Digital Hollywood: Online video needs marketing
DIGITAL: Panelists debate whether segment will ever equal DVD in revenue
By Jennifer Netherby -- Video Business, 5/6/2009
MAY 6 | DIGITAL: SANTA MONICA, Calif.—It’s not enough for studios to put movies and TV shows online and wait for consumers to find it. To build viewership, and in turn revenue, executives on a panel at Digital Hollywood here Tuesday said they’re finding they have to market to consumers through social networks and merchandise titles so they are easy to find.
At the same time, there is debate over whether digital will ever contribute the same revenue that traditional media now does.
Speaking on the “Hollywood and the Digital Consumer” panel, Paramount Digital Entertainment VP of North American digital distribution Malik Ducard said he has found that merchandising online makes a big difference in sales. Ducard said Paramount put out Eddie Murphy film Raw on Hulu, which performed well at first but then tapered off. But after Ain’t It Cool News did a story on Murphy with an embedded link to the film at the bottom, the film once again popped.
MySpace director of content and marketing Christian Cussen noted that two-thirds of the video on MySpace is in the form of embedded videos on user profile pages, with users acting as a recommendation engine for friends. MySpace is positioning itself as a social portal, or place to find content, rather than as a social network, he said.
Using Twitter and other social networks to promote online videos also drives viewers.
Sony Pictures senior VP of digital networks Eric Berger said digital content is delivering incremental revenue to the studio. Sony merchandises TV on its video streaming site Crackle.com, offers minisodes of TV series online and is creating original online productions that it plans to also release on traditional formats. For example, online series Angel of Death is premiering on Crackle but will then go to cable TV, DVD, international TV and iTunes.
Berger said Crackle, which the studio revamped last week to be the leading movie streaming site online, is meant to be a “blog meets independent video store,” guiding its core users, guys 18-34, to programming as a way of helping them find what they want to watch.
Cussen said MySpace is taking the opposite approach, letting users be their own programmers and calling it “arrogant” for the company to think it could program for 70 million users.
As the two debated the best way to bring content to users, Foresee Entertainment president John Penney questioned what he called the “profitless prosperity” of putting programs online and giving users free content. He asked where the money would come from to support a digital business model.
Cussen said MySpace is putting money in content holders' pockets. When questioned about how much, he only offered that hundreds of content holders are making in the six-figure range from the site.
A drop in the bucket to what companies make from TV, DVD and traditional distribution, Penney countered.
Yahoo! VP of connected TV Patrick Barry predicted online distribution wouldn’t ever make the same revenue that the traditional media business does now. But he also doesn’t believe online will replace traditional media either.
Everyone seems to agree that for digital to grow, it must be easy for consumers to play content back on multiple devices, just as they can with DVDs.
Paramount's Ducard predicted a year from now digital will include more bells and whistles, with studios offering consumers “more than just movies, but digital ownership on par with physical.”
The companies that win will be the ones that serve consumers best. As Blockbuster OnDemand senior VP and general manager Bruce Anderson said on an earlier panel Tuesday, “consumers are going to win.”
On both panels, Apple, Netflix and the Roku box won the most praise.
