This Internet Thing is Starting to Seem Important Somehow

There's been a lot of interesting news this week, so I wanted to share a few links and reactions.

- YouTube is apparently working on a deal with the William Morris Agency to bring more professionally-produced content to the site. I do think celebs will attract a big audience on the site if they can figure out how to make short, funny, sexy stuff on a really tight budget. That tight budget thing is gonna be the issue...(And what about William Morris' 10% cut of all this action?)

- Netflix is successfully creating the perception that they will win the race to deliver movies over the Net to televisions. CEO Reed Hastings said this week that "streaming is energizing our growth." Netflix's fourth quarter results this week beat Wall Street's estimates, with revenues of $359 million.

- Paramount, Lionsgate, and MGM hope to launch a new subscription TV channel for movies, to compete with HBO, Starz, and Showtime. No cable or satellite or telco provider has agreed to carry the channel yet, so it will appear first on the Web, this May. It'll be called Epix. Ummm, didn't Starz already try its own Web-based movie service...called Vongo? That didn't work so well. Of course, Epix might have some radically innovative new take on how to build and Internet movie service...

Let's hope.

Sundance Panel on Digital Opportunities for Creatives

This afternoon's panel at the New Frontier was a heap of fun. I especially enjoyed the interplay between Maria Maggenti, a writer/director in the true indie mode (her last movie, 'Puccini for Beginners,' was made with InDigEnt and shown at Sundance two years ago), and Evan Spiridellis, co-founder of JibJab, a digital "microstudio" in Venice Beach.

Maria talked about her experience making a three-minute film for cell phones -- she loved it -- but asked Evan a lot of questions about how JibJab has cultivated an audience (and an e-mail list) over time, and how they're making money from their work.

A few bullet points that stood out from the conversation (and the audience questions):

- It's still hard to find industry types who "get it," and are willing to experiment with new production/marketing/distribution models. Evan referred to Walt Disney's embrace of TV in the 1950s as a way to promote his movies... and I think it's still unclear which studio will follow in Disney's footsteps with the Net.

- Though Paramount and its MTV Films division could be a good candidate. MTV Films released 'Jackass 2.5' in December directly to the Net, as a full-length streaming feature. The Internet release (free, but ad-supported) was followed by a DVD and paid download offering. (The movie didn't have a theatrical release at all.) David Harris from MTV New Media said that there were three issues they encountered with the experiment: first was that someone posted the film to BitTorrent almost immediately, which meant that Paramount/MTV lost control over it (no way to tally views or deliver ads); second, that the site's age verification process created hassles for viewers; and third, that to watch the movie during its Internet premiere required downloading a new bit of software (Microsoft's Silverlight video player.)

- Evan noted that JibJab's goal when it makes its short animated music videos is to have one visual and one textual joke in every line of the song. I mentioned "Kirsner's 10-Second Rule of Internet Video," which says that if you don't give someone a reason for continuing to watch in the first ten seconds, they're going to close the window, and you've lost them for good. (Think about TV, typically thought of as the medium for short-attention spans. But when a sitcom or drama is starting, you likely give it a minute or two to get you involved. Not so on the Net.)

- David talked about the idea of navigable documentaries...MTV and Electronic Arts are working on one about videogamers, in which viewers will be able to dive deeply into topics (and games) they care about, skimming over those they don't.

- Someone in the audience asked about subscription models for indie content. We couldn't really think of any great examples (beyond porn and sports) of someone who is cranking out content and charging a monthly fee.

- John Pattyson with Ustream Entertainment sounded like he was happy to leave the world of Nielsen ratings behind; he and Evan agreed that it's nice to have real data about how many people are viewing your video on the Net (even if most sites still don't have good data about how much of it they're watching, versus just starting to watch.) Evan also said that having comments from viewers is nice, but the real sign that you've done something great is when they decide to pass it along and tell others about it.

- We reinforced the importance of collecting e-mail addresses (and perhaps ZIP codes, too) from people who express any sort of interest in your work. When JibJab's first viral video took off in 2004, they already had a list of 130,000 e-mail addresses that they could notify whenever they released new work. I likened it to LL Bean and Crate & Barrel: catalog retailers understand the importance of maintaining a mailing list; creatives are just starting to.

- Not every filmmaker is going to want to become a DIY demon and take control of their own destiny... there's a spectrum of entrepreneurship, and some will be game to think creatively about business opportunities, while others will want someone else (a studio or distributor) to do it for them.

- We talked about the model of releasing work on the Internet and then producing a DVD. JibJab did that with some success, and so has AskANinja.

- A filmmaker came up to me afterward and asked a few questions about promoting a documentary that won't be out for another year or so. I suggested that there was no downside in starting plant seeds around the Internet, sharing clips or full interviews (longer than what will end up in the film) with communities that care about the topic (it's about a paralyzed fellow -- didn't get much more than that.) Sharing this free content is a way of building interest and buzz, and also collecting e-mail addresses of people who'll appreciate a notice when the doc is available on DVD, or being shown on TV or in theaters.

- Joel Heller from Docs That Inspire was in the audience, and I saw him wielding a recorder -- so he may have audio at some point.

More color on last Tuesday's Apple news

I did some post-MacWorld analysis for Variety, focusing mostly on the addition of movie rentals to iTunes. (Diane Garrett also wrote this piece a few days later.)

The big things that could hamstring Apple's move into rentals: the breadth of its selection, and the fact that rentals won't show up there until about a month after the DVD release. Both those limitations, in my mind, still favor Netflix.

Let me share some interesting studio exec comments that didn't make it into my piece...

- Jim Gianopoulos, chairman of 20th Century Fox, told me that his studio had eventually gotten comfortable with Apple's DRM system, Fairplay: "Nothing's perfect, but they've worked hard. The better the content protection, the easier content flows... and the more comfortable content providers are about handing over their titles." He said that digital revenues simply won't grow in the presence of rampant piracy: "None of this works if there's a parallel flow of freely-available content."

Gianopoulos also said he didn't think that digital rentals from Apple and others would necessarily undermine bricks-and-mortar rental chains, or services like Netflix. "People make choices, and they make choices that are most convenient to them. We're in all of those businesses, and we want to support all of them. It's up to those providers to provide good value."

- Thomas Lesinski, president of Paramount Pictures Digital Entertainment, told me that last week's announcement from iTunes "will be the beginning of a significant digital media business." He added that Apple "learned a lot from the original Apple TV, and changes in the 2.0 version will get a lot of people interested in digital distribution in the home. It's a very easy-to-use product, and they lowered the price."

Paramount's Direct-to-Net 'Jackass' Release

We can debate whether 'Jackass 2.5,' made up mostly of left-overs from 'Jackass 2,' really counts as a new, stand-alone feature film... but Paramount is claiming that it'll be the first studio feature released first online as an ad-supported streaming program. Later, it'll be available on DVD and as a paid download on iTunes and Amazon Unbox. Essentially, this is experimentation with what would've been a direct-to-DVD release, and the budget for the movie was under $2 million.

It goes up December 19th on Movielink, and on sale as a DVD and on iTunes on December 26th

From the NY Times:

...Viacom executives emphasized that this was a stand-alone venture that would pay for itself.

They described the online premiere as an experiment aimed at gauging the potential revenue streams for studio-produced, longer-form Web material that could take advantage of the consumer appetite for user-generated content.

“If this works, it could open up and really change the game about additional content that studios can create,” said Thomas Lesinski, president of Paramount Pictures Digital Entertainment. Then again, Paramount executives acknowledged it might not be the fairest test of long-form films, given that the movie, like the TV show, is made up of many short segments, consumable in morsels.

From the Wall Street Journal story:

The move comes as the studios explore new media in the face of lackluster revenue in traditional outlets. Box-office sales are down about 7% for the holiday season beginning Nov. 2, according to Media by Numbers LLC. DVD sales are down for the year, dropping 1% so far in the fourth quarter, according to Nielsen VideoScan.

If Paramount can show this tactic brings in revenue, it could become a template for movies aimed at young, Internet-savvy viewers. The original "Jackass," released in 2002, took in $64 million at the domestic box office. "Jackass 2," released in 2006, took in $73 million domestically.

3-D Conference in San Francisco

If you're interested learning more about 3-D cinema, gaming, phones, TVs, and signage, you should know about this event coming up next week (Sept 18 and 19) in San Francisco. An exhibit pass is free; conference pass is $695.

But the sessions look good, among them:

3D Digital Cinema
Prospects for 3D Digital Cinema
Matthew Brennesholtz, Sr. Analyst, Insight Media
ABSTRACT: The transition from film to 2D digital cinema is well underway and 3D cinema is also becoming a component of this transition. The presentation will provide updated information on our 3D Cinema forecast with the latest information on trends, issues, roll outs and prospects for 3D in cinema applications.

Next Steps in the 3D Cinema Revolution
Lenny Lipton, CTO, RealD
ABSTRACT: This talk will discuss the needs and hurdles for taking the 3D cinema industry to the next level. Currently, there are over 700 3D digital cinema theaters, but to get most major movies made in 3D, we need several thousand theaters. Clearly, 3D cinema is riding the wave of digital cinema projector installations. This is currently the gating issue, but there are other needs in terms of production workflow, post production, visualization and distributiuon that need to be dealt with. In addition, some view the 3D as a distraction and not an opportunity. This talk will discuss all of these issues and the prospects for 3D Digital Cinema in the near term.

Trade-Offs in 2D to 3D Conversion
Dave Seigle, President/CEO, InThree, Inc.
ABSTRACT: There are three ways to produce 3D content: using dual cameras, producing second eye renderings in CG, and Dimensionalizing 2D content. The presentation will focus on three areas related to the third method: the technology, techniques and applications of Dimensionalization; a framework for understanding issues of quality and cost; and the current state of industry commitment to this approach.

Stereoscopic Technology Options for 3D Digital Cinema
John Carey, Vice President of Marketing, Dolby Laboratories
ABSTRACT: Digital cinema has revitalized the 3D movie viewing experience and new stereoscopic technologies have come to market. Dolby continues to revolutionize the cinema experience by developing a new 3D solution using a unique color filter wheel technology that meets the needs of exhibitors, filmmakers and moviegoers. In this session Dolby will talk about the early stages of stereoscopic technology and where 3D is headed with the emergence of digital cinema.

Challenges to 3-D Filmmaking
Aaron Parry, Executive Producer, Paramount Pictures
ABSTRACT: The presentation will cover the creative, production, scheduling, technical and distribution challenges to 3-D filmmaking from a major motion picture studio perspective. The presentation will also focus on specific production and financial issues related to producing 3-D features utilizing stereo cinematography, stereographic rendering, and stereoscopic conversion.

Authoring in Stereo: Rewriting the rules of visual story telling
Jim Mainard, Head of Production Development, Dreamworks Animation
ABSTRACT: Stereo filmmaking is a bright new landscape ready to be explored - due in large part to stable, high quality projection available today. Composition, light and camera are rediscovered as tools to tell stories not in the flat, but in the round. We don’t have all the answers. Instead we have many questions. The answer will be revealed in the years ahead as filmmaking is redefined, not unlike it was with the advent of sound, and later color.

HD DVD's Last Ditch Effort?

Today's news that Paramount and DreamWorks Animation will release movies in HD DVD only feels like a last-ditch effort to give HD DVD a leg up over Blu-ray...especially because financial incentives are involved, and especially because the exclusive agreement could be for as short as a year.

From Brooks Barnes' NY Times coverage:

...Paramount and DreamWorks Animation together will receive about $150 million in financial incentives for their commitment to HD DVD, according to two Viacom executives with knowledge of the deal but who asked not to be identified.

The incentives will come in a combination of cash and promotional guarantees. Toshiba, for instance, will use the release of “Shrek the Third” as part of an HD DVD marketing campaign.

In the Wall Street Journal, Sarah McBride writes:

The exclusive could be for as little as a year, according to two people familiar with the situation.

The studios won undisclosed financial incentives for exclusive commitments to release high-definition movies onto HD DVD only. A person familiar with the situation said the incentives included both cash payments and soft incentives such as marketing promotions.

...Prices for hardware to play each of the dueling formats are dropping. Toshiba HD DVD players are now available for less than $300, compared with about $449 for the least-expensive Blu-ray player. The combination of the less expensive players and the hot titles that will be available on HD DVD could help steer many consumers in that direction over the key holiday sales period.

Variety notes that as recently as March, DreamWorks Animation CEO Jeffrey Katzenberg had been non-plussed by high-def discs in general. Daniel Frankel and Ben Fritz write:

"Blu-Ray and HD DVD are a niche business," [Katzenberg] said in March on a conference call with Wall Street analysts. "They're not going to become the next platform. I think for the general consumer, there is not a big enough delta between the standard DVD in terms of where it is today and the next generation."

That's a far cry from the statement he put out on Monday: "We believe the combination of this year's low-priced HD DVD players and the commitment to release a significant number of hit titles in the fall makes HD DVD the best way to view movies at home."

Studios Court Mr. Skin

- I found this story in today's NY Times fascinating: studios actually send screeners of new movies to the Web site MrSkin.com, to promote new releases that have nudity in them. From the story:

“The movie companies aren’t stupid,” [CEO Jim] McBride said. “I’m a guest on radio shows at least 300 times a year as the expert on celebrity nudity in film. If I’m on the radio talking about a movie like ‘Ask the Dust,’ and telling guys, ‘You’ve got to check it out: Salma Hayek has a full-frontal at the 33-minute mark,’ it’s going to make guys want to rent or buy the movie.”

More than 75 movie companies — including Universal, Fox, Paramount and Lionsgate — regularly send advance DVDs to Mr. McBride’s company. And his subscribers buy hundreds of DVDs every day, said Brian Sokel, director of marketing at TLAvideo.com, which sells DVDs on the site. (He declined to provide precise figures.)

Mr. Sokel finds nothing untoward about selling a film solely on nudity.

“That’s why filmmakers and Hollywood put sex scenes in movies — because it sells,” Mr. Sokel said. “People have a problem with raw or open sexuality, but for our company and for Mr. Skin, it doesn’t have to be a demonized concept. This is normal; you’re not a freak for wanting to see a Hollywood star in a film be naked.”

I wonder if the actresses in those scenes find this kind of niche marketing a little unseemly...

- The Times also has a piece about a new area on The Daily Reel that's intended to be a place for content creators and companies that need content to mingle.

Eastwood didn't want 'Flags' shown digitally

The LA Times has a run-of-the-mill progress report on the digital cinema roll-out, with one juicy detail. Josh Friedman writes:

Paramount Pictures has released digital versions of almost every movie since last summer's "Mission: Impossible III," said Mark Christiansen, vice president of operations at the studio.

But when it screened Clint Eastwood's World War II drama "Flags of Our Fathers" digitally before last fall's release, the director and his team balked.

"They just didn't think it gave the same visceral feeling," Christiansen said. "We're always going to listen to the filmmakers.

(Paramount, of course, has the rep of being the first to dabble with, but slowest to commit to, digital cinema.)

Three from the Times: BitTorrent, Gaming at the Movies, and YouTube Celebs

Feeling glum this morning because I wound up in the middle of the pack last night in the Oscar pool...(though I did manage to get the visual effects and best animated feature awards right -- two categories near and dear to CinemaTech.)

Most of the coverage this morning involves dissections of last night's Oscar-cast. But the NY Times has three worthy, non-Oscar pieces:

- Software Tool of Pirates Gets Work in Hollywood

Brad Stone writes about BitTorrent, the file-sharing service that's trying to go legit. One possible advantage of buying movies from BitTorrent as opposed to other sites could be speed:

In a test of the new BitTorrent store, downloading the film “X-Men 3” took two hours with a broadband Internet connection. Downloading the same movie from Walmart.com took three hours. And BitTorrent downloads should theoretically become faster as more people sign up, since digital copies will originate from nearby computers whose owners have bought the movie, instead of from a central server.

The company, which has received close to $30 million in venture capital, ultimately wants to use its media store to demonstrate how the underlying technology is effective at moving large files around the Internet. It wants to sell the technology to other media stores and to the studios themselves.

The studios hope the new BitTorrent will put a dent in the illegal trading of their content. Thomas Lesinski, president of Paramount Pictures Digital Entertainment, said he hoped the store would win over young people accustomed to free fare. “We look at this as a first step in the peer-to-peer world, to try to steer people toward legitimate content,” he said.

- The New Video Arcade in Spain Might Be the Movie Theater

Doreen Carvajal writes about cinemas inviting gamers in to play against one another on the big screen:

“Forget the pathetic speakers of a PC or television!” screams an ad for the theater, which opened in December and is offering cut-rate tickets at 3 euros, or about $3.95. “Come feel the sound that puts you at the center of the action.”

“We’re trying this concept because there are many theaters in Spain, and admissions are down,” Mr. Martínez said. “So we have to offer new products.”

- New Hot Properties: YouTube Celebrities

Bob Tedeschi profiles some YouTube celebs who are being recruited by other video sites, with promises of pay - or just more promotion. He claims that YouTube "has been stung by the departure of popular acts" like Lonelygirl15. Would any traffic numbers bear that out? Not sure it made much of a dent. But there is a tiny scrap of speculation in the piece about how YouTube may soon compensate creators. Tedeschi writes:

In January, YouTube’s co-founder, Chad Hurley, said the company would in the coming months begin sharing advertising revenue with contributors. The company last week said it would not elaborate on that plan, or on the efforts of competitors to lure its contributors away.

But [videomaker Paul] Robinett said he was contacted by a talent agency claiming YouTube plans to share about 20 percent of the advertising money gleaned from each video clip with the clip’s producer. Mr. Robinett said he could not confirm that claim with a YouTube executive.