The Entertainment Development & Programming Weekly - April 20th Edition

Here are the most interesting articles that came across this week…

Innovation lessons from Pixar: An interview with Oscar-winning director Brad Bird
Ten days before Ratatouille won its Oscar, we sat down with Bird at the Emeryville, California, campus of Pixar, which is now a subsidiary of Disney. Bird discussed the importance, in his work, of pushing teams beyond their comfort zones, encouraging dissent, and building morale. He also explained the value of “black sheep”—restless contributors with unconventional ideas. Although stimulating the creativity of animators might seem very different from developing new product ideas or technology breakthroughs, Bird’s anecdotes should stir the imagination of innovation-minded executives in any industry.
http://www.mckinseyquarterly.com/Strategy/Innovation/Innovation_lessons_from_Pixar_An_interview_with_Oscar-winning_director_Brad_Bird_2127?gp=1

Life on the Edge: Learning from Facebook
These edges are fertile with innovation because participation requires such a small investment in time and money. Last fall, psychologist B. J. Fogg taught a class at Stanford University in which he assigned students to develop Facebook applications. During the 10 weeks of the class, 73 students developed applications such as Kiss Me, Oregon Trail, and Secret Admirer, that have since resulted in 25 million installs and, by the end of the class, were attracting about 1 million daily, active users. These applications have generated more than $500,000 in ad revenue since September. At least three companies were formed by students in the class.
Edges not only spawn product and service innovations; they also catalyze business-model innovations. On Facebook, for example, the fragmentation of development activity made it inevitable that brokers would emerge to help entrepreneurial application developers monetize the results of their programming efforts by connecting them with advertisers. One of the most prominent of these early brokers is SocialMedia, a company formed by Seth Goldstein, a serial entrepreneur and venture capitalist who recently migrated from Silicon Alley (the infotech neighborhood of Manhattan) to Silicon Valley.
http://www.businessweek.com/innovate/content/apr2008/id2008042_809134.htm?chan=innovation_innovation+%2B+design_innovation+strategy

How Mickey Got His Groove Back
Credit for this astounding turnaround goes to Anne Sweeney, president of Disney-ABC Television Group since 2004, who joined the company after a stint as chairwoman and C.E.O. of FX Networks. “We found there was this huge demo that was too old for Nickelodeon and too young for MTV. We realized this was an opportunity for Disney to establish itself in the lives of these kids.”Sweeney has done more than that. She has made the Disney Channel the major profit driver in the company. Ten years ago, it was a stagnating pay-TV service that programmed for the kindergarten crowd in the morning and adults at night. Nickelodeon was closing in. But in 2007, Disney’s cable networks, including ESPN and the Disney Channel (a tween powerhouse), were the fastest-growing division in the House of Mouse, boosting the company’s ­media-division revenue 12 percent over the previous year, to more than $9 billion, and increasing income during the same period by an astonishing 19 percent, to $3.6 billion. (And those numbers don’t include the huge ancillary revenues that the franchises generate in the $2.3 billion consumer-products division.) The Disney Channel has been adding a million viewers a month—every month—for the past five years.
http://www.portfolio.com/news-markets/national-news/portfolio/2008/04/14/Disneys-Evolving-Business-Model

Silicon Valley And Hollywood: Intersecting At Content
So what will make a successful Hollywood/Silicon Valley joint venture? The one that comes with a monetization model built in. Be it advertising, or an innovative subscription model, or a new easy to use pay-for-play model. Content producers already assume the risk of content being successful or not; that's a risk they are willing to accept. What producers cannot do is also assume the risk of failed monetization of their content that does become popular. A joint venture built to aggregate eyeballs will eventually collapse, as the hits won't be able to support the failures -- and it will continue to be difficult, if not impossible, to allocate the resources necessary to create episodic hits. Media is certainly in a very transitional state, with no sustainable model for content creation and monetization online, which is becoming a necessity as more and more attention shifts to the digital medium. But you know what they say about necessity and invention...
http://blogs.mediapost.com/spin/?p=1278

The Single Currency Myth: Why The Television ‘Metric’ Is In Need Of Some Company
In my opinion we should drop the currency debate. The currency is the almighty US dollar, not Nielsen's panel-based ratings. We should embrace new metrics that shed light on some of the more pressing issues in advertising. Imagine being able to compare which news networks have the most loyal viewers as ranked by appointment viewing. Would anyone be interested in knowing what the audience turnover for a typical weeknight is on MTV and how it might compare to Comedy Central or G4? Is one network a reach vehicle and another better suited for building brand awareness? With new metrics, all these insights are possible. And we are just scratching the surface. As a start, research companies could develop metrics in the following categories:
VIEWER LOYALTY -- What separates the consistent viewer from the occasional viewer for networks and programs. Desirable loyalty figures for ESPN might be very different than desirable loyalty figures for CNN Headline News.
BEHAVIOR DRIVERS -- What appears to drive television tuning behavior? Analysis of demographics, content, channel lineup, time of day.
ROI -- What is the cost to reach a unique viewer? What is the cost to reach unique viewer for thirty minutes a day? How do those costs compare across the most watched networks? The most widely viewed dayparts? Is primetime for A18-24 really 11:00 p.m. - 1:00 a.m.?
PREDICTORS -- What is likely to be watched by a specific group of viewers when given specific options? Is a good Monday Night Football game more interesting than a playoff baseball game to males aged 18-34 or something else entirely?
http://blogs.mediapost.com/tv_board/?p=295

The Google economy
This is also one of the many factors making old-style media — and, in some cases, economic — measurement inaccurate and irrelevant. I’ve been saying that measurement by sample is useless because you can’t possibly get a big enough sample to measure all the niches; Nielsen, Comscore, and the entire industry will fail in a small-is-the-new-big economy because they can never measure and add up all the smalls. They will also fail because measuring how big a media outlet is has become almost irrelevant: An advertiser buying in Condé Nast Traveler cares how many people read the magazine because the assumption is that everyone who sees the magazine sees that ad. But online, a sponsor buying ads at the magazine’s site, Concierge.com, cares only about the specific people who saw the ad when it was served on specific pages, and so the size of the overall site is largely irrelevant except as a filter to decide where to consider buying ads or as a bragging right for the site. (This is why, when I served on committees for the Audit Bureau of Circulations in the mid ’90s, we discovered that audits of total site audience were meaningless — nobody wanted to pay for them — and all sponsors wanted audited was the serving of their own ads.)
But the pity is that ad agencies and stock analysts, reporters, and stock buyers still pay attention to these outmoded measurements and the companies that push them. That’s why GOOG went down 100 points while the company’s revenue soared 30 percent. They were selling on the wrong measurements that led to the wrong assumptions. But mere methodology won’t help. Why?
http://www.buzzmachine.com/2008/04/18/the-google-economy/

New Web-to-TV Prospects on Deck
As part of its deal with Electric Farm, NBC will show Gemini and the upcoming online zombie comedy Woke Up Dead across its different websites. As many as eight episodes of the series will also run on oldteevee as a means of driving people back to the web to watch more.
According to The Hollywood Reporter, the two series will also be reformatted as seven half-hour episodes to run on TV. Perhaps sensing the sour mood after the quarterlife fiasco, Gemini and Dead aren’t going to be cutting and pasting from the net to the network. Producer Stan Rogow told THR, “If there were to be a TV show, that would be a whole different show.”
http://newteevee.com/2008/04/17/new-web-to-tv-prospects-on-deck/#more-3784

'Grand' videogame breaks record
Comparisons to other media are difficult, since "Grand Theft Auto IV" costs $60 domestically and contains dozens, if not hundreds, of hours of content, whereas the average film ticket in the U.S. last year cost $6.88 and is good for a few hours of entertainment.
Nonetheless, Take-Two will likely be crowing that the perf of its game is close to, if not above, the No. 1 film bow of all time, "Pirates of the Caribbean: At World's End," which grossed $404 million worldwide in its first six days.
http://www.contentagenda.com/article/CA6551921.html?industryid=45173

Sony talks TV and movie downloads for PS3
"Many of you have been hearing rumblings about a video service that will allow you to download full-length TV shows and movies via PLAYSTATION Network for North America."
He goes on to say: "While I don’t have any new announcements here for the PlayStation Nation, it's already been confirmed that we'll be offering a video service for PS3 in a way that separates the service from others you've seen or used."
"Ultimately the goal of the PLAYSTATION Network service will be to break through the overwhelming clutter of digital media to give you the TV, movies and gaming content you want."
http://www.pocket-lint.co.uk/news/news.phtml/14011/15035/sony-planning-ps3-movie-downloads.phtml

Ex-HBO Executive Stakes His Comeback on SlamBall
Now, Mr. Albrecht is trying for a comeback. And he's staking much of it on a bizarre, futuristic sport called SlamBall, which failed to break out in an earlier debut. With the feel of a live-action videogame, SlamBall is essentially basketball combined with rugby and trampoline gymnastics, and if Mr. Albrecht is right, it will become a phenomenon as successful and profitable as the latest sports craze, ultimate fighting.
"There are not a lot of new sports being invented," Mr. Albrecht, 55, said this week. "This was not just a sport that would be fun to watch, but it's a business that we can build."
"To the extent that there is some sort of scoreboard that people are keeping on me personally, I guess there is something at stake," he added later, "but I believe in my partners here."
http://online.wsj.com/public/article/SB120848112892025053.html

I Want My (Web) MTV
MTV and its sibling brands now have more than 300 sites, including some 30 media-rich broadband sites that boast video, music and lots of interactivity. And they have captured an impressive amount of traffic: Nickelodeon alone logged 1.4 billion video streams last year. MTV Networks' Internet sites attracted 90 million unique visitors worldwide in December 2007, up from 76 million the previous year, according to comScore. But the digital empire Salmi is helping to expand and turbocharge goes way beyond streaming video. MTV is now a leading creator of online virtual worlds like Neopets.com, where users' avatars can interact with virtual pets, and Pimp My Ride (named after the popular MTV show), where avatars can customize cars. MTV has also become a major player in videogaming, which is now the hottest category in all entertainment. It owns the leading casual-games site, AddictingGames.com, where simple card games, puzzles and the like can be played free of charge, and has one of the industry's hottest games—the cultural phenom Rock Band: for those of you who are videogame Luddites, Rock Band lets you and up to three friends become a "virtual" band, using video controllers that look like instruments to play along with songs you download from the Internet. Introduced in November by MTV-owned game developer Harmonix, which also created the hit Guitar Hero, Rock Band has sold a remarkable 1.8 million units, as well as 6 million downloaded songs. Fueled by Rock Band, Viacom Media Networks posted $1.1 billion in worldwide "ancillary" revenues in 2007, a figure that includes royalties earned from MTV-owned videogames.
http://www.newsweek.com/id/130290

'Surviving High School' Rises to Head of Mobile-Gaming Class
Vivendi's blockbuster IP game, "Surviving High School," now in its third iteration, gives consumers the choice of playing jocks, nerds and other iconic high school stereotypes through a script that is expanded with weekly episodic content. According to the publisher, the game has already been downloaded more than a million times, with an additional 6.5 million episodic downloads. "Customers can download new content each week," said Maria Pacheco, VP-marketing for Vivendi Games Mobile, "and as they do so they get entrenched deeper into the game." The game's popularity has spawned forums, Facebook groups and a slew of online communities embodying the kind of engagement that makes marketers drool. And while "Surviving High School" isn't currently being supported by advertising, its episodic format makes it an almost ideal vehicle for brand underwriting. The question is, will marketers get involved in these kinds of projects?
http://adage.com/madisonandvine/article?article_id=126445

Testing the Boundaries of Branded Entertainment
One-off deals have been replaced with complete commitments to TV concepts from birth. Marketer support ranges from backing premiere event parties to producing behind-the-scenes webisodes destined for both a cable channel and a brand's website. The future appears to hold even more promise. Coming soon: series production costs paid for entirely by marketers, which will collaborate with programmers like never before. "My conversations have gone through an arc, from 'I've got to get my brand in a show' to what we're seeing now: series-long partnerships" that involve many multiplatform elements, says Kevin McAuliffe, VP-branded entertainment for NBC Universal's cable assets, which include Bravo, USA Network, Sci-Fi Channel and now Oxygen.
http://adage.com/cabletv08/article?article_id=126278

Game Boy
In 1990, Bobby Kotick bought 25 percent of failing videogame maker Activision for $440,000, with financing from his mentor, casino king Steve Wynn. Since then, the company has been in nonstop-growth mode, through both internal expansion and acquisitions, and late last year, Kotick engineered his biggest deal yet—a nearly $19 billion merger with Vivendi’s game division. The prize for Activision: Blizzard Entertainment, maker of the online game World of Warcraft, which has about 10 million paying subscribers. Vivendi will own a majority stake in the merged company, to be renamed Activision Blizzard, and Kotick will run it.
With megahits like Guitar Hero, Call of Duty, and Tony Hawk’s skateboarding games, Kotick, 45, has become one of the most powerful figures in the $10 billion videogame industry (a number that counts sales of games only, not consoles). Longtime game-industry leader Electronic Arts currently has about $3.7 billion in annual sales. Once Activision closes the merger with Vivendi, the combined entity will have yearly revenue of nearly $4 billion as well. But E.A. recently made a hostile offer for Take-Two Interactive, creator of the Grand Theft Auto series, a move seen by industry observers as an attempt to stay ahead of Kotick. Moreover, some analysts question whether Activision can continue growing at such a rapid rate.
http://www.portfolio.com/executives/features/2008/04/10/Interview-With-Activision-CEO