It’s all about keeping the customer satisfied, as D2D learned at DCM Europe. People will pay for what they want, so make sure consumers can find content, can consume it however they want – and can buy ‘stuff’.
According to Futuresource’s David Sidebottom, chair of the one day Mobile Summit which prefaced the main two-day conference, the presentations and discussions over the course of the day had: “Confirmed the scale of opportunities for mobiles and highlighted the diversity of its customer base. In a couple of years will we be at this conference talking about digital content profitability rather than monetization?”
Key to this profitability is knowing your audience, as Yahoo! Director Mobile EMEA Ed Laws explained that the way people consume content has changed dramatically. “People are spending more time on mobile devices and less time on traditional methods of content consumption compared to a year ago,” he said. In particular, people now prefer to consume news on small devices, which provide more flexibility – mobile devices are now the reading platform of choice for the bathroom and “longer visits” he pointed out. Most people are now disappointed if a news website is not optimized for mobile, so content providers need to be sure to give them what they want.
This notion was echoed by Polar Mobile CEO Kunal Gupta who pointed out: “The time spent on tablets is far greater but the number of times smartphones are used is greater,” he said. That makes the tablet more of a lean-back experience and, as such, it is much more of a paid content model. “People are more aggressive with monetization on tablets than PC or smartphones.” In the future, he said, we will see optimized content streams for tablet, so “there should be more long form content.”
Another point raised by many of the speakers was that the one to many TV broadcast model will evolve to a one to one as content owners learn ways to stay with the consumer and keep providing the content they want on the different devices they use throughout the day. The ‘keeping the customer satisfied’ theme carried on throughout the conference. Bismarck Lepe of Ooyala shared some statistics on video from the company’s video index. Among the facts and figures he shared was the fact that non-PC video consumption is growing rapidly and will continue, and that the growth rate of connected TV is faster than tablets and mobiles. “Every single experience is different for every single user in the connected world consumption so the right strategy for the right device for each user is very important,” he stressed.
DRAGONS AND STARTUPS
DCM events always have something that little bit different from other conferences, and this year’s DCM Europe in London was no exception. While, strictly speaking, the Startup Showcase wasn’t completely new (having appeared at DCM East last year) it had its own European take on it, and the Dragons’ Den session was certainly different.
The Dragons included the delegates and moderator David Naylor of Field Fisher Waterhouse. Three ‘entrepreneurs’ argued the case for why they should be given an investment of €250,000. Pitches included Clive Dickens, COO of Absolute Radio who proposed RADIOsync: “A new product proposition to make the discovery of online radio easier through metadata”; Paul Westhorpe, formerly of PRISA, who also went down a content discovery route with his pitch of ‘The Good Life’ – an online service to help people find “cool, new, local and global authentic experiences”; and Matteo Berlucchi, CEO of book reader service Anobii, who discussed what he called the development of ‘moral DRM’.
Dickens quoted some figures: 91% of people in the UK listen to 21 hours of radio per week (”radio is very much in rude health”). However, though 80% of the people in the UK own internet enabled devices, and there are around 40k radio stations online, only 10% of people have listened to the radio online. This, he said, was largely down to discovery, or lack of: data, he declared, is the new oil of our economy.
Westhorpe discussed the necessity for content discovery, using what he called a “content federation system”, which would help to compile experiences based on user preferences. He cited the example of visiting Madrid, where the user could view maps based around a certain experience, such as a tapas crawl, with recipes for patatas bravas, or a cultural experience, where they could also watch a video on how to flamenco dance.
Berlucchi declared that DRM was not necessarily a cure for piracy, and that education is key to preventing piracy of content, including books. The relatively new ebook market should learn from the music industry and drop DRM as we know it (digital rights management) for Digital Rights Morality. Publishers could provide DRM-free books that were watermarked with the buyer’s personal information (name and address for instance) on each page. That would install an ‘honour’ system of not misusing the publication. “Interoperability of books would open the market,” he stressed. “Other publishers could sell into Kindle and vice versa.”
Second place was a virtual tie between Dickens and Westhorpe, but Matteo Berlucchi emerged as the the clear winner.
In the Startup Showcase, four outstanding new ventures presented to and were voted on by a panel of judges and the delegates. The presentations were all extremely well received and voting by the audience resulted in a tie for first place, which then went to a best of three judges’ votes.
First up was Lee Morgenroth of leemail.me – ‘a PO Box for your email’. The service provides a unique and secure email address for all those websites we want to use, and which want an email address. There is a facility to turn the email on and off, and should, said Morgenroth, make it easier for people to give companies an email address. “Look at PayPal,” he said. “They are a trusted mediator for payments. We do the same thing for contact details.”
Fans for brands was the mantra of the next startup, Gruvi.tv, represented by James Hobbis. “Spotify attracted one million followers in the US with the Facebook Ticker,” he pointed out. “We can do that for any brand.” The company works with movie companies primarily, helping fans to discover, explore and share content. “The trouble with social media is that people don’t want their personal conversations interrupted. We join that conversation; we don’t interrupt it.” The advantage for movie studios was huge, he said, allowing them to market early to the right people with the appropriate use of shared trailers and recommendations.
Music with a view was the next pitch, as Stephen O’Regan of BalconyTV explained the concept that started on a balcony in Dublin. “It’s the rock ‘n’ roll part of digital content monetization,” he said. “Three friends started with the crazy idea of doing a TV show from our balcony. We wanted a new show every day and invited bands to perform so we could put the show on MySpace. Soon we were inundated by requests.” One of the unknown bands who performed for the first time on that Dubin balcony was The Script, who were to be seen two years later on the David Letterman show.
Last up to the podium was Jessica Butcher of Blippar. Blipping, she said, is “Converting an old push into a realtime proactively pulled experience.” With the use of image recognition, an app can turn even the most everyday object into interactive fun. “It is content delivery to the user’s hand, interactively and proactively requested.” The cumulative and rapidly growing audience has resulted in two million user Blipps, 50 client campaigns, and 350,000 users already.
There was a dead heat between BalconyTV and Blippar, with Blippar winning in the best of three votes by the judges.
DISRUPT OR SUSTAIN
A keynote panel at the event discussed the topic of ‘Disrupt or sustain? Developing a sustainable business model in an innovation-led sector’. Moderator David Naylor set expectations high by saying: “We live in wildly interesting times. Eastman Kodak, which could be viewed as the inventor of digital photography, is preparing to file for bankruptcy.” That, he said, is “A sign that even big companies are struggling with this rapidly changing landscape.”
Disruption and flexibility are key to staying in business in today’s changing digital landscape, and creativity shouldn’t be stifled, was the consensus. According to panellist MB Christie, Online Project Management Director, ft.com: “We have to keep disrupting our own selves in order to sustain growth.”
John Clark, Managing Director, UK for SEGA, combined the view of traditional packaged goods, with digital distribution, and his belief was that the paradigm shift has been from linear consumption to multiple devices. “Games companies for the first time are trying to catch up with the consumer,” he said. SEGA has acquired UK studios and the innovators in the company need to be supported to keep up with technology and continue creativity.
Peter Briffett, of LivingSocial, was very much of the view that creative elements need the corporate and financial backing of large companies but should very much be “separate from the mother ship”. He spoke from the point of view of someone in the enviable position of having sold a company to Microsoft but still being allowed to keep some autonomy.” Particularly good, he pointed out, as “Microsoft has a great history of killing anything they acquire but they are getting better at that.” Harking back to Naylor’s opening comment, he added: “Kodak never understood the digital space and didn’t innovate there.”
The conversation also turned to failure and how to cope with that. According to Christie, a standard question for her with interviews was “What was your biggest mistake and how did you recover from it?” Her company, she added, believed in ‘test, test, test’ but still sometimes that wasn’t a guarantee of success.
“Sometimes we release a great product but the public didn’t want it. If it works it’s not a failure in itself,” she stressed, giving the example of book publishing where some authors spend years getting a book published. “Then a later book becomes a bestseller so their first book that wasn’t well received succeeds. Persistence and optimism are crucial.”
A SCREEN IS JUST A SCREEN
Keeping the customer satisfied was revisited in many of the panels. For instance, during the discussion on ‘The growth of VOD: getting your product to the customer where and when they want it’, Charles Muirhead of Rightster stated firmly: “A screen is just a screen. It’s up to the technology providers to make it work.” Two uncontested points made during the discussion were that ‘content discovery is the next big thing and a huge opportunity for everyone’, and ‘multi-screen access is growing – consumers demand content when and where they want it’.
Social TV is going to be the ‘way to go’ was the opinion of George Meek of Kaltura during that panel, and another discussion of the conference revolved around the issue of ‘Delivering results through social media: likes, engagement, and monetization across all customer groups’. Todd Kurie of MyCube set the scene with a presentation on ‘Monetizing social media through social exchange’. The web today, he pointed out, has 250 million distinct websites, 150 million blogs, and 600 Facebook profiles. Every day there are 300 million tweets, 250 million photos are uploaded to Facebook, and every day eight years’ worth of content is uploaded to YouTube. “You are competing against a lot of content!”
Kurie’s message: “You need to make your content discoverable – metadata offers the best ROI.” Content doesn’t necessarily have to be free, he stressed – if people can find your content they are willing to pay for it. The comedian Louis CK offered the video of his Live at the Beacon Theater gig from his website for a fee of $5. No DRM, no restrictions – pay $5 and do what you like with it. “Over one million people bought it.”
Social media can be a hugely successful marketing tool, said Denise Parkinson of Yahoo! “When you have someone like Vin Diesel with five million fans on Facebook, he can drive traffic to like trailers of movies and then we can show our major studio clients that there is a huge interest in a title before it is released.”
Localization is important, so social media needs to be monitored carefully and “Research, research, research,” was the message of moderator Dana Al Salem of FanShake. She cited an example of the Middle East and North Africa, where there are two mobile phones per person. “Even if someone can’t afford to call or text, they still have two phones.” So if you are looking at growing a market in that region, looking at mobile is the way to go, she said. That sentiment was echoed by Henning Linblad, VP of Marketing at the WTA (Women’s Tennis Association), who said that what fans in China want is very different from what US or UK fans want. Facebook needs to be treated almost as another country in itself.
Maria Ingold of FilmFlex doubled up as a speaker on both DAM (digital asset management) and DRM (digital rights management) sessions and: “People want the latest premium content – now!” she pointed out, which is what FilmFlex aims to provide. “Rights windows are collapsing down to day and date, and people want a number of things: ease of payment; to watch on TV; to watch on other devices at home. And to take it with them when they travel.” What’s worth selling is worth managing, she said in the context of DAM. And, regarding DRM, Ingold pointed out, “We’re involved in some of the most premium content available so studios want to protect it. Content has to be licensed per territory per partner per device. We have rights negotiations about all of them, so that’s a lot to think about.”
Moderator Simon Tanner quizzed the panellists, in a quick-fire round, on the best and worst aspect of DRM. Some of the answers were: best – being invisible; worst – being visible (Trevor Albery, Director of Ant-Piracy, Warner Bros). Worst – the inflexible way it has been implemented in the past (Paul Gathercole of Universal Music); and worst – the fact that it can be hacked so it needs to be dynamically updated and is not a one-time, one-off solution (Christopher Schouten of Irdeto).
GIVE THEM COFFINS
Games also dominated a large part of the conference, with Edward Humphrey of Zodiak providing an insight into ‘Building digital relationships which transcend the broadcast window’. This he did by talking delegates through the case study of a Facebook-based role-playing game based on the popular TV show Being Human. It is, he said, the ideal property for such a game, with lots of social media buzz and devoted fans, and gave as many chances for making revenue as you could think of – and some.
Among the tips he shared for success were: “It’s never finished – get it out there”, and: “Don’t be too highbrow to chase revenue.” The devoted fans, he said, were prepared to buy anything, “Even things like coffins that we never thought originally would be worth putting into the store. So if they want coffins, give them coffins.”
David Perry of Gaikai discussed the failings of the big games companies to keep up with digital distribution. “There is DRM. There is incompatibility.” He pointed out the negative effect that the HD DVD/Blu-ray format war had on the entertainment sector, “But the games industry accepts format wars.”
The games sector has been marked by stair steps of change, rather than gradual evolution, he said. “Digital distribution is inevitable,” he stressed, “and free to play is important to our future.” Social sharing has been virtually unreachable by the big game names, because they make access to games difficult and/or expensive. Cloud delivery of games is the way forward, Perry said, in the spirit of removing all hurdles between players and games and bringing the game to the gamer. “We don’t have to explain how it all works, it just needs to work.” A bonus: zero piracy problems on servers.
Nicholas Lovell of Gamesbrief provided some insights into social games and pricing: “Free has been hugely successful.” In the physical world, the traditional pricing was a fixed price that meant it was too expensive for some people and other people were paying less than they would have been willing to pay. He cited the example of a Nine Inch Nails album, which was made available for free download and then had levels of pricing going up to $300 for a 200,000 limited edition signed album. “They sold out in 30 hours.” Lovell’s point: “In the digital world wevcan be more granular. Allow users to choose how much they will spend on your product and your revenues will go up.”
