I thought the web page loaded incorrectly, so I reloaded. Still nothing. Then the light bulb went off. I tried “$200,000-$250,000″, clicked “CALCULATE NOW”, and instantly I was saving $800.

Yes, the site is called “Obama Taxcut”, but when my taxes are going up, is it honest to pretend to malfunction?

I know that my taxes will increase if Obama wins, but personally, I’d prefer to find out how much and receive a thank you for my prospective support than to be ignored.

What do you think? Is this a legitimate website design or a liability for the Obama campaign?

ADDENDUM:
Thanks for your comment, DM. I rechecked and sure enough, the Obama site is working and returns “You probably won’t receive a tax cut under Obama.” So perhaps the site wasn’t working when I checked, or perhaps I was not sufficiently observant. Either way, Barack still gets my vote.

Imagine instead that as a member of the audience you were part of the action – you enter the video, talk to the characters, and they talk back to you. Or that the story was about you and your family members. Or that the characters in commercials cared about what you have to say instead of just shouting at you.

We’re not as far as you might think from this kind of convergence between media, video gaming, and artificial intelligence. At the most recent Digital Hollywood conference, Andrew interviewed Jonathan Strietzel, Founder of BigStage and Peter Hodge, CEO of Virsona, whose companies offer intriguing components of this future that have the potential to create big value for brands and media companies today.

BigStage’s technology allows users to create and integrate life-like 3-D avatars of themselves into movies, videogames, commercials, and other digital video content, using just three digital face photos. Virsona offers artificial intelligence technology that can recreate and automate any personality after just a couple of weeks of training – allowing characters to personally interact with an unlimited number of audience members.

If you are part of a brand, media, or other company with the vision to imagine what moving from linear to interactive content could do for your business, these interviews with BigStage and Virsona are must-listen conversations.

[tags]Interactive Media, Big Stage, Virsona, Advertising[/tags]

Imagine if you and your friends could star in a music video, famous movie clip, or commercial as realistically as if you were around for the shoot. Jonathan describes the company and the potential that its technology has to transform advertising and the audience relationship with movies, television and videogames.

In the interview, Jonathan describes his early start as a wunderkind discovered by SoCal VCs (0:00), his insight into the coming importance of personalization as he discovered the technology behind Big Stage (2:45), and how he helped move the technology to become consumer internet capable and fundable (7:05).

He talks about the current business, his monetization model through brands and content partners based on the technology’s dramatic impact on advertising effectiveness (11:35), and what the big media networks are seeing in terms of monetization and CPM rates (16:12). He also describes privacy considerations (17:40) and the other cool non-advertising stuff, like videogaming and short internet adventures, that Big Stage will be making possible (19:05).

Jonathan Strietzel is co-founder and chief creative officer of Big Stage. He brings 10 years of experience as an entrepreneur in the entertainment and technology industries, including founding Stritz Studios, a boutique special effects studio. He has also invented multiple systems for delivering digital advertising and currently holds a U.S. patent for his work in particle-based advertising. In addition, Jonathan has worked with numerous TV studios and Fortune 500 companies, including developing the highly publicized online clue delivery system for NBC’s “Treasure Hunters.” Jonathan graduated from Chapman University with a Bachelor of Science degree.

[tags]Digital Hollywood, Big Stage, Jonathan Strietzel, Virtual Reality, Avatar, 3D[/tags]

Imagine if anyone could have a personal conversation with Iron Man, the Michelin Man, or their great-great-great-great grandfather. Peter describes his new company and technology that is about to make these ‘holodeck’ scenarios a reality – at least the conversation part.

In the interview, Peter shares how he founded Virsona after being inspired by his desire to continue conversing with a recently deceased friend (1:21), and why the internet will accelerate the development of artificial intelligence based on his meeting with David Levy, a foremost AI expert (4:10).

He describes how we’ll be able to interact with Virsona’s technology shortly (6:00), including re-creating our own personalities (11:05). Here are some screen shots of the site:

Perhaps most importantly, Peter describes how Virsona’s platform can be leveraged by Hollywood, brands, and others to deepen relationships with consumers and audience (11:55). He even gets into some of the complexity and norms that may evolve with virtual personalities, especially the need to keep some information and aspects of our personalities more private, as well as the future capabilities we might see from virsonas (19:05).

Peter Hodge is CEO of Virsona Inc. Peter has worked with and for some of the biggest names in the Technology, Telecoms and Media industries over the last 20 years both in the US as well as globally. He brings significant experience to Virsona with over 20 years in technology including development, sales and management experience. Peter holds a BSc in Computer Science from the University of Greenwich, London and lives in Boca Raton, FL.

[tags]Digital Hollywood, Peter Hodge, Virsona, Interactive Media, Artificial Intelligence[/tags]

Bill Kispert, VP, Interactive, NBC Interactive
Sandi Isaacs, SVP, Interactive & Mobile, Paramount Digital Entertainment
Daniel Offner, Partner, Nixon Peabody LLP
Mike Breslin, VP, Global Marketing, I-play
Moderator: Andrew Wallenstein, Deputy Editor, The Hollywood Reporter

Where are we now in 2008 where things seem divisive in the Hollywood and games dynamics?

Mike – There are a few ways to look at it. You need collaboration between the production and the game developers, sets, and so forth; you can’t just hand over a style guide anymore. It also comes down to finding teams who share the creative vision. So collaboration is improving but it comes down to finding fit early in the process.

Keith – There are only three factors in the film license – time between film and game release, marketing budget, and likelihood of franchise to the film.

Sandi – I feel like everyone’s missing the point. It’s never been a more exciting time for film makers to collaborate with game makers. Now we have a great opportunity to start prototyping early in the process and explore business models, not just stay in the licensing box. At Paramount we’re putting together a team of game industry veterans to help make that happen. It’s also not just about the new release, but also the classics like The Godfather. It’s about the game, making a great experience and making it profitable for the studio.

Daniel – I’m slightly amused by the question, is Hollywood killing the game industry. We’ve worked with THQ for many years, and they make their bread and butter selling licensed games. There are some interesting changes now, though. The convergence of casual games, community and the web, and the access of content through broadband connectivity. The ability to tap the digital distribution platform opens up all kinds of interesting things. The other thing is having great content coming out of the studios and pairing that up with really great talent. I don’t think retail is going away – Wal-Mart, Amazon, etc. – but digital distribution is becoming very important.

Mike – I can speak with mobile industry perspective. One reason there has been consolidation in mobile is the cost of licenses with the peak of interest in mobile. Of course the studios are trying to maximize their license revenue, but from the side of the team investing in these licenses and putting together teams, you overextend on the licenses and can kill your business.

Sandi – Obviously we’re investing heavily in these properties which drives the mobile licensing terms. It’s a tricky fragmented business but the players know the challenge. It’s not the cost of the IP but the economics of the mobile game business overall.

What does the mobile game business look like, all license or some original IP too?

Mike – We’ve had success with some of our own IP. But on the license side, I think that Hollywood can help the game industry with the co-marketing and opportunity to leverage a brand where the studios are spending millions of dollars.

Keith – That’s a key point, you have to work with the license holder, because if you don’t, you’ll lose the value of the marketing, events, co-marketing if you don’t check in regularly and see what they are doing with the IP.

Sandi – Another factor is the broadening of the game demographic overall, expanding the scope of movies that work for games.

Keith – And now for the first time you have gamers making movies; the producer or director says from day one ‘where’s my game’, and wants to be involved on a creative level and ensure quality. They are also not demanding large up front payments as part of the deals.

Bill – You could argue that Hollywood can drive the game industry going forward – places, characters and worlds, with game play layered on top of it. Then there are millions of other promotional touch points, like theme parks, television, fast food, and more.

Keith – The other really important point is that when you talk about these $8 million marketing budgets, you can piggyback on those budgets and have credibility going into Wal-Mart for retail distribution and retail promotion. By paying for the license, you get to piggyback the buy for the sell-in level, let alone the consumer level.

Daniel – My question for the studios is, as what point will you be in my clients’ business and not need them any more.

Sandi – I think we already are and that’s the issue. There are going to be different parts of the value chain where we need the game companies, but other parts of the value chain where we don’t. We’re looking to work with partners based on value-added for both parties, not a single model.

Keith – That’s no different for any other part of the studios’ businesses.

Bill – Our ability to take things on ourselves also depends on the capacity we have available at different points of time. But it’s a very good time for independent developers to have conversations with studios. It used to be that we would go to Vivendi or another publisher and they in term would deal with the independent developers.

Sandi – It’s going to be very similar to the TV and film industry, lots of co-financing, lots of distribution deals.

With all these changing models that are happening, are there any upcoming releases that will put things to the test?

Sandi – On our side it will come from the casual gaming side. We are going to put in the time to develop really great games.

Boesky – There’s one coming up in September called Afro-Samurai from Gonzo. Gonzo committed to making a mini-series, and we invested in it from the creative side. Spike picked it up for a nominal license fee. They only got the right to run it; it was a great five episode commercial for us. We pick up revenue from the DVD, iTunes, action figures, and the action game coming out from Namco. All of the revenue from all of those ancillaries go directly to Gonzo, and Spike made so much money from the advertising without paying for content that they commissioned another run from us.

Bill – The notion is that if you’re really trying to build a franchise, you need content across platforms, and think about how you release them strategically.

Keith – The lie we told in the 90s is now true. We actually can use our game assets across media. Disney, Warner are starting to do it sometimes.

With a show of hands – is there a perception that Hollywood games are bad games? (Many hands are in the air)

… Andrew’s note: My fingers can’t keep up with the debate!

Mike – We all know there’s nothing more discerning than a gamer.

Keith – If it’s a bad deal, don’t buy the game. If you have a desperate publisher who wants something, or who messed up and can’t get it right – they won’t pull the public.

Sandi – We’re talking about hard core gaming reviews coming out and killing Sponge Bob. These mass market games are not targeted at the hard core gamer. It’s about being realistic, what game are you playing and what the audience expects for it.

Keith – If you compare these titles to other games, look at what you’re comparing them too. If I invest $30 million in BioShock, I can only invest $10-15 million in a licensed property because of the spend on the license.

Sandi – And that’s why the studios are developing games ourselves, so we can reinvest in our own IP.

Bill – We’ve introduced a hybrid model where we are co-funding games. Some developers said thank god, we’ve been waiting for the studios and networks to put skin in the game, and other showed no interest.

Daniel – A question for Ubisoft, THQ, and the others is will the studios still be giving out their best AAA properties? Will they be asking for a different economic deal, or will the studios just do it themselves and use publishers for retail distribution?

Sandi – If publishers have internal great teams, they often don’t want to put them on licensed properties.

Bill – We’ve tried to adjust our internal model to get involved early and put our publishers in a position to succeed.

[tags]LA Games Conference 2008, Hollywood, Videogames[/tags]

Mobile Games: Challenges & Opportunities to Create a Mass Market Phenomenon
Scott Scherer, VP Product Management, Hands-on Mobile
Jill Braff, SVP, Global Publishing, Glu Mobile
Stephen Jackson, CEO, Smashing Ideas
Kay Gruenwoldt, Head of Industry Marketing, Nokia
Erica Chriss, VP of Strategy & Business Development, Greystripe
Moderator: Mark Donovan, CMO & Senior Analyst, M:Metrics

Jill, what have you seen shift in the last year in terms of drivers of your business?

Jill – The increase in people playing mobile games. Back in 2002 with Sprint, we were doing focus groups and couldn’t find anyone playing. Now we can find active players a day after posting an ad in CraigsList. The core audience may be different from the typical mobile user, but that’s what you need to grow a business. Also, we’re trying to see the carriers start to measure RPU (Revenue Per User). As the networks become a commodity, these services become more important.

Scott, HandsOn involves bringing titles like Incredible Hulk to market. How is that doing?

Scott – Guitar Hero 3 has been a tremendous success, the number one title since it’s launch in December. It’s a brand that’s hard to screw up, but also hard to create a long tail and ongoing revenue stream. So we deployed an option where if you buy the game you get three additional songs each month, which drives people maintaining their subscription. People are coming back and trying out the new songs and getting more great experiences each month.

Mark – That underscores the shift to subscription models and evolving content.

Jill – It’s awesome to see this kind of stickiness to content and episodic content. Mobile really should be about this kind of close relationship with consumers.

Steven, you’re a serial entrepreneur with Smashing Ideas, a smaller company. What does this market look like to you?

Steven – The company has been a casual game maker for 12 years, generated 150 million game plays last year. We’re the largest independent Flash developer in the US. Adobe decided they’d spend $900M to address the mobile space with Flash Lite and we jumped on the Adobe bandwagon for the mobile space. We have 30 applications on Verizon and 80 screen savers. We create 60% of our games, and then for the other 40% distribute for other developers. As a small player, we play in the Adobe Flash Lite niche and that’s where we focus.

Kay, tell us what’s happening with Nokia. When nGage was first launched it was laughed at, but you’ve been tenacious and successfully relaunched. How does it fit in?

Kay – We’ve learned a lot over these last 3-4 years. It took quite a while to come up with the new nGage platform, and we’ve accomplished all the points we set out to address: fragmentation, discovery, purchase process. We’re focusing on a premium experience for higher end phones. The average price for games on the platform is from $8-14. People pay for it because they can try the content out first and perceive the value. Now, original IP is leading ahead. The content that our games publishing unit creates is selling very well. That’s great news for smaller game companies and developers, they have a chance to be successful.

Erica, your business model is what Greg just said is way too early, ad supported games. How does that work, and is it cannibalizing the market?

Erica – We see it as a great market, and we know we are not cannibalizing it because our publishers are telling us so. It’s increasing the scale of the entire market, enabling discovery, and providing content for folks who will never pay for content. Instead of having them pirate your content and pay you nothing, why not allow them to create meaningful experiences that you can monetize. We’re seeing 300K downloads per day, and a large percentage surveyed would not pay for games, and are experiencing similar conversion rates as other distribution models.

Are there top tier publishers signing on with Greystripe?

Erica – We do have a number of top tier publishers whom we work with, including Hands On and Vivendi. First, we can be thought of as part of a windowing strategy, like DVD vs. theatrical. Things that are utility based, applications, do very well. We also have content from top tier providers who are experimenting with simultaneous introduction through us and carriers. They are measuring cannibalization careful and finding none – we’re just an addition channel.

What are you seeing as the relative importance of carrier vs. handset vs. direct to consumer distribution?

Scott – For HandsOn most of the revenue comes from the carrier deck. For B2C, it’s less about creating a portal for us, and more about working with larger brands like World Poker Tour where it makes sense – we run a website that offers free play online and then upsell to mobile

Jill – Certainly today, the lion’s share of the business comes from carriers. I’m actually interested in learning more about how much money you’re seeing from advertisers, Erica. There are other channels that are more direct that we are exploring. Over time this will look more like one-to-one marketing. The great thing about mobile is that literally it is always with people.

Mobile as an industry is a real pain, with so much fragmentation and handset standards. Is that getting any better?

Jill – We really like the complicated part. Not only is it a barrier to entry but it’s something that for us is a competitive advantage. We also do localization, day and date launches, event marketing tied in with carrier marketing. It’s similar to any other entertainment business. You can’t let people have a game only on one type of phone. Consumers don’t understand the technical complexity, it has to be seamless for the consumer.

Scott – For us it’s a lot like what Jill said. License partners expect global launches across carriers. We end up doing dozens of unique builds instead of a “high” and a “low”. It ends up creating a lot of extra work that changes the economics of the business.

Kay – What this discussion shows is that if you really want to grow this business you have to look across these issues as a whole. How you distribute. Consumer experience and discovery tools. Billing mechanisms. We are trying to address these as a whole, and those who do will be successful.

What would the panel’s advice be for people making games on other platforms and are eyeing mobile?

Kay – My key advice is do not copy and paste, it will not work. You can ruin great IP and a great brand by copying and pasting. The technology is a lot different from a PC and a console. It has a lot more – cameras, motion sensors, touch screens, wifi, GPS. Don’t just slap what you have onto mobile.

Erica – What’s interesting is that might decrease your chances of getting carrier distribution. But we believe that consumer choice leads to real experimentation, original IP, and reinforce the entire system.

Jill – If I were a strong brand holder I would build a really strong license business given the risks and uncertainties. If I were a developer I’d talk to carriers and publishers. You need to understand the carrier retail environment, and then partner with a publisher as a way of getting in the channel. On the flip side if you were going to develop for nGage, iPhone, etc, you wouldn’t have to deal with the porting issues but do have to deal with the complexity of developing for these platforms. There’s room for innovation. Even the videogame business, which is dominated by large publishers, has room for this kind of innovation (look at Guitar Hero).

Erica – It’s actually a wide open market, and new developers have the opportunity to take share with hit products.

Mark – But most of the volume is through the carrier channel, and that’s a tough channel to crack if you’re two guys in a garage.

Is location a component of games you are developing or see in the market?

Kay – Location is something that needs to develop, especially location based gaming. The only reason it’s not out there bigger is that noone has yet been able to develop a valid business model for it. With GPS in so many devices, it’s something we have to look at. I can’t say more at this point. If anyone here has a great concept, hit me up after the panel!

Erica – We’ll experiment with anything and we have a very cool distributed mostly in Japan that is all location based treasure hunting etc.

Are you seeing things outside the US that foreshadow what we’ll see here?

Stephen – We’re seeing a lot of interest in off-deck distribution models outside the US.

Jill – As an industry we make the mistake of talking about mobile from a US perspective. It’s also not one size fits all outside the US. We’re very successful in China and it’s all very local content that would probably be rejected by Verizon. In Europe networking is just starting to happen in terms of game play. Or in Latin America people are experiencing entertainment the first time through mobile, they don’t have cable or Wiis because of cost.

Mark – Did you just suggest that Verizon is a stronger censor than the Chinese government…

Are mobile games being usurped by casual online games; are these competition for eyeballs, dollars and entertainment?

Kay – Everyone is competing, it’s entertainment as a whole whether movies, mobile, or others. One note is that we are now looking at cross platform gaming across mobile and PCs.

Jill – From the consumer point of view, people are used to being on many screens simultaneously. There’s a lot more gender neutral user base for mobile, so it’s more akin to and complementary with what you see in casual games. That seems to make the brands grow far more than a cannibalization effect.

Stephen – One of our customers is Cartoon Network and we’re taking their online games and immediately bringing them to mobile.

Are we seeing games start on mobile and then go to other platforms?

Jill – That’s where we are trying to go as an industry.

Kay – There are pretty good examples already of that happening, one example from Germany that went from mobile to retail distribution in supermarkets for PCs.

Stephen – The challenge for us is monetization. We are able to sell clicky sticky games for mobile, but not Flash games for online.

Erica – That’s a challenge as games go cross-platform, consumers free expectations transfer to mobile, so advertising is important.

You still haven’t told us how much money publishers can earn through advertising!

Erica – In places like India and China we are seeing advertising with higher CPMs through advertising than through purchase. We’re seeing CPM’s in the US as high as $40, and in India as high as $15.

What do you see for the mobile games market going forward?

Scott – The real innovation will be through multiplayer connected games, which is a way of having a terrific experience, to reach out and add new experiences.

Jill – All these new technologies and devices are not for technology’s sake but to create more immersive, richer experiences.

Stephen – We’ll see much better discovery, the ability to find, share and play content.

Kay – Richer, more immersive experiences. Multiplayer and connected game play going beyond what you can have on your PC because mobile is something you walk around with.

Erica – More UGC, more social viral content now that there is a revenue model that can support free things.

[tags]LA Games Conference 2008, Mobile gaming, International mobile[/tags]

LA Games Conference Featured Interview
Johnathan “Fatal1ty” Wendel
Interviewed by Ken Rutkowski, Host, Ken Radio

Johnathan is the most accomplished professional PC gamer in history. He has joined forces with the Championship Gaming Series, which is owned by DirectTV, as a spokesperson.

Ken starts talking about travelling through Korea with Johnathan, where he is a gaming superstar mobbed by gaming groupies. He’s a spokesperson now, and is no longer playing games at a competitive level, but for the right game, moment, and TV exposure will jump back in.

Succeeding in gaming is about focus, like any professional athlete. For gamers, a lot of skill sets are required: Discipline, timing, psychology, even math (for understanding the odds).

Johnathan believes that as CGS reaches hundreds of millions of homes worldwide, there will be more and more gaming stars in different countries. They already number in the hundreds, and increasingly are getting sponsorship from brands. They will be the new professional athletes.

The “Fatal1ty” business model is to pick the up coming athletes, pay them salaries, and build the revenue behind them. Andrew’s comment — It sounds a lot like the music labels until a few years ago.

Johnathan has moved from trying to split his time between running his business and gaming to just focusing on the business – it takes a substantial investment of time.

The “Fatal1ty” brand is a lifestyle brand for gamers. The keyboard, the mouse, the headset, etc., evolving from Johnathan as a celebrity to a brand for gamers, like Nike is to most physical sports.

What do you think about the Wii Fit? Very exciting. Johnathan is looking forward to using it. He woke after a Wii session sore, realizing that his work out was throwing punches with Wii. He’s a hardcore sports guy, football, tennis, and was a top 50 tennis player in his space.

[tags]LA Games Conference 2008, Videogames, Fatal1ty, Johnathan Wendel, Ken Rutkowski, Championship Gaming Series[/tags]

Matthew Bellows, VP, Consumer Strategy, Vivox
Catherine Herdlick, Dir., Game Production, GameLab/Co-Founder, Come Out & Play
Spencer Hunt, VP, Game Production & Digital Dev., Sony Pictures Television Int’l
Ariella Lehrer, President/CEO, Legacy Interactive
Chris Petrovic, VP, Digital Media, Playboy Media Group
Moderator: Scott Steinberg, Managing Director, Embassy Multimedia Consultants

What does having a successful game mean? Financial return? Set up for follow-up game? Great reviews?

Ariella – Obviously with a small company you have to make money, so number one is generating enough revenue to pay for your marketing and development expenses. Right now we have a number one product, Lost Cases of Sherlock Holmes, so that’s a success.

Spencer – First and foremost it’s about getting deck placement, and it’s about carrier relationships and consumer uptake. We do a lot with licenses, and for us, if the original content creator is excited about the product, that’s a strong indicator for market success. With mobile, if you’re getting 50K downloads a month for a few months, that would be fantastic.

What about retail distribution?

Ariella – For our games retail is now an afterthought. Online with our prentice Los Angeles game we sold 60K online and 20K at retail.

Let’s look at a popular game, Guitar Hero, and discuss what are the common factors that lead to success.

Catherine – Aspirational qualities are important, the desire to be a rock star. The game lets a consumer immediately identify with a role that has broad appeal and gives them the power to be the star.

Matthew – So much of a game developers’ motivation is to make something amazing and exciting, that even if a game is not a success based on revenue but pushes boundaries and finds passionate fans.

Chris – Aspirational is an important element for us (Playboy), on the male side living the good life as Hef does, and on the female side it’s important as well, though we’re still looking for what that element is.

Spencer – Everyone wants to be a rock star, so Guitar Hero nails the aspirational component. Also the core game play mechanic – it’s very easy to play the easy level, but very difficult to master, and it provides encouragement along the way.

Ariella – Also for Guitar Hero, the innovative use of the controller which allows people who have never played games to interact with the content. The interface is a large part of the success.

Matthew – What’s interesting about the controller is that it was not seen as the right thing to do from a business standpoint. It was a financial risk that publishers took, it drove up the SKU price, but it was all about game play.

How important is doing the groundwork, picking a business model?

Spenser – It’s all about following through on a vision. If you are really passionate about a decision, like Nintendo’s controller emphasis rather than graphics, following through is key.

Matthew – Look at Harmonix. They tried for ten years to follow through with the vision of making music accessible, and now they’ve hit the right formula and it’s a big success.

How important is it to be able to turn on a dime when you’re approach isn’t working?

Ariella – Very important. You look at the strengths and weaknesses of your developers to decide how to transform a property into something great. Then the process of refining and developing is a very iterative process. We’ll do the extra month or two at the end of the process to beta test, refine and polish before launching so we get it right. You have to be sure you have enough time to do it right.

How many concepts do you go through and throw out before deciding what to put into production, and whether to design by committee or use one person’s input.

Catherine – We go through dozens of ideas per month, and the decision depends on many factors, what we think will resonate with the market, production capacity, etc. We discuss as a committee but don’t design by a committee, the producer is the filter through which management, developers, etc. can voice their concerns.

How about prototype development?

Catherine – It’s absolutely imperative, you have to put something together almost immediately to have a vision for what the game is. With Fashion Play we iterated for four months, scrapped the product, than started over and created the finished product in five months.

How far into left field should you go with your original concepts?

Spencer – Left field is great for original IP, but for licensed content, you will have a flop if it varies from consumers’ expectations. You can go further out in mechanics, though.

Chris – We’re an evergreen brand so there aren’t a lot of pockets for totally original things. Evergreen is good but it has it’s constraints. Used to be you could reskin existing game engines, but we’re past that now. It’s hard to innovate as an original IP holder without new and different hits to go from.

How important is international?

Chris – For us international is much bigger. Looking at mobile we’re not on deck here but have been from early days globally. Existing and new territories, Asia Pacific and Latin America are very important.

Do review scores actually matter and influence sales?

Ariella – They don’t matter for casual games, but do for hardcore. Casual gamers look at top-sellers. Brands are becoming more important for the casual game market with 20 new games a day. If you as the millennial generation, they don’t believe in experts anymore, they believe in what each other and their friends think. GameRanking.com etc. are important for us when we are looking to find developers and see how they’ve scored with their games; it’s more of a business-to-business use of expert scores versus consumer driven.

Can good marketing sell a bad game?

Matthew – Marketing can definitely get the first launch 50% or 100% above what you ‘should have been’, but good games last. Here reviews do have an influence. I love the consumer reviews of the title, not so much expert reviews but people who have played games, love them, and think of themselves as expert. They set an incredibly important tone.

Let’s learn from common mistakes by players in the game space…

Chris – I’ll use ourselves as an example, though it preceded me. We had an online game aggregator come to us, suggest we slap our brand on an existing arcade, and we had about two consumers come to that URL. The web has a long memory about bad experiences. Reskinning without advancing the brand is disastrous.

Catherine – I’ll add perspective about thinking through the use of the controller. Most of our games use the mouse. We’ve launched games that can hurt your arm if you play too forcefully. In one example, we promised a game that we couldn’t make because it was technically impossible with the control mechanism, and kept bumping against the wall and eventually had to abandon the effort.

If you haven’t played a GameLab game, audience, download one now. They are top notch.

Ariella – We produced a game for a wonderful charity, Starlight / Starbright. We were given a script with celebrity participation. The only game we could come up with that fit the script was a side-scrolling platform game, and this type of game is not very successful as a downloadable PC game. It was actually well reviewed, but it didn’t do well in terms of sales. It was the wrong game for us as a developer and for the audience. Nothing was good about the result.

Spencer – It’s very easy for the team to follow in love with pieces of the game but they can’t pull away from the closeness to see how it relates to the brand or how playable it really is. Pulling away is an emotional rather than technical problem. You always have to build in the time to make adjustments.

Matthew – We had a concept game for MoPets and bring it out for mobile phones. It was original content, we had a great partner (Sony BMG), but it’s so hard to break original IP on mobile versus on downloadable PC where you can get cat, dog, etc. lovers engaged.

Are there any trends improving chances of success across the board?

Catherine – There has been discussion about franchising, licensing, etc. One of the exciting things now is original IP starting with games and moving to other media

Ariella – There are huge opportunities thinking about innovative controllers, look at the Wii Fit and other titles. We’ve really just touched the surface of what’s possible here.

Matthew – I’m so excited right now to be in the video games industry. You can do things so many ways – Flash, browser, mobile, etc. – we’re seeing a lot more creative things being developed.

Spencer – The reality of multiple platforms is finally being realized. Everyone in media is recognizing the power of this.

Chris – Building on that, the concept of synchronous game play through multiple platforms is finally coming to fruition.

Matthew – For example look at PMOG, Justin Hall’s passively multiplayer game. It’s a browser plug-in that tracks you as you go through the web, and you acquire your points, levels, badges, and so forth just as you browse the web.

Catherine – The whole definition of what’s a game is evolving, turning every day activities like buying groceries into a game – it’s pretty amazing.

Audience Questions

There’s a lot of discussion about innovate controllers. How do we do this without having to acquire another set of plastic toys that fill our rooms?

Spencer – Are you talking about the same plastic working across multiple publishers?

Maybe getting rid of the plastic altogether.

Spencer – I’ve wondered why noone has created a Guitar Hero controller that connects to an actual guitar

Catherine – I think we’re actually streamlining it more than we were 15-20 years ago.

What new innovate technology is on your radar screen as the next big thing for gaming – haptic interfaces, 3D, etc.?

Spencer – I’m really interested in location based games, and game design that takes advantage of that information. Use of GPS, photos for scavenger hunt, community, etc.

Catherine – I definitely think that GPS will become huge and change the way we play.

Ariella – I saw a presentation from an Israeli company that has to do with how your body interacts with the PC – there’s some camera that tracks your movement and allows you to physically interact with what you see in the screen

Matthew – I’m very interested in the integration of speech into games, facilitating a much more natural interface

Scott – We also haven’t talked about UGC, such as with the SIMS, which is important.

Chris – Having a tactile interaction with a virtual experience. I’ll leave that to your imagination regarding the implications for our world (Playboy).

What is your development cycle, and how does new technology impact that?

Chris – For Playboy, because games are not a core part of our business, we are strategically opportunistic about pursuing opportunities. We’ll sit back and analyze the financial benefit to us, with the partner taking the majority of the risk. We see a lot of pitches and don’t execute on 99.9% of them because it doesn’t make sense.

With respect to Matthew’s comments about voice in games … I was reading an article that discusses the advantages of using a third party voice provider like Ventrillo is that you can still talk to your guild when the game crashes. What do you think about this?

Matthew – It’s a good point, though there’s not much for the guild to do when the game crashes. But we’re working on a project to make that capability possible, keeping the voice independent of the game.

[tags]LA Games Conference 2008, game design, videogames[/tags]

Casual Games: What’s Next Now that Everyone’s Involved?
Peter Blacklow, Pres., WorldWinner (Liberty Media subsidiary), EVP, Digital, GSN
Kate Connally, Vice President, AddictingGames, MTV Networks
Eric Lavanchy, Director of Gaming, Endemol USA
Matt Turetzky, VP, Non-PC Games, RealNetworks, Inc.
Dave Madden, EVP, Sales, Marketing & Bus. Development, WildTangent
Moderator: Mike Vorhaus, Managing Director, Frank N. Magid Associates

Give a profound or controversial comment with your introductions:

Dave – I think that casual games are generally going free, with monetization inside and and at the back end of the game

Matt – News Flash: Gaming division is about to spin off from RealNetworks as a publicly traded company – and that’s all I can say about it

Eric – I’m convinced that within 5 years there will be no game shows or reality shows without a significant online component that intimately involves and integrates people into the show.

Kate – This is a profound question, not a statement. What will be the successful types of games that are going to spring to life on television?

Peter – Celtics in 4 over Detroit

In such a crowded old space, how do new casual game titles break through?

Dave – It depends on how you define casual, psychographic or demographic. If casual is a game found online, no money spent, no time investment required … in that world, it’s going to be much bigger than the traditional game business is today.

What’s the next new thing in casual games?

Kate – We’re looking at platforms like Facebook and MySpace engaging a much bigger interactive audience daily than ever before who are looking for something to do. You give them an interactive experience while they’re on their web page, and you have a much better chance of engaging with them. There are also some innovative game styles emerging but they are still early stage, like the viral vampire games which are interesting at first but seem to become annoying.

Matt – Obviously there are a lot of interesting things happening on social networks, but in general I don’t think there’s much new. We’re all to blame for focusing on things that have been successful over time, but that sameness will open the door to brands, like Scrabble, Mattel and Hasbro.

Eric – It needs to be remembered that this is a very nascent area; Facebook as a platform has been opened for all of two years now. In the early days of TV they were filming radio plays. We probably haven’t seen the thing that can really get accomplished through social media yet.

Peter – This whole industry – online casual games – is still brand new. Particularly at GSN, we hear a lot from people who enjoy the game shows on TV and who have no idea that they can go online and compete in these games. Wheel of Fortune is the number one syndicated show week after week after week, and while Sony is doing a great job trying to move people online, the viewers and loyal fans are just beginning to move online.

What tools do you use to get viewers on to game sites?

Peter – Back to TV shows, none of these should happen without an online component. Example, Bingo America, GSN was getting 2000 registered users per day, not many. When we launched Bingo America with prizes and contests, that jumped to 22,000 registered users a day.

Is there really a difference between the casual gamer and the hardcore gamer?

Peter – I also work with GamerDNA, a company that I’m on the board yet, which is focused on hardcore gamers. This segmentation around casual, hardcore, etc. games doesn’t work the same way in any other industry – people listen across music genres for example. We’ve all lost sight of the gaming consumer, who don’t define themselves that way.

Kate – We’ve also defined gamers by the way games are delivered, the platform, vs. the games that are differentiated by brands and programming vs. platforms.

Matt – There’s a perception that casual games are for women 35 plus. If you look at the traffic coming to RealNetworks is much more balanced, 50/50. Casual is just about monetizing.

Dave – The credit card is the gating factor for gaming online, who has it and who has access to it in order to buy the game. I load up my iPod at 99 cents a song but I can’t do the same thing in gaming, to break the price down and sample games on a bite-sized basis. It’s dependent on microtransactions and other forms of monetization, the ways people can pay for games.

Kate – Or advertising.

Can Eric talk about mobile vs. internet entries?

Eric – We’re trying to minimize the distinction, and that’s how consumers see it.

How about voting, mobile vs. internet?

Eric – Because of the way we advertise and make money from the calls, it’s 90% mobile vs. 10% internet but that will change over time. If you look at Current.TV, over 40% of the audience is having a two screen experience while they watch.

Are people interested in learning about or improving themselves through gaming? Self-awareness?

Eric – Nintendo has a whole line of such games

Kate – We’ve done research, and the drive for personal achievement and accomplishment is a big part of the motivation. Consumers say it’s the one time they can actually finish something.

Matt – Our research indicates the same thing, that our users play games for relaxation, entertainment and also a sense of achievement. When you want to relax and feel good about yourself, you might want to pop balloons vs. do math problems, because the frustration level gets in the way of the sense of accomplishment.

Peter – When we started to benchmark people’s scores against others in tournaments, we doubled our conversion from free to money.

Are you looking at all at casual gaming as a way of affecting how people engage and connect with each other, and understanding the effect on others?

Mike – The SIMS is the closest to what you are describing.

Kate – The concept of collaborative play is creating awareness that people can accomplish more in groups than they can individually. Collaborative play is an exciting new area where we are seeing a lot of interest from gamers.

How do you determine content synergy with consumer lifestyle?

Collective hmmm… from the panel

For example, in the videogame Crimes of New York, who was creating that lifestyle and how do you create synergy with the games.

Eric – Some Endemol examples – Extreme Makeover Home Edition. We’re aggregating people based on lifestyles and interests, allowing for social interaction.

Kate – We have a whole category called News Games based on things that celebrities and politicians do. We have a whole team of creative developers who make those choices and let fly.

But the kids are playing GTA IV, etc. Who’s keeping this real world?

Kate – It’s the responsibility of the game publisher

Eric – We’re starting to see platforms for user generated gaming content. So the whole question of control won’t matter over time, you’ll control it, the consumer will. A few years ago, that wasn’t possible.

Kate – At Addicting Games, 70% of our games are coming from independent developers who might be teenagers learning Flash. Our most popular game last year was developed by a 14 year old in Sweden.

Dave – The same plumbing being used by Real Time Worlds to launch their games is being structured as a Wiki. Individuals will be able to create their own story lines, story arcs, etc., and a $50 million bet was just made against it.

Who’s the hard core gamer and who’s not?

Dave – If you are an aggregator of games, you don’t need to worry about it. But the payment models is where things get interesting. The number one game played by RuneScape, Habbo’s users, is free. There’s a whole slew coming out like this where you get in for free, and then pay for new capabilities on a microtransaction basis or through advertisers.

Eric – To answer an earlier question, what happened to the paid download model for casual games – it’s not gone yet but there consensus that it’s going away.

But the paid download model is paid and growing, it’s bigger than PC retail!

Matt – We agree with that but the mix is moving toward online and free, ad and microtransaction supported.

Peter – As you know I don’t like the hardcore / casual distinction. At Worldwinner, all of our gamers are hardcore casual gamers. On average, they spend $400 a month on contests. Our commission is 15-25%.

Dave – That’s called gambling addiction and people do it at the horse race all the time.

Peter – The gamblers don’t stick around very long. People know they are going to lose $300 a month but are doing it for the entertainment value not because they think they are going to make money.

What’s going to get the other 250 million people involved in casual games?

Matt – It’s a question of ubiquity. We’re distributing our games through as many portals and locations as possible to drive that reach.

Dave – It’s a huge addressable audience, the way you make money is multi-faceted but it’s going to be a huge market from an advertising perspective.

Kate – We need to make great efforts to diversify the types of people who are making games. To date it’s been an outgrowth of technologists but we need people from artistic and creative backgrounds.

Eric – It’s about taking gaming out of its box and immersing games in other participatory experiences.

Peter – Television. Liberty Media, by buying our small skills based gaming company and merging it with a television network, is saying that they are going to drive people from TV to the internet to play games.

[tags]Casual Games, LA Games Conference 2008[/tags]

The 2008 Global Habbo Youth Survey
Emmi Kuusikko, Director, User & Market Insight, Sulake Corporation / Habbo Hotel

Habbo is an online entertainment company focused on virtual worlds, with 1300 employees in 15 countries, and over 8 million unique visitors per month globally. Their teen users create avatars, visit different public rooms, and engage in a lot of social interaction. There are active communities in 31 countries. This is the second global survey performed by Habbo.

Here’s what they learned:

US teenagers vs. peers globally.
(US sample size 7,730 respondents, 13-18 year-olds, 46% girls, 54% boys; globally 58,500 responses).

What’s similar:

• Friends and family are valued the most
• Craving for respect

What’s unique

• Having lots of difference experiences in life
• More traditional than Europe, less so than Mexico (religion, marriage)
• With Singapore, most ambitious teenagers – many life goals (education, wealth, influence, career)
• More positive attitudes toward military, very patriotic, but not visible in consumption behavior (don’t prefer domestic products)
• Higher share of “creatives” and “achievers” psychographic segments, fewer “loners”

Media habits

90% globally consider internet important, clear winner.
70% US consider TV important.
56% US consider radio important, significantly higher than global.

Internet habits

IM and Email are till most important web services (68%), but social networking has taken a lot of share (56%), especially compared to the rest of the world. Internet is really all about communicating and socializing.

Favorite web sites and games (outside of Habbo): MySpace (54%), YouTube (25%)

Brands

Drinks: Coca Cola (22%), then Pepsi
Fast Food: McDonald’s (27%), then Burger King and Wendy’s
Clothing: Hollister (8%), then Abercrombie & Fitch. Nike dropped to 9th!
Shoes: Nike (26%), then Vans and Converse
Mobile: Verizon (21%), then all others. US doesn’t distinguish between carriers and handset makers. Biggest growth in this category – listening to music, taking photos, SMS.

Summary

Teens are surprisingly similar worldwide

There are cultural differences, though, and US teens are more ambitious and crave experiences and respect (but note that Japan is even more different than the rest

Internet is important, and US teens lead in social use of internet.

To buy: webstore.sulake.com, marketinginsight@sulake.com

[tags]LA Games Conference 2008, Market Research, Habbo, Teens, Media Behavior, Internet Behavior[/tags]

Battle for the Digital Home: Is the Console Entertainment Hub of the Future or Fighting to Stay Alive?

Erin Turner, Sr. Director, Web Services & Publishing, Trion World Network
Steven Roberts, VP & GM, Games & Strategic Initiatives, DIRECTV
Mike Yuen, Senior Director, Gaming Group, QUALCOMM Internet Services
Josh Krane, SVP, Interactive & New Media, G4
Moderator: Ted Cohen, TAG Strategic/Chairman, Mobile Entertainment Forum Americas

Does the console die?

Josh – For consumers that would be a good thing, but it’s a question of how you’d get there. It would take a lot for set top box and PC makers to catch up to the consoles, and for consumers, they want the best gaming experience possible, which the consoles deliver.

My 15 year old has gone from Xbox 360 to PS3 to now a Dell XPS, and no longer touches the consoles saying that PC gaming is where it’s at.
Josh – As the big titles come out for the consoles I bet he’ll be back to the consoles. The titles will drive it.

Erin – There isn’t really a hub for the home; broadband has become the platform. Going forward, any device with a monitor, rendering engine and connectivity will be able to play games. That’s why we’ve focused on building server based games, where the intelligence is in the server.

Steve, your company provides set top boxes. Can you compete?

Steve – No. Set top boxes will never achieve a console or XPS experience. Can we do casual gaming with a good experience that 150K people pay for? Yes. The purpose for set top boxes is to provide content, and television content first.

But as you watch Joost, Brightcove and Veoh emerge, is there the potential for DirectTV to become disaggregated?

Steve – I don’t think so. You can’t think about people watching TV just in the context of gamers. Will the consoles be connected to TVs and bring in content, whether a movie or a TV show downloaded? Sure. But in terms of a TV provider, we are the ones who will pay $1 billion for NFL rights.

Mike – I’ll take the contrarian view, premised around emerging markets. We believe that a single hub or box will become dominant in emerging markets, like Russia. These markets may have one TV, no cable, and such a box would be a precursor to broader entertainment. It may not be a wired home, it may be wireless via 3G etc. to deliver content and conquer piracy.

Was the success of Xbox Live a surprise?

Josh – What was surprising was the speed at which they pushed it out. The only thing missing from Xbox now is the cable card slot. It’s one of the areas will Microsoft was able to bully it’s way into. It definitely extends the life and value of the consoles, to download content, communicate and connect with friends.

How do your companies utilize all this?

Erin – Our big focus is on connected games. For us it’s about content being local and intelligence being on the server, so games can evolve over time. With connected games you create enough to get started, build a feedback cycle, and then build out the game over time. It’s a different development model, and it also makes web access much more important. It changes the model from pure software to software plus service, all enabled by connectivity.

Steve – The connected home is critical for all of us. We are seeing more content and games going to broadband connected set top boxes. These components will all work together. Eventually, Xbox will become a client to our set top box within the connected home – not that far away, probably the next generation console. Today you can stream from DVRs to PCs.

How many of the audience have played the Wii Fit already, just release today? (20 or so hands in the air). What does the Wii do for the console market?

Josh – The controller changes the market for consoles, creating experiential physical gaming. The Wii Fit expands it even further, just another interface for using your body and natural motions, and will be another lift for Nintendo and for these experiential types of games.

Mike – The Wii changed the metric for gaming, let’s have fun. From an emerging market perspective, few of them have any exposure to games or have any brand preference. We think there’s a huge opportunity to introduce different types of content in emerging markets with this clean slate.

What is the future of HD in the home and gaming?

Steve – We see HD television growing faster than any other home entertainment element, and I can only believe consumers will want the same in gaming.

Josh – We also see a lot of HD owners with no HD service but with HD consoles.

Erin – The bottom line is that gamers like good graphics, and HD is great for that.

Mike – I just hope we don’t go down the path of increasing production cost and content pricing.

Coming from the music world, interoperability was a critical success element. Does the lack of interoperability hold back the success of the gaming market?

Erin – Absolutely not, if you think of a world where gaming is a service (server based) that can be delivered to any platform, where the server is common across all devices and the platform just renders the graphics.

Audience question, what do you do to keep consumers’ attention when they are multitasking with media?

Steve – That’s just the world we live in, so you build in mechanisms that will allow consumers to have a multi-tasking experience, like interactive TV elements or from a game to keep an eye on ESPN with picture-in-picture. You just have to make it flexible enough that you don’t impose it on the 60 year old woman who just wants to watch her TV programming.

At Qualcomm, how do you look at scaling experience to meet consumer expectations – so the mobile gaming experience is as rewarding as it can be given screen size limitations.

Mike – Though handsets are getting pretty powerful, they’ll never match consoles or PCs. We’ve been evangelizing cross-platform gaming. For example, rather than put a whole MMO on the handheld, you enable certain tasks that you can do on your phone.

Josh – I think that’s a brilliant idea (the approach Mike described). As a content provider, we also try to do something similar, push the use of multiple platforms. We’ve gone toward trying to be sure that we are on as many platforms as possible, enabling the ability to do a certain function for example on mobile that will bring you back to the TV. For example, with Championship Gaming, we’ll take snippets of the TV content and push it out via WAP and via the browser on the PS3, Wii, or Xbox Live, and using the web for interactivity and voting. We’d also want to push out that interactivity to the set top box during broadcast as well.

Erin – The same opportunity we discussed for gaming on mobile – doing a specific task – can apply to TV as well, like checking sports scores.

Steve – Summarizing around the question, interconnectivity across multiple platforms is not holding gaming back, it’s creating opportunities.

From DirectTV’s perspective, is there anything about the Xbox that’s scary?

Steve – No. Like any other competitor, it makes us better, to create a set top box that allows us to bring VOD content via broadband right into our DVR. In the end it helps the consumer get what they want. We just did a research study. We now have a 300 GB DVR. Whether you have a DVR or not, 50% of consumers say no, we need more content.

What do you think about the future of microtransactions in the console world?

Erin – Microsoft is a closed world. Sony is a more open platform, and PC is completely open. If you look at Asia, the majority of PC gaming business models there is microtransactions.

Seems that the carriers are in a good position to manage that?

Mike – From the mobile perspective in the US, some of the operators don’t understand it and are reluctant to adopt and drive a $20 support call for a $0.20 transaction. A question is whether there will be a big currency exchange across Xbox, PS3, etc.

The media center PC has had surprising staying power. Does the media center PC with console capabilities become disruptive to the console business.

Steve – First let’s look at media PCs. The people who own them are not using the media functions that Microsoft intended. In terms of capability, I think you’ll see amazing functionality on these boxes over the next 12 months. Over time, you’re going to see companies embrace one another’s capabilities to allow the consumer to fully utilize those functions across the home. You’re never going to stop advancement, and we feel secure that for our 17 million homes we can deliver a better entertainment experience.

So you don’t have to be in the hardware business, just the service business?

Steve – If we didn’t have to build set top boxes, we wouldn’t. It’s a necessary evil but not a high margin business. We went into the business for the ability to control the consumer’s experience, as well as for economies of scale. For Microsoft and Sony, like us, it’s a loss leader for selling software and content.

Mike – On the issue of the media center PC not taking hold, the limiting factor has been ease of use. The PC still has the stigma on being a PC. Will it take an Apple to get this right? I don’t think they’ll give up after the initial failure of the Apple TV.

We’re on PS3 now. Will there be a PS5 or will there be a death of the console?

Josh – I think there will be a PS5. Sony has been open that they see the platform as a ten-year platform. We’ll see a PS4. The 5 may have many more capabilities than a console today, but I think we’ll see one. All these devices are missing linear TV. I think they’ll work that out and we’ll see a 5, not sure about a 6.

I know Steve will hate me, but again, with an Xbox or a PlayStation, do you need DirectTV?

Steve – We get over 100 million customer service calls a year, “I can’t find channel 202”. If you think about those types of questions and the complexity of using a console to get linear programming in multiple rooms in the house, and extend that over the 120 million TV homes in the US, you are not going to displace DirectTV or Comcast so easily. We’re built for the mass market. And while the consoles evolve, we’ll be evolving as well.

[tag]LA Games Conference 2008, Connected Home, Set Top Box, Game Consoles[/tag]

I briefly caught up with Charlene Li after hearing her speak at Forrester Research’s Marketing Forum 2008 in Los Angeles.

In this podcast, Charlene talks about getting the book written, and her and Josh’s goals of helping marketers understand the wild world of social media and engage with consumers in the groundswell.

Charlene also describes how marketing is evolving from highly controlled one-way messaging to a much less controlled process of creating relationships with consumers. In particular, she outlines how one of the best-known and most successful consumer tech brands, Apple, breaks the rules for engaging the groundswell, and the risks that other brands face if they follow Apple’s lead.

[tags]Forrester 2008 Marketing Forum, Forrester Research, Charlene Li, Groundswell, Apple[/tags]

Andrew and Alex covered Forrester Research’s Marketing Forum 2008. During the forum, Charlene Li and Josh Bernoff presented material from their new book, Groundswell: Winning in a World Transformed by Social Technologies.

Charlene and Josh quickly overviewed their POST framework for using social networks and shared a number of bite-sized case studies of how brands like Procter & Gamble, Ernst & Young, and Loblaws effectively use social media to talk with and energize their customers. They also used Dell to illustrate the importance of tackling social media one application at a time, with high level executive support, and getting it right before moving on to the next initiative.

In addition to covering the presentation at the conference, Andrew also interviewed Charlene later in the day.

Harnessing Social Technologies to Energize Sales
Charlene Li, Analyst, Forrester Research
Josh Bernoff, Analyst, Forrester Research

POST Framework

The biggest problem with the use of social networks is that companies are trying things without a strategy. You need to have a process, start with the desired customer relationships, not the technologies, then decide what technologies to use the enable those relationships.

We call our methodology the “POST” process:

• People – What are your customers’ social activities?
• Objectives  – What do you want to accomplish?
• Strategy – Plan for how relationships with customers will change?
• Technology – Which technologies will help you achieve those objectives?

Within POST we break Objectives into five pieces:

• Research – listening to your customers;
• Marketing – talking to your customers;
• Sales – energizing your customers to advocate;
• Support – responding to your customers’ needs;
• Developing – embracing your customers.

Today’s Focus: Talking and Energizing (Marketing and Sales)

Talking. Talking is about two-way conversations, not just shouting, which is analogous to traditional one-way advertising. It’s critical to accompany these conversations with the use of metrics to track activity to sales.

Blendtec is a great example. They sell commercial grade blenders, and their decision to make videos began when the marketing executive saw the CEO trying to blend 2×4s to test out the blenders and decided he should record it. So they spent a few thousand dollars buying stuff to blend and then creating videos. The videos have become a YouTube hit with over 7 million views and 20+% sales growth. (See also Digital Podcast’s Are Ads as Content the Future of Advertising?)

Another example is Johnson & Johnson. J&J created a blog, opened it up for comments but incorporated a very strict comment screening policy to avoid liability, and made those guidelines explicit to consumers to avoid any will. They are a good example of how you can try things even within a strict regulatory oversight environment.

Ernst & Young is doing a great job of interacting with people on Facebook for recruiting. E&Y needs to recruit 3,500 college students each year, so within Facebook, they include information about recruiting and a wall for posting. In one post a student asked E&Y why they are not recruiting on their campus, and Dan Black, the head of North American campus recruitment, answered personally with suggestions for how to get in touch with E&Y. This kind of dialog has a viral effect on campuses.

Procter & Gamble had a problem trying to connect with teenage girls regarding tampons, which is not something that’s openly discussed. P&G created beinggirl.com, which includes discussions and Q&A about life as a teenage girl and Tampax and Always branding but no direct marketing. They are achieving a 4X return relative to traditional advertising, using their own internal metrics, and have rolled out the approach globally.

Energizing. Energizing is about finding and motivating enthusiastic customers to talk about your customers. Example efforts include brand ambassador programs, communities, and embeddable widgets.

Ratings and reviews are one of the most interesting ways for interacting with customers, especially for customers who wouldn’t otherwise be engaged. Loblaws, a supermarket chain, encourages shoppers to rate products online and share the ratings in the store aisles and advertisements. If customers complain about a product they’ll fix it, like when the added more eggplant to the eggplant mousaka that customers told them were under-eggplanted.

Fiskars, a scissors and craft supplies maker, created the Fisk-A-Teers website, an ambassador program. These are deeply passionate customers, but when surveyed, were very neutral about the Fiskars brand (when asked what food Fiskars would be, customers said Saltines). They made the Fisk-A-Teers site somewhat of a hot commodity by restricting membership to invitation-only after the site was seeded. They have 4,000 Fisk-A-Teers, and the number of positive mentions on the internet went up many-fold after the site launched. Fisk-A-Teers go to stores to give demonstrations, and when they do triple sales in the store on those days.

Brides.com energizes its fans through the use of widgets. They understand that brides and their friends are the ones who care about weddings, and created a countdown clock widget that brides can put on their own MySpace page.

How should companies get started?

It’s very easy for marketers to look at these social media efforts and get intimidated. Do not start by trying to move social applications into everything you do in your company. Pick one place, one application, make that’s successful and only then move on. Put metrics in place to make sure the success is measurable and can be replicated.

Dell jumped into social networking when Dells started catching on fire, literally. They had Lionel Menchaca be the lead spokesperson  he had the technical background, product review PR experience, and was well connected throughout the company.

Unfortunately, Lionel’s first efforts were too stiff and too company-focused. The blog was getting criticized, but despite these setbacks Michael Dell threw his support behind Lionel. It’s critical to have this kind of high-up support for social applications as these efforts always some ruffle feathers along the way.

Lionel put up a post titled ‘Flaming Notebook’ directly addressing the issue, including a link to pictures. He described in detail what Dell was doing about it and their investigations. Dell got wide praise for its directness and as a result were well ahead solving the problem and getting replacements before other laptop makers.

Dell didn’t stop there. The next thing they tried was IdeaStorm, a social application for generating ideas from customers. The first suggestion was a PC running Linux. They asked customers what form of Linux, what type of support, and conceived and shipped the product in 2 months vs. 9 months for the typical Dell product.

Next came DellShares, a Dell investor-focused blog. In many ways, this was really a means for distributing to individual investors answers they were already providing to the institutional investor community. They engaged with Legal first to identify and agree to necessary safeguards, ensuring that DellShares made it through to release versus being roadblocked. In this case, the Legal department devised a disclaimer that needs to be agreed to and clicked through before gaining access to the site.

In summary, to succeed with the use of social marketing:
(1) Focus on relationships, not the technologies.
(2) Find and nurture your revolutionaries.
(3) Start small with individual applications, but think big.

Q&A Discussion

How do you engineer the creation of viral video? It’s really hard to create something that goes viral, and it’s even harder to create one that communicates the message you want for the brand. For example, Delta put up a safety video featuring “Deltalina”, a take-off on Angelina. They at least thought about this enough to show consumers that they “get-it”, and there’s a lot more they could do to engage fans around the video. Forrester is going to do a video in support of the book about how to use data. It won’t be BlendTec-scale success, but we expect some pass-around

How critical are these techniques to driving business and marketing peripheral or the meat? It depends on how big your company is. BeingGirl.com is not what made Tampax and Always successful, but it’s a nice addition to a marketing plan. On the other hand, BlendTec had no consumer market before the videos, now they do. ConstantContact doubled their business with customer involvement. It goes back to marketing mix – never put all your eggs in one basket. You never know what will work with your audience.

How do you feel secure about what you’re creating? You don’t start with coming up with a brilliant idea, you start with who are your customers and what do they want. The BlendTech guys started by spending $50 with no real risk involved. Make it safe to fail, and encourage your team to try a lot of different things.

How do you tackle efforts to create very rich customer experiences with a very small number of people? If you look at the classical value of lifetime value, look at purchase amount, frequency, and viral value. Count the number of people they are actually touching and the value that drives. It’s not nearly as expensive as TV too. You have to start small to prove out the concept and see what works before trying to move it to the next level; once they get going these things scale very well.

More resources are available at www.forrester.com/Groundswell

[tags]Forrester 2008 Marketing Forum, Forrester Research, Charlene Li, Josh Bernoff, Groundswell, Social Marketing[/tags]

Battle at Kruger – YouTube Video

The New York Times story speaks to the growing power and influence of the internet and YouTube relative to broadcast television.  But there’s also a meta-story that reinforces the challenge that traditional media companies face as they come to terms with the internet.

The print world has been forced to open up its content to the online world.  Readers who want online news content will find it, and the print ad revenue those readers used to bring with them is being replaced by smaller online ad revenues.  The only choice for newspapers has been to keep at least the online ad revenue by opening up their content and maximizing monetization, or to let their competitors take all the revenue from them.

So nytimes.com, the only way I read that paper, carries the full story online, accompanied by beautiful hires images and an unfortunately no longer functioning link to the original YouTube post.  Someone in nytimes.com’s ad sales department did a great job too, as the article is surrounded by banner ads for the National Geographic Channel episode.  Or also likely, the article and the advertising were planned together – in a world where content is free, content and advertising are increasingly one and the same. Either way, there is no doubt that those well-targeted ads are maximizing the revenue potential for this particular story.

Click on any of those banner ads and you’ll get a stark reminder that television and print are still in very different worlds.

The National Geographic Channel has a well-constructed mini-site for Caught on Safari: Battle at Kruger, featuring the next prime time airing and accompanied by a video short/promo, the full YouTube clip, photos, information about Kruger, and related stories.  But you won’t find the the hourlong episode online.  The “real” content can only be accessed through your cable or satellite feed, where Newscorp and National Geographic, who jointly run National Geographic Channel, ring the cash register.

Print, and more profoundly, music, were the first media for which the internet could deliver a competitive and over time superior audience experience at a lower distribution cost.  As described above, the only response available to most outlets has been to cannibalize themselves or be killed.  No surprise that shares in The New York Times Company (NYT), at $19.67, are down 57% over a five year period; other major papers are in the same boat.

The internet does not yet deliver a super audience experience at a lower distribution cost compared to television.  Not yet.  Most streaming, YouTube in particular, is nowhere near standard broadcast quality, let alone HD, but there are an increasing number of exceptions.  It’s still pretty expensive to stream high quality video.  Getting internet video into the living room is costly, kludgy and not ready for the mass market, but then again, I also prefer reading a physical newspaper over breakfast than catching up on the news with my laptop.

So the networks have benefited from the luxury of time and insight from print and music as they experiment with online content and monetization.  They can still keep their highest value content available through broadcast only, where most of the money is, and use online as a tool for promotion and viewer engagement, selectively releasing episodes where doing so reinforces that dynamic.  Investors aren’t betting against the networks; shares in News Corp. (NWS), at $19.35, are up 33% over their price five years ago.

In the meantime, internet video is beginning to breach the walls of the living room, and the quality / cost tradeoff of internet video distribution continues to progress along the path suggested by Moore’s law.  The networks have some more time to work out how to maximize online monetization, but they don’t have forever.  And while they have a big leg up on the newspapers and music labels in this game, it’s sobering to bear in mind that investors weren’t betting against those players either five years ago.

[tags]Battle at Kruger, National Geographic Channel, New York Times, News Corp[/tags]

You’ve seen the scantily clad cocktail waitresses in the casinos.  The sexy woman posed on the hood of a car.  We know that sex gets men’s attention.

But does sex actually sell?

A new research study by Brian Knutson of Stanford suggests the answer is yes; at least, that heterosexual men are more likely to take financial risks after being subjected to positive emotional stimuli—in the case of the study, erotic photos of a man and woman.

Why should digital marketers and publishers care?

As digital content and advertising become increasingly intertwined (here’s one of many posts on that topic), and marketers and publishers get better about measuring the effectiveness of their efforts (read more in our mini-eBook on social media performance management), we can expect the trend toward sex in advertising to be further invigorated (pun intended), at least in advertising that targets men.

And as social media becomes an increasingly effective marketing tool, we can also expect more of the digital equivalent of those cocktail waitresses.  The Stanford study alluded to the particular relevance in online gaming (gambling) businesses, and I noticed the effect firsthand when checking out XuQa.com, an online casual gaming community co-founded by Murtaza Hussain, co-founder and CEO of PeanutLabs and the subject of a recent DigitalPodcast interview.  Many of the most popular gaming rooms in XuQa are hosted by very attractive women (or at least hosts with photos of very attractive women), and the formula seems to be quite successful there.

By the way, for our female readers (my wife included) who by now are gloating over the superiority of your half of the species, beware:  Mr. Knutson is planning to test women’s responses in the future.

[tags]Brian Knutson, Erotic Content, Stanford University, Sex[/tags]

Creating Brand Advocates at Nike’s Jordan Brand
Emmanuel Brown, Director of Digital and Content, Nike’s Jordan Brand

Nike’s Jordan Brand has developed a couple of immersive experiences for highly engaged fans.  The experiences start with deep insight into these “superfan” needs, and build intense community engagement for these hardcore fans, but are small scale communities relative to the scope of the Jordan Brand.  Which raises the question, are these high ROI applications for engaging and activating superfans, or are they so focused on the hard core that they are failing to engage the brand’s mass market?  Read on and share your opinion…

Emmanuel began by sharing background on Nike, whose headquarters in Beaverton, Oregon is like a Disneyland for adults, and its Jordan Brand division, where Michael Jordan (MJ) still deeply interacts with the brand, the same way that he was engaged with the game of basketball.

Mentally, or digitally, cut to a stirring, inspiring Michael Jordan video (videos can be found at Nike’s site for the Jordan Brand, Jumpman23).

The Jordan Brand.  Nike approached Michael Jordan in 1984 to have a signature shoe built around him, a completely novel concept at the time.  In 1996, the Jordan Brand was born as a division within Nike.  The brand has 110 people versus the Tiger Woods Brand’s 400 people, and both brands support the same amount of revenue.  Nine out of ten people own (or have owned) Air Jordans, and the Jordan Brand is the second in the market behind Nike itself.

The Jordan Brand’s primary consumer is the core urban male 15-20 year old, highly competitive, a leader of the team.  These guys often know what the brand is doing before the news is made public.  The secondary consumer is 12-24 year old males and females, urban and suburban, not necessarily competitive.  Their consumers’ mind space includes social media, television, and the video game space.  The Jordan Brand does a lot of marketing through video games – with them, kids can see the entire line-up.  Most kids know what products they want before they get to the store.

The engagement philosophy for the brand is (1) to engage with consumers where and when they want (online!); (2) product and service together are critical to delivering a greater experience and engagement; and finally (3) the consumer decides.

The Jordan Breakfast Club.  A key platform for engagement is the Jordan Breakfast Club.  The challenge was to establish an authentic position for Jordan in the training marketplace.  Every morning, MJ and his teammates used to wake up and complete a workout regiment before he got to eat his four course breakfast.  So the Jordan Brand went after an unmet need of the target customer around training – everyone says that training is important, but no one tells kids how to train.  The Breakfast Club includes a simple peer-based assessment and a custom designed workout program that can be printed out or downloaded onto an iPod as videos for a huge number of possible workouts.  The Jordan Breakfast Club has 20,000 plus engaged users, and tens of thousands additional views on YouTube.  The Club also did a 10-city summer tour to reach thousands more at day long training camps.  The program won a 2007 Forrester Groundswell Award.

The Jordan Flight Club.  After building the Breakfast Club, the brand started getting more information about its consumers, and next started the Flight Club.  The Jordan brand has a huge “sneaker-head” following, and the Flight Club is about limited edition, one-at-a-time, high demand products for fiercely loyal customers who are willing to pay a very high price and avoid the disappointment of trying to get limited products through retail.  The brand got a lot of feedback from consumers in designing how the Breakfast Club would work.  Members of jumpman23.com got membership offers and the opportunity to invite two more friends – in others words, an “insider” offer for loyal customers only.  Demand went through the roof, with people selling their free invitations on eBay, and over 40,000 members joining in the first 45 days.

Emmanuel’s summary:  (1) create relevant experiences beyond the product, (2) service complementary needs of the consumer, (3) empower engaged consumers to be brand advocates, and (3) create and own communities where they are relevant and authentic.  The Jordan Brand’s next big challenge is to take these opportunities in the digital space and migrate them to the physical space, like the Jordan Breakfast Club tour.

Q&A Discussion

How do you share learning from the Jordan Brand throughout Nike?  We do case studies.  Things may work differently for us versus golf, and we use best practices.

The 15-20 year old market is refreshed every 5 years, so how do you target for the future, and specifically do you market to even younger (under 15) generations?  We try to communicate in a simplified format, keep MJ’s story relevant, and make great products.  We don’t market to the younger kids, but do try to emphasize success through working hard.

What do you mean that you’ve learned the hard way about ignoring customers?  We created a website where consumers could buy one-off products, and only created 6,000 units of a product that 1.6 million consumers tried to buy, crashing the site and generating hate mail.  We use sales data and forecasting to ensure that problem is not repeated going forward.  We’d rather overstock and deal with excess inventory than to have too little product and anger consumers.

For limited editions, doesn’t it help the brand to sell out so fast?  You have to appreciate the global effect of our brand.  Kids in Australia were getting their hands on US-only products; we responded to make the products available there.   We’re pushing to think more globally and satisfy demand, offering limited products in all parts of the world.

The Breakfast Club concept sounds great, but how are you measuring the true impact?  We’re not measuring the financials, but we do track the ongoing activities of the kids who sign up.  One of the Pro teams we visited adopted the philosophy as their primary means of training!

Realizing Your Return on Empathy (ROE)

Steve Kerho, VP Analytics, Organic
Mark Kingdon, CEO, Organic
Creating effective online (and offline) marketing solutions starts with a deep, emotional understanding of your customer segments and their needs – in other words, “empathy” for your customer “personas”. This empathy serves as a critical guide in designing online and other touchpoints, and the personas also support breaking down how you measure and respond to online performance.

Mark led off the sessions with the observation that as marketers, we have a lot of data about customers, but we need to get beyond the data to “touch” our customers.

He then solicited audience feedback on the importance of understanding customers in marketing through a uniquely engaging technique. When we sat down in the conference room, a pad and a branded pen were keeping each of our seats warm. The pens were laser pointers, and Mark gave us a brief tutorial on turning them on and aiming them without blinding our neighbors.

Mark walked us through a series of slides filled with questions and multiple choice “answer” targets; the volume of laser points bouncing around each target quickly illuminated audience response. The survey responses told us that collectively, we thought it important to find an edge in our marketing and to develop and understand customer personas to refine marketing approaches, but that we had a way to go in implementing these techniques.

Organic believes that getting to personas is so fundamental to their work that each year they send staff down to Vegas for “persona work”. The group breaks down into seven teams that are each assigned one of seven sins. Each team is tasked with observing people indulging in their target sin, and then developing a campaign for that persona. The exercise is all about getting to empathy, getting everyone on the same song sheet around what’s driving the consumer, their behavior and their needs.

Organic sees four steps in order to take advantage of empathy:

(1) Know your consumers well enough to develop detailed personas,
(2) Design web experiences around those personas,
(3) Tailor all media and touchpoints to these personas, and
(4) Know and optimize against “Return on Empathy”.

To get to step 4, marketing needs to secure management commitment to overcoming the challenges of siloed organizations, to develop a process for optimizing efforts, and to connect campaign objectives to metrics.

Why go through all this effort? Because empathy pays off, as Steve demonstrated with three case studies:

Jeep Patriot. The business objectives were to create familiarity and purchase intent for this all new vehicle in a crowded segment, targeting younger, internet saavy buyers. The solution was a very interactive online experience, where they shot 40 or so minute-long video segments for about the cost of a traditional 30 second spot. These segments comprise an interactive film, which viewers could enter and then steer their experience and outcome. Consumers were introduced to the story starting with a TV broadcast spot, then rich online ads, targeted emails, and theatrical trailers. In total their was about an hour of content, and the vehicle and its features appear in every scene. Their campaign had great results – Jeep more than doubled its target for unique visitors, with 80% of them new to the Jeep brand, enjoying an average viewing time of 5 minutes with 40% of visitors staying for over 10 minutes.

Bank of America’s No Fee Mortgage Plus product. The business objectives were to create familiarity, awareness and sell-through. They identified one persona familiar with the mortgage process, and another unfamiliar with it, and customized the site experience accordingly after three very simple multiple choice pre-qualifying questions.

Coach. The business objective was to increase the sales of bags online. The empathy process highlighted a key “persona” issue around women’s discomfort buying bags unless they are sure that they fit. The solution was to create an online bag “sizer” that drove a substantial increase in sales and reduction in returns.

After the case studies, Steve walked us through an example of metrics supporting “ROE” on site design. The example showed how the measures were built up, and demonstrated the differential impact on return against identified personas versus non-personas.

The session was running late so there wasn’t much time to discuss the ROI calculations, below.  Deeper reflection reveals a number of interesting questions, for example, why calculate ROI based on revenue rather than contribution margin, why only amortize the redesign over one quarter, and whether the redesign impacted other drivers of value such as new customer acquisition and retention rates.  You might choose a different set of assumptions for your business, but in any case, the persona-level analysis of differential site performance provides an important basis for objectively evaluating ROI.

The bottom line: executed well, empathy pays.

Q&A Discussion

You mentioned that the Jeep example exceeded traffic goals, but how does one go about establishing those goals? You end up in the forecasting business, and need to use historical performance offline and online as the baseline that you are trying to meet or exceed, for example CPM through traditional media (even though may be lower engagement, more eyeballs) You can also look at search traffic and value as another baseline for the value of the consumers you bring in.

How difficult is it to sell-in the work of building personas to clients? Actually, doing so in increasingly easy, and we have had some clients asking only for personas, not the follow-on work.

What is the role of customers in participating in site design? Customers are an increasingly important part of the process. In fact, we are working with a client now to involve customers in their core product development process.

How are you developing personas beyond traditional observations? We have deliberately selected low-tech workshops versus high tech means to develop personas, which surprises many because so much of what we do is high tech. That approach may evolve over time.

Does all this work to actually increase sales? Our clients have realized a high correlation between engagement, purchase intent, and buying behavior.

Digital Podcast joined Forrester for its 2008 Marketing Forum, which focused heavily on the challenge of customer engagement in a digital media world. We’ll be writing about the conference over the next two weeks. Our first series of articles, like the conference, is focused on the topic of engagement. This article covers the first two presentations of the conference.

Setting the Stage
Harley Manning, Vice President, Research Director, Forrester

Harley introduces the conference’s theme by emphasizing that the imperative for marketing success going forward is customer engagement, and previews three case studies on the subject.

Traditional channels are shrinking – the 30 second spot is declining in reach and importance – yet the new channels, like YouTube, hold risk for marketers. The challenge and opportunity is to engage with customers and in return they’ll engage with your brand.

Harley shared three quick case studies of engagement:

Jordan’s Furniture: Is it a furniture store or an amusement park? Complete with a trapeze school, water display, café, IMAX theatre, and the backing of Berkshire Hathaway, Jordan’s engaged customers stroll past “finished room” furniture displays to get to lots of the good stuff. Along the way, they seem to buy a lot of furniture

Nike Running website: Articles, splashy photos, and aspirational content motivated Harley to drop a wad of cash on Nike’s best running shoes, begin running again after a lengthy hiatus, and then drop more cash on Nike apparel. Is Harley buying shoes or buying into a lifestyle?

LeapFrog: Toys that engage Harley’s son’s brain while he’s too busy having fun to notice that he is learning too. No wonder these toys sell like hotcakes.

Engagement: A New Approach To Understanding Your Customers
Brian Haven, Senior Analyst, Forrester

Two brands, two superfans, two very different reactions – one shove, and one embrace. If you want your fans to keep loving your brand, try hugging them back!

The Ikea Superfan

Brian starts by sharing a story of true engagement, and how gazing into the eyes of superfan love be hard for some corporations. Jen is an Ikea superfan from Ohio, and she singlehandedly started a movement to bring Ikea to her corner of Ohio. She started a website, scouted retail locations, and worked tirelessly to drum up support for Ikea to move in. How did Ikea management react? They warned her to stop using their trademark, were concerned when her Google rank approached that of the brand, and after actually building a store in her neck of the woods, Ikea didn’t even respond to her job application. While Ikea is a great brand that does many things right, they could have handled this superfan in a more enlightened manner.

What can we learn from Jen’s story? The traditional marketing funnel and message control is a thing of the past. Consumers can now chase down a spaghetti maze of paths to your brand, and marketers risk drowning in a sea of metrics – too often we don’t know which matter, what to do with them, and even if we did, how to track them technologically and across channels.

Even overcoming all these hurdles, the next challenge is how to make “engagement” actionable. What does engagement mean?

In simple terms, engagement is a person’s participation with a brand, regardless of channel, where they call the shots. Brian defines engagement as the 4 I’s, the level of Involvement, Interaction, Intimacy and Influence that a person has with a brand over time:

• Involvement: A person’s presence at brand touchpoints
• Interactions: A person’s actions while at the touchpoints
• Intimacy: A person’s affection for a brand
• Influence: A person’s advocacy for a brand

The Alli Superfan

Brian shares a contrasting example – Laura, who tries out GlaxoSmithKline’s “alli” weight loss system and community website. The system and site effectively engage Laura:

• Involvement through community tracking, forum tracking, registration data
• Interaction through product purchases, diet diaries, fridge photos, food journals
• Intimacy through product feedback, online ad opinions and shopping experience
• Influence through tools for advocacy.

As Laura worked with the system and the website (and lost a lot of weight!), GlaxoSmithKline decided to feature Laura, one of their most engaged customers, on the web site. This highly engaging system realized a very successful launch – in just the first six weeks, 1 million people tried product, and they rang up $155 million in sales on a $150 million ad budget.

Brian then discussed some of the steps for defining and measuring engagement (understand existing and outside data and metrics) and encouraging engagement (provide content, facilitate conversations, give customers a reason for sharing information). Engagement involves a fundamentally different relationship with customers.

And he reminded marketers to engage, embrace, and encourage the Jen’s of the world.

Q & A Discussion with Brian

How to address the fact that companies have many different departments involved in “engagement” and many different metrics are used? The marketing team needs to take lead with other parts of the company to share the vision of engagement, provide value to those groups, and bring the company together on goals and associated metrics.

How to identify and scale Superfans like Jen? Online is a great place to start. There are brand monitoring services, even Google search can be used to find the bloggers. To scale this group, first nail the customer insight, who the customers are, what they care about. Then the best way to attract, encourage and track them will depend on the answer to those questions.

How can companies engage around intangible, infrequent purchases such as insurance or other financial services? The purchase may be infrequent, but there is ongoing usage data that you can track and monitor. These customers may not be engaged Superfans like Jen, but the same principles apply.

How should Ikea have treated Jen? Not to pick on Ikea, but Jen wasn’t doing anything bad, everything she communicated about Ikea was positive. Ikea should have leaked her information about the store in advance, given her access to better technology to support the blog, talked about her on their own website. Reach out, embrace, and help your superfans! Very simple things would have meant the world to Jen, and would encourage others like her.

Are there examples where pursuing engagement has backfired? There is nothing negative about understanding who your customers are and what they care about. Overall there are negative things that can happen, but remember we’re in a different world now, and we don’t have the same control. We have to stop being scared of our customers.

What do you do about people who are negatively engaged with the brand? We call this disengagement, and it will happen whether you like it or not. The question is do you want it to happen where you can see and influence it, or spread out beyond your reach. Ultimately, brands need to pay attention to the reasons for disengagement and make their products better!

Panelists
Bill Sanders, VP Mobile Programming & Digital Development, Sony Pictures Television
Derek Broes, SVP Worldwide Business Development, Paramount Pictures
Steve Smith, Managing Director, Playboy TV International
Douglas Craig, SVP Digital Media Operations, Discovery Communications
Seamus McAteer, Chief Product Architect & Senior Analyst, Media Metrics
Moderator: Ted Cohen, Managing Partner, TAG Strategic

What are the gating factors for Mobile TV acceptance?

Hasn’t been an overwhelming response for adopting Mobile TV.  Insufficient marketing to consumers; marketing is not the carriers’ core competence, just as software development is not the core competence of studios.  The numbers are still small – one or two percent – of the mobile phone market in US and Europe, but it’s meaningful, and five to ten percent of the addressable market of video-capable handsets.  The combination of flat rate data with increasing video capable handset and YouTube-like free video should be powerful drivers of adoption.  If it’s free, everyone will try it at least once.

What are the major content and user interface issues?

Need to build products and services in the way that our kids want, not based on the constraints that we place on them.  Examples of limitations: content deleted after 24 hours, inability to pause and come back to content later.  Short form is performing better than long form, of course.  Foreign language is an issue – need dubbing, subtitles don’t work on mobile (Sony does subtitle, though).  Every panelist is doing a combination of repurposing existing and developing original content.

Whether long or short form, it’s about building habit — people returning to the brand again and again.  For example, Sony did 200 Ripley Believe It or Not clips.  Traditional carrier approach, put them all out there on the shelf and let them die a quiet death.  Bill is pushing to go back to original comic strip format, thirty seconds every day with a shelf life.  Perishability is important to drive habit building.  On YouTube, you want to be the person who discovers the clip and forwards it to your friends.  This is something that we should have learned from traditional media.

On digital rights, the most important lesson is that the consumer will do what’s convenient whether it’s legal or not; we need to get in front of the needs and offer what consumers want legally.  Should you ask for permission first or forgiveness later?  With talent, ask for permission.  In other cases, bias toward asking for forgiveness.

What will make Mobile TV prime-time, with DVR- and HD-like uptake?

Forcing the issue on studios and other content owners by device users figuring out how to get the content on the devices.  These mobile devices increasingly have the capability of PCs, access to broadband networks, and the ability to sync with PCs.

What about the opportunity for direct-to-consumer, internet / browser based mobile portals, bypassing operators?

Hard to market and reach consumers without carrier support.  However, YouTube has some success in mobile.  Operators are very concerned about this, want to stay well ahead of it.  Also, trying to convince carriers that they can be “smart pipes” without being the programmer, e.g. billing relationship.