A specialist’s take on entertainment and its future

December 20, 2007

On-demand entertainment is basically the next step beyond pay-per-view

By Sarah Miller

Entertainment is a huge focus for interactive and mobile companies. But imminent shifts in the delivery and creation of content will affect the media and entertainment industries, including mobile-focused companies.

So it behooves mobile marketers to understand how convergence, video on-demand, special effects, localization and micromarketing will shape the new media and entertainment landscape. 

Preprogramming gives way to video on-demand and music-on-demand. As one studio executive said, "Video-on-demand (VOD) has been our biggest initiative for the last three years and will continue to be so. This will determine how the next generation of content delivery will be generated."

On-demand entertainment is basically the next step beyond pay-per-view, when an individual can see or hear anything he or she wants, at any time, without having to use a VCR, an alarm clock or even TiVo – a product that attaches to a television set and allows its owner to record any show at any time without a timer or cassette.

Sarah Miller is president of Axis Marketing & PR

While VOD experiments have been launched unsuccessfully in recent years, the conventional wisdom is that they failed because the technology had not caught up to the concept.

There is now increasing evidence that VOD will be a critical part of all digital subscriber packages of the future, in which case it will represent a tremendous shift in the current revenue stream of content providers.

Creative endeavors are saturated with special effects. Special effects in movies are increasingly sophisticated. The growth of companies, such as LucasFilm's Industrial Light & Magic (ILM), Pixar and SGI, means that entertainment is increasingly blurring the line between creativity and engineering.

Some movies, such as the Oscar-nominated “Toy Story,” are one huge special effect. Other popular franchises – the “Harry Potter” and the “Lord of the Rings,” for instance – are effects-heavy.

One employee at ILM said, "Five years ago when I started there was one other person in my group (business development); now there are about 30." Some companies to watch: Pixar, LucasFilm and Blue Skye, the maker of the surprise animated Fox hit, “Ice Age."

Good marketing is all about convergence. Convergence is about the integration of several mediums of entertainment, usually involving the Internet. It can be TV and the Internet, magazines and the Internet, books and the Internet, movies and the Internet, or even just Internet marketing and Internet content.

Streaming media, live chat capabilities, targeted advertising and audience testing are all becoming simpler and more popular with broadband penetration. The prime benefit of these kinds of features is that they can ultimately drive additional revenue streams and cut expensive production costs down.

The most lucrative professional opportunities within convergence are generally in graphic design, Web development, content creation and direct marketing.

Micromarketing drives the best advertising models. With the explosion of cable networks and the existence of countless niches within publishing and on the Internet, it is now possible to target prospective clients more precisely than ever before.

One negative repercussion is that it puts more pressure on major TV networks such as NBC and ABC to squeeze more revenue out of their remaining mass-market products.

On the positive side, there are more opportunities for consultants and marketers who can address the needs of target audiences.

Globalization breeds localization. Globalization is the micro-specialization within certain countries, cultures, regions or markets of mass products available elsewhere.

One popular example is MTV, which tailors its cable programming with native-language music and personalities in Latin America, China and India.

While localizing content seems an obvious part of entering foreign markets, it is still something that is often neglected.

The next century will likely change that, especially as major entertainment companies expand to other markets through acquisitions, alliances with local players and Internet portals targeted to regional markets.

Hollywood continues to court big business. While content is the bread-and-butter of media and entertainment companies, it is also hit-driven and cyclical in nature. To provide a steady cash flow, companies rely on corporate sponsorships to provide regular revenue streams.

The magazine publishing and TV industries have relied on this revenue stream for years, and film and music are quickly joining them. It all started with legendary (and now deposed) agent Michael Ovitz of the Creative Artists Agency who signed Coca-Cola Co. as a corporate client back in the mid-1980s.

For Coca-Cola, CAA was responsible for strategic marketing and some advertising. More importantly, CAA provided the soft drinks company with access to celebrities, spokespeople and key cultural influencers who could provide brand endorsements in an increasingly competitive marketing environment.

In addition to providing celebrity affiliations, agencies were also known for providing entry into event marketing, the requisite Hollywood parties, meetings and shows.

For CAA, this “branching out” provided credibility as it was now legitimately entrusted with brokering bona fide business deals, not to mention collecting consistent paychecks. All in all, it was a win-win for both sides.

The video gaming industry gets bigger. As technology advances, so do video games, which are already a multi-billion-dollar business. Many franchises within entertainment have proven that a popular character can create billions for a company, and video games are no exception to that rule.

Some companies to watch: Activision, Eidos, Electronic Arts, Infogrames, Midway, THQ and Take Two.

“This is perhaps the biggest growth engine in the entire entertainment industry,” said one investment analyst covering media companies.

Sarah Miller is president of Axis Marketing & PR LLC, a Beverly Hills, CA-based agency specializing in interactive and mobile entertainment marketing. She is also chair of Mobile Monday Los Angeles, a networking organization. Reach her at .