Two from the LA Times

Two pieces on the digital media future that ran in the LA Times this week:

'Hollywood hits the stop button on high-profile Web video efforts' and 'Digital technology and dollar signs' (an op-ed piece I wrote.)

From the first piece, by Ben Fritz and Dawn Chmielewski:

Conceived with great fanfare, big media's attempt over the last two years to capitalize on the Internet video phenomenon embodied by YouTube and "Saturday Night Live" digital shorts has fallen victim to recession-triggered cuts and inflated expectations about the advertising revenue they would command.

"It's very similar to what happened in '99 and 2000, where everyone saw gold in the hills," said Mika Salmi, the former head of digital media for MTV Networks and now a technology venture capitalist, in reference to the first dot-com boom. "The reality is that it's much harder to make money than everyone thought."

It mentions the recent shut-down of 60Frames Entertainment, Disney's Stage 9 Digital studio, and earlier failures like NBC's DotComedy Web site and SuperDeluxe.

Meanwhile, in my piece, I argue that perhaps Hollywood hasn't been experimental enough with the Web, or taken users' behavioral changes seriously enough. (The top talent in Hollywood still wants to make feature-length, big budget content for cinemas, I'd argue...not short clips for mobile phones.)

From that piece:

Many in Hollywood still deride the wacky, user-generated videos that occasionally turn into viral hits on YouTube, the top website for video viewing. And it's true that one of the most-watched videos ever uploaded to the site is titled "Charlie bit my finger -- again!"

But a number of young creators -- many of them working outside of Hollywood's orbit -- have been feverishly experimenting with new ways to tell stories and generate revenue. An office worker in Connecticut created the catty entertainment commentary show "What the Buck" on YouTube, and suddenly found he was making more from the site's "partner program," which offers creators a cut of ad revenue, than he was at his desk job, which he promptly quit. Lance Weiler accents his suspense films with cellphone and Web-based "alternate reality games" that enable players to explore the story and interact with characters after they've left the theater. Robert Greenwald, a Culver City-based documentarian, has raised hundreds of thousands of dollars online to support his left-leaning films and Internet videos on such topics as the mortgage crisis and the war in Afghanistan. And Gregg and Evan Spiridellis are building a new kind of animation studio in Venice, where they produce a series of viral videos about current events and politics, and sell subscriptions to a vast collection of customizable digital greeting cards. This month, they'll debut their latest video for President Obama at the Radio and TV Correspondents Assn. Dinner in Washington.

Business models for content on the Internet are still evolving. But it's already becoming clear that $100-million movies like "Land of the Lost," or even $10-million independent films, may not represent the future of the industry. And new technologies like YouTube, the iPhone and next-generation gaming consoles are opening up all sorts of new, creative possibilities. The artists and business people who will succeed in this new environment are those who are paying attention to the changing behaviors and tastes of this new digital audience -- rather than trying to ignore them or, worse, explaining why they are wrong.

Your thoughts?

Notes and News from the HBS Entertainment & Media Conference

Spent the afternoon and evening yesterday at Harvard Business School's annual Entertainment & Media Conference.

I filed a short piece for Variety about the opening Jeff Zucker keynote, which felt pretty news-y to me. Liz Gannes from NewTeeVee was there, too -- and has some video and notes on the Zucker talk.

Some other notes:

- Marshall Herskovitz was on a panel, bemoaning the low ratings for the first NBC broadcast of his made-for-the-Web series 'quarterlife' this week. Herskovitz told me afterward that he was pretty sure NBC would kill the show, but that he hoped it'd find another home on cable, where it could have a few months to build up an audience.

Herskovitz also acknowledged that the production costs were too expensive for something that would only exist online; 'quarterlife' needs the broadcast component to it to make it financially viable. (I was always skeptical that Herskovitz and Ed Zwick started their venture by boasting that they were going to create Internet content with extremely high production values.)

But Herskovitz, later in the panel, was also very hopeful about the future of paid downloads (versus ad-supported streaming) for content creators. "Apple has shown us something," he said. But he acknowledged that most creators haven't figured out how to take advantage of it.

- Fresh from negotiating the truce between the WGA and the AMPTP, WGA West President Patric Verrone said the definition of what constitutes a paid download and what constitutes ad-supported streaming are becoming muddier by the minute. Verrone said he'd heard earlier in the week about free downloadable videos that could have ad blocks inserted in them, which would be updated by a server whenever the viewer decided to watch the video. I guess we'd call that an ad-supported free download ... and it's probably not covered by the new WGA contract.

- We're all still waiting for the mobile device that has high-bandwidth, always-on connectivity. (The iPhone isn't it -- unless you're sitting in a WiFi hotspot, and there aren't too many other people around.) Tim Westergren from Pandora predicted that once that happens, wireless delivery of music and video -- targeted to the tastes of the recipient -- will start to clobber traditional broadcasting.

- At dinner, I was talking with an HBS student who formerly worked in corporate strategic planning at Disney... we wondered what Walt would be doing right now, in terms of creating original content for iPods, cell phones, PCs, etc.

Lo and behold, today Disney announces Stage 9 Digital Media, a studio to create original content for the Net. From the LA Times story:

ighty years after the 7 1/2 -minute cartoon "Steamboat Willie" helped launch the career of a certain iconic mouse, Walt Disney Co. has returned to its short-form roots with the debut of a digital studio that will develop original content for the Internet.

Stage 9 Digital Media, quietly in the works for two years, will be unveiled today with the premiere of "Squeegees," a comedy series about window-washer slackers, on ABC.com and YouTube. It is the first of a planned 20 online programs currently in development.

...[ABC Studios president Mark] Pedowitz said Stage 9 would make it possible to experiment with new forms of storytelling, cultivate young talent and incubate franchises that might someday graduate to the bigger screen, namely TV. And because the financial risks are lower, there is greater creative freedom. The goal is to bridge the gap between the irregular quality of amateur video and traditional television show