Top 10 Digital Media Predictions for 2015 -- 30 Day Scorecard (or, "1 Year in 1 Month!")

One month ago, TechCrunch posted several of my predictions for the digital media world in 2015 in an article titled The Future of Digital Media in 2015.  I then expanded upon that article in this blog to give my very own Top 10 Digital Media Predictions for 2015.

This post is for those of you who read my predictions, keep score, and are in the game of keeping prognosticators like me, honest.  And, here's the deal.  Although we are officially only 1 month into this brave new year of digital media, I am pleased to report that many of my predictions are already coming true ... and in a very big way.

Below are my actual Top 10 Predictions -- juxtaposed against where we stand on each as we enter only 2015's second month.

I.  PREDICTION (1)  --  this one was really a two-parter:

PREDICTION (1) Part 1 -- The mobile-driven premium short-form video YouTube economy “grows up,” and traditional media companies finally take notice on a mass scale.  Shell-shocked studio executives internalize that digital-first platforms are where they must be to reach smartphone-obsessed millennials.  MCN acquisitions will quicken as more studios jump into the M&A game rather than try to figure out this new content platform themselves.  Some leading MCNs ripe for acquisition include ... sports-focused Whistle Sports (in which Manatt Venture Fund is invested). 

THE REALITY FOR PART 1, 30 DAYS LATER -- Whistle Sports in early January announced a major $28 million investment from "traditional" media companies BSKYB and Liberty Global.  Not M&A, but certainly strategic.  Very.

PREDICTION (1) Part 2 -- International also becomes a major new battleground for these borderless video opportunities.

THE REALITY FOR PART 2, 30 DAYS LATER -- Whistle Sports again -- both BSKYB and Liberty Global are major international media companies based across the Pond.  And, oh yes, there is also that little deal just announced this past week by mega-media companies Warner Bros., Sony Pictures Television and SingTel to essentially take over the OTT world in Asia.  That qualifies in my book.  

II.  PREDICTION (2) -- Major consumer brands follow suit and act in earnest.  Massive marketing dollars shift from traditional media to more measurable digital platforms in the form of branded content (not just ads), cannibalizing the former for the first time.  Major investments are placed on ad-tech companies to maximize and measure those spends.  We see a number of significant ad-tech exits like Yahoo!’s recent acquisition of BrightRoll for $640 million.  Several brands go further and invest big to become digital-first lifestyle media companies themselves a la Red Bull, developing and aggregating content.  GoPro, Pepsi and Marriott have proudly announced such ambitions.

THE REALITY, 30 DAYS LATER -- No major developments here ... yet!  But, keep reading ....

III.  PREDICTION (3)  -- Seeing all this activity, Silicon Valley investors increasingly make pilgrimages down South to the epicenter of media content – LA.  

THE REALITY, 30 DAYS LATER -- I am based here in LA.  I see this happening before my eyes.  In fact, I saw it immediately out of the gates of 2015 at CES, where NorCal VCs were seen canoodling with LA based new digital-first video companies up and down the Strip. 

IV.  PREDICTION (4) -- YouTube is increasingly under siege by new competing video platforms like Facebook and former Hulu chief Jason Kilar’s Vessel.  These “off YouTube” platforms lure content creators away with promises of more compelling care, feeding and economics (including the tantalizing prospect of real subscription revenues).

THE REALITY, 30 DAYS LATER -- Vessel officially set sail against the YouTube tide in private beta just in the past week -- and Facebook video is at the center of digital media exec conversations everywhere (I know, because I have been in many of such conversations).  Oh yes, and don't forget Snapchat.  Snapchat is now officially a media company, having launched an alternative video platform under the name Discover just this past week.  I'd say this prediction already has been satisfied -- and we're only going into our second month!

V.  PREDICTION (5) -- Traditional pay TV packages likewise increasingly are under fire in the “Great Unbundling” that began in 2014.  What was unthinkable just one year ago (even 6 months ago!) became reality as HBO, CBS, Starz and others announced stand-alone over-the-top (OTT) services.  A parade of others follow suit in 2015.

THE REALITY, 30 DAYS LATER -- And so it goes .... Even the kids aren't safe!  Nickelodeon just yesterday announced its own stand-alone OTT service, joining this ever-growing list that we will need to re-visit continuously throughout the year.

VI.  PREDICTION (6) -- Traditional media companies facing these tectonic shifts in long-established business models – and major tech companies (Apple, Google, Amazon, Samsung) for which content is increasingly critical to fuel their own – take M&A seriously and one pulls the trigger as media and tech converges … literally.

THE REALITY, 30 DAYS LATER -- We're only 30 days into the year!  Just you wait!

VII.  PREDICTION (7) -- On the music side, massive moves are made away from business model-challenged stand-alone services (Spotify and Pandora both still operate at a loss).  Like Apple buying Beats (which was never about the economics of Beats Music), numerous potential behemoth buyers exist.

THE REALITY, 30 DAYS LATER -- Yet another massive move just reported yesterday (a very busy day indeed in the world of digital media).  Looks like Spotify is looking to find itself some extremely wealthy private buyers (not the anticipated IPO).  Just reported that Spotify has hired our friends at Goldman Sachs to raise a $500 million round.  Now watch as reactive sparks fly amongst the remaining stand-alone services that have any kind of mass.  Spotify sings.  Now the other guys dance.

VIII.  PREDICTION (8) -- Gamers see real action too, as app developers increasingly focus on story-telling and compelling characters to build multi-platform media companies a la Rovio with Angry Birds.  Rather than take traditional media properties and “gamify” them, these companies flip the model with an Apps-first approach.  Finnish-based Silvermile and Seriously are two companies with Rovio roots to take … well … seriously.  VR also enters the ring with gamers at mass in 2015.

THE REALITY, 30 DAYS LATER -- Yes, this is happening ... at an ever-accelerating clip.  But, it is happening behind the scenes for now.  No single story earth-shattering news just yet.  But, like I said, we're only 30 days in!

IX.  PREDICTION (9)  -- Which leads to wearables, where we see an Oculus under every hard core gamer’s tree next year, alongside their parents’ new digital health/fitness watch.

THE REALITY, 30 DAYS LATER -- 2015 already marked a major milestone for Oculus and VR in general.  Not directly on the gaming side.  Rather on the cinema side, as Oculus unveiled the world's first major cinematic VR "experience" at the Sundance Film Festival.  In my book, this qualifies at least as being on the right track.  And, remember, we still have about 330 more shopping days until next XMAS -- so plenty of time to slip one under this coming year's tree.

X.  PREDICTION (10)  -- All of this leads to the big one – a concept I floated 1.5 years ago.  Apple buys Tesla and installs Elon Musk as CEO.  Now THAT would be a headline for 2015 … and for the ages!

THE REALITY, 30 DAYS LATER -- We're not quite there yet, but Musk just announced a new software update -- read again, SOFTWARE UPDATE -- that actually makes Teslas go faster.  That's still pretty damn cool!

No matter what you think about my Top 10 predictions -- or how the digital media world is tracking to them in the early days of 2015 -- it cannot be denied that there is a frenzy of activity.  And that we are living in exciting and transformative times for the world of media and entertainment ... which is a world in which all of us live.

Disney Accelerator - Round 2 - Accepting Applications Now

Disney's high profile digital media Accelerator clearly was a success inside the Mouse House, because it is now going into Round 2.  This big news -- just announced this past week -- should be cheered (and acted upon) by digital media entrepreneurs.  And the Disney Accelerator -- led by Cody Simms of Techstars -- is accepting applications now (details here).

I am proud to continue to act as an official Mentor.  Round 1 was fun indeed.  Great innovative companies were indeed accelerated.  How could they not be, given the sponsor's panache (and real access to the kingdom of Disney business opportunities).  Here is my recap of the inaugural class's Demo Day, which was impressive indeed.  Disney certainly knows how to put on a show.

Vessel -- My Review of the New "Alt" YouTube

Vessel -- your single "holder" of all the premium short-form video content you could ever want and need.  At least that's the hope for Jason Kilar's new high-profile and heavily-financed ($75M) digital-first video company that set sail in private beta just this past week.  With Vessel, Kilar -- Hulu's former CEO -- embarked on creating "the next gen Hulu" -- i.e., premium high-quality short-form digital-first video content optimized for mobile-using millennials.  And, even more than that, he and his fellow Love Boat crew want you to happily pay for it -- even if much of that content is freely floating elsewhere in the great virtual sea (okay, enough of the noxious nautical narrative!).

With a form of entrepreneurial alchemy and brash counter-intuity (entrepreneurial qualities that I love), Vessel aims to open windows of 72 hour exclusivity in a digital video world where most others (cue up Netflix) hope to close them.  And, Vessel takes aim directly at YouTube and other alternative video platforms (an excellent discussion of which from Digiday can be found here), hoping that creators of compelling video content and who have amassed their own audiences come to them first with a promise of better economics (another excellent discussion of which from VideoInk can be found here).

Will Vessel succeed?

I embarked on my own exploration of that question in Vessel's private beta, and here are my overall observations after wading through the experience in my first days.

I.  UI/UX

As expected, first impressions were positive as I first entered (and interacted with) the app -- and, let's face it, first impressions matter.  A lot!  Set-up and navigation on both my laptop and mobile were as they should be -- simple, intuitive.  Once you choose a user name and password, Vessel takes you through a set-up wizard -- a collection of video tiles that represent different content "categories," "channels" and "music artists."  You click on those that matter to you -- and that informs Vessel's individualized "vessel" for you.  For the most part, I liked the channels that Vessel laid out for me -- as if my own personal butler laid out my clothes for the day (although I found the particular video featured in the main pane to be an odd choice ... begging the question of whether it may be better to feature several videos that are potentially "meaningful" to me rather than take the lower probability route of just choosing one).

Next, the overall UI was clean and "pretty" -- very pretty.  No clutter here, which is important.  And, the overall user experience (UX) is strong, impressive (a respected press insider dubbed it "amazingly creative" in our own private conversation).  Simplicity rules the day (which is ideal for this mobile-focused experience).  The core features are all those you would expect -- none that you won't (NOTE: sharing is "disabled" during this private beta; in this regard, it will be interesting to see how share-able exclusive content is from one paying subscriber to non-payers who have yet joined Vessel's journey).  The overall mobile nav -- including swiping back and forth between the main menu and the video screen itself -- is remarkably aero-dynamic and downright addictive.  That bodes well for user engagement.

Next, Vessel's much-heralded new advertising forms are intriguing.  5-second pre-roll ads flutter by -- unobtrusively and ephemerally (a word?) -- and feel more like 2 seconds that have real visceral impact.  Much more compelling and meaningful than "dumbed-down" 30 second ads that are skip-able after 5 seconds (and lose virtually all of their meaning as a result).  And then there are the newly minted "motion posters" that float on in Modest Mouse-ian fashion (music lovers will "get" that reference) as you scroll through your videos.  Clever.  Very.  Remember one thing, however, you see these ads even if you become a paid subscriber.  Just like at Kilar's former home of Hulu, you pay for early access and content exclusivity -- not for an ad-free experience.  Important to know.

All of this worked flawlessly.  Downright snappily (another word?) --  even (even in my broadband-challenged home environment).

But, although critical, a compelling beautiful UX is not enough.  Other pretty faces exist in the increasingly cut-throat competitive digital-first video world.  That requisite beauty and elegance (which Vessel has in spades) must be backed up by substance, depth.

II.  CONTENT

And "depth" in this context means a depth of compelling video content.  This is especially true here where Vessel's business model and overall differentiation (and value proposition to creators) are tied to exclusivity.  (Here again is an excellent deep discussion of Vessel's overall business and pricing model -- which I won't repeat here).

So, is there enough here to justify paying $2.99 per month (especially when much of the content is available elsewhere for free)?

As a threshold matter, no matter what, that will be challenging to many millennials who are dependent upon their parents' credit cards.

But, for others who have a real ability to pay (and there are many of us, even non-millennials like me), Vessel is banking on two things: (1) exclusivity of course (for that 72 hour window); and (2) convenience -- i.e., curation/consolidation/navigation of the video creators/sources/channels you want -- all in one place.  Once again, hence the name "Vessel."

To even get to question (2) above, exclusivity is at the crux of Vessel's success or failure.  For Vessel to succeed, it must become THE first mobile "home" for must-see premium short-form video content to you (and a critical mass of others) -- much like Netflix is THE home to you for "House of Cards" and "Orange is the New Black," or Amazon with "Transparent," or Showtime with "Homeland," or FX with "Fargo," or HBO with "Game of Thrones," or ....  well, you get the point.  You need to build it for people to come.  Is Vessel there yet with content you can't get anywhere else for a limited period of time?  I don't know enough quite yet to make that judgement.

BUT, the fundamental difference for Vessel, as compared to all of those others, is that Vessel's form of exclusivity is transient.  So, while its $2.99 monthly subscription fee is a fraction of those of the others (making it almost invisible to your pocket book, in a very Pandora-like way), it remains to be seen whether significant numbers will feel the need for speed -- i.e., 72 hours of early access (rather than much more permanent exclusivity).  At least in part, you need hard-core, rabid fans of particular content or personalities to accomplish that mission.

The good thing for Vessel is that in our increasingly niche, verticalized mobile and millennial audience-driven world, rabid fans come in rich supply.  So long as the content is compelling, personality-driven and "authentic" (THE key word in the millennial lexicon), you have a shot.  And, Vessel's $75 million doesn't hurt.  In fact, it was that money that helped Vessel land tent-pole audience-attracting talent like musical comedy duo Rhett & Link (for a reported $500,000) and bleeding-edge content from major multi-channel networks (one deal alone is reported to be $3 million).  The company's panache also led to its ability to assemble a "dream team" of advertising partners that impress even industry insiders.

Vessel has set sail with the necessary ingredients -- and then some.  It is a luxury liner for sure.  And, its early disembarkation is impressive.

Lots of icebergs out there, though.

But isn't that what being innovative and entrepreneurial is all about?  After all, there were plenty of nay-sayers when Hulu first launched -- and look at it now.

So, FULL STEAM AHEAD!

[AND CUT my rambling and loquacious nautical imagery ...]

Oculus' "LOST" VR Cinematic XP Debuts - Its Pixar "Luxo Jr." Moment?

Yesterday may have represented a momentous and landmark day in the annals of cinema.  Just yesterday, VR powerhouse Oculus premiered its first VR cinema "experience" titled "Lost" at Sundance.  Up to this point, most in media and entertainment have viewed Oculus and its VR technology to be gamer-focused.  But, cinematic story-telling -- on a wholly immersive new plane -- has always been a central part of the plan.  And, yesterday may have marked that moment in time ...

Oculus' premiere of Lost has shades of Pixar's 1986 landmark release of "Luxo Jr." written all over it.  Remember that one?  That's where papa lamp, son lamp (Jr.) and a ball made cine-magic -- transforming movies forever via CGI (here is the link to that classic cinematic moment in time for those of you with nostalgia).  And, how about this?  Pixar's pedigree is all over Oculus' Lost as well.  One year ago, Oculus pilfered a peck of Pixars to lead its cinema efforts under the "Story Studio" banner.  So, did Oculus' "first-of-its-kind" cinematic VR "moment" deliver yesterday at Sundance?  Mixed reviews -- with content-focused pub The Verge excitingly calling it "the future" of cinema, whereas tech-focused TechCrunch giving it a more tepid review of being "cute, immersive, but hardly interactive."

How does VR for cinema "work" from a story-telling perspective?  Hard to imagine for sure, especially since normal notions of film simply don't work in the virtual world.  As an example, Oculus Story Studio's Creative Director Saschka Unseld recently told Techcrunch that VR-driven narratives flow very differently than more linear-flowing movie streams -- with myriad rivulets that reveal themselves only when you look at particular elements.  My "experience" -- as a result -- may take 4 minutes whereas yours could be 2X or 3X longer.  There is no one story.  It's a layer cake.  Think the movie Inception -- but, YOU are the Inceptee.  And you aren't just watching (with VR goggles on at this point).  You are experiencing.  Wow!

I have spoken with many insiders in the media business who have had glimpses of Oculus in the story-telling context -- experiencing cinematic moments.  And they have told me that, without question, it's a game-changer in every sense of those words (which really don't do justice to their reactions, since their minds were almost literally blown).  We have entered the "great unknown" of future cinema, whatever that word means in this context.  And, yesterday's premiere of Lost at Sundance was just the beginning.

So, while CEO Brendan Iribe underscores that gaming is still the company's immediate focus, make no mistake.  It's showtime.  And, while your mouth may be agape the first time you experience Lost, it won't be due to a hunger for popcorn.

It likely will be a reflection of shock and awe.

My Interview About Startups, Entrepreneurs, VCs & Digital Media (Via Podcaster "20 Minute VC")

Here is my "take" about all things digital media, VCs, entrepreneurs and startups via podcaster "The 20 Minute VC" -- click on link to hear the podcast.

Amazon-ics -- The Tech Giant's New Hollywood Math

Amazon is the new kid on the theatrical motion picture block, having just announced its Hollywood studio-like motion picture ambitions to produce roughly 12 films per year (at very indie-like budgets of $5-$25 million each).  Amazon already is a major player in OTT video, of course, with both Amazon Prime (including HBO-like original programming) and its "under the radar" stealth YouTube-like short-form video platform which continues to grow in prominence.  Bottom line -- Amazon is now a full-fledged media company.  After all, it just won its first highly-coveted traditional media accolade -- a pair of Golden Globes.

But, is it?  After all, despite its media trappings (or in spite of them), make no mistake.  Amazon still -- and always will be -- an e-commerce company first and foremost.   Everything else is just bait, luring you into its infinite store of possibilities that Amazon monetizes in bulk and at low low margins.  THAT, my friend, is Amazon's business model.  Get you into the store -- keep you there -- and make it easy for you to whip out your credit cards.

That means that video content -- in whatever form it may take (premium shorts, licensed movies, original programming like Transparent, and now theatrical motion pictures) -- is the marketing pre-show for that main feature of shopping.  In other words, content is a marketing spend, plain and simple -- and ultimate story-telling success is not measured by traditional Hollywood metrics (box office receipts).  The only metrics that matter to Amazon are traditional retail metrics.

That means that Amazon's business model is fundamentally different than that of any pure-play entertainment company.  Pure-play motion picture studios like Warner Bros. and pure-play entertainment distributors like Netflix can monetize one thing and one thing only -- the video content itself.  Their sole metric of success relates directly to the motion picture content (box office/ancillary revenues and subscription numbers, respectively).

Not the same case for Amazon.  Individual motion picture/content rules and metrics simply don't apply.  There are no box office receipts to tally.  No pure-play subscribers to count.  This is retail baby!  Amazon Studios succeeds if its motion pictures drive bodies into its virtual super-store and those bodies shop, shop, shop.

That means freedom.  Business and creative freedom.  Case in point, Amazon's series Transparent.  Transparent is content built not for a mass audience, but rather for a passionate niche audience -- and that is good enough.  No pressure for it to "succeed" in a traditional studio way.  And, Amazon's newly-announced indie-like theatrical film strategy follows that same playbook.  Produce "smaller" films for passionate niche audiences (niche audiences that it has already identified precisely via the deep shopping metrics and profiles that it has capture on each of us -- and continues to capture on each of us -- via our ongoing shopping habits).  Release those small films theatrically first (both domestically and internationally), thereby marketing Amazon to passionate audiences in a highly visible new way.  Collect whatever box office receipts that come (which is seen as being pure gravy).  Perhaps also collect some industry accolades for them (after all, underlying economic freedom leads to creative freedom which may lead to more celebrated films) -- more great marketing.  Subsequently, exclusively feature them on Amazon Prime (more marketing).

THAT is Amazon-ics.

The studios don't have it.  Netflix doesn't have it (although Netflix's pure-play subscription model also allows for more business and creative flexibility as well in its pure-play model, because the only metric that matters is overall subscription growth; hence Netflix's own revolutionary moves that have led to the two phenomena of "binge" viewing and true "day and date" theatrical/digital release (its upcoming plans for Crouching Tiger, Hidden Dragon 2, among others).

Interestingly, other major tech titans have something like it. Apple, Google and Samsung similarly use content as advertising to drive their underlying core business models of hardware sales and advertising -- not primarily to monetize the content itself.  Again, that leads to more business and creative freedom.  Here is my recent discussion in that regard.

What does this mean for filmmakers and we, the audience?

Right now, indie filmmakers should rejoice because they have a new potential home for their labors of love, the success of which is not measured solely by the box office revenues they generate.  That means more indie-like stories will be told.

And, that means more movie variety for all of us.

Tech Giant Buys Hollywood Studio -- Happens In 2015? Here's Why

Yes, THAT may happen in 2015.  A tech giant may very well buy its way significantly deeper into the content game this year by acquiring one of the major Hollywood studios.

Content is increasingly "king" in our multi-platform, smartphone-driven, millennial-focused world.  That small screen -- and the digital-first eco-system built on top of it -- changes everything (I recently wrote about this for TechCrunch, Variety and VideoInk).  That's where consumers (especially the young eyeballs coveted by marketers) engage.  And, that small screen and our increasingly digital-first world absolutely are critical to tech giants like Apple, Samsung, Amazon, and Google, each of which has a fundamentally different core business model that ultimately is driven by content.  I'll repeat ... that is driven by content!

Let's take a look at those business models.

Apple and Samsung are all about hardware sales (iPads, iPhones, Galaxies).  Everything else is a Trojan Horse to drive those sales.

Amazon is all about e-commerce.  Everything else is a Trojan Horse to drive more and more consumers into its virtual store to buy goods.

Google is all about advertising.  Everything else is a Trojan Horse to maximize eyeballs and ad sales.

CONTENT is that Trojan Horse.  Apple iTunes, Samsung Milk Music and Milk Video, Amazon Prime, and YouTube are the names of those individual stables.  And, the goal of each service is to have the deepest and best performing stable of horses -- and increasingly unique ones (i.e., exclusive/original programming) -- so that consumers jump on and ride their services instead of the "other guys'."

For these tech behemoths, content (movies, television) essentially functions as pure advertising.  Content is the means to an end, and ROI is not measured by the content service itself.  That's why stand-alone highly challenging economics that apply to pure-play services like Spotify, Pandora and Netflix don't apply to these tech behemoths.  Content is essentially a loss-leader.  That content is THE most critical form of advertising to fuel their underlying business model.

But, merely because this is the reality (i.e., that content is viewed as a marketing spend) isn't necessarily a bad thing from a creative (or consumer) standpoint.  In fact, the fundamental goal of all story-telling -- including in this "Trojan Horse"/advertising scenario -- is to captivate an audience.  The better the story-teller, the more listeners they will attract.  How they monetize those listeners IS the question.

Let's take a look at the flip-side of this -- i.e., the studios.  The smartphone's small screen is having major impact on the studios.  These studios have played effectively for years in the big/bigger screen worlds of theatrical and TV.  But, small screen, digital-first, millennial-focused video content is not in their DNA.  That's why Disney bought Maker Studios for up to a near-$1 billion.  And, this confusing new multi-platform smartphone driven world order makes "traditional" major studios (and the moguls who run them) feel vulnerable.  And, that vulnerability makes them more open to possibilities.

And, that leads to the perfect M&A storm.  Tech giants who increasingly covet content.  And, content-creators who increasingly scratch their heads about their next act (but are experts in story-telling and creating bigger screen premium content).

This is simple math that leads to one logical conclusion -- a tech giant could very well buy one of these major studios this year (this was #5 of my 8 predictions in my TechCrunch guest article).

Which studio?  One logical choice could be Warner Bros.  Remember, Rupert Murdoch made a big play to swallow Warner Bros. up last year -- an attempt that failed, but perhaps exposing a crack in the veneer of this and other major studios.  How about Sony?  It certainly has had its well-publicized challenges.

Which of these tech giants is most likely to make that bold move?  Apple certainly has signaled its willingness to move in that direction, buying Beats on the music side for $3 billion.  How about Samsung?  Its newly-launched Milk Video service needs to differentiate -- and studio content could be the ticket.  Amazon?  Bezos just scored big wins as a premium TV-like content creator at the Golden Globes. It has also quietly created its own YouTube alternative universe. Movies are the natural "next act" (in fact, Amazon just yesterday announced a major theatrical motion picture slate strategy and "traditional" media exec to run it).  And then there's Google.  Yes, you would think that it needs to be Swiss (neutral) with the "mother of all video distribution platforms" that is YouTube.  But, don't forget that Google has wanted to play hard in the premium video content development game for some time -- and is widely reported to be undertaking bold new major content development initiatives.

Think this is a stretch?  Not at all.  Each of these tech giants certainly has the cash to pull it off.  Yes, THAT is likely in 2015.  A tech giant may buy its way into the content game this year by acquiring one of the major Hollywood studios.

Content is increasingly "king" in our multi-platform, smartphone-driven, millennial-focused world.  That small screen -- and the digital-first eco-system built on top of it -- changes everything (I recently wrote about this for TechCrunch, Variety and VideoInk).  That's where consumers (especially the young eyeballs coveted by marketers) engage.  And, that small screen and our increasingly digital-first world absolutely are critical to tech giants like Apple, Samsung, Amazon, and Google, each of which has a fundamentally different core business model that ultimately is driven by content.  I'll repeat ... that is driven by content!

Let's take a look at those business models.

Apple and Samsung are all about hardware sales (iPads, iPhones, Galaxies).  Everything else is a Trojan Horse to drive those sales.

Amazon is all about e-commerce.  Everything else is a Trojan Horse to drive more and more consumers into its virtual store to buy goods.

Google is all about advertising.  Everything else is a Trojan Horse to maximize eyeballs and ad sales.

CONTENT is that Trojan Horse.  Apple iTunes, Samsung Milk Music and Milk Video, Amazon Prime, and YouTube are the names of those individual stables.  And, the goal of each service is to have the deepest and best performing stable of horses -- and increasingly unique ones (i.e., exclusive/original programming) -- so that consumers jump on and ride their services instead of the "other guys'."

For these tech behemoths, content (movies, television) essentially functions as pure advertising.  Content is the means to an end, and ROI is not measured by the content service itself.  That's why stand-alone highly challenging economics that apply to pure-play services like Spotify, Pandora and Netflix don't apply to these tech behemoths.  Content is essentially a loss-leader.  That content is THE most critical form of advertising to fuel their underlying business model.

But, merely because this is the reality (i.e., that content is viewed as a marketing spend) isn't necessarily a bad thing from a creative (or consumer) standpoint.  In fact, the fundamental goal of all story-telling -- including in this "Trojan Horse"/advertising scenario -- is to captivate an audience.  The better the story-teller, the more listeners they will attract.  How they monetize those listeners IS the question.

Let's take a look at the flip-side of this -- i.e., the studios.  The smartphone's small screen is having major impact on the studios.  These studios have played effectively for years in the big/bigger screen worlds of theatrical and TV.  But, small screen, digital-first, millennial-focused video content is not in their DNA.  That's why Disney bought Maker Studios for up to a near-$1 billion.  And, this confusing new multi-platform smartphone driven world order makes "traditional" major studios (and the moguls who run them) feel vulnerable.  And, that vulnerability makes them more open to possibilities.

And, that leads to the perfect M&A storm.  Tech giants who increasingly covet content.  And, content-creators who increasingly scratch their heads about their next act (but are experts in story-telling and creating bigger screen premium content).

This is simple math that leads to one logical conclusion -- a tech giant could very well buy one of these major studios this year (this was #5 of my 8 predictions in my TechCrunch guest article).

Which studio?  One logical choice could be Warner Bros.  Remember, Rupert Murdoch made a big play to swallow Warner Bros. up last year -- an attempt that failed, but perhaps exposing a crack in the veneer of this and other major studios.  How about Sony?  It certainly has had its well-publicized challenges.

Which of these tech giants is most likely to make that bold move?  Apple certainly has signaled its willingness to move in that direction, buying Beats on the music side for $3 billion.  How about Samsung?  Its newly-launched Milk Video service needs to differentiate -- and studio content could be the ticket.  Amazon?  Bezos just scored big wins as a premium TV-like content creator at the Golden Globes.   It has also quietly created its own YouTube alternative universe).  Movies are the natural "next act" (in fact, Amazon just yesterday announced a major theatrical motion picture slate strategy and "traditional" media exec to run it).  And then there's Google.  Yes, you would think that it needs to be Swiss (neutral) with the "mother of all video distribution platforms" that is YouTube.  But, don't forget that Google has wanted to play hard in the premium video content development game for some time -- and is widely reported to be undertaking bold new major content development initiatives.

Think this is a stretch?  Not at all.  Each of these tech giants certainly has the cash to pull it off.  Moreover, such a move certainly is not unprecedented.  Let's not forget that consumer electronics giant Sony bought its way into the content business 25 years ago when it acquired Columbia Pictures.  And, remember, competing CE company Matsushita, not to be undone and in rapid succession, bought MCA/Universal (which it unloaded soon thereafter to Edgar Bronfman and his alcohol dynasty).

Mixed results, for sure.  But, these are very different times indeed for the "media plus tech" equation.

The math is right.

The times are right.

Don't be surprised by it.

Dez Bryant's Catch That Was(n't) -- Blame Coach Jason Garrett First!

Today is NFL Championship Sunday.  You and I all will be holed up in our living rooms with Cheeto-filled hands glued to our big screens.  And, no doubt, as we watch the NFC game where the Seahawks inevitably defeat the Packers (only because Aaron Rodgers is gimped out), we will continue to debate last week's incredible Dez Bryant "catch" from Tony Romo that got the Pack into the Championship in the first place (here is that video again).  It was "the catch that wasn't," of course.  And, we all know the Ref got it wrong.  The ruling on the field stands unless convincing proof otherwise -- and there was no such proof.  We all know the "catch" was too close to call.  So, it should have stood.  Hence the debate and passion behind it.  Social media lit up with vitriol that we all read about (voila, there's my digital media nexus for this post!).

But, here's the REAL question -- and one I haven't seen discussed anywhere.  Remember, it was late in the 4th quarter (4:37 left in the game) -- the Cowboys were behind by more than a field goal (down 26-21) -- and the Cowboys faced 4th and 2 (from the Packers' 32 yard line).  In other words, it was survival time.  This offensive series undoubtedly would be their last chance to win the game.

So, what play does Cowboys' coach Jason Garrett dial up?  A 27 yard pass play from Romo to Dez Bryant!

WHAT KIND OF CALL IS THAT?  WHAT ARE THE ODDS OF THAT PLAY WORKING and the Cowboys surviving?  And, why go for it all with 4:30 minutes left in the game?  Even if "the catch that wasn't" were not reversed (which should have been the case), why give the best quarterback in football (Rodgers) the ball back with so much time left?

Here are your answers.  TERRIBLE call.  TERRIBLE coaching.  Probability for that play working, 25% at best (I would argue lower).  Props to both Romo and Bryant for an incredible pass and catch -- under extreme duress -- to at least approach that probability.

Yet, I have seen few if any place responsibility squarely on Garrett.  All the Cowboys had to do was throw a 2-3 yard "doink" pass across the middle -- a high probability pass (I would argue 75% or more) that is hard to defend.  Then, the Cowboys would have a new set of downs -- near the Packers' Red Zone -- and with plenty of time to win the game and significantly run down the clock.

Would the Cowboys have won the game in that scenario?  We'll never know, of course.

But, Cowboys' coach Jason Garrett (whose contract was just extended ... really?????) placed them squarely in a position to lose.  And, lose they did ....

INFOGRAPHIC - 2014 Digital Media Year In Review

2014 in Review: The Top 5 Defining Trends in Digital Media

Jan 13th

Download (PDF, 614KB)

Bonnaroo 2015 Lineup First Class (While "The Other Guys" Fly ... Coach?)

Bonnaroo 2015 lineup just announced earlier today.  Coachella 2015 lineup announced last week.  Which is better?  YOU be the judge.  The judges already have my scores .... (here's my review of the Coachella 2015 lineup) ....

Booyah! Whistle Sports Scores $28 Million Series B -- That's "Big" In Any Language

Whistle Sports, THE leading sports-focused MCN (and a Manatt Digital Media client) just scored big -- very big -- as in $28 million big, for its just-announced Series B round.  Two major international media companies joined the round as significant strategic investors -- BSKYB and Liberty Media (via its Liberty Global Ventures arm).  BSKYB's individual investment is $7 million, joining lead investor Emil Capital Partners (an affiliate of Germany-based Tengelmann Group) which adds to the round's overall international flavor.  Why relevant?  Because sports obviously is (are?) universal -- truly global in terms of interest and potential reach.  These massive new investors can accelerate that global reach -- which is smart, very smart (for all involved).

Want more?  Sports legends Peyton Manning and Derek Jeter -- both investors in the original $8 million Series A round -- also joined this one.  That's a good sign -- one that need not be hidden from the bench.

Whistle Sports essentially bills itself as a new ESPN for millennials -- built for a digital-first/native audience in an increasingly digital-first, smartphone-driven world.

They've got a massive market opportunity (a global passionate audience willing to spend on all things sports).  Great creative talent (include those "Dude Perfect" guys).  Seasoned coaching (CEO John West, co-founder Jeff Urban, and #2 Brian Selander).  A deep bench of executive talent.  Impressive metrics (12 million subs who have viewed the videos of 225 channel partners over 2 billion times).  And now a boatload of cash.

That's a winning combination in my book ...

My 2015 Predictions - Consolidated Guest Articles from TechCrunch, Variety, Billboard & VideoInk

CES 2015 is in the books -- and we are now firmly simply ensconced in 2015.  Time to rock and roll in all things that are digital media.  To that end -- consolidated here for your reading pleasure -- here are my predictions for media/music/digital media for 2015 (via my separate year-end guest articles in TechCrunch, Variety, Billboard, and VideoInk):

"The Future of Digital Media in 2015" -- from TechCrunch -- where I identify 8 specific predictions for the year (a longer "director's cut" version with 10 predictions can be found here via my separate post in LinkedIn)

"The 3 Digital Media Mega-Deals that Defined the Year" -- from Variety -- where I discuss the rationale for those 3 deals and discuss how they impact what we will see in 2015

"Five Predictions for Digital Video in 2015" -- from VideoInk -- this one is exclusively focused on video

And, finally, here is my single major music industry-focused prediction/theme for 2015 (and which is featured in the print edition of Billboard Magazine that is on your newsstands now ... will post it here as well if it goes online):

2015 is the year that the music business begins to understand and embrace the power and potential of deeply integrating technology and online fan engagement with offline live events.  For most artists, streaming services expand their “communities” of thirsty fans and will offer ever-more tools to engage directly with -- and monetize -- them (via both live event tickets and unique new live “experiences”).  Live events (especially major festivals) will fuel these direct interactions further (both online and offline) – and more effectively line their own pockets – by leveraging innovative new technology to capture invaluable attendee data that they will share with savvy artists.  And, rabid fans will happily hand over more dollars for closer artist connections and better live music experiences (including more efficient food, drink and merchandising sales at shows). 

Coachella Clash - "Should I Stay or Should I Go?" - This Year's "Must See" Artists

Coachella 2015 -- "To go, or not to go?  THAT is the question!"  (Or in the immortal words of The Clash, "Should I Stay or Should I Go?")

Last year's Coachella line-up was outstanding (here is my post about it from last year).  This year, not so much.  More bluntly, and sadly (in my view), not at all.

The long-awaited unveiling of this year's line-up occurred early this past week (here it is).  As I received the official email in my inbox, my fingers twitched with anticipation (with rumors of U2 swirling in my head).  Then reality set in as I first focused on the three headliners -- (1) AC/DC (a classic band, no doubt, but headliner ... really?), (2) Jack White (talented of course, but same question), and (3) Drake (ditto).  A triple head-scratcher.  A massive disappointment.

OK, those are the headliners.  But the rest of the line-up must be great, I thought to myself.  Right?  After all, Coachella is massively successful, so they absolutely can attract the absolute best.  But, as I very carefully mulled the list, I was beyond disappointed.  Very few of the artists and bands even remotely grabbed my interest.  And, long-time readers of my blog know that I follow the contemporary music scene very closely (and believe I have some fairly deep awareness of the artists and bands "of the day" across multiple genres).

I wasn't alone in my shock & awe.

In my informal poll taken in the aftermath of the "great Coachella unveiling," others whom I respect as (1) being music lovers, (2) having music depth (and who are taste-makers), and (3) are experienced Coachella/festival go-ers, like me -- all felt very much the same.  Virtually all of them also scratched their heads (several, more deeply than I)  -- and expressed not just deep surprise, but also deep disappointment.  And this theme carried through conversations during my past week at the Consumer Electronics Show (CES).

Whereas last year's list of "must see" artists and bands was long (again, here is the link to last year's post that followed last year's line-up announcement), this year's is downright diminutive.  Here are my picks -- day by day:

Friday -- Tame Impala (but, although a great band, second billing ... really? ... worthy of that kind of prominence already?), Lykke Li (maybe a "must see", but that is generous).

Saturday -- alt-J (definitely!  Although I have already seen them 4 times), Kasabian (maybe), Perfume Genius.

Sunday -- Florence and the Machine, Vance Joy (maybe ... but, again, that's a generous designation).

That's it!  That's all that even remotely "excites" me.

Yes, I know, I know -- festivals like Coachella are very much about music discovery.  I "get" that -- and know that several artists whom I do not know right now likely will impress me when I see them play.  But, I also know most of the artists in the line-up.  And, very few of those do.

So, what to do at this point?  Coachella is an annual ritual for me and my fellow music compadres.  We have made the annual pilgrimage to Music Mecca 6 of the last 7 Coachellas.  And, we purchased our VIP passes and La Quinta Resort room reservations months ago.

After seeing this year's line-up, my initial reaction was "Nyet."

But, due to the coaxing of others, I have now pulled back a bit ... and have not made my final decision ... not yet.

I'll stream the music I don't know -- (see, streaming really does lead to music discovery) -- and then make my final decision.  But, in the end, I likely will go ... for the ritual of it all ... and because, after all, 2015 would have a gaping hole without the Coachella experience ....

[UPDATED SUNDAY JAN 11 -- OF COURSE I'M GOING!  It's Coachella after all.  There is nothing like being out in the desert -- with great friends -- and getting lost in the music ... my year would not be complete without it ... no matter what line-up ...].

My 5 Predictions for Digital VIDEO in 2015

My post below was originally featured as a guest article in VideoInk, titled "5 Predictions for Digital Video in 2015."

2014 proved to be a transformational year for digital-first video and the YouTube economy.  The short-form video world essentially “grew up” and traditional media, major brands, and even previously cynical Northern California investors took notice.  It was easy to see why.  2014 introduced the video content-driven mega-deal. Disney bought leading multi-channel network (MCN) Maker Studios for up to $1 billion, Otter Media uploaded rival MCN Fullscreen in a deal rumored to be up to $300 million, and European-based RTL Group tried on Stylehaul for a deal that values that vertically-focused MCN up to $200 million.

So, with that backdrop, here are my Top 5 predictions for digital video in 2015:

(1)  The pace of MCN acquisitions will accelerate as more studios jump into the M&A game rather than try to figure out this new content platform themselves.  Some leading MCNs ripe for acquisition include foodie-focused Tastemade, dance-focused DanceOn, Latino-focused Mitu, sports-focused Whistle Sports, and Collective Digital Studio.  (Note – Manatt Venture Fund is an investor in DanceOn and Whistle Sports is a client).

(2)  But the MCN action won’t be just domestic.  International becomes a major new battleground in the borderless digital video world.  Companies big and small will extend their reach via major partnerships, investment, and M&A.  Notable 2014 deals included RTL’s acquisition of Stylehaul, BSKYB’s $7 million strategic investment in Whistle Sports, and Fullscreen’s partnership with major Indian MCN Qyuki.

(3)  Major consumer brands follow suit.  For the first time, marketing dollars shift in significant scale from traditional media to more measurable digital platforms.  This takes the form of branded content -- not just ads.  As a result, investors place major bets on ad-tech companies to maximize and measure those spends.  We will see a number of significant ad-tech exits like Yahoo!’s recent acquisition of BrightRoll for $640 million.  Several brands will go even further and invest big to become digital-first lifestyle media companies themselves a la Red Bull, developing and aggregating content.  GoPro, Pepsi and Marriott have proudly announced such ambitions.

(4)  Both “traditional” media and YouTube itself are increasingly challenged by this fast-accelerating activity and by new competing video platforms like Facebook and Vessel (which just opened its paid subscription-first MCN kimono last week).  These “off YouTube” platforms will seek to lure content creators with tales of more attention and significantly greater revenues.

(5)  Seeing all this activity, and harboring a FOMO mentality, Silicon Valley investors will increasingly make pilgrimages down to LA --  the epicenter of this video content innovation and creativity.  After all, even super blue-chip VC Andreessen Horowitz vouched for video via its $50 million investment BuzzFeed.  That accelerated pace of investment will only further fan the flames of the vibrant SoCal entrepreneurial scene and the digital-first video revolution.

2014, exciting, transformative times for the media world.  And, just a precursor of more (much more!) to come in 2015.