A few weeks ago, the front cover of Broadcast magazine had a headline stating that the time of digital pennies is over. For more than a decade, established studios, producers and broadcasters looked at digital as the unloved child of the entertainment industry. Internet, and later social media and mobile content, were seen as cool, innovative and exciting, but dismissed it as a non-revenue generating venture. At its maximum potential it could be used for marketing activities, but the revenues generated were insignificant when compared with TV or movie revenues.
In the last ten years, a lot of projects have caught the attention of media and established producers, and made the headlines of the media industry at the same time, capturing the preferences of new audiences. From (our own) Sofia’s Diary to LG15, to The Guild or the just launched Halo web series, content that was produced for digital platforms was seen as cool and experimental; but not as a solid revenue generator with a sustainable business model.
To prove my point, the few executives and industry professionals who used the pioneer companies that started doing this have already disappeared. Even the big Hollywood studios had a love/hate relationship with their digital departments, acquiring digital companies, merging them and then closing them.
But this world is starting to change.
I have just got back from Los Angeles and after two weeks of meetings you can sense that the market is different; it is more mature. Investments are more cautious than in the past, and more importantly, new funding sources and models are being used to generate the necessary revenues to sustain this activity. Not only are the big video platforms (Youtube, Hulu, Yahoo, Netflix, etc) starting to commission original productions, but they are also giving advances on future revenues. If you look at the international TV and film business, you see that distributor advances and minimum guarantees are the key element on any funding plan.
Now that the digital platforms are also throwing money towards producers and talent, a new breed of digital-only content is starting to appear and the companies behind it are starting to prosper. In the other hand, producers are begining to work around the idea of extending their audiovisual work and entertainment brands to different platforms. Exploiting the billion-dollar industry of mobile apps, or using digital paid downloads – in the form of video, audio or eBooks – to increase the bottom line. The paychecks that these platforms are generating every month for content producers now in the region of tens of thousands. So there really are ‘no more pennies’.
These new business opportunities are key to the development of this new industry: digital content, cross-media content, or transmedia content – whatever you want to call it. Audiences are already embracing these new platforms, so now it’s time for business models to support the audience’s behaviour.
YouTube networks like Machinima have daily viewerships that are bigger than the majority of TV networks around the world. Some webseries have more viewers than top prime-time shows, and even in the TV World; VoD, mobile, internet and pre-recorded viewerships are starting to count towards almost half of the viewership of the TV shows and episodes.
As audiences change their habits, from traditional media to new online platforms, content producers need to understand these new mediums and how audiences engage with content on these platforms. The excuse that there’s no money in digital is no longer acceptable. Companies of all sizes, from established traditional TV and film producers, to new start-ups are benefitting from this new world. In the last 12 months, all around the world, producers and creators have to start looking at these digital platforms as the main media for telling their stories (and not a secondary medium where we could re-release after it was on TV or theatres).
Most of these new projects are becoming not just audience pleasers but also sustainable businesses. Some of them will make their premiere at the next MIPCOM. Now, as the money issue is starting to be resolved, the next evolution will be in terms of the language of these new platforms. New mediums always borrow their original language from established media, but as soon the new medias become established medias, they start to evolve and develop their own formats and languages.
So an exciting new world awaits, just around the corner.