On Nov. 12, GHJ held its annual Entertainment and Media Forum. As part of the event, I had the privilege of leading a panel discussion entitled “The Shake Up of New Media: A Seismic Shift in Content Consumption.”
Panelists included: Lindsay Conner, a Partner at Manatt, Phelps & Phillips, where he is co-chair of the Entertainment & Media Practice and leader of the motion picture, television, and digital content practice group; Roberto Orci, CEO of Acento Advertising and a leading expert in Hispanic advertising; Michelle Stafford, a Daytime Emmy-winning actress currently seen on General Hospital and a prolific Producer/Director/Writer; and Brian Toombs, the Vice President of Partner Content at the popular Internet channel, Funny or Die.
The panelists discussed important industry trends and key conclusions from the recent GHJ white paper New Media Industry Trends: Consolidating to Meet Consumer Demands.
Surprising Industry Changes
When asked what has surprised them, the panelists said:
Lindsay Conner: The willingness of consumers to watch long-form content on small devices is a pleasant surprise, because it provides more opportunities to distribute and sell content.
Michelle Stafford: I always thought nothing could replace live television for sports, so I’m surprised that people are watching sports on their phones now. To me, this means that nothing is actually sacred and the world is continually evolving with the shifts in technology.
Roberto Orci: I’m surprised by the availability of detailed data that tracks what and how consumers are watching. We can now maximize ROI using this data.
Brian Toombs: First, I’m surprised at how traditional media has risen to meet this challenge as you describe in the white paper. Second, Snapchat — that stuff disappears! Seriously, though, they’ve leveraged that product really well.
Lindsay Conner: The challenge of how to make money remains, however — how do you advance the platforms (e.g., YouTube) so that content developers can make money?
Defining Success in New Ways
The industry is advancing at a very swift pace. Our panelists mentioned some ways that success has been redefined:
Brian Toombs: There may never be another Facebook, so moderate success can be considered the new success. It’s fantastic to see people of all ages leveraging New Media and turning it into businesses.
Lindsay Conner: You can now translate New Media success on a medium like YouTube into a network television show on traditional media. But as you mention in the white paper, technology is developing faster than the audience. Matching up the broader audience with the technology is a challenge for New Media and old media alike.
Michelle Stafford: Creative people now have a chance to put something out without a huge media company behind them. The “democratization” of content has created a level playing field.
Geography As An Opportunity
A clear way for New Media companies to expand is into new markets geographically:
Lindsay Conner: The New Media landscape has changed in terms of technology, geography, and in what consumers want. In both New Media and traditional media, China is fascinating to watch because it is moving so fast and because of the vast audience, the film box office there will surpass the size of the U.S. box office by 2017 or 2018.
Brian Toombs: There are new worlds to conquer, like China. High-speed Internet is getting to places it’s never been before — it’s a pipeline for entertainment content.
The fragmentation of content distribution and the proliferation of channels lead to challenges for advertisers:
Roberto Orci: The CMO’s job has become enormous. They are responsible for much more now — from product advertising to brand image. This has required a lot of integration between channels.
Lindsay Conner: Amazon pioneered the strategy of collecting information on people and then delivering content to satisfy them and market to them — we’ll eventually see more of that with others.
Michelle Stafford: I work hard to advertise myself. I use social media and every other possible avenue to get my shows out there. Personal branding is now part of what we all do.
Roberto Orci: We use media differently now. We tailor advertising to the channel and the customer. Cheaper production allows us to do much more custom, tailored advertising. Short-form ads can be tested extensively by the type of message and medium and can determine overall value of that customer.
Michelle Stafford: The new environment lowers the costs to a point where I can invest in myself and tailor the message and sponsors to what I’m selling — it’s a more cost-effective model that can be scaled more effectively, which helps smaller industry players to succeed.
Lindsay Conner: Storytelling is also becoming more important — even with lower production costs, it’s important to spend money to develop iconic programming to promote the brand.
Roberto Orci: Ad rates will continue to depend on the number of eyeballs you attract, however.
Brian Toombs: Product integration is a growing trend. Advertisers are even making their own content. This isn’t a new idea: soap operas started that way. It doesn’t have to be blatant — some advertisers are just sponsoring the shows without obvious product placement.
Michelle Stafford: Because my shows focus on relatable themes like motherhood, I’m always looking to create relationships with advertisers who have products I can place — there isn’t a diaper I can’t sell!
Lindsay Conner: The bottom line is that if you can’t make money after some period of time, why are you spending so much on a particular kind of advertising? It must have ROI.
Social Media’s Role
Social media has democratized the process of getting content out there and it has also helped in managing talent’s careers:
Lindsay Conner: Built-in audience is an attention getter and lowers risk in an environment with so many channels. The costs are high, so anything that mitigates risk is helpful.
Roberto Orci: We’re seeing secondary characters now being cast because of their social media followings.
Michelle Stafford: It’s now expected to have a large social media following. It’s a lot of pressure, but it’s the reality.
Brian Toombs: There can be a detriment too — when old tweets come back to haunt you, it makes you think twice about what you post.
Michelle Stafford: Despite all the extra channels, it’s still hard to get your show out there. I had a built-in audience of TV fans for my first web show, but I’m not dependent on that as much now because I have my own audience through social media — my audience is portable.
Roberto Orci: One of the biggest things to come out of social media is that people now interact with content; for example, tweeting their comments to a live event in real time.
What opportunities haven’t been fully explored yet?
Lindsay Conner: I think virtual reality and augmented reality offer one of the most unique new areas. It has the potential to take us to a whole new level in how we experience the content.
Michelle Stafford: Creative people will have more and more ways to put content out on their own.
Roberto Orci: I see a couple of things happening in the near future. First, Judge Harold Green in the U.S. vs. AT&T case issued a consent order that broke up the Bell system, leaving room for innovation in many areas, including phone technology. Now it’s the major cable companies that are under scrutiny for monopolistic practices — breaking this up will open the door to getting content from many different sources. Also, there are 25 major markets where minorities are expected to be the majority by the year 2043. The content we develop will need to reflect this. Smart marketers are already doing it.
About Peter Klass (Senior Manager, Green Hasson Janks)
Peter began his career at GHJ in 2009. As a member of the Firm’s Entertainment and Media practice, he specializes in contractual accounting with a focus on performing audits of production and distribution of motion picture and television programs on behalf of third party participants. He also consults on entertainment litigations and participates in settlement negotiations of audit claims.
Peter began his career at GHJ in 2009. He currently oversees participation audits at various studios, including Paramount Pictures, Lions Gate, HBO and The Weinstein Company. Prior to joining GHJ, Peter worked at Sony Pictures Entertainment, where his focus was managing issuance of profit participation statements, coordinating worldwide royalty audits and accounting systems analysis.
Peter received his degree from the University of California, Los Angeles. He is a Certified Fraud Examiner, and is a member of the Association of Certified Fraud Examiners.