A Four-Link Summer Reading List

Just wanted to share a few blog posts and articles that are worth a read today...

- 'Web TV is a hit. So where's the big money?' from the SF Chronicle. From the story:

Even with a YouTube partnership, contest winnings from Internet video clearinghouse Metacafe and other recognitions, [the video series] "Break a Leg" has grossed about $2,500 for two years' work.

"We're in a funny place," admitted director-producer-star Yuri Baranovsky. "I don't know how many people get how much work it is to make this."

"Break a Leg" embodies the key contradictions of the brave new world of online video entertainment. It's easier and cheaper than ever for individuals to produce their own work and put it up for global audiences - on sites like YouTube, Revver, Veoh and My Damn Channel - but it's almost impossible to make a living outside of the established TV and film industry.

- Venture capitalist David Beisel on the next phase of online video. Beisel writes:

...I believe we’re entering a second phase of the online video space in which the discovery mechanisms for (semi-)professional content, coupled with the increase of professional content available online in a distributed fashion, will facilitate a willingness of users to venture beyond YouTube to consume video across the net. But it won’t happen overnight. Especially when I hear that the dirty little secret from many independent video producers which maintain their own destination sites is that an overwhelming number of their views come via YouTube and not on their own distribution.

- Mark Cuban on 'The Way to Save Internet Video' (link it to the traditional television distribution systems, he suggests)

- Finally, the Xbox 360 game console will now deliver Netflix streaming movies (at least to the 5 million users who pay $50 a year for a "gold" membership, and also have a Netflix subscription)

Sony Pics on Phones ... Original Content for Xbox ... Yahoo and Microsoft's Video Strategies ... Pocket Projectors

- Sony Pictures Television is developing PIX, the first movie network for mobile phones. It'll be available on the recently-announced AT&T Mobile TV service in May. From the Hollywood Reporter piece:

Sony eventually might convert PIX to an on-demand model and might take the brand online as well. The full-length linear strategy is just one of many different content plays with which the studio is experimenting. "We're not doubling down and saying it's only about longform," [Sony VP Eric] Berger said. "We'll continue to do innovative things in the shortform universe as well."

- Microsoft and the Safran Company are collaborating to create original shows for the Xbox game console, according to the NY Times. From the piece:

In an interview at his office in Los Angeles last week, [producer and talent manager Peter] Safran said his first round of programs would all be scripted, as opposed to reality shows, and would probably run under 10 minutes. He said he planned initially to focus on genres, like comedy and horror, that appeal to the Xbox 360 audience, which is heavily concentrated from the ages of 14 to 34, and tends to be more male than female. The first shows are expected to be available to viewers by the fall.

Microsoft’s previous forays in digital entertainment include a two-year-old initiative, MSN Originals, to provide original shows for the Web, and an ill-fated foray more than 10 years ago in which it poured about $100 million into Internet shows like the comedy “475 Madison,” about an advertising agency, then quickly canceled most of them.

- I wrote a piece for this week's edition of Variety that looks at Yahoo and Microsoft's video strategies. From the piece:

"Video consumption is becoming part of most users' Internet experience," says Karin Gilford, VP of entertainment at Yahoo. "The question is, what do you do to differentiate yourself?"

Yahoo and Microsoft have both been struggling to answer that question since the February 2005 launch of YouTube. Since then, video viewing on the Net has become an addiction for some: The top 20% of diehard downloaders watch an average of 14 hours a month, according to research firms comScore and Media Contacts.

- I've been eagerly following the development of pocket LED projectors for a few years now... looks like 2008 could finally be the year a few of them hit the US market, according to the NY Times.

For Thursday: Set-Top Box Reviews, Upconverting DVDs, and Player-Developed Games

- NY Times columnist David Pogue evaluates four leading Internet-connected set-top boxes, and gives the $300 Vudu the highest overall grade. (Others included in his survey include Xbox 360, Apple TV, and TiVo.) Pogue also makes some good points about the limitations imposed on all of the boxes by studios:

...[N]o matter which movie-download service you choose, you’ll find yourself facing the same confusing, ridiculous time limits for viewing. You have to start watching the movie you’ve rented within 30 days, and once you start, you have to finish it within 24 hours.

...What would the studios lose by offering a 27-hour rental period? Or three days, or even a week? Nothing. In fact, they’d attract millions more customers. (At the very least, instead of just deleting itself, the movie should say: “Would you like another 24-hour period for an additional $1?”)

Then there’s the fact that to protect their cash cows, most studios don’t release their movies on the Internet until a month after they’ve been available on DVD.

- NY Times reporter Saul Hansell talks to an electronics retailer who says that until the cost of Blu-ray players drops below $200 or $150, most consumers will still be happy buying standard-def DVD players that upconvert, producing a very nice looking picture from a garden-variety DVD.

- This feels important, somehow: Microsoft allowing players to develop their own videogames and share them with others via Xbox. A vidgame twist on YouTube?

`Why are striking writers so intent on getting a cut of Internet profits?'

That's the question LA Times writer Joseph Menn asks in today's paper. The answer is that digital media revenues are poised for explosive growth ... and the Internet-connected TV in the living room could mean that writers don't earn as much as they once did for TV and cable broadcasts...and consumers may not spend as much on DVD purchases and rentals.

From the story:

"The real winners from the writers holding out are the people in five or seven years," said analyst Laura Martin of Soleil/Media Metrics.

Exactly how entertainment will be delivered in the future is a matter of speculation. "In 10 years, there will be a monitor on the wall in the family room, and it will be connected to a box -- maybe an Xbox, maybe something else -- and I'm going to watch [content] on demand," said Richard Wolpert, an L.A. investor and former chief of strategy at RealNetworks Inc. "That's not going to be delivered over cable, it's going to come over Internet protocol."

Bypassing broadcast and cable delivery could wipe out a big chunk of residuals that writers now collect when their material is rerun. Wolpert said that explains why the writers are so intent on staking a claim to all new modes of transport into the home.

60Frames Entertainment: Model for a New Kind of Studio? Plus, Disney movies on Xbox

- Ad Age reports that Brent Weinstein, head of United Talent Agency's digital division, is starting a new venture in partnership with Spot Runner, an online advertising firm. It'll be called 60Frames Entertainment, and has an initial bankroll of $3.5 million, according to the WSJ.

The idea is to fund professionally-produced short-form comedic content for the Web. Spot Runner will sell ads around the content. This is similar to what Barry Diller has been up to, Michael Eisner's Vuguru, or the Atom Films Studio.

All these experiments, it seems to me, are essential to figuring out how a next-gen TV "network" or movie "studio" will work: how it will identify and fund cool content, support creatives, structure the costs of production, market the finished product, and spin it off from the Web into other media. One important milestone that probably isn't more than a year away: a Web series that attracts a big enough audience to get a movie greenlit. We've already seen an animated cell phone series spawn a TV show, after all.

Here's the official press release.

- About 35 Disney movies, including 'Aladdin' and 'Armageddon,' are now available on the MSFT Xbox. WSJ story...LA Times. The Times notes that there had previously been 192 movies from Warner Bros., Paramount, Lions Gate, and New Line, and 179 TV shows available on Xbox. From the story:

Xbox Live's users can rent high-definition versions of new release movies for $6, or $4 for standard definition. Older movies are $4.50 for high definition, $3 for standard.

Once downloaded, consumers have 14 days to begin watching the films before they are erased from the console's hard disk drive.

Monday Links: Costner on the Web ... CustomFlix to Support HD DVD ... New Edition of Film Financing Book ... And More

- This is an interesting model: Kevin Costner is financing an animated Web series called "The Explorer's Club." It'll debut later this year, as 12 four-minute episodes, with Costner's voice. The goal is to later turn "The Explorer's Club" into a live-action feature. This approach uses the Internet as a proving ground for new characters and stories, before committing to make a feature -- something I think we'll soon see a lot more of.

- CustomFlix, part of Amazon.com, will now accept indie films in high definition, and sell them in the HD DVD format, according to the NY Times. From the story: "The company said it would waive processing fees for the first 1,000 films it accepts for production by its CustomFlix Labs subsidiary."

- Via Lance Weiler's WorkbookProject Web site, I learned about a new edition of The Film Finance Handbook. They're offering a free chapter online, too, which deals with using the Net to distribute movies -- one of my favorite topics. The authors' premise in this chapter is that the Internet is evolving into the seventh major studio. They write:

"...We have seen the gradual emergency, very loosely, of a seventh major studio-like power. It is neither owned by a single organisation or individual. It does not even have a manager. Rather it is a collection of tools, networks, information and communities which collectively could be said to be beginning to offer similar functions to a traditional vertically integrated studio. ...And of most interest to the independent producer, this 'studio' is neutral, largely meritocratic and completely global."

- This piece about Xbox users watching movies and TV shows on the system really annoyed me, because it contains not a single statistic about how many people have paid for TV shows or movies through Xbox...yet it's basically a wet kiss to Microsoft. If Xbox is doing so well, why not back it up with some data, guys?

- Robert Katz will be head of production at The Film Department, a new indie production company founded by Mark Gill and Neil Sacker.

The MPAA's Annual Report, Video on the Xbox, and More

- In advance of next week's ShoWest gathering in Vegas, the Motion Picture Association of America has released its annual report on movie industry economics. (A PDF of the press release is here.) From the NY Times coverage:

The average production cost of a film made by [an MPAA] member company rose about 3.4 percent to $65.8 million in 2006, according to the report, while the marketing cost fell slightly, to an average of $34.5 million. (Association executives noted that the production cost figure does not include money contributed by outside investors who frequently underwrite the expense of Hollywood films.) The domestic box office rose about 5.5 percent last year to $9.49 billion, while theatrical admissions rose 3.3 percent to 1.45 billion, and the worldwide box office rose about 11 percent to $25.8 billion.

Variety offers a thorough analysis of the numbers. Some interesting elements from that:

> Spending on online marketing is growing
> So is the number of movies released each year (607 in 2006, an all-time high)
> There's a correlation between people who have a lot of technology in their homes (game consoles, DVD players, high-def TV) and people who see a lot of movies. (Seems to me this could be purely related to household net worth, rather than home theaters generating a desire to see movies in theaters.)

- Microsoft is clearly trying to promote the Xbox's video offerings, if this piece from Sunday's NY Times is any indication. Dave Itzkoff writes:

In late November Microsoft began expanding the library on its Xbox Live network, a broadband service available by subscription to Xbox 360 owners. In addition to the video-game trailers and playable demonstrations that the network has traditionally offered, you can now find an eclectically selected collection of films and television shows offered for downloading to a console’s hard drive: for a few dollars you can view “Mission: Impossible III” or “Chinatown” or the episode of “Chappelle’s Show” with the blind white supremacist, on your television, just as if you were watching a DVD or a video-on-demand channel.

...This month XBox Live will offer a new view of the corpulent form of Eric Cartman when it becomes the first outlet ever to offer an episode of “South Park” in high definition.

While Microsoft acknowledges that most consumers are buying Xbox 360s primarily, if not solely, to play video games, the company also sees an opportunity to use film and television content to draw an audience that doesn’t fit the stereotypical gamer profile.

“The original Xbox was probably the domain of that testosterone-fueled male in the household, and while we love him to death, we also want his little brother and sister and mom and dad and their friends to be able to enjoy it,” said Peter Moore, corporate vice president of Microsoft’s interactive entertainment business division.

- Viacom's CEO disses YouTube at an investment conference in New York, and says a deal with the video service Joost will give the company more control over its content, according to the LA Times.