainment hub of the home intensify with the launch of Microsoft’s new ‘Vista ‘operating system. Designed to complement the media Centre Edition (MCE) of the XP windows operating system, MCE provides a UI specifically designed for operation at 10ft in sit-back mode. Hewlett Packard has also recently debuted its successful Widescreen media smart TV which also syncs to one’s own home network.

The huge growth in video that enters the home through the Internet will be displayed on your TV as well as your PC.

The cable networks have also been quick to get in on the action with AOL launching its own 10ft experience, ‘AOL Hi- Q’ went online this month and allows consumer DVD quality video on line. In the UK, British Telecom in conjunction with Microsoft are launching its own IPTV service ‘BT Vision’ and in December Apple will launch its I-TV set top box that will sync TV sets to its I-Tunes portal.

The development of game consoles also represents another viable means of digital entertainment for the living room with Sony Playstation 3 and Microsoft's X Box 360 both connecting to the internet and being marketed as home entertainment hubs to pipe movies, TV programming and music in addition to games. Incorporated into both new players is a HD DVD drive that is being touted as the next generation format which provides six times the resolution of a standard DVD and a higher level of interactivity.

Either way you look at it ‘the battle for the living room’ is showing no signs of abating and it’s anyone’s guess how things will pan out. One thing is certain: we are still a long way from the one black box which will pipe all our entertainment; however with advances in technology you will see hardware become more robust, more powerful and more affordable at every level.

6/3-D PHOTO REALISM -THE NEXT STEP IN ONLINE GAMING & VIRTUAL REALITY

Right now, computer generated animation for films, games and virtual reality (VR) only go 95% of the way there but with enormous advances in video processing technology it is only a matter of time until that last 5% achieves photo realistic rendering. Imagine in virtual reality being able to put your own face on your avatar or player in your favorite online game, complete with facial expressions.

With My Space losing it’s cool factor it will be interesting to see how VR sites like Second Life (www.secondlife.com) and MTV ‘s newly launched Virtual Laguna Beach (www.vlb.mtv.com) will impress over the coming months. Where else can you cross a reality TV show, My Space, a Personalized website and day-to-day life? Using an avatar, VR lets users travel through a virtual world and interact and share experiences with other users. 80’s Pop act Duran Duran and other musicians have done virtual concerts in Second Life and interacted with fans in ways never thought imaginable in the real world. There is no reason why we won’t be able to work in VR in the future.The possibilities are limited only by our imagination.

7/COPY RIGHT-THE DIGITAL SHOW DOWN

Striking the balance between owning intellectual property and giving consumers control is key to the debate over copyright. Two main camps have emerged, each with widely divergent views.

One group comprised of traditional media companies and hard ware/software companies. Those who believe information is a commodity that can be bought and its distribution controlled. On the other side are those who believe that information, by its nature should be free and its distribution uncontrolled, this group comprises of a few far sighted computer companies Google, IBM and most consumers.

In Kevin Kelly's book ‘New Rules for the New Economy” he explains how the magic of the internet has turned conventional business models on their heads. In the old world, wealth was based upon physical objects, value came from scarcity; in the information age value comes from abundance. The more people who have access to information the more valuable that Information is.

Rob Metcalfe the inventor of the Ethernet networking standard explains it very well in what became known as Metcalfe’s Law - the utility of a network expands by the square of the number of users. The more people on the network the more conversations are possible. Those who want to restrict the flow of information think of information as little atoms rather than as part of a great network .The furor currently surrounding YouTube is a classic example; numerous companies are engaged with litigation for copyright infringements and requesting their content be removed from the site.

These people claim to be in the content-delivery business but they do not understand it. YouTube grew from nothing to be sold for 1.65BillionUS dollars within 18 months, because of ‘the free flow of information’. DRM is another example which restricts the way information can be used in software or hardware Advocates of this technology say that it is necessary to protect the rights of artists and publishers but all the signs point to the inevitable demise of copyright.

A website www.defectivebydesign.org goes one step further in the campaign against the control of information. It is a grassroots movement against the absurdity of DRM. Targeting all manufactures. DRM products have restricted features built in that restrict what jobs they can do, products that have been intentionally crippled are, from the users point of view, defective by design.

8/MOVING TOWARDS A NEW MEDIA MODEL -THE SIGNIFICANCE OF GOOGTUBE

Moving towards a new media model the combination of Goggle’s search savvy and You Tubes handle on Internet video yields the first viable new media successor to broadcast and cable TV. The union offers the interactive infrastructure and tools needed to manage and monetize web-based digital video unmatched by traditional media platforms.

What it means is that the Ad dollars and creative content that have sustained traditional media will increasingly shift to interactive platforms that can give consumers and advertisers more of what they want on interchangeable screens.

The 6.2 million daily visitors to You Tube are ripe for Google’s advertising savvy technology which gives immediate open access to most commercial and user generated content. It reflects the demands of a young audience that will broaden as it matures.

Clearly the emerging standard for video and information is on-demand interactivity, being able to download and store content across any platform or device. The search engine is the means to manage this content, one cannot exist without the other. Add to this the ability to charge consumers and advertisers and you have a ready made new media model. Google can perfect ways of making money from content online by connecting the right targeted consumers, advertisers, content producers, platforms and devices.

9/THE FUTURE OF DIGITAL ENTERTAINMENT

By 2010 it is predicted all TV will be digital, your computer will be able to speak to a whole host portable and lounge room devices, even sing to us, Broadband penetration will be 75% of all households and 80% of all advertising will be on line.

Henry Jenkins talks of us being in an apprenticeship phase where we are still learning to use the new consumer power at our disposal in a age of convergence. If we fast track five years’ we have learnt to harness this power and these skills will have spread from niche fan based communities to general consumers.

As demand for content soars, more consumers are seeking out information in online communities and engaging in media content in new ways. We will no longer be watching scheduled prime time shows, we will be subscribing to TV programs in the same way we subscribe to a magazine.

The opportunity for niche programming via an Internet based model will be significantly increased as those shows with a niche dedicated market and audience will be able to support and fully fund the show.
The idea of niche products is more fully explored in Chris Anderson’s book ‘The Long Tail’ which demonstrates that the renaissance being enjoyed by back catalogue titles can be also applied to other industries. He cites the example of one US line music website Rhapsody being able to sell each of its 1 million music titles at least once a month; out of its total sales 40% of titles were previously unavailable. This, he argues, is part of ‘the economics of abundance’ in a new digital world and has been coined ‘the long tail effect’ www.thelongtail.com

In the future there will be more examples of transmedia storytelling techniques, like ‘The Matrix’ where stories are told across different media platforms. Right now children‘s content like Pokemon have this integrated story-telling technique but we will reach the point where the West Wings of the future will be fully integrated across multiple TV shows and multiple web platforms. The notion of a ‘good’ drama will be one that lets the viewer go as deep as s/he like and have as much complexity as s/he wants. Interactivity will become a more important part of the TV viewing experience which means more reality TV programs.


SUMMARY

The transformation of the digital entertainment space will give the consumer the power to control their entertainment space in hitherto unimaginable ways. Any online strategy will have to cater for a level of consumer interaction unheard of ten years ago.

The concept of Kevin Roberts “inspirational consumer’ will be the norm in all forms of online marketing and advertising. The theory is that those core consumers that care passionately about your product have an important role to play, therefore companies had better listen to and engage them. Companies will aspire to that sweet spot where brand message and fan community meet. Branded entertainment, intelligently incorporated into programming, will be as much part of everyday life as the 30-second TVC slot was to traditional media companies over the last 50 years.

A Google style advertising/subscription based on ‘the economics of abundance’ will be the new media model that companies adhere to in an information age with no copyright restrictions. A world of digital entertainment that Chris Anderson describes as providing endless choice that creates unlimited demand.

We will be able to lead multiple lives in various virtual worlds and, armed with just a computer and mobile phone, it will no longer matter where you live if you can work online and communicate Holographically with those people you choose and need to interact with.

Thomas Freidman’s best selling book ‘The World is Flat’ talks of a world where the power of the internet makes it possible for individuals to collaborate and compete globally. He tells us that by 2020 the free flow of information will completely blur national boundaries and they will be replaced by corporation-based cultural groupings and reconfigured human organizations tied together by global networks. Maybe this isn’t so far from the truth.



Acknowledgements

’New Rules for the new Economy’ -Kevin Kelly -1999
‘Sisomo’-Kevin Roberts, Powerhouse Books 2004 www.sisomo.com
‘Convergence Culture’-Henry Jenkins 2006 New York University Press
‘The Future of Entertainment’-special The Hollywood Reporter September 26 2006
‘Broadband Delivery of Film and TV content over the open Internet: A technical discussion of the technical issues and Hurdles-The British Screen Advisory Council Briefing Paper: Ben Keen 2006
Let me entertain you’ -Article by Simon Van Wyk Australian Newspaper 2026 Magazine Special: Entertainment
’What is web 2.0’- Tim O’Reilly-30/9/2005 O'Reilly web resources www.oreilly.com
‘Pew Internet and American Life Project’-The Future of the Internet-24th Sept 2006 www.pewinternet.org
Goog deal shifts paradigm on demand”-Hollywood Reporter article October 17 2006
Madison & Vine’-Scott Donation McGraw Hill 2004
The coming digital showdown’-Graeme Philipson SMH article October 17 2006
The World is Flat-Thomas Freidman-Farrar, Straus and Giroux 2005
The Long Tail’-Chris Anderson-Randon House Business Books 2006