I found this video on Robert Scoble’s blog. I thought it was a great overview of the Blogworld event. They do a great job of bringing the life of the event to everyone who couldn’t be there.

Brent Mitchell, MediaFly’s Chief Technology Officer, explains how the system works in this video interview from BlogWorld Expo.

So how is the US Army dealing with the messy, distributed, un-controllable social web? It’s doing what it does best. It’s developing processes, tools, roadmaps and training to deal with ambiguity. I don’t think there’s any one better at taking potentially complicated, almost always ambiguous, and frequently dangerous situations and preparing its people to perform at consistently high levels.

In another social track, Social Web Analyst Jeremiah Owyang answered my question about who is putting processes around social web and he points quickly to the military. In his case, he pointed to the US Air Force’s response roadmap. (BTW, The US Army has one too.)

The star of the Army’s social media efforts on display at BlogWorld was ArmyStrongStories.com, a blogging system that lets anyone in the Army post to the blog. It can be used to help recruits see what it’s like from first hand accounts by people like themselves and to bring the soldiers’ voice to life for all of us.

Major Mary Constantino was kind enough to share a few minutes explaining ArmyStrongStories.com.

Here’s the video:

Go Army! Follow the US Army.
Blog: http://ArmyStrongStories.com
Facebook: http://facebook.com/goarmy.com
Myspace: http://myspace.com/usarmy
Twitter: http://twitter.com/armystories
YouTube: http://youtube.com/armystrongstories
Press: http://armyaccessionsnewsroom.com

At the BlogWorld Expo,

Here’s the quick video version of how he did it. The longer post summarizes the rest of his presentation about how to grow your audience on the web. He has some excellent advice, which may be one of the reasons he has been able to realize such a return on his efforts.

Jason is an expert in new media and internet marketing. He is also the author of Promoting Your Podcast.

Jason starts out by discussing goals. The end goal is an action, something we want the audience to do because of our efforts. But we have some work to do to earn the action.

We need influence to make the action happen, and we don’t get influence instantly. We have to bank influence overtime and then we can make the withdrawel.

Before influence, comes engagement. We need an audience that this active and engaged with the content and the subject.

Before engagement, comes permission. We need the audience to opt-in in some way, to sign up for our email list, subscribe to our podcast or blog, or follow us on Twitter or Facebook. We need them to take a step to give us permission to send them stuff.

Finally, before permission, comes attention. We need to get their attention to get the process started.

Jason describes these steps as the New Media Money Map:

1. Attention
2. Permission
3. Engagement
4. Influence
5. Action

Jason then dove into the subject of attention in more detail.

He pointed out that we live in an attention economy and that competing for attention is the focus on new media marketers.

Jason went on to describe the components of new media magnetism that can help you gain more attention.

He described the components as relevance, reciprocity, authority, trust, convenience and desire (either urgent pain or rational passion). Building these components into your content and behavior will help you gain more attention.

He went on to describe what he called the preeminence principle. This is all about making sure you are the expert everywhere your users go. This ubiquitous expertise helps reinforce your position in the users mind.

Jason provided some great tips on how to be ubiquitous. He described how high rankings in search engines is essential and how it’s not just Google, but also iTunes and Youtube. He described how all search engines use relevance and authority to drive their rankings. In iTunes, he has found that keywords are what drives relevance and subscriptions, ratings and reviews help to drive authority.

Some other tools to use include Feedburner and Tubemogul to help with distribution. He also suggested Webcam Max and Camtasia as software tools to help generate content.

Moving on to permission, he described how your email list is still your most important list, but now you have Twitter followers, RSS followers, Facebook fans etc. Don’t overlook building those lists as well. He pointed out that you should make your opt-in one of the most prominent parts of your web page and make sure it’s above the fold. Aweber and iContact were his two suggestions for mailing list management.

He suggested GotoWebinar as one of his key tools to convert people on Twitter and Facebook into email lists and conversion opportunities. Don’t sell on Twitter, use it for sending invitations.

Jason then described his thoughts on engagement. The drivers of engagement are knowing you, liking you and trusting you.

You want your audience to resonate with you. He also said that telling stories is a method that works exceptionally well.

He suggested The Story Factor by Annette Simmons as a great resource for improving your story telling.

At this point, we started running out to time, but you can get more information from Jason at his blog.

From those tracks, I came away with four key takeaways for bloggers and podcasters who are trying to become commercial successes at what they do.

1.  You have to be willing to work hard.  Whether you’re trying to break through or already well known, you need to put in the hours to make it work.  The evidence suggests that the most successful bloggers 3-5 times every day.  Whether it’s blogging, podcasting, video, or micro-blogging, consistently producing lots of content is a key component of success.

2. You need to be the expert, or a least perceived as the expert.  And you need to put in the time to stay ahead of others in your field.  Expertise leads to credibilty which can lead to trust and conversion.

3.  You need to develop and follow a process for successful new media marketing, capturing attention, engaging your audience, building influence and ultimately getting your audience to take action.  I saw a great presentation on the topic from Jason Van Orden and will be providing detailed notes in a later post, so stay tuned.

4. Most of us need produce a signature product to be commercially successful.  Making money via advertising just doesn’t seem to pay enough to make it work unless you have a huge audience.  Whether it be an ebook, a coaching class or a continuity program, product seems to be the way people make good money.  If you can develop a successful continuity program, that seems to be the most lucrative product.

In his keynote, Tim updated the audience on the current state of Pandora and his thoughts on the future of online radio.

Tim started his speech by observing the how the when you book a flight on Expedia you get a slew of other offers for hotels, cars, shows and even pedicures. He stated that their might be a lot of lessons for the music industry that can be learned from the travel industry.

The focus of his talk was “From Competition to Interdependence”. He observed that in the arduous discussions of royalties and the subsequent compromise everyone had to give to make it work for everyone.

Broadcast radio is a big guerilla in music. Of the 20 hours people spend listening to music each week, 17 are listened to on radio. Music will go as radio goes.

Artists and labels have organized themselves around the radio industry. All the effort goes into getting on the air.

Broadcast radio is gradually being replaced by online radio, driven heavily by the mobile revolution. This is changing the relationship between radio and artists.

In online radio, it’s much more democratic and inclusive thousands and thousands of artists can now be included.

And the money flows are changing too. The money broadcast radio collected from advertisers mostly stayed with the radio station. In contrast with online radio a large percent of the money flows through to the artist. Of the $40 million in revenues that Pandora collects a 75% will flow through to artists via royalties.

The industry structure is also changing as artist services are growing fast.

The missing piece has been scale. How do you get this new interdependence to work at scale?

Pandora is now starting to reach scale. Pandora now has 36 million registered users,
12 million mobile users, 65,000 new registrations a day and providing 2 billion hours of radio in 2009. This is an example of online radio starting to reach the scale tipping point where they attract national advertisers who want to reach large markets. This means that more and more money can flow through online radio to the artists.

He also sees a day when services like Pandora can become a really rich source of information to bands about who is listen to their music, what they listen too, where they are etc all provided via a dashboard.

Tim’s ultimate vision is to have 1 billion users listening to music on Pandora creating a global scale that provides lots and lots of money to artists.

Panelists

• Dave Conway, Founder, Little Radio
• Johnie Floater, General Manager, Media, Live365
• Kurt Hanson, Publisher, RAIN / CEO, AccuRadio
• Jim Rondinelli, SVP of Strategic Development, Slacker
• Moderator: David Oxenford, Partner, Davis, Wright, Tremaine LLP

Why is Internet Radio relevant?

Kurt Hanson, of RAIN, points out that radio is how the average music fan finds music.

Johnie Floater, from Live365, the most important aspect of internet radio is bandwidth to support huge diversity of content.  Even the classical music of the Canary Islands can have its own channel on the internet, something which is not possible on terrestrial or satellite radio.

Jim Rondeinelli, of Slacker, points out that most people don’t want to program their own music flow and radio provides that programming.

How do you make money on a radio focused on a micro segment?

According to Floater, subscriptions are about 50% of the revenue coming into Live365 radio stations.  Rondinelli seconds the subscription model as being an important part of Slacker’s revenue.

Is advertising on internet radio working?

From the discussion on the panel, it seems to be hard to find advertising for internet radio due to the small size of each channel’s audience.  Sponsorship seems to be a model that the panel sees as having more success.  Slacker seems to be having more success with advertising selling out their inventory in the first quarter.  Floater says that they get their advertising on traditional channels focused on popular music.

Rondinelli points out that local advertising pays a lot better than broadcast advertising.

What about internet royalties?

The panel dove into the discussion without hesitation.  Rondinelli describes the major differences between the royalties paid by satellite radio, terrestrial radio and internet radio, with internet radio paying much higher rates.  He goes on to say that paying different royalties based on method of delivery is ludicrous.

Hanson points out that if the music industry got the royalties they want then the entire internet radio would shut down.

Is Internet radio competing with terrestrial radio?

Hanson says that it is both a competitor and a supplement to terrestrial radio.  When Live365 etc are built into the car, then it acts like a competitor. Floater says that if you look at the entertainment pie, music is just one slice.  Over time the internet is gaining an increasing share of the music slice.

Rondinelli says it really is location dependent.  If your in your car, you’re most likely listen to terrestrial radio.  Hanson points out that with an iPhone you can get internet radio right in your car.  Rondinelli says its not so great with the AT&T network in many places.

How is the business different today?

When Kevin started at NBC in 1988, he started to see articles being written about how network TV was a dinosaur. The articles we see today are similar. The death of TV is greatly exaggerated. Back then you could see that cable would grow and network TV would lose share to cable.

There was no discussion of how the business model would change back then. TV was the greatest advertising mechanism every invented. While the media mix will change, there is so much information coming out now that people actually miss ads when they get pulled out of shows. People want to know about products and ads play a useful role.

People will declare TV dead. While there is no turning back the clock, there will be TV networks in the future.

What are the fundamentals that will always apply?

Kevin says he’s really shocked to see how much sometimes nobody knows anything.

We can’t make declarations about what will work and what won’t. He tells the story of how everybody passed on the Sopranos, how Law & Order was not seen as the great show and the same thing applies to the media and the business model. There is massive change going on, but when people declare something to be the “way things will be” it’s more often wrong. He says the one constant is quality content.

If we were at this conference 2 years ago everybody would be saying long form video won’t work on the web. Now, we see it as one of the leading drivers of video on the web.

Where are you on UGC?

We all love a polished production, but great entertainment can be some 5 minutes of truly entertaining content. He’s all for it if we can make a living with it.

What experiments have worked and what haven’t?

This is not like trying to re-tool the auto industry. He says the media business is very responsive. It’s all about the risk takers. He points to Rupert Murdoch as someone who has challenged the status quo and its one of the traits of News Corp.

Talk about year round development

The more things stay the same, the more they stay the same. The old network model was a license to print money. The cycle worked. It wasn’t very efficient. Peaks and valleys in work were huge.

It seemed to outlive it’s usefulness, but people kept doing it. When we came out to the strike, it seemed like an opportunity to move to a year round basis. It’s a risk, but it creates opportunity to use highly viewed shows at the end of their season to promote new shows.

Talk about the Remote Free TV idea.

The idea is an experiment. Last year they were setting the schedule and they decided they needed to do something different. They had been stuffing more and more commercials into shows. Advertisers had come to view the commercial load as clutter. They decided to cut the ads in half and charge twice as much per ad. Fringe was the first experiment. It was really received well by the audience. The rub was that the advertisers who would pay the premium were few in number.

Not sure whether this will be the model for the future, but it may be the way to go. (My note: he should read the Innovators Dilemma. TV is in segment retreat to the high end. Higher quality ads at higher prices. Same move as the steel industry etc. Worth reading if you care about this stuff.)

What about the relationship with Cable Networks.

We are at a saturation point with cable. People have 118 networks and watch 16. It’s no longer good to add more networks. They are negotiating with cable networks to take cash for their network broadcasts, but it may mean a reduction in the number of cable networks that companies like Fox have.

When things are available online via Hulu, how does that change the relationship with cable companies?

We have to create legitimate models before illegitimate ones pop up, like they did in music industry. Fox makes high end content which need 10 minutes of premium advertising to support. When people watch 24 on Hulu we make less money. How we balance this is important. Windowing might help this. Cable companies have a 7 day delay before it goes online. It’s just one of many challenges we are dealing with.

For example, the way we finance these shows has changed as well. It used to be getting to re-run syndication. That market has seriously contracted. We need to figure out new revenue models.

What’s popped culture?

Pop culture and mass media had a symbiotic relationship. It was a great robust time for media. Now we’re living in the era of Moore’s law. Everything is moving much faster. Managing the relationship with pop culture is challenging when things are moving so fast. Media is not moving in lock step with pop culture. It’s the beginning of a really big transition. Even in a forest fire, there is rebirth after the fire.

Why is a successful producer even dealing with the Internet?

Stan says he has a son who was just not watching TV. He says his son asked him about CSI which he saw on YouTube. His son’s generation just doesn’t know about networks.

The Internet is just growing and growing.

What does it take to make a successful show on the internet?

Principally, it starts with a simple thing – a great idea that the audience will embrace. If you don’t have that nothing else matters, no matter what channel of distribution you use.

The difficulty of making a 3 minute episode with a beginning, middle and an end, with a cliff hanger to bring people back is very hard. Some writers figure that out, some don’t. It’s very challenging to make that short format work.

The other thing that is becoming very important is the social networks into account. They are different and they will evolve into places where different type of entertainment will migrate to different places.

The challenge is to stay ahead of the curve. It changes always.

One of Stan’s partners spent two years working on games. They see the game aspects of the core piece of entertainment is important and growing in importance.

How did you get Rosario to do the show?

One of the writers of Afterworld is a friend of hers. She did one of the voices on Afterglow and it turns out she’s a sci-fi fan. We asked if we could do something with her and she said yes. Finding an artist that thinks the internet is cool and wants to be there, is what it takes.

Where’s the money?

Gemini Division has different model. They are using product integration with 5 different brands that are very organic. Microsoft, Intel, Cisco, UPS. They talked to the brands to find what was really cool about their stuff. They then could integrate the product features into the show.

The show starts with Rosario talking into the PDA, they had her talking into the Windows Mobile software. They created a new interface which was not the traditional Windows Mobile interface. Microsoft let them go ahead and it got really good reviews. Now waiting to see what Microsoft does with the interface.

They have not done pre-rolls – but they are open to experimenting. They believe there is more value in product integration, but traditional media buyers still want the things they know.

What about distribution?

Phase 1 was tied to NBC for the first 50 episodes. Phase 2 will be opened up to much wider distribution. There are lots of people who love the show now, but it can be opened up to many more people with wider distribution.

What can be learned from Quarterlife?

Internet entertainment is internet entertainment and TV entertainment is TV entertainment. They will re-cut the web version to make a DVD, but the TV version is a different thing as is a game version of the show.

Hulu has been a great consumer success. But it’s not clear how it plays out for the traditional distributors like cable and the content producers.

The traditional distributors are saying hold on, we’re paying to distribute this content and you are giving it away for free online.

The content producers are used to the TV load of advertising revenues which is much higher than the ad load at Hulu. We may not be talking about trading analog dollars for digital pennies, but it may be analog dollars for digital dimes.

If the cost per thousand impressions doesn’t change, it’s a hard to see how things progress quickly. It just doesn’t make economic sense for Madison Avenue.

One of the things that technology allows to do is to target ads much more effectively, which may be a way to increase the digital revenue without the same advertising load. There is some certainty that advertising will remain a major component of the revenue model.

There’s a tendency to lump music, TV and movies into an entertainment bucket. Movies have two primary sources of revenue. Renting a night at the movies which represent about 30% of revenues and then the sales of DVDs and the like representing the bulk of the revenue.

Cloud computing based movie distribution will begin to substitute for DVD’s as rental on demand grows. For example, while DVD sales may be down 30%, Xbox video on demand revenues have roughly doubled.

Looking at TV, before DVRs, TV viewers would watch about 2 out of 4 episodes of shows. With DVRs, that number has increased to the average viewer watching 3 out of 4 episodes. Cloud based access could play a role in further increasing the viewing ratio.

Is the next step the Netflix subscription model? Fewer and fewer movies are being distributed via the ad supported model. The Netflix model is not new. HBO has been around for a long time and is the premier movie channel. Netflix is a different time window than HBO. It’s offering access to the library. One in ten Netflix subscribers use the Xbox Live service to access movies to consume billions of minutes of media.

The two models that seem to make the most sense are subscription and ad supported distribution.

What’s been the impact on the rental market? The VOD market should see strong growth. The average consumer only watches a movie a couple of times which makes rental a sensible alternative.

However, the switch to online will take longer than people expect. It won’t be one model for everyone.

Westlake looks at the audience and see different segments. The older audiences will be stay wedded to the traditional channels. The younger generation will be different. Just like they prefer cell phones, they will be looking at it with a very different set of eyes. They will drive the change.

The bottom line – the internet has caught up with TV for entertainment use. TV viewing is down by about 2 hours from last year, with most of the increase being in watching online video.

The interesting thing is that there is lots of data to suggest that TV and Internet media reinforce each other. Much of the online activity revolves around catching up with what’s going on with TV shows. Watching shows you missed is a highly popular use of online video.

There appears to be a future for TV, but one quite different from that of the past. TV won’t be the single dominant entertainment channel. It’s going to have to share prime time with the Internet.

You can follow what’s going on via Twitter search.  Just search for #FOTV.

UPDATE:

# Mike Vorhaus (Magid Advisors) Presentation:
Nielsen versus Consumers – They Say Canabilization Happening
# Seth Geiger (SmithGeiger) Presentation:
Digital Media Trends and the Future of Television

Ben Grossman, Editor in Chief, for Broadcasting & Cable led this panel discussion.

Danny Kastner is founder of Fan Rocket. Fan Rocket provides services to media companies that help promote media via viral videos.

Stephen Andrade is General Manager of NBC.com with a mission to promote TV shows, provide online advertising opportunities and create content for NBC.com. He shows a clip of what he calls creative social media that shows how The Office’s Dunder Mifflin Infinity website provides tools for fans to build content. The goal was to create a really deep community for fans of the show. The site presents creative tasks to “branches”( user groups) each week.

David Glover is CEO of Or Die Networks. The company is a online creative company that partners with celebrities to build new shows, such as Funny Or Die, and combines that with user generated content and social network tools to build community. He views it as a pyramid of content with the celebrity partner at the top, advanced users producing high quality content and then the mass user generated content.

EriK Flannigan, EVP of Digital Media at MTV Networks, runs Comedy Central and a few other sites. He says that consumers will form groups with or without you, so you need to decide if you want to participate. MTV is trying to embrace the social web using things like the Facebook activity feed.

How does an aspiring producer play in this? Stephen says that it’s important to understand the economics first. He says there are no barriers to entry so it doesn’t make a great area for investment. It doesn’t work to make things with TV type budgets. TV is a hit business where 1 hit can pay for 10 failures. On the web, there is a much lower cost of failure and therefore many more people trying.

Erik says that the industry has come a long way in the past few years understanding how users want to and will mash up content. The biggest stumbling block is letting go and letting users make their own choices. You don’t really have much choice because you can’t control what happens. He says you occasionally get into trouble with copyright issues, but you keep on going.

Dick says he met last week with one of the premier writer producers in comedy television. They were working on a concept and the writer said it would only work if there were no comments allowed. Dick says they walked away. You can’t fight reality.

Dick says they have less issue with copyright problems because their content is short and some what self contained.

Danny says this is really an area of opportunity as TV shows start hiring people dedicated to making extra content and making it viral. Stephen calls it a writer producer in training role, where when they go on to write/produce TV shows they will get the online side of this. Erik and Dick concur saying that new jobs are being created to re-purpose existing content for the digital space and new marketing jobs are requiring digital experience.

Does every new show need a social component as well as a digital component? Stephen says he’s not sure what “digital” means. He says it probably means both, but it really depends on the content.

Erik says that the social component depends upon the show. He describes the difference between The Daily Show and The Colbert Show. One is about presenting content, the other is really social.

The panel had some interesting advice to people in the audience who are interested in the space. In short, think beyond video. Erik pointed to an example on the Huffington Post that was an interactive view of how a conservative views the NY Times. Stephen concurred saying they want interactive ideas beyond video because they can really drive page views. Dick closes by saying think about what the technology can do, and video is just one of the things the technology can do.

Moderator: Wayne Karfalt – Editor, Cynopsis: Digital

Panelists:
Eyal Hertzog Founder and Chief Creative Officer for Metacafe
Melanie Hall – COO Quarterlife
Kevin Chou – CEO Watercooler
Justin Cooper – Chief Innovation officer for Passenger

Crowdsourcing has it origins in things like WikiPedia where people can collaborate and develop content together.  How can crowdsourcing sourcing techniques be applied to entertainment?

Melanie discussed the social networking site for creative people and online show.  She says they have many opportunities for crowdsourcing at Quarterlife.  They use the audience to discuss characters and story lines.  The principles of the show were used to build out a social network so that the show and the site can play off each other.  They launched the show on Myspace, Youtube, Bebo and other sites which then referred people to the site resulting in a fast growing online community.

Eyal described how Metacafe now serves up over 300 million videos each month to over 35 million people.  He says the internet is introducing a new low cost of failure which means many more experiments and allowed many more people to participate in the creative process.  They have recently allowed people to edit the metadata about the videos. The members can edit the tags, titles, descriptions etc connected with the videos.

Kevin introduced Watercooler, a company that makes widgets for social networking sites.  Watercooler’s mission is to bring fans together online.  People have allows gone online to discuss entertainment.  They started online forums to discuss TV shows.  They launched in 2007, growing to 25 million registered users in 12 months.

Kevin says that their users are using the site to find out what others are thinking about when they watch a show. The communities can be very different.  Lost, for example has a community of 600,000 with very different involvement, while the online community for Jericho is 10,000, but very passionate about the show.

Justin described Passenger, a company that provides a crowdsourcing application for large corporations and media companies.  Major networks like ABC and Fox use the application for collaborate with their most passionate users.  These super fans can drive storylines and changes in shows using Passenger.  These audiences are built from either web sign ups or email lists that the clients have built up over the years.  Filtering tools are really important to allow people find the content they want and for the clients to sift through all the information provided by the users.  Justin says that Lost has been an active user of crowdsourcing to steer the show and for what content should be submitted for Emmys consideration.

The panel discussed the future of pilots.  Eyal says that the whole model for pilots is changing.  It used to be that because of distribution constraints there was a filter, then publish model for testing new content. The change of the distribution method has changed the model. We are moving from filter, then publish model to a publish, then filter model.

Eyal says that about 50% of videos are found via search for the first video you watch.  The second video is more likely to be the exploration of the related video.

In another example of crowdsourcing, Wayne described how Digg is building a recommendation engine based up your Diggs.  This will makes for more active recommendations based upon the collective input from the crowd.

A question from the audience – how to use input from the community when it conflicts with the creative direction of the show?  Melanie says that in any successful relationship there is compromise.  Justin describes how the creative commons process where other can build upon existing content and generate fresh content.

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]

Developing content, building audience and getting advertisers to buy in will take serious effort. Publishers who understand the huge opportunity for subscribable media and its capacity to shape the media industry’s winners and losers will step up and make the investment required.

Putting these elements into a framework allows for systematic evaluation of operating practices across publishers and for the identification of best practices for new media publishing.

The framework links the three key elements of Audience, Content and Advertisers with the critical activities of creative/production, marketing, distribution, monetization and user experience.

In each of these functional areas, there are best practices that need to be deployed to make the most of a new media business. Some of these factors are observable from the outside looking in and others require examining how things work from the inside out.

Creative and production encompass the all important aspects of conceiving the concept, translating it into a show and producing high quality content on a regular schedule.

Marketing involves many factors including the key factors like search engine optimization, iTunes/media directory optimization, syndication via RSS feeds and sharable players. Evidence of best practice marketing can be found in how well things like ID3 tags are populated, the quality of feeds, file naming practices and quality album art. These are all factors that impact how findable the media is.

Monetization can take many forms and best practice players will find the right mix that works for them. While we can’t determine how much a show makes from the outside, we can examine the presence of monetization mechanisms like advertising, premium content, sponsorships, commerce/merchandise and paid syndication.

Distribution is an important component. In this area we are specifically looking for cost effective high quality content delivery. New media files are quite large and how well the distribution infrastructure works can have a significant impact on the user experience. In many cases we can determine whether a content delivery network is being utilized and we can also observe the use of advanced file sharing technologies like BitTorrent.

Perhaps the most important and observable element of the best practice framework is the user experience. How well are the shows presented? Is the content available in a format compatible with the devices consumers want to use? Is it easy for the audience to interact with the show? What’s the online viewing experience like? The answers to these questions and the inputs of the other four elements of the framework all go into determining how effective the user experience is.

By examining these factors in detail, we can begin to identify specific changes that will improve business performance and help publishers get serious about building new media businesses.

In the weeks ahead, we will dive into each of these areas to examine best practices and to review how well different publishers are employing best practices.

[tags]podcasting, best practices, new media[/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]

Panelists
Christian Batist, SVP Marketing, Sulake Inc. (Habbo Hotel)
Barry Schaffer, President, Promotional Currency
Julie Shumaker, SVP, Sales & Marketing, Double Fusion
Keith Kane, Co-Founder, SVP, Sales & Marketing, Giant Realm
Mark Friedler, Internet Advertising, Media, Games Entrepreneur/Founder, GameDaily
Moderator: Chris Lang, SVP, Research Strategies, SmithGeiger, LLC

Chris: Any case studies to start?

Julie: Sponsorship and engagement is really where there is opportunity right now. It’s like major league sports. Sponsorship are a really important part of the marketing mix. This is one way brands can reach fans. The combination of engagement and interactive experiences is allowing brands to participate in long play experiences. TMobile spent $60 million on their NBA sponsorship and mobile was the most important part of the campaign.

Chris: Will gamers put up with advertising?

Christian: It works well if you treat the gamers with respect. Logo slapping isn’t the way to go. You need to make it part of the experience. Have them find the ad and they win something and give them ways to wear your brand in the game.

Barry: We will work with the new release to promote it through specific brands or retail outlets. If you think about it like promotional items, but done digitally. Games, music, video can all be used promotional items.

Mark: Games are compelling as media. There is very high engagement. Attention to the game is very different to information around the game. The way to market to gamers is by working marketing around content about the game. CPM models don’t work in this kind of environment. You’re buying time, not really impressions. If you think of games as media, you start thinking about it differently. Free MMO games can monetize via digital goods. You can get very good revenue per user.

Julie: It’s no different than TV. Brands expect to get product placement to go with their impression buys.

Mark: The web is going micro. Everything is splintering. Players like EA want to spend $50 million. If everyone becomes their own media company, how does EA buy advertising?

Keith: These micro environments can be really scary to brands. There’s lots of things going on that brands don’t want to be part of. The marketing needs to be very relevant to the community. He describes a HP campaign for high performance machines that they ran in Machinima communities.

Q from Andrew via Mozes: How does the need for immersive placement impact scalability of in game advertising.

Julie: Without aggregation across lots of games you can’t scale. It takes a network of games to create audiences big enough.

Keith: Brand advertisers need to start thinking differently. Brands think they need a separate budget for game advertising. They should be thinking about how to reach audiences.

Julie: The game industry creates this problem by talking about PSP, Wii, DS etc. Brands should not have to care. They want to buy advertising and engagement.

Mark: We should be talking about engagement. If people want scale, they should go to Google and buy tonnage. There is going to be downward pressure on advertising because there is unlimited supply. You need to be able to offer media buyers engaging programs that are really simple for them to understand. He describes how this one MMO was able to offer virtual currency to members for signing up for credit card applications. The credit card company called them up and told them to stop after one week. The credit card company had a 12 month backlog after one week running the campaign.

Will there be single measure of engagement

Christian: It would be nice, but I don’t think so. The thing is to agree with your advertisers.

Julie: Advertising nomenclature is reach and frequency and CPM. Engagement is measured by ROI.

Mark: It’s also up to the industry to not take stupid ideas. We should segment it into different segments. Google allows you to buy clicks and measure results. If you’re trying to get a lifestyle product marketed, the product needs to look cool.

Barry: Engagement for us product selling, getting a new customer etc. A lot of the programs we run drive trial.

Christian: If people buy Corn Flakes in Brazil, the customer gets Habbo credits. The same type of program is running in Spain and Finland. It’s too early to tell the results, but the Spanish company pulled all their other advertising to focus on the Habbo program.

[tags]LA Games Conference 2008, gaming, in game advertising[/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]

Glu Media is about a $100 million company in the mobile game space. In 2003 the industry was very fragmented. In 2004, Greg thought that an industry consolidation would take place with companies like Verisign, Yahoo, Real buying mobile game companies. It didn’t turn out that way. Now 50% of the market is controlled by 3 publishers: EA(25.6%), Glu (14%) and gameloft (11.8). The rest of the market is made up of huge numbers of publishers. It’s a healthy business for those that are getting big, but not so great for the smaller players.

At what point, does this become a mass market. Greg thinks it already is a mass market. He focuses on the size of the installed base that you’re targeting.

• 56 million next generation game consoles
• 85 million iPods
• 850 million personal computers
• 1.3 billion landline phones
• 1.3 billion internet users
• 1.5 billion television sets
• 3.3 billion cell phone users

There is a huge untapped market to address. Even if only 5% are playing games, that’s 165 million mobile gamers playing every month. While going from 5% to 6% seems small, each percent gained means 33 million new mobile gamers.

Mobile phone game sales are bigger than DS and PSP game purchased combined.

Every minute glu ports 10 games, every second they sell a game. In 2007, glu sold 30 million games.

The business is healthy, the business is mass market. The question is how to grow the pie. The explosion of new players and platforms in the mobile space. We’ve seen the introduction to iPhone, ngage, and android. This is not to take anything away from existing platforms, but Greg thinks its going to change the battlefield because of the companies behind these platforms who are leaders in the digital media world.

These new players are innovating in both hand sets and in business models. We’re seeing direct sales to consumers, bypassing the carriers. This makes it really interesting for content providers. In this kind of battle, content becomes the differentiator.

Flat data plans, better handsets, better merchandising, better games. 44.7 of smart phone users buy games compared to 19.6 on non-smart phones. The difference is related to flat rate data plans.

Greg compares the iPhone to the PSP and DS in terms of capabilities. The iPhone has more memory and more processing power.

If you look at merchandising, it’s about to get a lot better. Just look at ngage. It makes the buying experience much, much better.

If the business is healthy and growing fast, what’s the one thing holding it back. The issue from Greg’s perspective is the way we think about the value we sell games for.
Playstation titles are at $60. PC games are at $50. DS games are at $30. Mobile games sell for $8. The question is what happens to the price point for next gen mobile?

“It may be a small segment of the market today, but this is a puppy with very large paws,” says Greg.

[tags]LA Game Conference 2008, Greg Ballard, Glu Mobile, mobile gaming, gaming[/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]

Panelists
Keive Huffman, SVP, Business Development & Sales, Championship Gaming Series
Robert Norton, VP, Business Development, King.com
Rob Uhrich, Senior Director, Digital Markets, PaymentOne
Brent Hurley, Strategic Partner Developments, YouTube
Jason Rubinstein, Senior Director, Entertainment, Mobile Devices, Motorola
Moderator: Jay Moore, Head of Special Ops, The Strategery Group

Jay asks What is connected gaming? What’s your perspective on what Connected Gaming is.

Jason: Connected gaming is a better experience. The ability to get it from your friends the ability to get it easily on your phone, and ulitimately how social networks connect with games.

Brent: Game developers can pull in relevant data to make the game better. If it’s raining outside, it could be raining in the game.

Rob: Connected relationships are what it’s all about. Usually my kids fight all the time. Seeing my kids working together on webkins shows the power of connected gaming. Strengthening current relationships and develop new relationships is an important part of connected gaming.

Robert: In all our games you are playing against other people. It’s about people vs. people. Helping them connect. The lobby system is the most important part of our site.

Kieve: We look at connected gaming as a huge part of what Championship Gaming Series is all about. We see a way for connecting a competitive gaming to main stream audience. Television is CGS’s primary distribution channel. The online element introduces a new element of interactivity. CGS just announced a YouTube channel.

Jay: What have been the big breakthroughs in the past year?

Robert: Figuring out pre-roll and post roll advertising has opened up free ad supported games. Another breakthrough is the social network sites that allow game developers to reach very large audiences.

Jason: VMK had to shut itself off due to unexpected success. Scrabulous is great. A couple of guys in India introduced something that ignited a lot of interest in casual gaming and it has a business model.

Kieve: It’s amazing how strong the communities are. Any time we run a tournament it’s a frenzy. Our traffic goes up 10x.

Robert: Scrabulous reinvented turn based games. The game had been around for a year before it went on Facebook. The social network allowed the game to become the marketing tool itself. By building in the right features, the engineering could drive the marketing of the game.

Jay: What’s been driving connectedness in the MMO space?

Kieve: We work with World of Warcraft. It’s been a lot of fun to work with them. They’ve created this immersive environment. The fun has been trying to mainstream this community by publicly broadcasting the game tournaments.

Jason: What’s not happening is MMO expansion into mobile. It doesn’t even have to be the game. There’s tremendous opportunity in mobile for applications like tools, utilities and teaser games.

Jay: Will the iPhone be disruptive?

Jason: The SDK and platform is not really open, so publishers should beware. Apple shattered some ceilings that only they may have been able to shatter. It still needs to achieve volume to be disruptive. Google’s open mobile is more likely to be disruptive.

Jay: What is the future of UGC games and mashups?

Brent: We want to encourage sharing of game video so people can share their in game experiences.

Robert: This is one of the most significant developments. Over the next 18 months, UGC around the game. The combination of community, games and flash skills set this up to grow. It opens gaming up to anyone with the right skills.

Kieve: One of the most popular things is sharing your best victory. Ode to Gamer Girl is one of the most popular videos around. It’s hard to beat this kind of marketing.

Kieve: Counterstrike is one of our most popular games. For the upcoming season, we are using a user generated map.

Jay: How will advertising play out?

Robert: Everyone is experimenting. Micro-transactions are the real revenue now. Advertising is the potential for real growth. Right now we’re experimenting with what works for users and how it impacts user’s interactions with the site and the games.

Jason: I side with the consumer. The consumers want free and they want quality. Diner Dash costs $20 for a download. On the mobile it costs $4-5. Consumers expect that games will be on the handset. Advertising could make this possible.

Rob: Advertising as a part of the business model continues to be a important part of the revenue mix. Game developers just need to be careful about how they integrate into advertising into the games.

Jay: What needs to change in the home?

Kieve: The technology in the US is getting better, but it still is not a great user experience. In Korea and China where they have the bandwidth, particularly in mobile, connected gaming is doing very well.

Rob: It needs to get much simpler.

Brent: Bandwidth into the home is the block for streaming high def into the home. So hitting the mainstream will take some time.

Jay: What categories will be disruptive in the next wave?

Jason: The companies that are positioned to do well are the big companies and the people who spin off from them and really understand the networks. Companies that are thinking about where the real numbers are and how to reach them with proven game mechanics can light up the mass markets.

Jay: What do you see happening next? What would like to see?

Kieve: True connectivity, that’s ubiquitous and that works.

Robert: The games that represent the cutting edge of content are teaching us about new things that work. Seeing these things move to other activities and applications is exciting.

Rob: The gaming market will become much more competitive.

Brent: Excitement about derivative works. It can be exciting to see and interact with the game and game play in different ways.

Jason: Open mobile networks. Fewer mobile operating systems. Super distribution – the ability for people to send media to friends get. Like to see US legalize online gambling.

[tags]LA Games Conference 2008, Connected Games, gaming[/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]

Geoff asks about the explosion of the music category. How do you work with the music companies?

Cindy says that the music business is actively looking for new outlets for their content. The interest level for music companies to be involved with games has reached a high point. First it was just background, then it became jukebox material, then artists became characters in the game, and then music became the game.

It’s been good to see the growth in sales of these games. We’ve also seen lots of growth of in game music purchases which is very exciting.

Geoff asks about movie games. The view is that movie games are rushed out and hard core gamers don’t really like them. The high mark was the Chronicle of Riddick. It seems that Vivendi is going back into the old movies, for example Scarface and Ghostbusters.

Cindy says they try to coordinate with release dates where they can. These are good opportunities. The problem is that it can take longer to make a good game than make a good movie. They wanted a way around this problem, so they researched the back catalogue. Scarface emerged as one property that could do well. For Ghostbusters, it’s one of the most familiar and popular movies. They were able to unite the original cast and it has unique game play.

For Scarface, they had huge popularity of the character and they were able to weave in contemporary hip hop theme. Ghostbusters was also familiar to the audience.

Geoff asks about The Bourne Conspiracy release. Cindy says they are immersed in a large scale marketing campaign. They see this as a mass market product so they are looking creatively at how to reach people. Two things they are doing that are unique. The first is cinema based ads. The ads are based on showing the motion capture technology and action sequences from the game. They will be shown at the opening of the new Indiana Jones movie. The other thing we did was to have the music composer, Paul Oakenfold, host a music conference and produce a music video for the game.

They will also have outdoor advertising and street teams that will help promote the game.

Geoff asks about how Vivendi approaches a Facebook or Myspace. Cindy says they go where the people are. For Scarface, they had a Myspace contest to determine music for the game. They also have a Scarface page on Myspace which has 400,000 friends.

Cindy also describes How Do I Survive High School. It’s a mobile game that connects to people. It’s episodic. People are attached to the game. 7.5 million packs have been downloaded for the game. They have promoted it in Facebook focusing on how to get the game on your mobile device.

Geoff asks about iPhone games. Will it be disruptive to the mobile market? Will it blow the market wide open? Cindy says that most mobile games have been crappy games. The iPhone has the ability to support much better games. It has the potential to be disruptive when the installed based gets bigger. The key is to get enough people with the phone to make it really big.

Cindy addresses a question about new virtual currency. She says that she wants to clarify that World of Warcraft continues to grow and that Blizzard is really focused on the player experience is.

Question: Will Blizzard allow digital object exchange? Blizzard has made it clear that they have decided not to do this. They are focusing on the player experience.

Question: What about iPhone games? Will Vivendi be delivering more games through the browser? She says the ability to download or access through the web is really exciting to Vivendi. It will be a matter of consumer choice how the get the games.

[tags]LA Games Conference 2008, Cindy Cook, Videndi Games, gaming[/tags]