HOLLYWOOD, CA: I'm afraid this blog post won't be as provocative as
that title suggests, but please keep reading.

Thanks.

Here at the first day of Digital
Hollywood Spring 2008, a recurring theme among the three afternoon panels I
attended was this: Is it better for creative works to be shown and/or
distributed on the web by the copyright owners, or by a third party? The
answer:

Yes.

That's the beauty of the Internet, there are no right or wrong answers. Any
given consumer, at any given time, is going to have his or her own way of doing
things, so so you might as well cater to all of them.

Now that doesn't mean you can have a thousand blooming flowers. Creative
works, even when digital, cost money to produce, and creators wish to be
compensated, so you have to monetize. And some channels monetize better than
others. Well, most on the Internet don't monetize well at all, as many panelists
admitted, such as Solomon Entertainment Enterprises' Michael Jay Solomon, who
said "Right now, the Internet does not give you the return on your investment."
But optimism reigns here, such as NuMedia Studios CEO Michael Kernan, who said
it will "only take a year or two to monetize" creative works online. These
people know more about the business side of these things than I do, so I'll hope
their right.

Those thousand flowers can lead not only to allergies but to schizophrenia, a
term that was actually introduced into the discussion by Heavy Corp.'s Jimmy
Jellinek. But Lori Schwartz, who brings advertisers to web conent with
Interpublic Emerging Media Lab, put it best when she said it's hard for
advertisers to feel comfortable with their brand placement "when video is put
all over the place" in what she called "hypersyndication."

What is refreshingly clear is that all of these panelists respect copyright.
Even when an audience member threw out a bomb of a question, all but begging
panelists to talk about how much of a hinderance copyright is to distribution,
no one bit. The only real reference to copyright was from Jaman CEO Gaurav
Dhillon, who bemoaned the billions of pirated downloads and uploads online and
said he was working hard to provide easy-to-use legal alternatives.

The myth of user-generated-video was also laid to rest, as speaker after
speaker discussed how much of the most popular viral video was actually produced
by semi-professional people, people with film and writing training, people
aspiring to be the next "South Park" or "Lil Bush" success story. I have no
problem with that. I also have no problem with the sports rapper discovered on
MySpace.tv who ended up in the SuperBowl pre-game show, or the guy who filmed
himself fighting in his back yard and is now drawing major pay-per-view fights,
a person Jellinek has featured on his network. (Kids, don't try that at
home.)

Bottom line, any creator who can capture the imagination of consumers is
applauded by me. I don't think it's wrong if I'm watching a funny, amateur video
online and it turns out the person has a background that involves training for a
professional career. He or she is using the Internet as a marketing medium.

There was much discussion at this conference about how in this viral video
world, you do all of the creation first, then distribute it for no monetary
return, THEN figure out how to get an advertiser to support it. That might seem
foreign to some creative industries, but in reality it's not. No one knew Iron
Man would make $100 million; it could have been a dud, he's not as well-known
among the general public as Spider-Man. No one knows how a new novel or a new
album or a new videogame will sell. The creative industries have been in the
speculation business from Day One. Ben Franklin released his Poor
Richard's Almanack in Philadelphia in a market crowded with almanacs; he had
no way of knowing his would be a runaway success.

So while there are a lot of brave people operating in this web world — a
wild, wild world as more than one panelist called it — they're no more brave
than what some here refer to as "old media." Call it what you will, but the
demand for old media is higher than ever in the new media world, and this
conference with its packed ballrooms is a testament to that.

ADDENDUM: Dean
Kay pointed me to a blog
post by Mark Cuban in which he cites a Craig Moffett report focused on
Internet video and ad support. Cuban makes some compelling arguments that
current production costs for quality TV video simply can't be maintained in an
online market supported by ads.

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This entry was posted on Monday, May 5th, 2008 at 8:51 pm by Patrick Ross and is filed under market forces, piracy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.