New publisher begins with a balance between technology and content

Ion, a new multimedia publishing company, officially opened its Los Angeles office this past March. Since then, the four-person company has announced a publishing deal with rock superstar David Bowie, negotiated a deal with actor Dennis Hopper to feature the actor in a future CD-ROM project, and is in discussions with RCA Records to publish a CD-ROM sampler of the music giant’s recordings.

If we didn’t know better, we would almost believe that finding content for interactive CD-ROM titles was on par with shooting fish in a barrel. In reality, the only similarity between the two is they are usually both messy.

What has kept Ion from slipping in the bloodbath is one part timing — “multimedia” and “interactive” are daily news these days — and two parts people. Ion was founded by four individuals who each hold expertise in at least one essential area of the interactive multimedia publishing game.

From its inception last June the company included experts in content, technology, design and marketing — a balanced combination that is still uncommon within many of the large, let alone small, interactive publishing houses in existence today.

FINDING THE RIGHT PARTNERS TO OPEN DOORS

Ty Roberts, Ion’s chairman of the board and the catalyst for the company, learned the hard way that he couldn’t become a multimedia publisher alone. Roberts, who has helped found two successful computer software companies and is an award-winning music software and interactive game designer, has been interested in creating a multimedia publishing company for several years. He found, however, that technological muscle alone couldn’t pry open doors to the entertainment community.

While Roberts was spinning around Los Angeles unable to connect with content people (also known as “artists”), John and Ann Greenberg, who are entrenched in the music and film communities of Los Angeles and have Rolodexes any new media publisher would be glad to possess, had decided that “multimedia was the next thing.” They began hosting “multimedia dinner parties,” inviting multimedia insiders to dinner to learn more about this new medium.

It is not as strange as it sounds. Both the Greenbergs have had an ongoing involvement in digital music and interactive video technology. John, a musician and producer who has worked with They Might Be Giants, Lionel Ritchie, members from the Red Hot Chili Peppers and Oingo Boingo, got involved in computer music shortly after the arrival of MIDI. He became dissatisfied, however, with what technology was doing to music and began exploring what was possible with technology in the interactive music market.

Today Greenberg, now the CEO of Ion, sees himself as a conduit between the entertainment community and Silicon Valley. “I can explain what is possible in this medium to people in a way they understand,” John says. “Down here most of the people within the industry don’t know the computerspeak, and many of the people in the North don’t have the entertainmentspeak. If somebody explains a technological concept to me, I can work it out, but most of the people in this town are lucky if they know how to turn on a fax machine.”

Ann, now Ion’s VP of marketing, most recently worked as director of marketing at the Edward R. Pressman Film Corp., the independent company that produced Badlands, Wall Street, True Stories, Conan the Barbarian, Bad Lieutenant, Reversal of Fortune, Talk Radio and Hoffa. Her background is not in marketing or public relations but in architecture and experimental film — two areas that she says demanded a certain understanding of computer technology and the potential for interactivity.

Bringing in the artistic vision. Eventually a mutual friend introduced the Greenbergs and Roberts and, together, they approached Lou Beach, a well-known graphic designer and artist who has designed album covers for Atlantic, A&M and Virgin, to help them develop the Ion look and a compelling human interface design. He accepted and about a year later — this past March — the four them officially launched Ion.

Each member of the group has made substantial investments — both in money and time — in Ion. (They have also received some outside funding from private sources.) And while there is not a lot of cash left at the end of the day to pay themselves, members of the team say they have turned down venture capital funding as well as investment offers from “big names in the entertainment community,” rather than align themselves too early with the wrong type of partner. According to John, they are looking for an equity partner “who understands content and can create content.”

Location, location, location. Beach and the Greenbergs are based in the Ion office in Los Angeles, “which is where the personalities and lawyers are,” according to Roberts, while he remains primarily up north in the San Francisco Bay area, “which is where all the technical know-how is.” Despite the difficulties of holding meetings over the phone and shipping Syquest portable hard disks back and forth overnight for content review, as well as the cost of plane tickets between the two locations, the Ion team has managed to line up some potentially amazing content deals and deliver demo discs and interactive prototypes on deadline.

THE BOWIE DEAL: CONTENT IN SEARCH OF TECHNOLOGY

The first title to appear with the Ion label is an interactive David Bowie disc featuring the music video for the first single to be released from Bowie’s Black Tie White Noise CD. The disc, which will initially be bundled with Apple’s PowerCD, is expected to make its commercial debut this summer when the Apple three-in-one (CD audio, Photo CD and CD-ROM) player ships.

In addition to the linear music video, the CD will contain a behind-the-scenes interview with Bowie and his band members, as well as a collection of Photo CD images taken during production of the single, Jump They Say. As the user flips through the electronic picture book, Bowie narrates.

Exploring simulated worlds. The interactivity comes in the form of navigating through a simulated environment that mirrors the environment of the music video. Ion has access to nine hours of outtakes from the video shoot for Jump They Say to create the environment, plus they used 3D modeling packages on the Macintosh to create rooms and corridors that reflect the style of the retro building used for the video shoot.

Consumers can visit different rooms in the building, including “a video editing studio,” where they can mix their own version of Bowie’s music video using five different tracks. To prevent intellectual property nightmares, Ion says the program has no facility for allowing people to save their mixes off the CD-ROM.

The Bowie disc will also contain a sampler of music from various Bowie albums, from which the user can play excerpts. It will also have a “TV room” that contains a “virtual PowerCD player with discs stacked next to it.” You can “insert” the discs into the player and see trailers of other titles available for PowerCD.

APPLE COMPUTER PLAYS AGENT TO TECHNOLOGISTS

Ironically, it was Roberts’ reputation in the computer industry that paved the way for Ion to get the publishing deal with Bowie. Bob Goodale, Bowie’s business manager, called Apple because he wanted to get Bowie involved in this new medium. Apple recommended he call Roberts. The two met and Roberts showed Goodale digital music videos he had helped produce for Todd Rundgren, The Residents and Michael Penn. (These QuickTime movies appear in two of Apple’s QuickTime Developers CDs.) Goodale liked what he saw and requested that Ion create a “Bowie disc demo.”

To produce the prototype, Goodale gave Ion access to some of Bowie’s recordings from the Low and Lodgers albums as well as videotaped interviews and images from that time period in Bowie’s life. (Unlike many recording artists or Hollywood figures, Bowie actually owns the rights to his own content.) Goodale gave them a month to produce a short, interactive piece on Bowie’s life during that time. When the team presented the demo to Goodale — on time — he said it was the first piece of interactive rock ‘n’ roll that he had seen that had merit.

Bringing back the good ol’ days. The key to the team’s success, according to Roberts, is understanding the needs of music consumers. “We are interested primarily in the visual aspects of this medium,” says Roberts. “An album used to offer a visual feast, but today with [audio] CDs the record industry is giving people less images to look at, less information. We believe the record companies are going in the wrong direction. We want to bring those visuals back — to put MTV on our discs, because people want to buy those images.”

David Gales, vice president of artist development at RCA Records, agrees. The self-proclaimed “Mac fan,” whose primary responsibility is “discovering new ways to market RCA products,” had been trying to find out “what synergy could be found between the music industry and the computer industry.” He says he began to discover the possibilities when he met Roberts — again, on the recommendation of Apple Computer — about a year ago. (Gales was eventually responsible for RCA recording artist Michael Penn’s appearance on the second Apple QuickTime CD.)

Since then, Gales says he has kept track of Ion’s progress. “We are very interested in this new medium,” says Gales. “And what we are trying to do is use the skills of the folks at Ion to do some exploratory projects, to cast nets. We are very impressed with what the Ion people can do, and we hope to do a great many projects with them.” Ion is in negotiations with the RCA record label to publish interactive music discs based on RCA’s vast content library.

ION WANTS TO BE A PUBLISHER, NOT JUST A PRODUCER OF CONTENT

While the team’s first few titles will primarily involve repurposing existing content, all the members agree that Ion’s charter is to publish original interactive content —for any commercially viable platform. “When we started this thing, we realized that simply producing these titles is not what we were looking for,” says John. “We started with the notion of a publishing company and that’s what we want to do — literary titles, music, cutting-edge underground products.”

The first original title is expected to feature actor Dennis Hopper. Although the script is still in the early stages of development, Ion says that it will rely on Hopper’s pop icon status as well as his vast skills as an actor, photographer and art collector. The title will be an art piece, not a game, according to the team.

Ion is also reviewing scripts that were originally written for the motion picture industry but have not yet been bought by a studio. The company says it is working with the writers on these projects to see if they might be able to turn them into viable multimedia projects.

Film industry leery of change. At some point Ion would like to develop interactive film projects, but the group believes they will have to approach the studios through the back door, so to speak, since studios are traditionally leery of change. For instance, Ion would first develop an interactive title for distribution within the CD-ROM market and then sell the whole package to a film company.

To date, the motion picture industry has been less receptive to Ion than the music business. “The large film studios,” says John, “let us come in, present our ideas and then they decide they want to build the title in house. They are more interested to know if we want distribution deals, whereas the record companies are more open to our ideas because of the success they have had with [audio] CDs.”

Since Ion’s first release will be distributed through the PowerCD bundle deal, the company has not formalized a distribution program. Members of the company say they plan to distribute additional titles through a CD-ROM mail order channel, which has proven to be a successful venue for titles developed for the personal computer platforms.

“Our philosophy is that it may be too big a deal to create our own distribution system, but it is part of the vision,” says John. “If certain partnerships develop, then we will do distribution differently. But if that doesn’t happen we will deal with distribution project by project.”

PROTECTING COMPETITIVE EDGE IN AN EMERGING MARKET

Perhaps one of the most interesting aspects of the Ion business model is how the team is attempting to structure its relationship with its legal counsel. As Roberts stated earlier, Ion hired entertainment lawyers based in Los Angeles. (It is the same legal firm that represents film director James Cameron and Randy Jackson, who founded an interactive multimedia company called TMM.) Finding a firm that understood what new media is, according to John, was quite an adventure.

Digital parlor tricks. “We would go to these law firms and a parade of hungry eyes would follow us,” says John. “They wanted to see ‘Digital Parlor Tricks.’ It’s been quite an odyssey to educate people in this town.”

Ann believes Ion should be compensated for that educational process by deferred legal fees and is in discussions with Ion’s counsel about such a possibility. “The legal matters really interest me,” says Ann, whose parents head up the American Law Firm Association, a cooperative of more than 100 law firms. Lawyers, she says, are benefiting from their clients forays into the new media market as much, if not more so, than the clients are benefiting from their counsels’ legal prowess.

The value of a good education. “We are a wealth of information for a law firm,” she says. “They can learn the [interactive media] ropes from us. As we cut our deals they learn, but we are not getting a consulting fee for all the education time we are putting in.

“You want a lawyer who understands this technology but who will not use it to expand his client base with your information,” says Ann. “For example, if I cut a deal with Apple Computer for a bundle and that information is not proprietary within my law firm, it cuts my competitive edge.”

Ideally, Ion would like to find a young lawyer who is enthusiastic about this new medium to join the company. “The older lawyers see this medium as another way to fry the egg — repurpose the content,” she says. “The young lawyers see it as a whole new egg.”

Eyes on the prize. Lawyers are not the only group that needs to sacrifice some of its typical fees in order to learn more about the industry and help it grow, according to Ion. At this point in the game everyone in the content business has to realize that they are not going to walk away with a huge advance. “We are not talking about a $20- to $30-million-dollar motion picture here,” says Ann. “Titles that will get done today will be done cooperatively.”

“If we are going to develop our CD-ROM titles, it’s because this is a viable market, but that does not mean it is a commercial market,” she adds. “If you can get people understanding more that this is an interim market, then we are more likely to get the deals done we need to today to make this a commercial market later. It’s a time to work out the technical nightmares, the legal nightmares — a time to get feet wet.”

SMALL FISH, SMALL POND WITH POTENTIAL FOR BOTH

Ion is a model for a publishing house of the next century. It is what members of the team identify as a “new entertainment label.” And although the four-person startup is unproved in delivering product, it has shown itself adept at understanding this emerging market.

The group has technical know-how, an understanding of content, and more importantly, a few firm publishing deals. It has made connections into the entertainment community that bode well for future products. In addition it is attempting to set a precedent for a lawyer-client model that works within the confines of today’s nascent multimedia publishing market. (We wish them luck on that one.)

Time to deliver on that potential. For the company to grow beyond what it is today — a small fish in a small pond — it must produce a library of interactive titles that not only captivates the commercial CD-ROM market of today, but expands it.

The upcoming debut of the David Bowie disc bundled with Apple’s first consumer product, the PowerCD player, which is expected to cost less than $500, should help them jump-start that process. (We hope it is not relying too heavily on high performance, since the PowerCD — designed and manufactured by Philips — is a very slow CD-ROM drive.)

If Ion produces the disc on time, it will be one of the first companies to publish an interactive music CD-ROM from a recording artist of Bowie’s stature. The company’s window to cash in on that cachet, however, is small. Several other multimedia publishing houses will be delivering CD-ROM titles from famous musicians, including Peter Gabriel, hot on the heels of Ion’s Bowie disc debut.

Not a one-trick pony. For Ion to differentiate itself from the emerging interactive publishing pack, it will have to maintain that edge. And to do so the company will need to add more staff — technologists and artists who can work on simultaneous projects and deliver product on time, so that the core team at Ion is free to do what it does best: acquire content, negotiate deals and create the vision. Ion also needs a business manager who understands issues such as multimedia distribution. Although distribution is a non-issue for the company’s first title, it will become an important one when Ion tries to enter the commercial market on its own.

At this point Ion has all the possible advantages necessary to ensure its success — not the least important of which is that it has captured the attention of several media giants, such as RCA Records, that are looking for partners to help them navigate this new medium. If Ion can prove itself a worthy guide, and consumers are willing to pony up the money for a new kind of CD player, the company might very well become the entertainment label of the next century.

Janice Maloney