the Film Industry

J Conte

ICHARD HUl

In the
mid 199O's,
the buzzword in
Hollywood was
"coiweigence."
22
Everyone in Tinseltown sought desperately lo solve the riddle of how
Hollywood's content would merge with emerging digital technologies.
The bigwigs ai Microsoft made a bold march onto studio lots and pro-
claimed that they held the keys to the convergence kingdom. Yet in a
short time, the two sides called a truce and returned to their respective
comers, declaring that Hollywood would stick to content, while
Microsoft would stick to technology.
Ten years have passed and, after getting its proverbial bubble burst,
Hollywood has timidly started to embrace the online world once again.
Will it be for real this time? And if so. how is Hollywood seeking to get
the most bang for its online content buck?
^ H C E S S AND FAILURE
j^^ffik anyone in tlie movie business about Hollywood's most high-
profile online success and he or she will tell you about The Blair Witch
• Project when the stars truly aligned. "We caught lightning in a bottle,"
•MK^^vin J. Foxe. the film's executive prtxlucer. "The online commu-
• B n o o k the fibn's marketing materials and passed them around virally
j in such a way that audiences showed up in droves for opening night."
" Clearly, without the online buzz, it is a film that would have never been
discovered by mainstream audiences. Instead, the movie—made on a
$35,000 budget—went on to gross more S350 million worldwide.
Of course, this well-worn success story took place five years ago.
Common sense would dictate that this should have been the first splash
of an inevitable tidal wave that blended Hollywood's content and the
Internet. Instead, the well quickly ran dry. And in Hollywood's what-
have-you-done-for-nie-Iateiy culture, hanging your hat on a success
five years in the past doesn't get you invited to too many lunches.
Now for ihc first time in years, Hollywood's online ad spending is up,
and the backrooms of Sunset Boulevard eateries are once again abuzz
with producers talking about the Internet. According to figures from thtf
Motion Picture Association of America, online advertising budgets for
its member studios nearly doubled from 2002 to 2003. "And the news for
2(X)4 is even better," according to Ian Schafer, president of Deep Focus,
a leading online marketer of studio movies for clients such as MGM,
Miramax, and Dreamworks. "We're seeing at least five psercent of overall
marketing budgets for a film being allocated for online promotion, and
this is up considerably even since the beginning of this year." While these
numbers can't compete with budgets for television and print, they do indi-
cate a steady improvement in Hollywood's attention lo online audiences.
2004 ECoMTEHT 2 3

trailers, clips, and related promotions, online audiences must be provided
with constant and immediate access to showtimes and theaters.
So why has Hollywood only just recently returned its
attentions to the online world? In order to understand the answer,
it's important to realize that, for Hollywood content-makers, the
Internet boils down to only two things—marketing and distribu-
tion. And each represents a double-edged sword.
The upside in the marketing arena is that the Internet has joined
the ranks of bona fide mediums that can be used to galvanize the
audiences who fill theaters on opening nights; the downside is that, if
not done properly, it can severely damage or even destroy hard-won
brands. For distribution, the coming years might very well prove the
Internet to be an additional and enormous revenue stream, while
the downside entails the hot-button issue of content piracy.
MARKETING
Only in the past few years have Hollywood new media staffs
migrated from beneath the umbrellas of the IT departments to
those of marketing. And Hollywood marketing these days is all
about opening weekend box office. "The biggest challenge in
online movie marketing right now is to make sure that showtimes,
theaters, and viewable trailers are accessible to a user at all the
right times," says Deep Focus' Schafer. People still need to con-
stantly be reminded that they need to get out of their seats and go
to the theater.
And while they're surely limited by budget, online marketers
are also constrained by limited available content and how they
can access it. Many outsourced online marketers complain of
having to sift through shipments of unlabeled CD's containing
non-catalogued cast photographs and movie graphics. The new
rules are clearly being written as we speak.
"Rather than being an end-all, be-all...the Internet has become
simply a piece of the marketing pie," says Hollywood movie pro-
ducer Andrew Panay. "Just as with movie marketing in general,
we've learned that some audiences respond to online marketing.
24 WWW.ECONTENTMAG.COM
With so much riding
on opening weekend box office
grosses, movie marketers say that, beyond simple movie
and some don't," For instance, Panay is currently finishing the
Miramax film Underclassman starring Nick Cannon of Nickelodeon
fame. "We've already started discussing online promotions that
will catch the attention of youth audiences for this film," says
Panay. Whereas on The Wedding Crashers—another film Panay
is finishing for New Line Cinema that stars Owen Wilson and
Vince Vaughn—he expects the studio to rely less on online mar-
keting, as the audience skews somewhat older.
Robert Levy, producer of the phenomenally successful Mary
Kate and Ashley Olsen direct-to-video movies, agrees. "Young
audiences are online. We play extensively to these kids online
because we're both encouraging them to buy these movies and
we're reinforcing Mary Kate and Ashley as a brand."
While studios struggle with using the Internet as a too! to cre-
ate box office punch, many Hollywood content-makers feel that
using it to develop and extend a brand is the real untapped power
of the Internet. Marc Levey, founder of the Producer's Guild of
America's New Media Council and managing director of Pacific
Media Ventures, insists. "The Internet for Hollywood is about
community. If you build a branded community that people can par-
ticipate in, they'll come back over and over." Levey points to
Hollywood film franchises such as Spidennan, Harry Putter, and
Lord Of The Rings. "The online communities for these types of
franchises can be huge when they emulate the "water cooler'
atmosphere, giving visitors the ability to chat and exchange ideas
between installments of movie episodes."
But branding is serious business. In movies, the brands tend to
be movie specific, rather than company specific. With the possible
exception of Disney, few people rush out to see the new Universal
or Sony fibn. Because of this reality, each movie's branded mar-
keting assets—logos, artwork, photographs, movie clips, trailers,
and the like—must be created on very short timelines. Digital
management of these assets is even more cumbersome.
 Companies Featured in This Article
Deep Focus Neospire Producer's Guild
www.deep-locus.net www.neospire.com of America's New
Media Council
Extensis Motion Picture
www.extensis.com Association of America •pj - ' • a
www mpaa.org Sony Pictures
INSCI www.sonypictures.com
www.insd.com MTV
www.mlv.com
MANAGING ASSETS
For Sony Pictures, producer and distributor of the Spiderman
movies, this presents the problem of having to control and cen-
tralize access to thousands upon thousands of moving parts. Using
INSCl's ActiveMedia digital asset management (DAM) software
as its platform, Sony has created cineSHARE. cineSHARE is
designed to move and share marketing materials and stock footage
with post, print, finishing, and marketing houses. The system pro-
vides secure access to more than 20,000 assets, all of which can
now be accessed through the Web. "ActiveMedia has become one
of many point solutions used by Sony," says Mike Koehler, sys-
tems engineer for INSCI Corp., developer and marketer of the
ActiveMedia software. "All of these point solutions together are
wrapped up with a bow and become Sony's enterprise-wide solu-
tion." As a piece of this enterprise solution, cineSHARE enables
access by producers, directors, lawyers, editors, and marketers
alike to digital media from around the world and in all parts of the
production cycle—digital dailies, location photos, head-shots, and
production notes, among others. Because it is Web-based, collab-
oration can take place in near real time.
"We feel that ActiveMedia really "plays well' with other appli-
cations already in use at Sony," adds Susan Worthy, INSCl's mar-
keting VP. "In addition to allowing for high customization on the
front end, we think that being able to interface with so many other
applications is one of the major keys to making this all work."
Search capabilities also get a high priority. "cineSHARE is basi-
cally a big collection of Weh-based folders with the ability to exe-
our Build Your Own Ride game online." The show quickly became
a hit, especially in the 12-34 age range, and it was ultimately seen
by more than 80 million viewers in its first season.
Of course, MTV's problem mirrors Sony's, but because of the
added emphasis on overall channel branding, it's a struggle that
occurs on a longer-term basis. In order to maintain consistency of
the MTV brand online, the network turned to Extensis' DAM soft-
ware. Portfolio. Extensis' director of product management. Kirk
Sadler, says, "Among other things, MTV has used Portfolio to
archive and centralize all of its branded elements. Logos, graphics,
video clips, animation, photographs—anything branded—is able
to be accessed, sorted, and identified immediately." This ease of
access to multiple terabytes of data allows departments and con-
tractors in many locations to quickly gather the most current
brand assets and then use them creatively. Likewise, centralization
enables administrators to more easily implement a formalized
backup procedure, and Portfolio's Express feature allows users to
transfer data to various other desktop applications through simple
drag-and-drop methods. Extensis' Sadler adds that an unantici-
pated benefit of the software for MTV is that they've vastly sped
up internal approval times, thereby allowing MTV's branded con-
tent to go on-air and online more quickly. By ultimately speeding
up production time and ensuring a consistent brand identity,
Extensis considers MTV's use of the software a time-saving, com-
petitive advantage for the network.
DISTRIBUTION
These days, legal online distribution of Hollywood's content to
mainstream audiences appears confined to downloadable movie
trailers and program clips. But, as the music industry has quickly
discovered, things are changing...and fast. Whereas only a few
years ago the download time for a full-length feature film was
Using ActiveMedia, a search has produced four available video clips, while
one low-res proxy is being streamed lo the desktop.

cute great searches," notes INSCl's Koehler.

"Your ability to find what you need with this
software is much greater than when we all
worked with just FTP."
Television networks also seek to brand
individual programs. But more important for
them is the extension of their overall channel
brand. "We very intentionally have reached
out to online users for our auto-makeover series
Pimp My Ride," says Beth J. Greenwald, MTV
Network's executive who oversees the popu-
lar series. "Kids come to the MTV Web site
because they get an overall experience consis-
tent with the culture of our network. That
experience is bigger than any one particular
show. We tried to grab the attention of these
kids by giving them the opportunity to play

OcTOBER 2004 E C O N T E N T 25
 seven hours or more, widely used broadband connections have cut
the time to less than one hour.
A new study conducted by the Motion Picture Association of
America and online research firm OTX reports that an astounding
58% of online users in South Korea—where 98% of the popula-
tion has high-speed Internet access—have downloaded movies.
Although the study claims that the number of Americans who
have downloaded films is around 24%, the penetration of high-
speed access for Americans hovers at only 46%. Clearly, without
immediate attention as access to broadband increases, Hollywood
is on the verge of some serious piracy problems. According to
Derek Wilson, chainnan of Neospire, a Dallas-based provider of
mission critical managed-hosting services for companies such as
ABC Radio, Loews Cineplex, and others, "Our entertainment
clients are seriously considering the implications for their Web-
accessible content as consumers continue to gain broadband access
at such accelerated rates."
And this, 10 years after the start of "convergence," is where
Hollywood and technology tnight he showing signs of becoming
bedfellows. In addition to developing its electronic anti-piracy pro-
tection and digital rights management applications, Hollywood
now seems willing to consider accepting the technology industry's
latest overtures. Although each is wary of the other, there's no
question that the ability to quickly and efficiently download a film
opens Hollywood's content to all sorts of new platforms. Even
Microsoft has jumped back into the fray. This holiday season,
Microsoft expects to debut its Portable Media Center, a handheld
PDA capable of playing downloaded movies, music, and other
recorded programming.
Likewise, there's a move to piggyback Hollywood content
onto the inroads already being made by wireless gaming. "With
hundreds of millions of wireless phones out there and a rapidly
accelerating installed base of consumers anxious for its content,
Hollywood is pushing hard to merge the worlds of gaming and
movies," says Dominic Ianno. Ianno, formerly VP of merchant
bank Europlay Capital Advisors, has worked on merging movie
and video game properties such as Terminator 3 and Matrix 2. He
is now EVP at Outlaw Productions, the movie company responsi-
ble for such blockbusters as The Santa Clause and Training Day.
One company to watch, Ianno says, will be JAMDAT Mobile, the
mobile gaming company that filed paperwork in July signaling its
intention for an initial public offering. Says Ianno, "After wireless,
the next natural leap will be downloadable Hollywood content
jutnping from your computer to your living room television."
Levey, the Producer's Guild's New Media founder, concurs. "I
have no doubt that the Subscription Video On Demand (SVoD)
model will win. You'll turn on your TV, turn to chatinel 400, choose
virtually any tnovie, download it, and play it in real time...all
without leaving your couch." And yet, with its intense fear of losing
control of its content and not yet necessarily having the means to
digitally manage it successfully, the notion seems to scare the heck
out of Hollywood.
26 WWW.EC0NTENTMAG.COM
MTV has used
Extensis'
Portfolio
software to
catalog and
centralize multiple terabytes of brand-specific
images and video files for easy access
and reuse.
LOOKING FORWARD
Some, like Levey, say that Hollywood-content makers still
aren't getting it. He says, "There's no incentive for the studio's
marketing and distribution departments to really work together
internally to figure out how to optimize their digital content for
the Internet." Likewise, adds Richard Schinner, a studio market-
ing consultant and former marketing executive at The Walt Disney
Company, "Hollywood has always been slow to adapt to change.
It's just in the culture."
But hope just may be on the horizon. If Hollywood indeed gets
a handle on the piracy issue, the landscape is clearly moving
rapidly towards allowing easily-downloadable, mainstream access
to Hollywood content online.
With distribution now set to be ingrained in the same medium
that is currently seeing a resurgence in marketing attention, per-
haps Hollywood will finally become focused enough to allow the
two to work hand-in-hand online. It'll become imperative that DAM
developers keep these Hollywood'ers supplied with fresh software
(and .strategies) that will allow them to quickly and consistently
extend their properties and their brands online, and to do so in a
way that safeguards the creative assets from unauthorized uses.
And it'll be incumbent upon Hollywood to actually accept the use
of this technology and leverage it to generate new revenue streams.
Perhaps it will take another Blair Witch-\ikc phenomenon for
everyone to take renewed notice, hut for those willing to take the
leap, the future of Hollywood content online might just be the
next rising star worth catching. [Bi
RICHARD HULL (rtch@sportshollywood.com ) is a Hollywood movie and
television producer. In lieu of a social iife and much to the dismay of his
girlfriend, he occasionally writes about technology issues in Hollywood.
Comments? Email letters to the editor to ecletters@infotoday.com.