4 Highlights from VideoSchmooze:LA Panel

At this past Tuesday morning's panel discussion at the VideoSchmooze:LA breakfast we had a great discussion about how Hollywood succeeds in the digital era. While we covered a lot of ground, below are 4 key highlights. As a reminder, our panelists were:

• Albert Cheng - EVP, Digital Media, Disney/ABC Television Group

• Gannon Hall - Chief Operating Officer, Kyte (co-lead sponsor of the breakfast)

• Justin Herz - SVP, Direct-to-Consumer, Warner Bros. Digital Distribution

• Ted Sarandos - Chief Content Officer - Netflix

• Ben Weinberger - CEO and Co-Founder, Digitalsmiths (co-lead sponsor of the breakfast)

Note a video of the discussion is available here; the lighting is a little low, but the audio is solid. Thanks to NATPE for live-streaming the event and making the on-demand version available.  

1.Windows are extremely important to Hollywood and they aren't going away any time soon. As Albert explained, the 2 things that drive windows are money/distribution and segmenting the market. Any change in windows for new digital distribution is predicated on monetizing as effectively as the incumbent window being impacted. Albert noted that with the increase in ads on ABC.com, it can monetize more effectively than with DVR playback, so it is going to promote .com accordingly. Ted pointed out that Netflix is proving the digital window's value to longer shelf life content vs. the day-after value of broadcast networks' sites.

2. Digital will address the significant inefficiencies in current media distribution models. Ted noted that the Internet and e-commerce are very good at rooting out inefficiencies of traditional offline models (he cited as an example the demise of travel agents in favor of online travel sites). With respect to windows, Ted cautioned that  they can be overmanaged: "in what other industry would you know exactly what your customer wants and not give it to him and yet expect to succeed."

Some of these inefficiencies are clearly in the Pay-TV business, which packages and delivers a lot of channels, though viewers actually only watch a few. Ben raised the question of what role Pay-tv providers should play: packager of content or deliverer of the best possible user experience through fast broadband networks. But with cable TV programmers receiving $25 billion a year in distribution fees, a good chunk of which finds its way back into the Hollywood production community, there are many built-in barriers to significant change.

3. Personalization in the digital era is key. Ted noted that with the Internet bringing vastly increased choice, one-to-one personalization is growing in importance. He pointed out that one of Netflix's key strengths is providing a simple menu of relevant choices for users, that allows users to remain relatively passive.

Justin echoed the point, noting that the recently-launched Warner Archive is all about targeting the micro-niches with catalog content that wasn't economic to deliver in mass-market approach. Gannon explained that some of their customers' traffic-driving success is due to social factors: users discovering great content and sharing it with others.

Ben weighed in that metadata is what fuels accurate personalization and also pointed out that what specific input device the user has makes a big difference in how to navigate the choices offered.

4. Electronic sell-through of content is heavily challenged as a successor to DVD sales. Lastly, the panel pretty much agreed that EST isn't going to succeed DVD sales any time soon. Issues around portability, security, rights, device interoperability and cost were just some that were named. Further, Gannon speculated that for younger people, the purchase of a digital copy may be outdated anyway. As content moves to the cloud, anytime/anywhere access could well displace the need to own content outright. The EST discussion highlighted the need for Hollywood to move faster to keep up with consumers' changing preferences.

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Categories: Events

Topics: VideoSchmooze