Media Company Strategies
How traditional media giants produce interactive content
The very newness of interactive publishing as a medium levels the playing field — at least for a while — for publishing startups that are conceived from the ground up as interactive companies.
Both interactive publishers and mainstream media companies interested in making the transition to new media products are scrambling to uncover what consumers want from an interactive entertainment or educational experience, and how much they are willing to pay for it.
And while traditional media giants enter the interactive media arena with the advantages of deep pockets and access to existing content, the price of admission is still steep. It requires a willingness to fundamentally change established business models and to invest in the re-education of their existing talent pool as well as invest in new staff and consumer research.
During the Media Company Strategies panel at Digital World, some of the heaviest hitters of the entertainment industry — Michele DiLorenzo, senior VP of Viacom New Media; Keith Schaefer, president of Paramount Technology Group; and John Papanek, editor-in-chief of Time Life Inc. — discussed in detail how their companies are making the transition toward interactive production.
KNOW WHAT INTERACTIVE ISN’T TO UNDERSTAND WHAT IT IS
Interactive media production appears to be a natural for large, diversified media companies such as Viacom, which is a cable operator with more than one million subscribers. What makes Viacom powerful in the new media world, however, is not its cable system but its programming, which is among the most recognizable in American culture — Nickelodeon, MTV, Showtime, VH-1 and The Movie Channel. The company also owns and operates several radio and TV stations.
According to Viacom’s DiLorenzo, the sheer size and stratification of large media companies can also be a weakness when entering the new media marketplace.
“The downfall of getting started in new media for a lot of companies is that they are good at setting up vertical hierarchies — ‘I have a movie business; I have a record business; OK, now I am going to have an interactive business’,” she explained. “(But) what inspired you to get into interactive is that it’s really not a peripheral thing. It’s really the creative extension of what you can do in your existing businesses. Therefore, you have to find an organizational structure that enables you to not live off on the side, but allows you to tap into the talent and thinking that exists across your company.”
Companies that don’t approach new media in this holistic way, she said, tend to treat interactive production as an assembly line procedure that primarily involves one division “repurposing content” created in another division — a strategy each of the panelists agreed is doomed to failure.
A process of education.>> DiLorenzo said Viacom New Media is a “facilitator,” bringing together traditional creators with savvy tools. The group has invested heavily in the education process of its in-house creative team, which DiLorenzo identifies as Viacom’s “most critical asset” for success in the interactive media marketplace.
These individuals, she said, always create with the audience in mind. “TV looks different today because of the MTV production approach,” she said. “They broke a lot of rules back then, and they are totally psyched now about the possibilities [for interactive production]. These people are banging down our doors; they have more ideas than we can possibly use.”
To help turn those ideas into reality, Viacom has built a technology center, where interested creative staff can experiment with the latest cross-platform technology. The cable giant has also built an in-house design lab, where creative technologists and creative producers can collaborate on the design of an interactive product. In addition, Viacom offers classes on interactive production environments in order to demystify the technological process. “Until we empower the creative people,” she said, “we can’t have an industry.”
Educate the consumer.>> Beyond educating the creators, DiLorenzo emphasized the need to educate the consumers. She said that Viacom is conducting extensive, disciplined consumer research.
“It is important that we understand that just because we can create something, doesn’t mean we should,” she said. “We must always find a way to communicate with our audience.” As an example of how Viacom is introducing its customers to digital media, the MTV news team covered, for the first time, the Consumer Electronics Show in Chicago in an attempt to educate its audience about the difference between an audio CD and a CD-ROM disc.
The long view to ITV.>> Viacom is in no hurry to get interactive product onto the shelves. At this point, DiLorenzo said, a lot of research and experimenting remains to be done. “We are primarily a TV company, which means that at some point interactive television will be our core business, not some ancillary market,” she said. “Therefore we take this very seriously.”
She did say that a number of Viacom New Media products and titles, including a CD-ROM based on the legend of Dracula from Icom Simulations, and several video games and CD-ROMs based on Nickelodeon and MTV characters, are to appear next year. (Viacom New Media acquired Icom Simulation this past May.)
PARAMOUNT MAKES PLANS TO FILL THE DIGITAL HIGHWAY
Paramount’s approach to interactive media production (outlined in detail in Vol. 2, Nos. 8 and 12) is similar to the Viacom business model, where the technology group collaborates with and has access to each of the business units within the entire media corporation.
As the largest provider of education content in the United States, however, the Paramount Technology Group is focusing primarily on interactive learning products first, leveraging off its established contacts and distribution channels within that marketplace. Schaefer says entertainment titles will follow.
“Next year we will take Paramount movie properties and make them interactive,” he said. “We are also working with Madison Square Garden [which is owned by Paramount Communications, Inc.] and making sports games.” The group also plans to deliver an interactive CD companion to a new television series Paramount is developing called Viper.
Schaefer reiterated the need to keep the consumer in mind when creating new media. “What is often missed in the technology rush is the consumer’s voice,” he said. “That voice dominates what we are doing at Paramount and should be what all of you listen to if you are working in this emerging marketplace.”
IS MULTIMEDIA AN ANSWER IN SEARCH OF A QUESTION?
For John Papanek, editor-in-chief of Time Life Inc., and the former director of new media at Time, there are many questions left to be answered before interactive CD production makes the transition from “practice platform” to the “$3 trillion entertainment business” that it has the potential to be.
“As a passionate publisher, I am excited about [interactive media] — all of us are excited about it,” he said. “It’s because of that excitement that so many of us are so frustrated. The reason is that no matter what we want desperately to believe, as a popular publishing medium, most of what we’ve been able to make of new media so far is simply lame. Not every title, of course, but for general leisure-time information entertainment fulfillment, CD-ROM can’t touch a book or magazine or newspaper.”
In order to become really viable, interactive titles are going to have to invoke passion among the people who use them. “Publishing thrives on passion — passion for repeat readings, renewals, building collections,” he explained. “We have not yet seen a CD-ROM that captures hearts and minds the way that Time Magazine, the New Yorker or Harlequin Romances do.”
THE SEVEN STEPS TO A TRILLION DOLLAR BUSINESS
Papanek offered seven steps that he believes will bring us closer to that $3 trillion industry.
1. Get smarter.>> The greatest assets we have as publishers, he said, are our storytellers: writers, photographers and graphic artists — what our computer-industry friends might call “interface engineers.” They’ve been refining their art of connecting editors to “users” for more than a century. Storytellers can learn to be technologists far more readily than technologists can learn to tell stories.
2. The story, stupid.>> As if this really needs to be said: Clicking on something does not make it better. People don’t want to work to be entertained and informed. Paper is a display and access medium that is very hard to beat. Interactivity is difficult to justify when you’re not playing games, Papanek said. Don’t settle for being “user-friendly.” No book or magazine is “user-friendly.” It must be as comfortable as a person’s clothes. People don’t think about what they’re doing when they read a book. They get inside it.
3. Get a verb.>> Papanek was serious about this one. He asks, can anyone dispute the statement that if there’s no good verb to describe the doing of something, it can’t be worth doing? You read a book, watch a movie, play a record, eat lobster, drink champagne. But what do you do with a CD-ROM? Catch it? Glom it? ROM it? Use it?
“Use,” he said, is the worst verb of all. At best it is colorless, at worst, pathetic. “Oh, her? She’s a user. Or worse, she’s an end user. Please, he said, let’s find a verb.
4. Get a noun.>> In books there are novels and novellas, romances and roman-a-clefs, thrillers, biographies and bibles. Magazines are weeklies, monthlies, women’s books, men’s books.
But CD-ROMs? This, said Papanek, “is an embarrassment to speakers of English or any other language. We have got to think about and promote new media as stories, not as gadgets!”
5. Break the plane.>> Nobody reads anything sitting in a straight-backed chair staring at a vertical surface atop a desk. You’ve got to be able to sit back, lay it in your lap, curl up, take it on the bus, said Papanek.
6. Portability, stupid.>> TV has beaten up on magazines and newspapers because it brings information immediately, with moving images. Now, electronic magazines and newspapers, fed by digital and cellular links, capable of mixing penetrating text with sound and moving images, can beat the hell out of TV by virtue of its being portable, said Papanek, while TV becomes ever-more tethered to that big, fat cable in the “home theater.” Remember portable TV? Don’t hear much about that anymore. Ergo: Golden opportunity for electronic books and magazines.
7. Know what we don’t know.>> Books on a shelf and magazines in a rack have great value to their owner even when they are not being read, said Papanek. Even if they have never been read. They look good. People feel good for having them, knowing that all that knowledge is theirs, even when they’re not using it.
Do CD-ROMs hold similar value? Will people buy them to own them, or choose to get their information by the piece, as at a sushi bar? In the electronic media world will there be anything like Time or Newsweek or the World Almanac or the Time Life Library of Home Repair? Or will those be the names of databanks? Will too much access turn all information into a commodity, or will quality be rewarded? Most important, how will intellectual property be valued, and its owners protected and compensated?
QUESTIONS HAVE BEEN RAISED, LET’S FIND SOME ANSWERS
This session certainly left the audience with questions without answers. Papanek’s talk provoked, while DiLorenzo and Schaefer raised important issues about shifting business models and the cost of entering an emerging marketplace. It will take massive amounts of consumer research, experimentation and collaboration among technologists and traditional creators to uncover future guidelines for this emerging medium. As DiLorenzo said, “it’s a lot of hard work, but once you understand that you can move forward.”
Janice Maloney